DCPP VS. J.C., L.C. AND J.R.IN THE MATTER OF E.C., JU.C., A.R. AND J.R.(FN-09-0360-14, HUDSON COUNTY AND STATEWIDE)(RECORD IMPOUNDED)

New Jersey Superior Court Appellate Division·Decided July 7, 2017·No. A-1168-15T1·Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."

Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

DOCKET NO. A-1618-15T3

STOCKTON UNIVERSITY, Plaintiff-Respondent,

v.

KK VENTURES – ATLANTIC CITY, LLC,

Defendant-Appellant.

KK VENTURES – ATLANTIC CITY, LLC,

Plaintiff-Appellant,

v.

STOCKTON UNIVERSITY,

Defendant-Respondent.

Argued January 10, 2017 – Decided March 9, 2017 Before Judges Fisher, Ostrer and Leone.

On appeal from the Superior Court of New Jersey, Chancery Division and Law Division, Atlantic County, Docket Nos. C-47-15 and L-

1490-15.

Stuart J. Moskovitz argued the cause for appellant.

Stephen Hankin argued the cause for respondent (Hankin, Sandman Palladino & Weintrob, attorneys; Mr. Hankin, on the brief).

PER CURIAM On December 12, 2014, Stockton University purchased the former Showboat Casino and Hotel in Atlantic City from Caesars Entertainment Operating Company, Inc. with the hope of opening an Atlantic City "Island Campus." A 1988 restriction for the benefit of Trump Taj Mahal Associates and Trump Taj Mahal Realty Corp., however, required the property's use as a "first class hotel casino" until 2082, and another restriction, which Caesars recorded in November 2014, prohibited the property's use as a casino for ten years. According to Stockton University, Caesars had represented as an inducement that Trump expressed a willingness to discharge the 1988 restriction; when that inducement proved false, Stockton University's intentions were frustrated and its position became untenable. Consequently, on April 3, 2015, Stockton University (the seller) agreed to sell "no later than" ninety days later, the property to KK Ventures – Atlantic City, LLC (the purchaser) for $26,000,000; that contract lies at the heart of this litigation.

The contract unequivocally recognized and referred to the two conflicting restrictions. One provision recognized that the

property was sold "as is" and purchaser's decision to buy was "not based on any covenant, warranty, promise, agreement, guaranty or representation by seller . . . except to the extent expressly set forth in this agreement." Another provision contained purchaser's acknowledgement, review, and approval of the "pro forma title insurance policy," which referred to the Caesars and Trump restrictions as "permitted exceptions." Attached as an exhibit to the contract, in fact, was a proposed deed, which recited that title would be subject to the Caesars restriction and "all other covenants [and] restrictions . . . of record."1 And yet another provision expressed purchaser's "confirm[ation]" and "aware[ness]" of both the Trump restriction and Trump's intentions to enforce that restriction, and the Caesars restriction, which "purport[s] to prohibit gaming and gambling" on the property; purchaser expressed its desire "to purchase the [p]roperty notwithstanding the risks attendant to such matters."

Seller did not expressly obligate itself to rid, or attempt to rid, the property of either or both restrictions. Regardless of whether seller commenced such litigation, the parties expressly agreed that the seller would assign to the purchaser "all legal

1 Elsewhere in the contract, the seller represented and warranted that it was aware of no other lawsuits that would threaten or affect its ability to convey "other than potential claims arising in connection with" the Caesars and Trump restrictions.

claims, including but not limited to those claims that exist or may exist under the [documents creating the two restrictions]." Along those lines, the parties agreed that the seller could unilaterally terminate the contract depending upon its obtaining relief from one or both of the restrictions; in requiring that the closing was to occur on an agreed upon date no later than ninety days from April 3, 2015, i.e., July 2, 2015, the parties stipulated in section 4(a) that

[s]eller may cancel this [a]greement by giving written notice to such effect to [p]urchaser at any time during such ninety[-]day period if, and only if, [s]eller is unable to resolve to [p]urchasers['] satisfaction title issues pertaining to the [Trump restriction] and [the Caesars restriction] whereupon the [e]scrow (with all interest earned thereon) shall be returned to [p]urchaser and the parties shall be released of all further obligations hereunder.

The rights conferred by this provision generate one of the first bones of contention in this appeal.

The dispute about the rights and obligations conferred by the contract arose when – three weeks after the contract was executed – the purchaser advised that it would not close unless seller obtained a discharge of both the Trump and Caesars restrictions. Seller made such attempts; it met with Trump and Caesars representatives to obtain releases and filed a proof of claim in Caesars' bankruptcy proceeding. Those efforts failed, and, to keep

viable the possibility that the transaction would close, seller advised the purchaser on April 28 or 29, 2015, that it was "waiv[ing] its [section 4(a)] right to cancel and [was] elect[ing] to proceed to closing."

On June 18, 2015, the purchaser again advised it would not close unless the seller obtained releases of both restrictions. Seller – still insisting it had no obligation to obtain the release of either restriction – recounted its efforts to secure releases and, when the purchaser refused to close on July 2, seller declared the contract terminated.

The day before, July 1, 2015, purchaser filed a complaint against the seller in the Law Division, seeking damages for unjust enrichment and a declaratory judgment that, among other things, seller could not unilaterally terminate the contract. On July 8, the seller moved to dismiss that suit and, on July 10, filed its own complaint in the Chancery Division and applied for injunctive relief. On July 13, the judge issued temporary restraints in the chancery action; he prohibited purchaser from filing a notice of lis pendens on the property or otherwise interfering with the seller's attempts to convey the property to another. The next day, the purchaser filed an answer and counterclaim, which reasserted the allegations contained in its Law Division complaint. The two suits were later consolidated.

On August 10, 2015, after hearing argument regarding the relief sought in both the order to show cause and the motion to dismiss, the judge issued a written opinion explaining his rationale for granting the seller's request for a judgment which: declared the contract terminated as of July 2, 2015; permanently enjoined the purchaser from interfering with a sale of the property; prohibited purchaser from filing a notice of lis pendens on the property; dismissed the purchaser's Law Division complaint; and awarded seller counsel fees in an amount to be determined.

On August 31, 2015, the purchaser requested that seller supply energy, as defined by the contract, to purchaser's neighboring property.2 Seller immediately refused, asserting that the right to energy contained in the contract's section 4(a) only "survived termination . . . in the event . . . [the purchaser] made a request between [April 3, 2015] and ninety days thereafter[,]" i.e., July 2, 2015. On September 2, 2015, the purchaser moved for an order compelling seller to provide energy to Revel.

On November 23, 2015, the judge denied the motion to compel the providing of energy and granted seller $44,570.84 in counsel fees and costs.3

2 Purchaser had previously obtained the failed Revel casino.

3 Seller subsequently sold the property.

Purchaser appeals the August 10 and November 23, 2015 orders, arguing:

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DCPP VS. J.C., L.C. AND J.R.IN THE MATTER OF E.C., JU.C., A.R. AND J.R.(FN-09-0360-14, HUDSON COUNTY AND STATEWIDE)(RECORD IMPOUNDED), (N.J. Ct. App. 2017).

DCPP VS. J.C., L.C. AND J.R.IN THE MATTER OF E.C., JU.C., A.R. AND J.R.(FN-09-0360-14, HUDSON COUNTY AND STATEWIDE)(RECORD IMPOUNDED) (DCPP VS. J.C., L.C. AND J.R.IN THE MATTER OF E.C., JU.C., A.R. AND J.R.(FN-09-0360-14, HUDSON COUNTY AND STATEWIDE)(RECORD IMPOUNDED)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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