NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-1309-15T1 A-4651-15T1
NATIONAL LOAN ACQUISITIONS,
Plaintiff,
v.
BRIDGETON MUNICIPAL PORT AUTHORITY,
Defendant-Respondent,
and
HENRY.GROVE DIVERSIFIED INVESTMENTS, LLP,
Plaintiff-Appellant,
THE CITY OF BRIDGETON,
RENEWABLE JERSEY, LLC,
Intervenor-Respondent.
________________________________________ HENRY.GROVE DIVERSIFIED INVESTMENTS, LLP,
Appellant,
STATE OF NEW JERSEY DEPARTMENT OF COMMUNITY AFFAIRS,
Respondent.
_____________________________________
Argued March 23, 2017 – Decided July 27, 2017
Before Judges Lihotz, O'Connor and Whipple.
On appeal from Superior Court of New Jersey, Law Division, Cumberland County, Docket Nos. L-0781-06 and L-0100-12 and an agency decision of the State of New Jersey Department of Community Affairs Local Finance Board.
Keith A. Bonchi argued the cause for appellant (Goldenberg, Mackler, Sayegh, Mintz, Pfeffer, Bonchi & Gill, attorneys; Mr. Bonchi, of counsel and on the brief; Elliott J. Almanza, on the brief).
Rebecca J. Bertram argued the cause for respondent City of Bridgeton (Bertram Law Office, L.L.C., attorneys; Ms. Bertram, on the brief).
Melanie R. Walter, Deputy Attorney General, argued the cause for respondent State of New Jersey Department of Community Affairs (Christopher S. Porrino, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Ms. Walter, on the brief).
2 A-1309-15T1 Jack Plackter argued the cause for intervenor-respondent (Fox Rothschild LLP, attorneys; Mr. Plackter, of counsel and on the brief; Bridget A. Skyes, on the brief).
Long Marmero & Associates, LLP, attorneys for respondent Bridgeton Municipal Port Authority, join in the brief of respondent City of Bridgeton.
PER CURIAM
In these back-to-back appeals, consolidated for purposes of
this opinion, plaintiff Henry.Grove Diversified Investments,
LLP, appeals from an October 16, 2015 order denying its motion
to enforce litigant's rights, as well as from a June 23, 2016
resolution issued by the Local Finance Board (Board) of the
Department of Community Affairs. We dismiss the appeal from the
October 16, 2015 order, concluding its order is interlocutory.
Further, we remand to the Board for consideration of the
application of N.J.S.A. 40A:5A-19 to this matter.
I
A
We first address plaintiff's appeal of the October 16, 2015
order denying its motion to enforce litigant's rights. Many of
the facts pertinent to plaintiff's appeal of this order apply to
its appeal of the Board's resolution, although we provide
additional facts below when addressing the actions taken by the
Board. 3 A-1309-15T1 In 1983, defendant City of Bridgeton (municipality) created
defendant Bridgeton Municipal Port Authority (authority) for the
purpose of building a port facility along the Cohansey River.
As part of its effort to achieve this goal, in 1985 the
authority purchased a parcel of land known as the Sorantino
Warehouse Building (warehouse property). Eventually, the
authority abandoned its plan to create a port facility, choosing
instead to develop the property along the river.
With the approval of the Board, in 1988, the authority
obtained a loan for $800,000, secured by a note and mortgage on
its property. However, the authority eventually defaulted and
the mortgagee at the time, First National Bank of Chicago,
obtained a judgment in foreclosure; the balance due on the loan
at that time was approximately $631,900. The authority
appealed, and we held N.J.S.A. 40:68A-60 precludes the remedy of
foreclosure against a port authority. See First Nat'l Bank of
Chicago v. Bridgeton Mun. Port Auth., 338 N.J. Super. 324, 327
(App. Div.), certif. denied, 168 N.J. 295 (2001).
In 2006, a subsequent assignee of the note and mortgage,
National Loan Acquisitions, filed a complaint in lieu of
prerogative writs seeking mandamus, specifically, an order
requiring the authority to pay all money due under the loan
documents. In 2010, National Loan Acquisitions and the 4 A-1309-15T1 authority entered into a consent judgment (judgment) for
$394,198.56, plus post-judgment interest, set at ten percent,
and counsel fees.
In 2011, the municipality entered into a redevelopment
agreement (agreement) with intervenor Renewable Jersey, LLC
(Renewable), designating Renewable as a redeveloper of the
authority's property. Under the terms of the agreement,
Renewable is to purchase various properties belonging to the
authority, including the warehouse property, and redevelop them.
Later that year, plaintiff acquired National Loan Acquisition's
interest in the judgment for $250,000. Plaintiff has pursued
satisfaction of the judgment since.
In 2012, plaintiff filed a complaint in lieu of prerogative
writs, seeking mandamus in the form of compelling the authority
to pay the judgment or, in the alternative, compelling the
transfer of the warehouse property from the authority to
plaintiff. The complaint also alleged the municipality was the
real party in interest, as the authority had been a
non-functioning, debt-ridden entity for a number of years.
Among other things, plaintiff sought a writ of mandamus
compelling the municipality to dissolve the authority, liquidate
its assets, and use the proceeds toward the judgment. In the
alternative, plaintiff sought to have the municipality declared 5 A-1309-15T1 the "lawful successor" and real party-in-interest to the
authority, and either ordered to pay the authority's debt to
plaintiff or transfer the warehouse property to it. Renewable
successfully intervened in this matter.
On November 26, 2012, the court entered an order stating,
among other things, a writ of mandamus shall issue compelling
the authority to satisfy the judgment. On August 7, 2013, the
court entered an order striking from the complaint the
aforementioned relief plaintiff sought against the municipality.
The court found it did not have jurisdiction to determine if
plaintiff were entitled to such relief, that such requests had
to be heard and decided by the Board.
On September 4, 2015, the court denied without prejudice
plaintiff's motion to enforce litigant's rights in the form of
transferring the subject property to plaintiff, in exchange for
a credit toward the balance owed on the judgment, or ordering
the property to be auctioned off. Plaintiff argued Renewable
was taking too long to find the appropriate funding to
consummate the purchase of the subject property from the
authority. The court ordered a plenary hearing to ascertain
what efforts Renewable had made to close on the property.
At the hearing, the principal of Renewable testified about
the efforts the company had made to secure funding to close on 6 A-1309-15T1 the property, noting it had invested between $400,000 and
$500,000 into making the redevelopment project a reality. He
recounted the delays caused by litigation in another matter
affected Renewable's and the authority's ability to close. He
testified Renewable was still committed to proceeding under the
agreement, expecting it would be ready to close in approximately
four months. The principal promised if Renewable were not
ready, it would willingly "step-aside."
Based upon the principal's testimony, on October 16, 2015,
the court entered an order denying plaintiff's motion, noting in
its oral decision:
[T]he existence of all of these legal issues is a real impediment to finalizing the sale of the property. . . .
The point is very well taken that these judgments and circumstances of buying discounted judgments are often fraught with unseen and unforeseeable irregularities, difficulties, issues. . . . I don't think anyone questions the reality that the nature and extent of financing a project of this nature is complex and time-consuming and subject to fits and starts. . . .
So for now we maintain the status quo.
Significantly, the court added:
And if there are any other prayers for relief in terms of enforcing litigant's rights or moving forward on the writ of mandamus, I wouldn't foreclose those. I would ask that we not revisit any time soon 7 A-1309-15T1 the issue of transferring the property to the plaintiff, simply because we've been down that road, and I just can't see my way clear to doing it.
If something significant changes . . . the parties, of course, are free to make appropriate application before the court. . . . [But] I don't simply want to revisit the same issue for the sake of revisiting the same issue.
[(Emphasis added).]
B
On appeal, plaintiff challenges the court's October 16,
2015 order denying its motion to either convey the property to
it or order an auction. We need not address plaintiff's
arguments, as the October 16, 2015 order is interlocutory.
"[A]ppeals may be taken to the Appellate Division as of right
. . . from final judgments of the Superior Court trial
divisions," R. 2:2-3(a)(1), or the Appellate Division "may grant
leave to appeal, in the interest of justice, from an
interlocutory order of a court." R. 2:2-4.
"To be a final judgment, an order generally must 'dispose
of all claims against all parties.'" Janicky v. Point Bay Fuel,
Inc., 396 N.J. Super. 545, 549-50 (App. Div. 2007) (quoting S.N.
Golden Estates, Inc. v. Cont'l Cas. Co., 317 N.J. Super. 82, 87
(App. Div. 1998)). "[A]n order that 'does not finally determine
a cause of action but only decides some intervening matter 8 A-1309-15T1 pertaining to the cause[,] and which requires further steps
. . . to enable the court to adjudicate the cause on the
merits[,]' is interlocutory." Moon v. Warren Haven Nursing
Home, 182 N.J. 507, 512 (2005) (quoting Black's Law Dictionary
815 (6th ed. 1990)).
Plaintiff argues the appeal is final because the court has
disposed of all claims as to all parties. It asserts the only
remaining issue is the court's failure to enforce its order
compelling the authority to satisfy the judgment. Plaintiff
contends the court's denial of its motion to enforce litigant's
rights in the form of ordering the transfer of the property to
it or ordering an auction was final, because the court stated it
would not grant another motion to enforce plaintiff's rights.
We disagree.
In denying plaintiff's motion, the court clearly stated
that, although it was denying plaintiff the specific relief it
sought, the court was not otherwise denying or foreclosing the
consideration of other remedies to effectuate the authority's
obligation to honor the judgment. The court explicitly stated
that if plaintiff sought other relief or relief related to
"moving forward on the writ of mandamus," it would consider such
application.
9 A-1309-15T1 The court did discourage the filing of another motion
seeking the transfer of the property to plaintiff or the
scheduling of an auction, but the court did so merely because it
was unable to determine how such relief could be granted. The
court also stated that if there were a change in circumstances
making such relief viable, then a party could pursue that
remedy. Otherwise, asking for the same relief when there has
not been a change in circumstances would be an exercise in
futility, as "we've been down that road, and I just can't see my
way clear to doing it."
We are satisfied the order is interlocutory. The fact the
court denied the specific relief plaintiff sought did not make
the order final. The court did not foreclose considering all
remedies to satisfy the judgment, just the two plaintiff sought
in its motion. As not all claims as to all parties have been
disposed of by the court, the subject order is interlocutory.
Plaintiff's remaining arguments on this issue lack
sufficient merit to warrant further discussion in a written
opinion. R. 2:11-3(e)(1)(E). As the appeal of the October 16,
2015 order is interlocutory, it is dismissed.
Plaintiff also contends the court erred when it failed to
grant motions it had previously filed to enforce litigant's
rights. However, the October 16, 2015 order is the only one 10 A-1309-15T1 plaintiff lists in its notice of appeal. "It is clear that it
is only the orders designated in the notice of appeal that are
subject to the appeal process and review." W.H. Indus., Inc. v.
Fundicao Balancins, Ltda, 397 N.J. Super. 455, 458 (App. Div.
2008) (citing Sikes v. Twp. of Rockaway, 269 N.J. Super. 463,
465-66 (App. Div.), aff'd o.b., 138 N.J. 41 (1994)). Therefore,
we do not address this particular contention.
II
We turn to plaintiff's appeal of the Board's June 23, 2016
resolution and provide the following additional facts.
After the court determined it did not have jurisdiction to
order the dissolution of the authority, in April 2014, plaintiff
submitted an application to the Board requesting it do so and
compel the municipality to pay the authority's debts.
In August 2014, the Board passed a resolution authorizing
the sale of the warehouse property from the authority to
Renewable for $310,000, and the following June, the Board
authorized the sale of the authority's remaining properties for
$225,000. Meanwhile, the Board deferred taking action on
plaintiff's application, while it sought additional information
about the authority's financial condition, including requesting
11 A-1309-15T1 the municipality to provide a dissolution plan. The Board
eventually held a hearing on the authority's financial status.
Based upon the testimony and the documents submitted at the
hearing, the Board determined no purpose would be served by the
authority's continued existence, which had stopped functioning
years before. The total value of the authority's assets was
approximately $720,500 and its debts were $1,196,000. The Board
noted plaintiff was seeking the full value of its debt against
the authority, which by that time exceeded $900,000. In its
dissolution plan, the municipality noted it was unwilling to
assume any of the authority's debt.
The Board found dissolution of the authority would be in
the public's interest and would "achieve a more efficient means
for providing and financing local public facilities." However,
the Board further noted it was unable to find a solution to the
authority's financial problems. In addition, because there was
no plan in place to adequately provide for the authority's
creditors, the Board determined N.J.S.A. 40A:5A-21, the
provision governing the dissolution of authorities by the Local
Finance Board, precluded it from dissolving the authority. This
statute provides in pertinent part:
The Local Finance Board may order the dissolution of a local authority if, after holding a hearing consistent with section 18 12 A-1309-15T1 of this act, it determines that, due to financial difficulties or mismanagement, the dissolution of an authority will be in the public interest and will serve the health, welfare, or convenience of the inhabitants of the [municipality] . . ., and the dissolution will achieve a more efficient means for providing and financing local public facilities, except that an order dissolving an authority shall assure adequate provision in accordance with a bond resolution or otherwise for all creditors or obligees of the authority.
[N.J.S.A. 40A:5A-21.]
The Board did not take further action after it determined
it could not dissolve the authority under this statute, other
than in its resolution to "encourage[] plaintiff, the authority
and the municipality to actively pursue a solution of debt issue
to facilitate the dissolution of this moribund entity." A
resolution memorializing its findings was issued June 23, 2016.
On appeal, plaintiff argues the Board erred by failing to
(1) compel the municipality to submit a new dissolution plan
making adequate provision for the authority's creditors, and (2)
compel the municipality to assume the authority's debts.
Plaintiff argues N.J.S.A. 40A:5A-21 empowers the Board to order
the municipality to do the former, and N.J.S.A. 40:68A-38
authorizes it to order the municipality to do the latter.
Because the Board did not order or even decide whether it 13 A-1309-15T1 could order the municipality to assume the authority's debts, we
decline to decide this issue in the first instance. See Duddy
v. Gov't Emps. Ins. Co., 421 N.J. Super. 214, 221 (App. Div.
2011). Thus, we address only the question whether the Board was
obligated to compel the municipality to submit a new dissolution
plan or to take additional steps once the Board concluded the
municipality's initial plan did not provide adequate provision
for the authority's creditors. Plaintiff's principal argument
is by not taking further action, the Board abandoned the
responsibilities entrusted to it under the Local Authorities
Fiscal Control Law (Act), N.J.S.A. 40A:5A-1 to -27.
"An appellate court should undertake a 'careful and
principled consideration of the agency record and findings.'"
In re Zisa, 385 N.J. Super. 188, 194-95 (App. Div. 2006)
(quoting Riverside Gen. Hosp. v. N.J. Hosp. Rate Setting Comm'n,
98 N.J. 458, 468 (1985)). However, an agency decision should
not be disturbed on appeal unless it is arbitrary, capricious or
unreasonable. In re Proposed Quest Acad. Charter Sch. of
Montclair Founders Grp., 216 N.J. 370, 385 (2013). An agency's
findings should be affirmed if they "'could reasonably have been
reached on sufficient credible evidence present in the record,'
considering 'the proofs as a whole,' . . . with due regard also
to the agency's expertise." Close v. Kordulak Bros., 44 N.J. 14 A-1309-15T1 589, 599 (1965) (quoting State v. Johnson, 42 N.J. 146, 162
(1964)). However, a reviewing court is not bound by the
agency's interpretation of a strictly legal issue. In re Zisa,
supra, 385 N.J. Super. at 195.
The Act created a state agency, the Local Finance Board,
"which has been delegated substantial power with respect to the
establishment, management, operation, and dissolution of local
authorities. This Board has the power to dissolve local
authorities if it is in the public interest to do so due to
their financial difficulties or mismanagement. N.J.S.A. 40A:5A-
21." Stone v. Old Bridge, 111 N.J. 110, 120 n.3 (1988).
The Act's legislative purpose was to "promote the financial
integrity and stability of local authorities . . . by providing
for State review of project financing of local authorities and
for State . . . supervision over [their] financial operations."
N.J.S.A. 40A:5A-2. "It was intended that the act . . . would
strengthen the existing system of State oversight of local
financial operations and debt by providing for State supervision
of independent local authority and special tax district
financial operations and debt." Howell Twp. v. Manasquan River
Reg'l Sewerage Auth., 215 N.J. Super. 173, 179 (App. Div. 1987).
There are two procedures for dissolving a local authority.
One procedure permits a municipality to dissolve an authority, 15 A-1309-15T1 see N.J.S.A. 40A:5A-20, which is not implicated here. The other
is found in N.J.S.A. 40A:5A-18 and 40A:5A-21. N.J.S.A. 40A:5A-
18 provides if the Director of the Division of Local Government
Services has reason to believe an authority is experiencing
financial troubles, he or she may convene a hearing before the
Board.
N.J.S.A. 40A:5A-21 vests in the Board the power, if it
chooses, to dissolve the local authority if, after a hearing, it
determines, because of financial difficulties or mismanagement,
the dissolution of an authority "will be in the public interest
and will serve the health, welfare, or convenience of the
inhabitants of the local unit or units, and the dissolution will
achieve a more efficient means for providing and financing local
public facilities." Of relevance here, the statute provides an
order dissolving an authority must provide adequate provision
for the authority's creditors or obligees.
In our view, N.J.S.A. 40A:5A-21 does not authorize the
Board to order the municipality to provide a dissolution plan.
This statute merely states the Board may order the dissolution
of a local authority if certain conditions are met. However,
N.J.S.A. 40A:5A-19 obligates the Board, if the conditions set
forth in the statute exist, to implement a plan which will
assure the payment of debt service on obligations of the 16 A-1309-15T1 authority, or provide relief from undue financial burden.
N.J.S.A. 40A:5A-19 states in pertinent part:
If the Local Finance Board determines that financial difficulties exist which (1) jeopardize the payment of operating expenses and debt service on obligations of the authority or either of the aforesaid; or place an undue financial burden on the inhabitants of the [municipality] or the users of the system or facilities of an authority; and (2) that these difficulties are likely to recur and, if they continue, will impair the credit of the authority and [the municipality] or either of the aforesaid to the detriment of the inhabitants thereof; and (3) no financial plan designed to prevent a recurrence of these conditions and which is deemed to be practicable and feasible by the director has been undertaken by the authority or the local unit or units, the Local Finance Board shall order the implementation of a financial plan which will assure the payment of debt service on obligations of the authority, or provide relief from undue financial burden.
If the conditions in this statute exist, the Board is
statutorily mandated to order the implementation of a financial
plan to assure the payment of the authority's debts or provide
relief from undue financial burden. The Board cannot evade the
responsibility imposed by this statute, even if in good faith
the Board considers the problem unsolvable. The Board is
17 A-1309-15T1 charged with certain duties under the Act that it must implement
and which it cannot avoid.
Accordingly, we are constrained to remand this matter back
to the Board, so that it shall consider if the conditions in
N.J.S.A. 40A:5A-19 exist and, if so, take the steps that it must
under this statute.
We have considered the parties' remaining arguments on this
issue and conclude they are without sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
Dismissed in part and remanded in part. We do not retain
jurisdiction.
18 A-1309-15T1