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NJ Appellate Division Awards Specific Performance After Seller Allowed Buyer Over Nearly Seven Years to Obtain Municipal Approval of Redevelopment Plans Banner Image

NJ Appellate Division Awards Specific Performance After Seller Allowed Buyer Over Nearly Seven Years to Obtain Municipal Approval of Redevelopment Plans

Month: May 2025

NJ Appellate Division Awards Specific Performance After Seller Allowed Buyer Over Nearly Seven Years to Obtain Municipal Approval of Redevelopment Plans

Posted on by Christie Bowness

What You Need to Know

  • Courts will enforce good faith obligations even when contracts allow termination. The seller couldn't suddenly terminate after allowing the buyer to spend nearly seven years and considerable resources pursuing municipal approvals with the seller's knowledge and support.
  • Actions can waive contractual rights and create estoppel. By permitting Oclar to continue working past deadlines without objection—and even supporting their efforts—AVC waived its right to terminate based on timing failures and was estopped from claiming breach.
  • Specific performance can be ordered even before all contingencies are met. The court granted specific performance despite the Planning Board's approval still being pending, withholding final judgment until the approval was actually obtained.
  • Original contract prices will be enforced without proof of appreciation. AVC could not increase the purchase price based on property appreciation over the seven-year delay because they provided no evidence of increased value, despite the lengthy timeline.
  • Parties cannot object to settlement terms they previously endorsed. Since AVC was aware of and did not object to the negotiated changes Oclar made with the Planning Board over six years, they were barred from objecting to those terms at the final hearing.

Introduction

In a recent decision, the New Jersey Appellate Division affirmed the trial court’s decision invoking the doctrines of implied duty of good faith and fair dealing, waiver, and estoppel to order specific performance compelling the sale of a property even if it took nearly seven years for the buyer to get to the point of obtaining the approval from the municipality’s Planning Board for future development that was a contingency of the sale. Oclar Prop. LLC v. Atl. View Cemetery Assn. Inc., No. A-0834-23, 2023 N.J. Super. Unpub. LEXIS 746 (App. Div. May 6, 2025).

Facts

In 2014, the plaintiff-respondent, Oclar Properties, LLC (“Oclar”), and the defendant-appellant Atlantic View Cemetery Association, Inc. (“AVC”) entered into a contract that AVC would sell a portion of its cemetery property to Oclar to build and sell five single-family residences in Manasquan Borough and Wall Township. The purchase price was $1,125,000. The agreement had two critical contingencies: first, AVC had to secure the approval of the New Jersey Cemetery Board (“Cemetery Board”) to sell the property and second, Oclar had to obtain subdivision approval from the Planning Board of the Borough of Manasquan (“Planning Board”). Paragraphs 5(B) and 5(C) of the agreement explain the timeline of the contract and what would happen in the event either party did not obtain the necessary approval:

The Buyer shall have three [] months from the date Seller gives Buyer written notice that it has received . . .[Cemetery Board] Approval, to obtain the Development Approval. The Buyer shall be permitted two [] extensions of two [] months each to obtain the Development  Approval upon written request to the Seller received by the Seller not later than ten [] days prior to the expiration of the initial or  extended Development Approval contingency  period, provided, however, that the Buyer demonstrates to the reasonable satisfaction of the Seller that it is diligently pursuing the Approval . . .

In the event the Buyer or the Seller has not obtained the approvals within the contingency periods set forth above, or any agreed upon extension thereof, either Buyer or Seller may terminate this Agreement.

On September 23, 2014, AVC obtained permission from the Cemetery Board. From 2014 through 2021, Oclar spent considerable resources attempting to obtain Planning Board approval, including filing a prerogative writ action. All of this was done with AVC’s express consent to continue past the time specified from the contract. In fact, during hearings and negotiations over this period, AVC permitted Oclar to negotiate on its behalf and was notified of all changes. In March 2021, Oclar and the Planning Board created a term sheet outlining agreed-upon terms for which the record reflects that a deal likely would have been completed in a final hearing. AVC, however, decided to terminate the agreement under paragraph 5(C) in November 2020, months before this final hearing, for the stated reason that Oclar had failed to obtain permission from the Planning Board.

The Trial Court Decision

On June 8, 2021, Oclar filed a complaint against AVC, alleging breach of contract and breach of the covenant of good faith and fair dealing. Oclar sought specific performance from AVC to sell the property. On September 20, 2023, after a six-day bench trial, the trial court held in Oclar’s favor, enforcing the agreement and granting specific performance as a remedy. The ruling also forbade AVC from objecting to terms it had already endorsed during past negotiations at the upcoming final hearing. AVC appealed.

The Appellate Decision

The Appellate Division affirmed the decision of the trial court in its entirety.

On appeal, AVC first argued that because there was no time by which they had to serve a termination notice to Oclar under paragraph 5(C), they could terminate the agreement at any time. However, the Court held that AVC’s decision to allow Oclar to litigate for nearly seven years past the expiration date set forth in 5(C) at considerable cost to Oclar, only to terminate the contract months before an agreement was potentially reached, was in bad faith and a breach of contract and of the implied duty of good faith and fair dealing.

Specifically, the Court found that AVC waived its right to terminate the contract and was estopped from asserting failure to obtain approval as the basis for termination due to its allowing Oclar to work for years to obtain Planning Board approval without complaint and actually supporting its efforts. In fact, the Court noted that “[t]he record … supported the trial court's finding that AVC ‘calculated that they could make a larger profit if they simply canceled this contract’ and not because Oclar had failed to obtain the necessary approvals.”

AVC also argued that specific performance was not available as a remedy to force the sale because the contract was contingent on third party approval. In that context, while the Planning Board’s approval was not final, a tentative settlement had been reached that would have provided for approval. Relying on Gulf Oil Corp. v. Montanaro, the Court held that specific performance could still be entered, albeit with entry of judgment withheld until the Planning Board actually issued approval of the subdivision. 94 N.J. Super. 348, 353 (Ch. Div. 1967).

AVC additionally asked that the price of the ordered sale be increased due to appreciation of the property over the years. However, the Court ruled that because AVC provided no proof that the property was now worth more than the number the parties agreed to, AVC was not entitled to more money from the sale despite the years it took to get to a potential closing. The Court also noted that the parties had previously agreed to a price increase of  $50,000 based on improvements, which further undercut AVC’s argument.

Finally, AVC took issue with the ruling that held they could not object to the terms that Oclar negotiated to gain final approval from the Planning Board before the upcoming final hearing. AVC argued that these changes were unwritten and unsigned changes to the original agreement and that they should therefore be able to object to these terms at the hearing. The Court dismissed this argument and found the changes were negotiated in good faith by Oclar to try and move the deal forward over six years, and AVC was aware of these negotiations and did not object when they occurred.

Takeaway

The Court’s decision in this case to order specific performance before the Planning Board approved the sale was an example of a proper use of the Court’s discretion to obtain an equitable resolution relying principally on the doctrines of waiver and estoppel. This ruling avoided waste and an unjust result considering the seven years of resources Oclar invested in obtaining Planning Board approval, all with AVC’s endorsement. Finally, the decision is a reminder that when seeking damages related to the value of real estate, proper proof is essential. Had AVC put on any proof of the property’s appreciation, the purchase price on the Court-ordered sale may have been increased.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Matthews Florez at mflorez@riker.com or Shelley Wu at swu@riker.com. We acknowledge our Summer Associate Noah Wilk, University of Maryland School of Law, for his valuable contribution to this post.

Do the Amended Ground Water Quality Standards Impact your Remediation?

Posted on by Christie Bowness

What You Need to Know

  • Stricter Standards for Many Constituents: NJDEP adopted more stringent ground water remediation standards for 52 constituents, with seven—including vinyl chloride, a contaminant commonly found in plumes of chlorinated solvents—tightened by an order of magnitude, significantly impacting remediation requirements.
  • Impact on Active and Closed Cases: These changes affect both active and closed remediation cases that address contaminants with newly lowered standards.
  • Phase-In Guidance Issued: NJDEP released two guidance documents outlining conditions under which the prior standards may be applied to active cases, provided certain deadlines and criteria are met.
  • Reopening of Closed Sites: Closed remediation cases may be reopened if the applicable revised standard has been reduced by an order of magnitude as compared to the standard in applied in the remediation and renders previous cleanups insufficient to protect human health or the environment.

The New Jersey Department of Environmental Protection (“NJDEP” or the “Department”) proposed revisions to its Ground Water Quality Standards (“GWQS”) on January 2, 2024. Exactly one year later, on January 2, 2025, NJDEP finalized the regulation amending or establishing ground water quality standards for 73 constituents within Class II-A ground water. These new standards became effective on February 3, 2025, and are the current ground water remediation standards (“GWRS”) under N.J.A.C. 7:26D-2.2, subject to the phase in period discussed below.

The adopted rule established more stringent standards for 52 constituents,  including trichloroethylene (“TCE”), tetrachloroethylene (“PCE”), 1,1-Dichloroethylene (“DCE”), polychlorinated biphenyls, benzene, cobalt, and vinyl chloride. Of these 52 constituents for which the Department adopted more stringent standards, the standards for seven decreased by an order of magnitude: 1,1-biphenyl, cobalt, cyanide (free), 1,3-dichlorobenzene (meta), heptachlor epoxide, methoxychlor, and vinyl chloride. The order of magnitude change in the vinyl chloride remediation standard is particularly significant because vinyl chloride is present at many contaminated sites as a breakdown product of the formerly common solvents TCE and PCE. On the other hand, the standards for 12 constituents became less stringent and NJDEP did not change the GWQS for nine constituents. Additionally, NJDEP established standards for dimethyl phthalate and 4-Chloro-3-methylphenol, which are less stringent than the current interim generic ground water quality criteria for these constituents.

The GWQSs will have significant impacts on both active and closed remediation cases across the state, especially for sites where constituents are present and their standard has been amended by an order of magnitude.

With respect to active remediation cases, the Department has issued two guidance documents discussing how the GWQS will be phased-in. First, NJDEP published Phase-In Period for Use of Ground Water Remediation Standards N.J.A.C. 7:26D, v. 3.0, updating the phase-in timeframes in N.J.A.C. 7:26D-1.4(b) that have been applied to past changes to the GWRS. A person responsible for the remediation (“PRCR”) can use the GWRS in effect before February 3, 2025 for its remediation case if the old standard is not greater than or equal to an order of magnitude than the newly adopted GWRS; a remedial action workplan or remedial action report is submitted before August 3, 2025, which is either certified by an LSRP or approved by the Department; and the PRCR completes the remedial action within the appropriate regulatory timeframe.

Second, NJDEP published its Phase-In Guidance for Initial Ground Water Remedial Action Permit Applications that include Contaminants where the Ground Water Remediation Standard changed by an Order of Magnitude. NJDEP explained that for new Initial Ground Water Remedial Action Permit (“RAP”) applications submitted (or postmarked) before August 3, 2025, it will review the application using the GWRS in effect prior to February 3, 2025. NJDEP explained that it would include in its approval of the RAP that the order of magnitude remedial action protectiveness evaluation needs to be completed prior to and submitted with either the first Remedial Action Protectiveness/Biennial Certification Form or an application for a RAP modification, whichever occurs first. Conversely, if a RAP application is withdrawn or deemed administratively or technically incomplete, the remediation must be conducted using the newly adopted GWRS.

For remediation cases that are currently closed, the case may be reopened if the remediation standard for a constituent present in ground water has decreased by an order of magnitude as compared to the standard used to remediate the site and the previous remediation poses a risk to the environment and human health. See N.J.S.A. 58:10B-13.e. The type of use remedy employed at the site dictates when the order of magnitude evaluation must be completed to determine whether the current remedy is protective or additional remediation is necessary. For sites subject to a restricted use remedy, the evaluation must be conducted as part of the next biennial remedial action protectiveness certification. If the site has an unrestricted use remedy, the evaluation would be conducted when the site “re-enters” the Contaminated Site Remediation and Redevelopment program, for example, if there is a new ISRA trigger for the site.

Licensed Site Remediation Professionals and persons responsible for conducting the remediation should be cognizant of these changes and consider how they may affect any of their active or inactive remediation cases and how they may take advantage of the phase-in period to be grandfathered under the old ground water remediation standards.

For more information, please contact the author, Amelia Whiting, at awhiting@riker.com or any attorney in our Environmental Practice Group.

NJ Appeals Court Clarifies Evidentiary Standards for Residential Nuisance and Trespass Claims

Posted on by Christie Bowness

What You Need to Know

  • For nuisance claims, plaintiffs must demonstrate an "unreasonable interference with the use and enjoyment of another's land" - the invasion must be either "intentional and unreasonable" or unintentional but negligent/reckless.
  • The absence of expert testimony is not necessarily fatal to nuisance claims; courts must consider all available evidence in the record when evaluating these claims, even without expert opinions.
  • The Appellate Division's decision emphasizes the importance of addressing affirmative defenses such as res judicata, collateral estoppel, and apportionment of damages in property disputes that involve prior settlements or judgments.

Introduction

In a recent opinion from the New Jersey Appellate Division, the Court considered an archetypal dispute among adjacent residential neighbors concerning typical claims of nuisance and trespass. In ultimately remanding the case for additional evidentiary analysis on the plaintiff’s nuisance claim, the Appellate Division undertook methodical analysis of the claims’ prima facie elements.  Unger v. Dwyer, A-2212-23, 2025 N.J. Super. Unpub. LEXIS 686 (App. Div. Apr. 28, 2025).

Background

The parties own neighboring properties in Roseland, New Jersey. In 2008, the plaintiff Donald Unger (“Plaintiff”) complained to the Borough of Roseland that stormwater runoff was moving from the neighboring property and causing property damage to his basement and foliage. In the ensuing arbitration, the arbitrator found that the neighbors had altered the elevation of the property which caused the disturbance of the flow of water in a brook behind the neighboring properties.  The arbitrator awarded Plaintiff $28,764 to install four catch basins and $27,225 for damages to foliage.

In 2020, defendants Edward and Sonali Dwyer (the “Defendants”) purchased the neighboring property and repaved their driveway to add  a Belgian block curb, which did not alter the grade or slope of the driveway. The Defendants’ driveway runs along the boundary line separating the properties.

Plaintiff complained that the Defendants’ alteration to the driveway caused water to be diverted onto his property and was causing damage to his trees. Plaintiff alleged that this water damage was the first such problem since the issue with the prior neighbors was resolved through arbitration. In 2021, a tree from another neighboring property fell on both Plaintiff’s and Defendants’ properties. Plaintiff alleged that Defendants improperly trespassed on his property to dispose of branches from the felled tree and killed his plants.

Later that year, Plaintiff filed a complaint raising claims for (i) nuisance due to the redirection of rainwater; (ii) trespass due to an encroaching driveway; and (iii) trespass due to the improper disposal of tree branches. During discovery, Plaintiff retained a professional surveyor, a professional engineer, and an arborist as experts, each of whom prepared reports. In relevant part, the surveyor testified to his estimation of the amount of stormwater runoff affecting Plaintiff’s property, the engineer testified as to the amount of runoff specifically caused by the installation of the Defendants’ Belgian block driveway, and the arborist testified as to damages to the trees.

Following discovery, Defendants moved for summary judgment. The trial court dismissed Plaintiff’s driveway trespass claim after Plaintiff admitted he could not demonstrate any encroachment by the driveway. The court also found that the surveyor and engineer’s expert reports were inadmissible “net opinions” because they consisted of pure speculation, and therefore, dismissed the nuisance claim. Finally, the court dismissed the remaining trespass claim due to lack of evidence. Plaintiff filed an appeal.

Analysis

A nuisance cause of action can be sustained where there is an invasion in another’s interest in the private use and enjoyment of land, and the invasion is either “intentional and unreasonable” or unintentional and negligent or reckless. In other words, a private nuisance “is predicated on the unreasonable interference with the use and enjoyment of another’s land.” Thus, an intentional but reasonable, or entirely accidental invasion would not constitute a nuisance.

On appeal, Plaintiff argued that the lower court erred because he had established a genuine issue of material fact as to whether Defendants altered the runoff in a manner to unreasonably affect the flow of water and that the engineer’s report was not essential to establish Defendants’ liability. The Appellate Division found that, irrespective of the expert opinions being net opinions, the lower court had to consider other facts in the record against the standard for a nuisance cause of action and did not do so. Thus, a remand was in order. The Appellate Division also directed the trial court to make findings on Defendant’s affirmative defenses of res judicata, collateral estoppel and apportionment of damages.

Regarding Plaintiff’s trespass claim relating to branches from the felled tree, the Court found that the evidence showed that the branches were placed on a municipal right of way, not Plaintiff’s property, and that there was no indication that the placing of the branches had damaged Plaintiff’s plants. Thus, the Appellate Division affirmed the lower court’s grant of summary judgment on the trespass claim.

Takeaways

This case is instructive with respect to the typical claims in residential real estate disputes as the Court laid out the prima facie elements for the claims and the evidence needed to overcome summary judgment. Notably, the lack of supporting expert testimony was not, in and of itself, fatal to the Plaintiff’s trespass claim, as the Court remanded the matter for additional analysis based on existing record evidence.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Matthews Florez at mflorez@riker.com, Kori Pruett at kpruett@riker.com or Shelley Wu at swu@riker.com.

 

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