AUGUSTA HOLDINGS, LLC VS. TOWNSHIP OF LAKEWOOD (L-0071-18 AND L-0147-18, OCEAN COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-3228-18
AUGUSTA HOLDINGS, LLC,
Plaintiff-Respondent,
v.
TOWNSHIP OF LAKEWOOD
and THE TOWNSHIP
COMMITTEE OF THE
TOWNSHIP OF LAKEWOOD,
Defendants-Respondents.
__________________________
FAIRWAYS AT LAKE
RIDGE HOMEOWNERS
ASSOCIATION, INC.,
Appellant.
__________________________
Argued September 21, 2020 – Decided May 17, 2021
Before Judges Currier, Gooden Brown and DeAlmeida.
On appeal from the Superior Court of New Jersey, Law
Division, Ocean County, Docket Nos. L-0071-18 and
L-0147-18.
Michele R. Donato argued the cause for appellant.
Afiya Ellington argued the cause for respondent
Augusta Holdings, LLC (Giordano, Halleran & Ciesla,
PC, attorneys; Paul Schneider, Matthew Fiorovanti, and
Afiyfa Ellington, on the brief).
Harold N. Hensel argued the cause for respondents
Township of Lakewood and Township Committee of
the Township of Lakewood (Secare Law Firm,
attorneys; Harold N. Hensel, on the brief).
PER CURIAM
Appellant Fairways at Lake Ridge Homeowners Association, Inc.
(Fairways) appeals from the March 29, 2019 order of the Law Division denying
its motion to: (1) intervene in this action in lieu of prerogative writs filed by
plaintiff Augusta Holdings, LLC (Augusta) against defendants Township of
Lakewood and its Township Committee (Lakewood); (2) vacate the final
judgment entered in favor of Augusta; and (3) reopen and consolidate this action
with an action in lieu of prerogative writs filed by Fairways against Lakewood
that is pending in the Law Division. Both actions challenge an ordinance
regulating the development of Augusta's property. We affirm.
I.
The following facts are derived from the record. Fairways is a
homeowners' association whose members include approximately 1124 property
A-3228-18
2
owners in an age-restricted residential development in Lakewood. The Fairways
development is adjacent to approximately 100 acres of land owned by Augusta
on which is situated a substantial portion of the Eagle Ridge golf course.
Augusta's property is located in the R-40 residential zone of Lakewood.
On December 7, 2017, Lakewood adopted Ordinance No. 2017-51, which
amended and supplemented the township's Uniform Development Ordinance
(UDO) in response to the township having adopted a new master plan. Prior to
the enactment of Ordinance No. 2017-51, the UDO permitted residential
development in the R-40 residential zone with a maximum density of 4.5 units
per gross acre on tracts of at least 100 contiguous acres. This type of residential
development was a permitted conditional use provided the units were age-
restricted.
Section 30 of Ordinance No. 2017-51 (Section 30) allows non-age
restricted development with a different density as a Planned Unit Development
in the R-40 residential zone. According to Section 30, this change is not
effective until certain road and transportation improvements in Lakewood are
completed by local, county, or state authorities. Section 30 does not establish a
timeframe for completion of the transportation improvements. The township
had previously submitted a petition to the State Planning Commission (SPC) for
A-3228-18
3
endorsement of the township's new master plan. SPC granted a conditional
endorsement, provided certain issues, including traffic concerns, were
addressed.
On January 12, 2018, Fairways and other plaintiffs filed an action in lieu
of prerogative writs in the Law Division against Lakewood, Augusta, GDMS
Holdings, LLC (GDMS), of which Augusta is an affiliate, and other defendants
challenging the entirety of Ordinance No. 2017-51, the newly adopted master
plan, and two other ordinances (the Fairways Action). In that action, Fairways
alleges that Ordinance No. 2017-51 violates the Municipal Land Use Law
(MLUL), N.J.S.A. 40:55D-1 to -163, is inconsistent with the SPC's conditional
endorsement of the master plan, and is the result of inside dealing between a
Lakewood Township Committeeman and the principals of Augusta and GDMS.
In addition to challenging the UDO, Fairways seeks to impose a constructive
trust or easement for its benefit on the golf course property. 1
Ten days later, Augusta filed this action in lieu of prerogative writs in the
Law Division against Lakewood challenging Section 30 (the Augusta Action).
1
Fairways filed a separate consumer fraud action alleging causes of action
arising from the marketing of the Fairways development and alleged
representations made to purchasers of homes in the development relative to the
use of the golf course as an amenity or as dedicated open space.
A-3228-18
4
Augusta, which seeks to develop the golf course property with non-age restricted
housing, alleged Section 30 creates an illegal building moratorium under
N.J.S.A. 40:55D-90(b), a provision of the MLUL, because it is an interim zoning
ordinance with an indefinite duration and/or a timed growth control ordinance.
Because Augusta had not yet been served with the complaint in the
Fairways Action, it certified in its complaint pursuant to Rule 4:5-1 that there
were no related cases pending. Its case information statement also did not
disclose the Fairways Action. Lakewood's answer in the Augusta Action,
however, identified the Fairways Action as a pending related case. Augusta did
not amend its Rule 4:5-1 certification after the township filed its answer. There
is no evidence that any party or the court notified Fairways of the Augusta
Action or sought to join Fairways as a party in that action.
Augusta subsequently moved for summary judgment. Lakewood opposed
the motion. The parties agreed there were no disputed material facts and
resolution of the motion by summary judgment was appropriate.
On April 16, 2018, the trial court granted Augusta's motion. Relying on
our holding in Toll Brothers, Inc. v. Township of W. Windsor, 312 N.J. Super.
540 (App. Div. 1998), the court held that Section 30 constituted an illegal
A-3228-18
5
moratorium on development because it effectively blocked development of
Augusta's property indefinitely.
On April 25, 2018, the trial court entered a final judgment in favor of
Augusta severing Section 30 from the UDO. The township did not appeal.
More than ten months later, on February 26, 2019, Fairways moved for
leave to intervene in the Augusta Action, vacate the April 25, 2018 judgment,
and reopen and consolidate the Augusta Action with the Fairways Action, which
was pending before the same judge who decided the Augusta Action. Fairways
argued that it should be permitted to intervene in the Augusta Action under the
mandatory joinder Rule 4:33-1 and the entire controversy doctrine. In addition,
Fairways argued that intervention after entry of final judgment was warranted
because it was unaware of the Augusta Action, the entry of summary judgment,
or Lakewood's decision not to appeal until the Augusta Action was discussed at
a January 2019 public hearing on a developer's application for approval to
develop the golf course property with non-age restricted housing.
In addition, Fairways argued that the April 25, 2018 judgment should be
vacated pursuant to Rule 4:50-1 (a), (c) and (d). In support of its position,
Fairways argued the judgment was void because Augusta's failure to amend its
Rule 4:5-1 certification amounted to fraud, misrepresentation, or misconduct of
A-3228-18
6
an adverse party and because it was entered without participation of a necessary
party. Augusta and GDMS opposed the motion.
On March 15, 2019, the trial court issued an oral opinion denying the
motion. An April 8, 2019 written opinion supplements the court's reasoning.
The court concluded that Fairways's intervention in the Augusta Action was not
mandatory because its interest in the validity of Section 30 was no different from
that of any other property owner in Lakewood and was represented by
Lakewood's counsel. The court also concluded Fairways's ability to prove its
claims in the Fairways Action was not harmed by the judgment, which
concerned only the discrete issue of the validity of Section 30. Fairways's
broader challenges to the UDO, master plan, and other ordinances concern
claims not raised in the Augusta Action or addressed by the court in that matter.
The court noted the acknowledgment by Augusta, GDMS, and the
intended developer of the golf course property that if Fairways is successful in
striking down the entire UDO in the Fairways Action, any land use approvals
issued for the golf course property under the UDO would be invalid. The court
found the potential developer was pursuing approvals for the golf course
property at its own risk and that Fairways would have the right to appeal any
A-3228-18
7
approvals issued with respect to the property and could seek to join any such
challenges with the Fairways Action.
The court also rejected Fairways's argument that it had established
grounds to vacate the judgment pursuant to Rule 4:50-1. The court rejected
Fairways's fraud claims, finding that while Augusta had an obligation to amend
its Rule 4:5-1 certification when it became aware of the Fairways Action, any
harm from its failure to do so was eliminated by the identification of the
Fairways Action in Lakewood's Rule 4:5-1 certification.
Finally, the court acknowledged that when it decided Augusta's summary
judgment motion it had not seen Lakewood's certification. However, it found
that even if it had been aware of the Fairways Action, it would not have ordered
or permitted Fairways to join the Augusta Action because "given the narrow
issue that was before" the court and the township's representation of the interests
of all of its property owners, doing so would not have been "fair, equitable, or
required by the entire-controversy doctrine . . . ."
This appeal followed. Fairways makes the following arguments.
POINT I
THE LAW DIVISION ERRED BY VIOLATING THE
ENTIRE CONTROVERSY DOCTRINE AND THE
COURT RULES.
A-3228-18
8
POINT II
THE LAW DIVISION ERRED IN REFUSING TO
ALLOW THE FAIRWAYS ASSOCIATION TO
INTERVENE.
POINT III
THE MOTION JUDGE ERRED IN REFUSING TO
ALLOW PERMISSIVE INTERVENTION.
POINT IV
THE LAW DIVISION ERRED IN REFUSING TO
VACATE SUMMARY JUDGMENT.
II.
We begin with Fairways's argument that it was entitled to intervene in the
Augusta Action as of right. According to Rule 4:33-1,
[u]pon timely application anyone shall be permitted to
intervene in an action if the applicant claims an interest
relating to the property or transaction which is the
subject of the action and is so situated that the
disposition of the action may as a practical matter
impair or impede the ability to protect that interest,
unless the applicant's interest is adequately represented
by existing parties.
"Intervention after final judgment is allowed, if necessary, to preserve some
right which cannot otherwise be protected." Chesterbrooke Ltd. P'ship v.
Planning Bd., 237 N.J. Super. 118, 123 (App. Div. 1989). In addition, "[w]hen
an intervenor seeks intervention 'after the final judgment' . . . the critical inquiry
A-3228-18
9
is simply 'whether in view of all the circumstances the intervenor acted promptly
after the entry of final judgment.'" Id. at 125 (quoting United Airlines, Inc. v.
McDonald, 432 U.S. 385, 387, 395-96 (1977)). Where the elements of Rule
4:33-1 have been met, intervention is mandatory. Id. at 124.
Having carefully reviewed the record in light of these legal principles, we
conclude the trial court correctly found that Fairways did not have a right to
intervene in the Augusta Action. While the property owners who are members
of Fairways have an interest in the validity of Section 30, we agree with the trial
court's finding that their interest, like that of all Lakewood property owners, was
adequately represented by the township in the Augusta Action.
In addition, Fairways's challenges to the validity of the entire UDO,
master plan, and other ordinances were not impaired by the judgment entered in
the Augusta Action. The judgment addresses only the validity of Section 30.
The court made no determination with respect to the validity of the remaining
provisions of the UDO, the master plan, or the other ordinances at issue in the
Fairways Action. This includes Fairways's claim, in light of the holding in the
Augusta Action, that Section 30 was an integral component of the UDO and
cannot be severed from it without invalidating the entire ordinance.
A-3228-18
10
Fairways is not, therefore, in the same position as the intervenors in
Chesterbrooke or CFG Health Sys., LLC v. Cty. of Essex, 411 N.J. Super. 378,
385-86 (App. Div. 2010). In those cases, private parties sought to intervene in
actions in which government entities that were representing their interests
elected not to appeal adverse trial court decisions. We held that intervention
was required in those cases because the intervenors otherwise would have no
recourse to advance their interests on appeal. Here, however, Fairways's
interests, which extends beyond the limited issue decided in the Augusta Action,
are being advanced in the Fairways Action, where its broader challenges to the
UDO, master plan, and other ordinances are pending. Any argument Fairways
has with respect to Section 30 may be raised in its pending action.
Nor do we agree with Fairways's argument that the trial court abused its
discretion by denying its request for permissive intervention. According to Rule
4:33-2,
[u]pon timely application anyone may be permitted to
intervene in an action if the claim or defense and the
main action have a question of law or fact in common.
. . . In exercising its discretion the court shall consider
whether the intervention will unduly delay or prejudice
the adjudication of the rights of the original parties.
An additional consideration is "whether intervention will eliminate the need for
subsequent litigation." N.J. Dep't of Env't Prot. v. Exxon Mobil Corp., 453 N.J.
A-3228-18
11
Super. 272, 286 (App. Div. 2018) (quoting Zirger v. Gen. Accident Ins. Co., 144
N.J. 327, 341 (1996)). The rule "vests considerable discretion in the trial court."
Ibid. (quoting Zoning Bd. of Adjustment v. Evesham Twp. Council, 86 N.J. 295,
299 (1981)). We review a trial court's decision to deny permissive intervention
for an abuse of discretion. N.J. Div. of Youth & Family Servs. v. D.P., 422 N.J.
Super. 583, 590-91 (App. Div. 2011).
Fairways's intervention in the Augusta Action would reopen a long closed
matter, negate the finality obtained by Augusta with respect to the validity of
Section 30, and delay resolution of Augusta's claims. In addition, Fairways's
intervention would not eliminate the need for additional or subsequent litigation,
given that the Fairways Action was pending before the Augusta Action was filed
and presumably would continue after intervention.
We are not persuaded by Fairways's argument that reversal of the trial
court's decision is mandated by the entire controversy doctrine. The doctrine is
designed to promote fairness to the parties, judicial efficiency, and complete and
final dispositions by avoiding piecemeal litigation. DiTrolio v. Antiles, 142 N.J.
253, 267 (1995). "The twin pillars of the entire controversy doctrine are fairness
to the parties and fairness to the system of judicial administration." Gelber v.
A-3228-18
12
The Zito Partnership, 147 N.J. 562, 565 (1997) (citing Joel v. Morrocco, 147
N.J. 546, 555 (1997)).
Rule 4:30A provides that "[n]on-joinder of claims required to be joined
by the entire controversy doctrine shall result in the preclusion of the omitted
claims to the extent required" by the doctrine. Whether or not the doctrine
requires judicial action is an equitable determination, subject to the trial court's
discretion. Oliver v. Ambrose, 152 N.J. 383, 395 (1998); 700 Highway 33, LLC
v. Pollio, 421 N.J. Super. 231, 238 (App. Div. 2011). While the doctrine reflects
the Supreme Court's "long-held preference that related claims and matters
arising among related parties be adjudicated together[,]" Kent Motor Cars, Inc.
v. Reynolds & Reynolds, Co., 207 N.J. 428, 443 (2011), "equitable
considerations can relax mandatory-joinder requirements when joinder would
be unfair." Prevratil v. Mohr, 145 N.J. 180, 190 (1996).
As discussed above, the Augusta Action concerned a challenge to a
discrete provision of the UDO. The resolution of Augusta's claims did not
impede Fairways's ability to advance its multifaceted challenge to the entire
UDO, master plan, and other ordinances. Because Fairways was not apprised
of the Augusta Action and, as a result, was unable to assert any arguments it
may have had in the Augusta Action, it would not be precluded under the entire
A-3228-18
13
controversy doctrine from raising those arguments in the Fairways Action. It
was, therefore, within the trial court's discretion to conclude that it would be
inequitable and unnecessary to permit intervention and reopen the Augusta
Action, which the parties reasonably believed to be final.
With respect to Fairways's motion to vacate the judgment pursuant to Rule
4:50-1, the rule provides in relevant part:
[o]n motion, with briefs, and upon such terms as are
just, the court may relieve a party or the party’s legal
representative from a final judgment or order for the
following reasons: (a) mistake . . . ; (c) fraud (whether
heretofore denominated intrinsic or extrinsic),
misrepresentation, or other misconduct of an adverse
party; [or] (d) the judgment or order is void . . . .
An application to set aside an order pursuant to Rule 4:50-1 is addressed
to the motion judge's sound discretion, which should be guided by equitable
principles. Hous. Auth. v. Little, 135 N.J. 274, 283 (1994). A trial court's
determination under Rule 4:50-1 is entitled to substantial deference and will not
be reversed in the absence of a clear abuse of discretion. US Bank Nat'l Ass'n
v. Guillaume, 209 N.J. 449, 467 (2012). To warrant reversal of the court's order,
Fairways must show that the decision was "made without a rational explanation,
inexplicably departed from established policies, or rested on an impermissible
basis." Ibid. (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)
A-3228-18
14
(internal quotations omitted)). In determining whether to vacate a judgment,
courts must balance "the strong interests in the finality of litigation and judicial
economy with the equitable notion that justice should be done in every case."
Jansson v. Fairleigh Dickinson Univ., 198 N.J. Super. 190, 193 (App. Div.
1985).
Fairways argues the judgment should be vacated under subsection (c) of
the rule because it was obtained by fraud, misrepresentation, or misconduct of
an adverse party. It bases its argument on the claim that Augusta intentionally
failed to amend its Rule 4:5-1 certification to prevent Fairways from seeking
intervention. Rule 4:5-1(b)(2) provides in relevant part as follows:
Each party shall include with the first pleading a
certification as to whether the matter in controversy is
the subject of any other action pending in any court
. . . and, if so, the certification shall identify such
actions and all parties thereto. Further, each party shall
disclose in the certification the names of any non-party
who should be joined in the action pursuant to [Rule]
4:28 . . . . Each party shall have a continuing obligation
during the course of the litigation to file and serve on
all other parties and with the court an amended
certification if there is a change in the facts stated in the
original certification. The court may require notice of
the action to be given to any non-party whose name is
disclosed in accordance with this rule or may compel
joinder pursuant to [Rule] 4:29-1(b). If a party fails to
comply with its obligations under this rule, the court
may impose an appropriate sanction including
dismissal of a successive action against a party whose
A-3228-18
15
existence was not disclosed or the imposition on the
non-complying party of litigation expenses that could
have been avoided by compliance with this rule.
The purpose of the rule is to implement the philosophy behind the entire
controversy doctrine. Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo,
Hyman and Stahl, P.C., 237 N.J. 91, 109 (2019) (quoting Pressler & Verniero,
Current N.J. Court Rules, cmt. 2 on R. 4:5-1 (2021)). In addition to ordering
the joinder of parties or claims, "a trial court, once informed of related actions,
can employ various procedural tools to prevent excessively complicated or
unfair litigation." Gelber, 147 N.J. at 566. Those tools include: (1) taking
measures to clarify the case before it and in the related proceeding; (2) defining
the limits of discovery to avoid duplication of overlapping witnesses or
evidence; (3) consideration of the applicability of collateral estoppel in respect
to factual determinations bearing on the claims and defenses of the respective
parties; (4) staying one or the other proceeding to ensure consistent results in
both proceedings; and (5) fostering mediation among the parties. Ibid. There
is, however, no mandatory provisions in the Rule requiring action by the court
or notice to any party in the related matter.
At the time it filed its complaint, Augusta had not been served with the
complaint in the Fairways Action. Its initial Rule 4:5-1 certification, therefore,
A-3228-18
16
was not fraudulent, a misrepresentation, or misconduct. In addition, the
existence of the Fairways Action was disclosed in Lakewood's answer. At that
point, the intent of the Rule was met. The court had notice of the related action.
Moreover, the trial court found that if it had noticed Lakewood's certification it
would not have required the parties to notify Fairways of the Augusta Action or
require its intervention, given the narrow scope of Augusta's challenge to
Section 30 and Lakewood's representation of Fairways's interests.
Augusta, therefore, gained no advantage by its failure to amend its Rule
4:5-1 certification when it became aware of the Fairways Action. "Every fraud
in its most general and fundamental conception consists of the obtaining of an
undue advantage by means of some act or omission that is unconscientious or a
violation of good faith." Jewish Ctr. v. Whale, 86 N.J. 619, 624 (1981). The
record does not support Fairways's allegations of fraud, misrepresentation or
misconduct in Augusta's failure to amend its certification.
Nor do we agree with Fairways's argument that the judgment was void
because Fairways was not joined as party in the Augusta Action. We have held
that where a necessary party is not served with a complaint and given the
opportunity to represent its interests, a final order affecting the party's rights is
void under Rule 4:50-1(d). Rose v. Arujo, 260 N.J. Super. 458, 462 (App. Div.
A-3228-18
17
1992). However, as explained above, Fairways was not a necessary party to the
Augusta Action, its interests were adequately represented by Lakewood, and its
ability to pursue its broader claims in the Fairways Action was not impeded by
entry of the judgment. We reach a similar determination with respect to
Fairways's claims that the judgment was entered as the result of a mistake.
To the extent we have not specifically addressed any of Fairways's
remaining arguments, we conclude they lack sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
A-3228-18
18