RRR NEWGEN, LLC VS. RESOL53 LLC (C-000053-19 AND C-000055-19, MIDDLESEX COUNTY AND STATEWIDE) (CONSOLIDATED) ( 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NOT FOR PUBLICATION WITHOUT THE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-3867-19
A-0175-20
RRR NEWGEN, LLC,
Plaintiff-Respondent,
v.
RESOL53 LLC and PETER J.
RICCIO, an Individual,
Defendants-Appellants.
___________________________
RESOL53, LLC,
Plaintiff-Appellant,
v.
POCHI CORPORATION t/a
RAY'S PHARMACY,
RRR NEW GEN: LLC, and
ASHISH PATEL,
Defendants-Respondents.
___________________________
Argued (A-3867-19) and Submitted (A-0175-20)
July 27, 2021 – Decided September 13, 2021
Before Judges Rothstadt and Enright.
On appeal from the Superior Court of New Jersey,
Chancery Division, Middlesex County, Docket Nos. C-
000053-19 and C-000055-19.
Michael Confusione argued the cause for appellants
(Hegge & Confusione, LLC, attorneys; Michael
Confusione, of counsel and on the briefs).
Eric B. Levine argued the cause for respondents
(Lindabury, McCormick, Estabrook, & Cooper,
attorneys; Eric B. Levine, of counsel and on the briefs).
PER CURIAM
These two appeals, which we have consolidated for the purposes of
writing one opinion, arose from an ongoing dispute about a parking easement
on property situated between two commercial properties in Dunellen granted by
deed in 1987, and its written, unrecorded modification agreement dated July 9,
2012 (2012 agreement). In A-3867-19, (the easement action) defendant
RESOL53, LLC (RESOL53), the owner of the benefitted property (Lot 1), and
its member, Peter Riccio (collectively defendants), appeal from the Chancery
Division's June 10, 2020 order granting summary judgment to the owner of the
burdened property, (Lot 2), RRR Newgen, LLC (RRR Newgen), of which
Ashish Patel is a member (collectively plaintiffs). The June 10 order also
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2
declared that the 2012 agreement between Peter1 and Lot 2's previous owner was
unenforceable against plaintiffs because plaintiffs did not have notice of the
2012 agreement prior to purchasing Lot 2 in 2018.
In A-0175-20, (the enforcement action) defendants appeal from the
Chancery Division's September 16, 2020 order denying their motion to enforce
litigant's rights and further ordering that Peter and his son, Carl Riccio, are
barred from interfering with the use and management of the parking lot and from
having any contact with any of plaintiffs' tenants or customers, except as bona
fide customers of plaintiffs' tenants.
We reverse the grant of summary judgment to plaintiffs in the easement
action and vacate the orders regarding enforcement of the easement because we
conclude the motion record established there was a genuine dispute as to a
material fact about whether plaintiffs had notice of the 2012 agreement.
I.
The only issue before the motion judge on summary judgment in the
easement action was whether the owner of Lot 2 had sufficient notice of the
modification agreement. With that issue in mind, we summarize the facts,
1
We refer to various individuals involved in these matters by their first names
to avoid any confusion created by their common last names with other
individuals to which we refer.
A-3867-19
3
relating to the creation of the easement and its modification in the 2012
agreement, and that agreement's impact on defendants' use of plaintiffs'
property. We do so in the light most favorable to defendants as the parties
opposing summary judgment.2 Ben Elazar v. Macrietta Cleaners, Inc., 230 N.J.
123, 135 (2017).
The 1987 Easement
Prior to 1987, A&J Enterprises, a general partnership, in which Peter was
a partner, owned Lot 1 and Lot 2 3 as well as the parking lot on Lot 2 that was
situated between the two properties' buildings. He also owned and operated
Towne Pharmacy, which occupied the only building on Lot 1, along with a
sandwich restaurant.
2
We recognize that where, as here, a motion judge is confronted with essentially
cross-motions for summary judgment, a party's argument on appeal, like
defendants assert here, that material issues of fact existed is typically
undermined by the filing of the cross-motion. See Spring Creek Holding Co. v.
Shinnihon U.S.A. Co., 399 N.J. Super. 158, 177 (App. Div. 2008); Morton Int'l,
Inc. v. Gen. Accident Ins. Co. of Am., 266 N.J. Super. 300, 323 (App. Div.
1991), aff'd, 134 N.J. 1 (1993). Here, however, as discussed infra, the facts
presented on summary judgment were disputed.
3
Lot 1 is located at 2-16 Washington Avenue, and is designated as Lot 1, Block
86 on the Tax Map of the Borough of Dunellen. Lot 2 is located at 233-257
North Avenue, and is designated as Lot 2, Block 86 on the same Tax Map.
A-3867-19
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In November 1987, A&J Enterprises sold Lot 2 and the parking lot to New
Dunellen Associates. In the deed transferring title, A&J Enterprises reserved
for its own benefit a nonexclusive easement permitting its use of Lot 2's parking
lot subject to restrictions. The deed described the easement area by metes and
bounds and relevant to the issues on appeal, it stated the following:
In consideration of the terms and conditions of the
Contract of Sale between the parties herein, the Grantee
hereby grants and conveys to the Grantor a
nonexclusive easement for customer parking and right
of way in the existing parking lot on Lot 2 . . .
....
Said nonexclusive easement and right of way is limited
to short term maximum two-hour parking for customers
and shoppers also patronizing the business conducted
in the building located on [Lot 1] . . . provided that such
use of said [Lot 1] is a pharmacy business.
TOGETHER with the right of ingress thereto and
egress therefrom, along, on and within the said
nonexclusive easement and right of way, for any and all
purpose connected with said patronizing of the
pharmacy business being conducted on said [Lot 1].
Said nonexclusive easement and right of way shall
inure to the benefit of the owner of the building located
at said Lot 1, Block 86, its heirs, assigns or successors
in title, interest or possession for as long as a pharmacy
business is conducted on said Lot 1, Block 86. This
nonexclusive easement and right of way shall also inure
to the benefit of any operator of the pharmacy business
located on said Lot 1, Block 86. Said parking lot shall
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be utilized by customers and shoppers from businesses
conducted on said Lot 1, Block 86, provided said use is
a pharmacy business, as well as said Lot 2, Block 86.
Subject to conditions and limitations set forth herein,
this nonexclusive easement and right of way shall run
with the land and bind the Grantee, its successors and
assigns, in title, possession and its heirs. It is expressly
understood and agreed that the parking facility shall not
be used or cause to be used for a parking lot for
employees or long-term commuter parking.
IN ADDITION, that the Grantor shall not be charged
any cost or expense beyond the consideration set forth
herein for the nonexclusive easement and right of way,
and the nonexclusive easement holder shall not be
responsible to maintain or pay to maintain the
nonexclusive easement and right of way in good
condition and/or free of snow and debris.
The deed also restricted the Lot 2 owner from allowing certain businesses from
being operated on its property, including a pharmacy.
The 2004 Sale of Lot 2 and the 2012 Agreement
After the conveyance, A&J Enterprises maintained ownership of Lot 1 4
and Peter operated Towne Pharmacy from its only building. In June 2004, New
Dunellen Associates sold Lot 2 to UMI Enterprises. Girish Patel 5 was a member
4
At some point in time, A&J Enterprises transferred title of Lot 1 to Peter, who
sometime thereafter created RESOL53. Carl is that entity's managing member.
Peter was also a member.
5
Girish is not related to Ashish.
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of UMI Enterprises at the time. The 2004 deed to UMI incorporated the same
language about the easement as was stated in the 1987 deed.
At some point after UMI bought Lot 2, Peter sought to expand the building
on Lot 1, which would impact the parking lot. He approached Girish with
changes he wanted to make to the building that required alterations to the
parking lot and modifications to the 1987 easement. During the ensuing
conversations, Peter was represented in conversations with Girish by Carl, who
was a practicing lawyer at the time and acted as a "go between" for Peter.
According to Carl's deposition testimony, Peter negotiated for himself. Peter
and UMI, through Girish, entered into the 2012 agreement on July 9, 2012, just
before the Dunellen Board met and granted approval for the renovations. The
board's approval was memorialized in an August 27, 2012 resolution.
The terms of the 2012 agreement were only set forth in the July 9, 2012
letter drafted by UMI's attorney. The letter explained that the 1987 easement
would be "modified to permit [Peter's] customers and employees to use the
parking lot [and t]he easement will run with the land." The letter also explained
that the parties agreed that Peter would pay for a share of the costs of cleaning
the parking lot, snow removal, and electricity. Additionally, Peter could build
a sidewalk, the two rows of parking next to UMI's building and the two rows of
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parking next to Peter's building could be reserved for two-hour parking, and they
could install appropriate parking signage as well. The last term read: "the
foregoing shall be incorporated in a form of Easement Agreement to be recorded
in the Middlesex County Clerk's Office."
In the conclusion of the letter, UMI's attorney wrote: "If acceptable, I ask
that the parties sign and return this letter to me. I will then prepare a draft of
the Easement Agreement." The letter was addressed to and countersigned by
Peter and made no mention of A&J Enterprises or RESOL53. Girish signed the
letter on behalf of UMI. The parties do not dispute that there was no evidence
that an easement agreement was ever prepared or recorded. It was also
undisputed that the physical alterations to the parking lot required to be
undertaken by Peter, including the installation of sidewalks, were at least
commenced, if not completed by 2018.
Sale of Towne Pharmacy in 2014
In 2014, Peter sold Towne Pharmacy to Mahendra Patel, who was the sole
member of Pochi Corporation. After that sale, Peter maintained ownership of
Lot 1 and the pharmacy became a tenant.
At his deposition, Mahendra, who speaks limited English, testified he was
assisted in the sale by his daughter, son, and his son-in-law, Ashish. After the
A-3867-19
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sale, Mahendra changed the name of the pharmacy to Ray's Pharmacy.
Mahendra was assisted in operating Ray's Pharmacy by his children and Ashish
because Mahendra was primarily situated in London at that time. Mahendra was
unaware of any agreements affecting the pharmacy's or Lot 2's use of the parking
lot.
According to Carl's deposition testimony, he first met Ashish when
Mahendra was looking to buy the pharmacy from Peter in December 2013. Carl
remembered showing Ashish around the pharmacy and the property, including
the parking lot. He testified that he told Ashish they had a parking agreement
through a deed, as well as a parking lot agreement with their "neighbors" for the
customers to park. Carl also said that he told Ashish they reserved the third row
for employee parking. He did not remember if Mahendra, Ashish, or Mahendra's
children saw a copy of the deed, and he did not remember giving them a copy
of the 2012 agreement. He did remember telling them about the existence of the
agreement as well as the site plan approval process.
Ashish testified that he did not recall when he first spoke to Carl, and only
remembered speaking to him once or twice. As to Ashish's involvement with
the pharmacy, he helped when Mahendra asked, but he was not involved in
Mahendra's purchase, beyond discussing things Mahendra's attorney told him.
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He estimated that he went to the pharmacy about five or six times per year
between 2014 and 2018.
Sale of Lot 2 in 2018 & Subsequent Parking Disputes
In 2018, Girish agreed to sell Lot 2 to Ashish. Ashish bought Lot 2 on
June 7, 2018, and a deed was recorded on June 13, 2018, placing title in the
name of RRR Newgen. It was undisputed that the title search relating to the
purchase only revealed the 1987 recorded easement and did not reflect the
existence of the 2012 agreement. It is also undisputed that after the conveyance,
Ray's Pharmacy relocated to a premises on North Avenue, two lots over from
RESOL53's building on Lot 1 and that RESOL53 leased the premises formerly
occupied by Ray's Pharmacy to Devine's Pharmacy. At one point, there was a
Ray's Pharmacy van parked in the lot on Lot 2.
Girish and Ashish had varying accounts of their discussions prior to the
sale. According to Ashish, he did not know much about buying commercial
property because this was his first purchase of that type. He did not have any
conversations with Girish about the parking lot or parking in general. He
believed he inspected the building and the parking lot once before buying the
property. He never received an email that included the 2012 agreement and was
unaware of the agreement, although he did receive from Girish Lot 2's tenant
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leases and the 1987 deed. Ashish had a title search completed and he requested
information from Girish as part of his due diligence. Ashish did not recall seeing
parking signs in the lot.
According to Girish's deposition testimony, in March 2018 he sent Ashish
an email that attached the 2012 agreement because they were "talking about the
easement" and Girish "told [Ashish] there's some changing in [the] easement"
and that he would send Ashish a "copy to memorandum" that was "a new
easement that we sign[ed]." However, Girish also confirmed that "there [were
no] conversations that led up to [him] sending this email," but he sent the email
only because the document was "very important for anybody buying [his]
property." However, he also stated that he did not have any conversation with
Ashish about the March 2018 email or about the easement agreement, because
Ashish saw all of the documents when they first met, and Girish sent the 2012
agreement by email. Although Girish did not know the exact date they met, he
recalled that when they did, Ashish asked for "all the paperwork" and Girish
gave him the 2012 agreement and other documents, including the leases.
However, Girish received an email from Ashish requesting various
documents in May 2018, two months after he sent the March 2018 email. In
response, he provided Ashish with all of the documents requested. He could not
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recall specifically sending Ashish the 2012 agreement in response to that email,
but he did give Ashish whatever Ashish asked him for, although he did not have
a copy of his response to Ashish's email. He also testified that in response to
the email from Ashish asking for twenty-two documents, Girish gave him the
documents in person, but he did not recall when or where that took place. He
also did not know if he produced all twenty-two documents at once. Although
Girish also stated that he did not remember if he provided the 2012 agreement
when Ashish asked for all of the documents, he did with his email in March
2018. However, he had no read receipt or delivery receipt from the March 2018
email.
Moreover, Girish confirmed that "after he showed [Ashish] the paper copy
of [the 2012 agreement, he] did [not]follow-up with the email, sending him the
copy as well." He also could not remember what conversations he had with
Ashish about the 2012 agreement. In addition, Girish believed that Ashish never
asked him about restrictions on the parking and could not recall if he ever had
any conversation with Ashish about who was allowed to park on the lot. He also
did not remember if he sent Ashish any documents after closing the sale of Lot
2, or whether he had conversations with Ashish about restrictive covenants or
not being able to run certain businesses in the property either. When asked if in
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May 2018 when Ashish asked for information as part of his due diligence, Girish
told Ashish that he had already provided that information, Girish stated that he
did not know.
The Litigation
After Ashish acquired Lot 2 in 2018, he, Peter, and Carl became embroiled
in disputes over parking in Lot 2's parking lot and the towing of automobiles
from the lot at Ashish's request. Each party had its own view of the
circumstances surrounding those disputes, which at times required police
intervention. Carl believed the parking issues arose after Mahendra took
ownership of the pharmacy and before Ashish ever bought Lot 2. Ashish
testified that the parking issues arose around July or August of 2018, shortly
after he purchased Lot 2. However, it is undisputed that the resolution of those
disputes turned on whether Ashish was bound by the 2012 agreement as
compared to the original 1987 easement.
As a result of those disputes, on March 29, 2019, RRR Newgen filed a
complaint in the easement action, seeking a judgment "[d]eclaring that
[defendants] are obligated and bound to honor" the 2004 deed, which
incorporated the same language as the 1987 deed. The complaint also sought an
injunction prohibiting RESOL53 and Peter from using the Lot 2 property,
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"namely the parking lot thereon, in any manner inconsistent with the subject
[1987] easement," and ordering them to immediately remove the parking signs
placed around Lots 1 and 2. RRR Newgen also sought damages and attorneys'
fees.
In the complaint, RRR Newgen alleged that defendants had "claimed
exclusive right to utilize certain portions of the parking lot," declared certain
rows of parking unavailable for plaintiff and that other rows could only be used
by employees and posted signs around the parking lot indicating that spots could
only be used for certain businesses. RRR Newgen also alleged that Peter had
allowed and continued to allow customers from stores other than the pharmacy
to use the parking lot, which violated the easement. Defendants answered and
filed a counterclaim, seeking a judgment "[c]onfirming the use and
responsibilities regarding the adjoining parking lot as set forth in [the 2012
agreement]."
Subsequently, RESOL53 filed a complaint commencing the enforcement
action,6 and in July 2019 amended that pleading, naming Pochi Corporation
trading as Ray's Pharmacy, RRR Newgen and Ashish as defendants in that
action. In the amended complaint, RESOL53 alleged that the named defendants
6
We have not been provided with a copy of the original complaint.
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had knowledge of the 2012 agreement from Ashish's experience working at
Ray's Pharmacy while it was RESOL53's tenant, and because of Peter's
performance of the obligations under the 2012 agreement, plaintiffs should be
estopped from denying it existence and the 2012 agreement should be enforced.
The amended complaint alleged that "[d]espite knowing of the restrictions
prohibiting a pharmacy from operating Lot 2," Pochi Corporation, RRR
Newgen, and Ashish parked a van advertising for Ray's Pharmacy near the
entrance to Devine's Pharmacy in the parking lot. The complaint did not
mention anything about Girish providing a copy of the 2012 agreement to
Ashish.
The complaint also sought enforcement of the restrictive convenant in the
1987 easement that barred the owner of Lot 2 from leasing to a pharmacy. The
complaint demanded a judgment enforcing the 2012 agreement, preventing
plaintiffs from "operating or advertising competing businesses in Lot 2," barring
plaintiffs from harassing RESOL53' employees and tenants and their customers,
and awarding fees and costs. The amended complaint also asserted a claim for
damages for tortious interference, unclean hands, and breach of the covenant of
good faith and fair dealing. RRR Newgen filed an answer, and the case was
later consolidated with the easement action.
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On May 14, 2020, both RRR Newgen and RESOL53 filed motions for
summary judgment in the easement action. RRR Newgen's motion was
supported in part by a certification from Ashish. He certified that he obtained a
title insurance policy and that a title search was conducted before he purchased
Lot 2, which revealed that Lot 2 was "subject to certain easements that were
recorded in the chain of title." Specifically, there were four easements—two
recorded in 1959, one recorded in 1987, and one recorded in 2004. He also
stated that no other easements appeared in the results of the title search. Ashish
also certified that prior to the initiation of this lawsuit, he had no knowledge of
the 2012 agreement. In addition, he was not an owner of Pochi Corporation and
he denied that he ever harassed or interfered with any of the tenants or customers
of RESOL53.
Defendants filed their motion for summary judgment and supported their
motion in part with an exhibit that consisted of a print-out of an email from
Girish to Ashish, sent on March 14, 2018. The email made no mention of the
2012 agreement and only showed that a file designated as "2018-03-12 19-
35.pdf" had been attached to the email. However, defendants also included a
copy of the 2012 agreement as part of the same exhibit, inferring that it was the
document attached to the email. In further support of that contention, as part of
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their statement of undisputed material facts, defendants cited to Girish's
deposition testimony that he informed Ashish of the 2012 agreement and he
provided him with copy of that agreement.
Plaintiffs submitted a certification from Ashish in opposition to
defendants' motion for summary judgment. Ashish stated that he did not have
any conversations with Girish about the parking lot, and that no one gave him
the signed 2012 agreement, until after the litigation began.
On June 5, 2020, the Chancery judge heard oral argument on the motions.7
During oral argument, the judge rejected defendants' contention that Ashish
received and read the 2012 agreement prior to purchasing Lot 2, which gave
notice to Ashish of the modifications to the 1987 easement. He rejected the
contention that receiving the 2012 agreement would have been notice as well.
The judge granted plaintiffs' motion and five days later entered an order
memorializing his decision.
In the order, the motion judge dismissed RESOL53's complaint under the
enforcement action and defendants' counterclaim in the easement action,
declared the 1987 easement to be in "full force and effect as recorded and
7
We note here that in many instances where the Chancery judge is speaking the
transcript reads "(Indiscernible)."
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unmodified" and that it bound the parties and all subsequent purchasers of Lot
2 regarding their use of Lot 2's parking lot, and that the 2012 agreement had "no
force and effect upon and does not govern" the parties' or any subsequent
owners' use of the parking lot. The order further barred the 2012 agreement
from being recorded but required that the order be recorded.
After the June 2020 order was entered, the parties continued to have
disagreements over the parking lot, and the restrictions in the 1987 easement.
The disagreements culminated in RESOL53 filing a motion in the enforcement
action to enforce litigants' rights against Pochi Corporation, RRR Newgen, and
Ashish on August 5, 2020. RESOL53, through certifications from Carl and
Peter, alleged that RRR Newgen was violating the easement rights by Ashish
having cars towed and directing employees and long-term commuters to park in
the lot. In response, RRR Newgen filed a cross-motion for the same relief. The
parties' motions were supported by their representatives' certifications, and those
from tenants and a towing company detailing how the parties' dispute over the
parking rights was causing hostile actions being taken by both sides, including
disallowing tenants to park in authorized spaces, harassing tenants, posting of
improper parking restrictions, the towing of vehicles, and the "aggressive"
interference of those towing operations.
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On August 28, 2020, the Chancery judge heard arguments on the parties'
motions and ultimately denied RESOL53's motion, disagreeing with defendants'
arguments that the 1987 easement did not limit parking to pharmacy customers
and that the deed restricted the Lot 2 owner from allowing employee parking.
The judge also concluded that the parking lot could still be used for pharmacy
parking, but that Peter had no rights to control the parking lot. According to the
judge, Peter "doesn't have any rights anymore. He transferred the corporation.
He doesn't have personal rights. He isn't the person who owns the property
anymore. He has no rights at all . . . [b]ecause it's the grantor." The judge
clarified that he was not ruling "that there is no right for pharmacy parking," but
was holding that Peter "has no rights to control."
As to the towing of customer vehicles, the judge did not find that Ashish
was violating the easement because RESOL53 did not submit any evidence that
pharmacy customer's cars, as compared to other business invitees, were being
towed. The judge explained that Peter's certification was not sufficient evidence
because he did not have any knowledge of what businesses those customers were
patronizing, and RESOL53 did not submit any certifications from customers or
tenants saying that their cars were towed. The judge then denied defendants'
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motion to enforce and granted plaintiffs' cross-motion and entered an order
memorializing that decision on September 16, 2020.
The order "barred, restrained and otherwise prohibited" Carl and Peter
from interfering with the towing of vehicles, instructing or mandating who may
park in certain spaces, interfering with signage, and communicating with tenants
or customers of Lot 2. The order did allow Peter and Carl to patronize Lot 2
businesses as bona fide customers of any business. These appeals followed.
II.
We review a motion judge's order on summary judgment de novo,
applying the same standard as the motion judge. Branch v. Cream-O-Land
Dairy, 244 N.J. 567, 582 (2021). A court will grant a motion for summary
judgment "if the pleadings, depositions, answers to interrogatories and
admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact challenged and that the moving party is
entitled to a judgment or order as a matter of law." Nelson v. Elizabeth Bd. of
Educ., 466 N.J. Super. 325, 336 (App. Div. 2021) (quoting R. 4:46-2(c)). Thus,
we consider "whether the competent evidential materials presented, when
viewed in the light most favorable to the non-moving party, are sufficient to
permit a rational factfinder to resolve the alleged disputed issue in favor of the
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non-moving party." Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 406
(2014) (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540
(1995)).
Here, it is undisputed that in 1987, A&J Enterprise reserved an easement
on Lot 2 for its benefit and for its successors in title, subject to certain express
conditions as to the use of the Lot 2 parking lot. That recorded reservation
therefore established
[a]n easement appurtenant[, which] is created when the
owner of one parcel of property (the servient estate)
grants rights regarding that property to the owner of an
adjacent property (the dominant estate). . . . The
easement appurtenant "enhances the value of the
dominant estate and cannot exist separate from the land
itself."
[Rosen v. Keeler, 411 N.J. Super. 439, 450 (App. Div.
2010).]
As already noted, the determination of summary judgment in this matter
turned on whether RRR Newgen had notice prior to its acquiring Lot 2 of the
unrecorded 2012 agreement that modified the 1987 easement. At the outset, we
disagree with plaintiffs' contention that as a matter of law, the fact the agreement
was unrecorded barred plaintiffs from being charged with notice of the 2012
agreement. New Jersey's Recording Act, N.J.S.A. 46:26A-1 to -12, holds
otherwise.
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We note that an easement created by grant may be modified by a
subsequent agreement and modifications are subject to the recording act.
Restatement (Third) of Prop.: Servitudes §§ 7.1, 7.14 (Am. L. Inst. 2000). While
it is true that "[a]n unrecorded modification or termination of a recorded
servitude is not effective against a subsequent taker of an interest in property
burdened or benefited by the servitude who is otherwise entitled to the
protection of the recording act," id. at § 7.15, the Recording Act only affords
protection to bona fide purchasers who take title without notice of the
modification.
The relevant portion of our recording statute, codified at N.J.S.A. 46:26A-
12, states in part that "[a]ny recorded document affecting the title to real
property is . . . notice to all subsequent purchasers . . . of the document recorded
and its contents." N.J.S.A. 46:26A-12(a). The statute also addresses unrecorded
documents and states "[a] claim under a recorded document affecting the title to
real property shall not be subject to the effect of a document that was later
recorded or was not recorded unless the claimant was on notice of the later
recorded or unrecorded document." N.J.S.A. 46:26A-12(b) (emphasis added).
"[P]arties are [therefore] generally charged with constructive notice [only]
of instruments that are properly recorded," Cox v. RKA Corp., 164 N.J. 487,
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496 (2000), unless they have actual notice about an unrecorded encumbrance on
the property. See Steiger v. Lenoci, 323 N.J. Super. 529, 537 (App. Div. 1999)
(explaining that defendants had actual notice of reciprocal restrictive deed
covenant banning "outbuildings" where, within weeks after defendants began
building a cabana, plaintiffs notified defendants of the restrictive covenant and
their intention to compel compliance); Wolek v. Di Feo, 60 N.J. Super. 324, 330
(App. Div. 1960) ("In the absence of actual knowledge of the sewer easement,
or of circumstances sufficient to put them on inquiry and of which they were
bound to take notice, they were chargeable only with such facts as might be
ascertained with reference to title records."). Such notice can also be established
through inquiry notice or constructive notice when the buyer has "knowledge of
whatever such an inquiry would uncover where facts are brought to his attention,
'sufficient to apprise him of the existence of an outstanding title or claim , or the
surrounding circumstances are suspicious, and the party purposefully or
knowingly avoids further inquiry.'" Friendship Manor, Inc. v. Greiman, 244
N.J. Super. 104, 108 (App. Div. 1990).
A subsequent purchaser who has no record notice of a modification to a
recorded easement may still be bound by the unrecorded modification if it had
actual or constructive notice of the agreement's terms. See Palamarg Realty Co.
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v. Rehac, 80 N.J. 446, 456-57 (1979). So, "a document that could have been
recorded but was not[,] is invalid as against any subsequent purchaser or interest
holder who takes without knowledge of the unrecorded document[, but] the
unrecorded interest is not void against a later-recorded interest taken with
knowledge, actual or constructive, of the unrecorded interest." PNC Bank v.
Axelsson, 373 N.J. Super. 186, 190 (Ch. Div. 2004). Accordingly, if plaintiffs
knew of defendants' 2012 agreement when it took title to Lot 2, the provisions
of the Recording Act "would validate the unrecorded easement as against"
plaintiffs. Ibid. Only, "a purchaser without notice from an owner who has notice
is protected." Palamarg Realty Co., 80 N.J. at 457 n.6 (quoting 3 Pomeroy,
Equity Jurisprudence §§ 754, 754a, at 55-61 (5th ed. 1941)).
On appeal, defendants argue generally that Ashish was "on notice" of the
modification. First, they argue that Ashish had actual notice because Girish
gave him the 2012 agreement and was told by Girish about the easement
modification. In addition, they appear to rely on a theory of inquiry notice,
citing Schwoebel v. Storrie, 76 N.J. Eq. 466 (Ch. 1909), to support their
proposition that the Board's resolution "incorporated and referenced" the 2012
agreement and therefore, Ashish should have been put on notice about the 2012
agreement. Moreover, they argue that because Ashish participated in the
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management of Ray's Pharmacy when his father-in-law owned it, he had actual
notice of the easement because he used the shared parking lot.
We conclude that the motion record established that a dispute of material
fact existed as to plaintiffs' knowledge about the 2012 agreement such that the
award of summary judgment was not appropriate.
Ashish's and Girish's testimony regarding their conversations over the sale
of Lot 2 varied greatly. Ashish on one hand testified that he was not provided
with the 2012 agreement and had no knowledge about its terms from any source.
Against that, Girish, plaintiffs' predecessor, testified that he sent the agreement
to Ashish, although the actual email on its own did not support his testimony
and his description of his conversations about the 2012 agreement and
modification were inconsistent. Further, Girish's responses regarding Ashish's
request for information as part of his due diligence lack clarity. Girish testified
he sent Ashish everything he asked for, then he said he gave him the information
hand-to-hand but did not know where or when that took place, and also testified
that he did not recall if he sent the 2012 agreement in reply but was sure that he
sent everything Ashish asked for.
In sum, Girish, at least in part, testified that he gave or sent the 2012
agreement to Ashish, and spoke to some extent to Ashish about the changes
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made to the easement, as Carl also alluded to, thus creating a genuine dispute as
to plaintiffs' knowledge. Moreover, it was undisputed that Ashish participated
to some extent in the operation of Ray's Pharmacy while it was located in Lot
1's building, during which time its customers enjoyed whatever arrangement had
been entered into between Peter and Girish.
Here then, reviewing the evidence in the light most favorable to
defendants, the evidence was not "so one-sided that there is only one reasonable
outcome." Bosshard v. Hackensack Univ. Med. Ctr., 345 N.J. Super. 78, 90
(App. Div. 2001). Nor was there any evidence that under any undisputed facts
plaintiffs were entitled to judgment as a matter of law.
III.
We reach a different conclusion as to the September 16, 2020 order that
construed the 1987 easement's restrictions to only apply to Lot 1 users of the
parking and denied relief because Peter "was the Grantor." As to that order, we
agree that the easement restriction only pertained to Lot 1's use of the parking
lot and not Lot 2 's use of the parking lot. We disagree that, as a representative
of the owner, Peter could not seek enforcement of RESOL53's rights to the
extent they were being interfered with by RRR Newgen's representatives, if at
all.
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The parties' dispute focused on the language in the 1987 easement that
stated the following:
Said nonexclusive easement and right of way is limited
to short term maximum two-hour parking for customers
and shoppers also patronizing the business conducted
in the building located on Lot 1, Block 86 . . . provided
that such use of said Lot 1 Block 86 is a pharmacy
business.
Said parking lot shall be utilized by customers and
shoppers from businesses conducted on said Lot 1,
Block 86, provided said use as a pharmacy business, as
well as said Lot 2, Block 86. Subject to conditions and
limitations set forth herein, this nonexclusive easement
and right of way shall run with the land and bind the
Grantee, its successors and assigns, in title, possession
and its heirs. It is expressly understood and agreed that
the parking facility shall not be used or cause to be used
for a parking lot for employees or long-term commuter
parking.
According to defendants, this language applied to both lots. Plaintiffs
disagree and contend that it recited the restriction being placed only on Lot 1's
use of their parking lot.
An express easement is a matter of contract between the parties, and it is
appropriate to employ contract principles in attempting to ascertain the rights
conveyed. Borough of Princeton v. Bd. of Chosen Freeholders, 333 N.J. Super.
310, 324-25 (App. Div. 2000), aff'd, 169 N.J. 135 (2001); Restatement (Third)
of Prop Servitudes § 4.1 (Am. L. Inst. 2000).
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Questions concerning the extent of the rights conveyed
by an easement require a determination of the intent of
the parties as expressed through the instrument creating
the easement, read as a whole and in light of the
surrounding circumstances. . . . [W]hen the intent of
the parties is evident from an examination of the
instrument, and the language is unambiguous, the terms
of the instrument govern.
[Rosen, 411 N.J. Super. at 451 (internal quotation
marks and citations omitted).]
See also Tide-Water Pipe Co. v. Blair Holding Co., 42 N.J. 591, 604 (1964)
(stating a determination of the rights conferred under a grant of easement
depends "on the intent of the parties as expressed in the language of the grant,
viewed in the light of the nature and reasonably necessary incidents of the
permitted use").
The primary rule of construction is that "the intent of the conveyor is
normally determined by the language of the conveyance read as an entirety and
in the light of the surrounding circumstances." Khalil v. Motwani, 376 N.J.
Super. 496, 503 (App. Div. 2005) (quoting Hammett v. Rosensohn, 26 N.J. 415,
423 (1958)). However, "[w]hen the language of the grant is ambiguous, the
surrounding circumstances, including the physical conditions [and character] of
the servient tenement and the requirements of the grantee, play a significant role
in the determination of the controlling intent." Rosen, 411 N.J. Super. at 451;
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see Khalil, 376 N.J. Super. at 503. The court may consider the course of conduct
of the parties as evidence of what was intended under the agreement. Savarese
v. Corcoran, 311 N.J. Super. 240, 248 (Ch. Div. 1997), aff'd, 311 N.J. Super.
182 (App. Div. 1998). Ambiguities in the easement must be construed against
the grantor. Hyland v. Fonda, 44 N.J. Super. 180, 187 (App. Div. 1957). The
interpretation should "accord with justice and common sense." Borough of
Princeton, 333 N.J. Super. at 325 (quoting Krosnowski v. Krosnowski, 22 N.J.
376, 387 (1956)).
Applying those guiding principles, we discern no ambiguity in the
language used by Peter through RESOL53's predecessor in title when it created
the easement from which he and his entities benefited. The restriction that
RESOL53 now argues was equally applicable to Lot 2 users of the parking was
clearly meant to only apply to Lot 1 users. The language employed makes that
clear, as does the restriction's placement within the language reserving the
easement. Even if there were ambiguities, as defendants argue, they would be
construed against Peter and his related entities because although they were the
grantor under the 1987 deed, they reserved the rights stated in the easement Peter
created for his and their own benefit such that they were to run with land so long
as a pharmacy business was being conducted from the Lot 1 building.
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We therefore agree with the motion judge that the 1987 easement
restrictions on the use of Lot 2's parking lot only applied to the Lot 1 users, and
we affirm the September 16, 2020 order to the extent it confirmed the
applicability of the restrictions to only Lot 1 users. However, to the extent that
the motion judge's order deprived Peter, on behalf of RESOL53, from seeking
enforcement of rights as a representative of that entity, we disagree and glean
no basis from the motion judge's remarks as to why Peter could not pursue a
claim in his representative capacity to seek endowment of RESOL53's rights,
albeit not as a named party. Having said that, we concur that Peter, like any
other individual involved in this dispute, cannot resort to self-help, in the form
of physical confrontations and harassing customers and tenants, in lieu of
seeking resolution through the courts if attempts to negotiate a solution fail , or
where appropriate, by calling upon local law enforcement to assist.
IV.
In sum, we reverse the June 10, 2020 order that granted plaintiffs'
summary judgment, declared that the 2012 agreement was unenforceable against
RRR Newgen, and dismissed defendants' counterclaim and RESOL53's
enforcement action, and we remand the matters for trial. For the same reasons,
we affirm the denial of defendants' motion for summary judgment. We affirm
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the September 16, 2020, order to the extent it declared that the 1987 easement
restrictions applied only to RESOL53, but we vacate the order to the extent it
denied defendants' motion to enforce the 1987 easement. We affirm the order
to the extent it granted injunctive relief preventing any individual from taking
"self-help" measures to protect their rights, but reverse it to the extent it held, as
a matter of law, Peter or Carl could not pursue legal remedies on behalf of
RESOL53.
In light of our decision, we do not address any of the parties' remaining
arguments to the extent we have not already touched upon them earlier in this
opinion.
Affirmed in part; reversed in part; vacated and remanded in part. We do
not retain jurisdiction.
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