Liberty & Prosperity 1776 Inc. v. City of Atlantic City ( 2024 )


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  •                                 NOT FOR PUBLICATION WITHOUT THE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-0420-22
    LIBERTY & PROSPERITY 1776
    INC., a non-profit corporation of
    New Jersey, JAMES MCLEAN, a
    resident and taxpayer of Atlantic
    City and Atlantic County, New
    Jersey, KAREN BOREK and
    JANIS HETRICK, residents and
    taxpayers of Atlantic County,
    New Jersey,
    Plaintiffs,
    v.
    CITY OF ATLANTIC CITY, a
    municipality of New Jersey located
    within Atlantic County, MARTY
    SMALL, SR., Mayor of Atlantic City,
    JACQUELYN SUAREZ,
    Director of the Division of Local
    Government Services, of the
    Department of Community Affairs
    of the State of New Jersey, THE
    LOCAL FINANCE BOARD OF
    THE STATE OF NEW JERSEY
    and THE STATE OF NEW JERSEY,
    Defendants.
    _____________________________
    COUNTY OF ATLANTIC, a body
    politic of the State of New Jersey, by
    and through DENNIS LEVINSON, the
    County Executive, THE CITY OF
    SOMERS POINT, a body politic of
    the State of New Jersey located
    within the County of Atlantic, THE
    TOWNSHIP OF HAMILTON, a
    body politic of the State of New
    Jersey located within the County of
    Atlantic, THE TOWNSHIP OF
    EGG HARBOR, a body politic of
    the State of New Jersey located
    within the County of Atlantic,
    THE CITY OF ABSECON, a body
    politic of the State of New Jersey
    located within the County of
    Atlantic, THE CITY OF
    VENTNOR, a body politic of the
    State of New Jersey located within
    the County of Atlantic, and the
    TOWNSHIP OF WEYMOUTH,
    a body politic of the State of New
    Jersey located within the County of
    Atlantic,
    Plaintiffs-Respondents,
    v.
    THE STATE OF NEW JERSEY,
    PHILIP D. MURPHY, in
    his official capacity as the
    Governor of the State of New Jersey,
    CITY OF ATLANTIC CITY, a
    municipal body of Atlantic County,
    MARTY SMALL, SR., Mayor of
    A-0420-22
    2
    Atlantic City, in his official capacity,
    JACQUELYN SUAREZ,
    Director of the Division of Local
    Government Services of the
    Department of Community Affairs,
    LOCAL FINANCE BOARD OF
    THE STATE OF NEW JERSEY,
    a division of the New Jersey
    Department of Community Affairs,
    JEFFREY S. CHIESA, in his
    official capacity as Emergency
    Manager of the City of Atlantic City
    and MATTHEW J. PLATKIN,
    in his official capacity as the
    Attorney General of the State of
    New Jersey,
    Defendants-Appellants.
    _____________________________
    Argued March 20, 2024 – Decided October 21, 2024
    Before Judges Vernoia, Gummer, and Walcott-
    Henderson.
    On appeal from the Superior Court of New Jersey, Law
    Division, Atlantic County, Docket Nos. L-0777-16 and
    L-1254-17.
    Tim Sheehan, Deputy Attorney General, argued the
    cause for appellants (Matthew J. Platkin, Attorney
    General, and Chiesa Shahinian & Giantomasi PC,
    attorneys; Michael L. Zuckerman, Deputy Solicitor
    General, Kavin K. Mistry, Assistant Attorney General,
    Abiola G. Miles, Deputy Attorney General, Tim
    Sheehan, Deputy Attorney General, Victoria G.
    Nilsson, Deputy Attorney General, of counsel and on
    A-0420-22
    3
    the briefs; John Lloyd, Ronald L. Israel, and Brian P.
    O'Neill, on the briefs).
    Ronald J. Riccio argued the cause for respondents
    (McElroy Deutsch, Mulvaney & Carpenter, LLP,
    attorneys; Ronald J. Riccio and Eliott Berman
    (McElroy Deutsch, Mulvaney & Carpenter, LLP) of the
    New York bar, admitted pro hac vice, on the brief).
    The opinion of the court was delivered by
    GUMMER, J.A.D.
    This case involves the purported settlement of litigation challenging the
    constitutionality of the Casino Property Tax Stabilization Act (CPTSA or Act),
    N.J.S.A. 52:27BBBB-18 to -28. The parties memorialized that settlement in a
    2018 consent order. The Legislature amended the Act in 2021. L. 2021, c. 315
    (2021 amendment or Amendment).          By way of an order to show cause,
    respondents sought to enjoin the enactment of the Amendment, contending it
    violated the 2018 consent order. The trial court did not issue an injunction but
    instead entered separate orders, finding the Amendment was a violation of the
    consent order, denying a reconsideration motion, requiring certain payments be
    made to Atlantic County, and awarding plaintiffs attorneys' fees. The State and
    Governor Philip D. Murphy appeal from each of those orders.          Because a
    disputed term in the parties' settlement agreement is ambiguous and because the
    trial court failed to resolve the ambiguity by conducting a plenary hearing, we
    A-0420-22
    4
    vacate the orders and remand the case for proceedings consistent with this
    opinion.
    I.
    In 2016, the Legislature enacted the CPTSA, which established a ten-year
    "payment in lieu of taxes" (PILOT) program for casino gaming properties
    located in Atlantic City. The CPTSA was proposed in response to Atlantic City's
    "dire situation" and "fiscal challenges," which arose in part from casino closures
    and the "large property tax refunds" Atlantic City owed to the casinos that had
    successfully appealed their property tax assessments. Sponsor's Statement to S.
    1715 (Feb. 29, 2016); see also Marina Dist. Dev. Co. v. City of Atl. City, 
    27 N.J. Tax 469
    , 476-77 (Tax 2013), aff'd o.b., 
    28 N.J. Tax 568
     (App. Div. 2015).
    The Legislature declared the Act served a public purpose "because Atlantic City
    w[ould] be able to depend on a certain level of revenue from casino gaming
    properties each year, making the local property tax rate and need for State aid
    less volatile." N.J.S.A. 52:27BBBB-19(m).
    The casinos' "gross gaming revenue" (GGR) was one of the criteria used
    to calculate the annual PILOT payments. N.J.S.A. 52:27BBBB-20(c)(4). The
    Legislature in the CPTSA defined GGR as "the total amount of revenue raised
    through casino gaming from all of the casino gaming properties located in
    A-0420-22
    5
    Atlantic City," as determined by the Division of Gaming Enforcement. N.J.S.A.
    52:27BBBB-20(a) (2016). In 2018, the Legislature passed a law that authorized
    sports wagering at casinos and racetracks, L. 2018, c. 33. See also N.J.S.A.
    5:12A-10 to -19 (the Sports Wagering Act). With the passage of that law, the
    Legislature also amended the definition of GGR to include "revenue from sports
    pool operations," effective June 11, 2018. L. 2018, c. 33, § 14; see also N.J.S.A.
    52:27BBBB-20(a) (2018).
    In 2016, Liberty & Prosperity 1776 Inc. (L&P) and three residents and
    taxpayers of Atlantic County filed suit against the City of Atlantic City, its
    mayor, the State of New Jersey, the Local Finance Board of the State of New
    Jersey, and the director of the Division of Local Government Services of the
    State's Department of Community Affairs, challenging the legality of the
    CPTSA. The parties did not include a copy of that complaint in the appellate
    record. We take that description from the memorandum of decision entered by
    the trial court with its July 29, 2022 order.
    On June 19, 2017, Atlantic County and five municipalities located in
    Atlantic County filed a complaint (the County action) against the State and
    others seeking a judgment declaring the Act null, void, and of no force or effect
    and unconstitutional under the Uniformity Clause set forth in Article VIII,
    A-0420-22
    6
    Section 1, Paragraph 1 of the New Jersey Constitution and under Article IV,
    Section VII, Paragraph 9(6) of the Constitution. They also sought to enjoin
    defendants from implementing or enforcing the Act.
    In their complaint, plaintiffs in the County action asserted Atlantic County
    and Atlantic City, through their designated representatives, had entered into "an
    intergovernmental contract" on January 14, 2015, that provided the County
    would "receive 13.5% of any PILOT payment that might be received by Atlantic
    City from the City's casino gaming property owners . . . ." They complained the
    Act did not include the County's purported right to receive those funds but
    instead "vest[ed] the Local Finance Board with unfettered 'discretion' to
    determine the amount of PILOT payments and other payments to be remitted by
    Atlantic City to the County." They alleged the Atlantic City manager had
    advised the County it would receive only 10.4% of the PILOT payments.
    The parties resolved their dispute during a settlement conference
    conducted by the assignment judge on April 20, 2018, and, through their
    counsel, placed the terms of the settlement agreement on the record that day.
    The terms provided that for 2019 through 2024, "the County will be provided
    with 13.5% of whatever the aggregate PILOT payment happens to be under the
    statute for each year" while providing some services to Atlantic City and for
    A-0420-22
    7
    2025 and 2026, the County would receive a "12% share" without having to
    provide services to the City. In a discussion regarding the parties' ability to
    enforce the agreement, counsel for L&P raised the issue of "the State
    Constitution prohibit[ing] present people from binding future legislation." The
    judge noted that incorporating the settlement agreement in a court order "would
    allow . . . for [an] enforcing mechanism."
    The parties memorialized the settlement in a June 18, 2018 "consent order
    for settlement." In that consent order, the parties defined "Aggregate Pilot
    Payment" as "the aggregate payment received, in a particular year, by Atlantic
    City from the Atlantic City casinos pursuant to and under the Casino Property
    Tax Stabilization Act, N.J.S.A. 52:27BBBB-18 et seq."; the "County Pilot
    Allocation" as "the County's share of the Aggregate Pilot Payment"; and
    "County Services" as "services . . . , as agreed to by the County and the State
    and/or City, assumed and provided by the County for Atlantic City taxpayers
    resulting in the City of Atlantic City saving the cost the City would have
    incurred had the City been the direct provider of those services." The parties
    did not define or reference GGR in the consent order.
    In the consent order, the parties incorporated by reference the settlement
    placed on the record on April 20, 2018. The consent order specifically provided
    A-0420-22
    8
    that "[f]or tax years 2019 through and including 2024, the County P[ILOT]
    Allocation shall be . . . calculated at 13.5% of the Aggregate Pilot Payment in
    return for which the County will provide County Services . . . ." For the 2025
    and 2026 tax years, the consent order provided "the County Pilot Allocation
    shall be twelve percent (12%) of the Aggregate Pilot Payment." The consent
    order dismissed with prejudice the claims made by the County plaintiffs and
    without prejudice the claims made by the L&P plaintiffs. The consent order did
    not specify an enforcement mechanism and did not address whether or how
    subsequent legislative developments would impact the parties' agreement.
    In 2021, the Legislature amended the CPTSA, effective December 21,
    2021. L. 2021, c. 315. In amending the CPTSA, the Legislature found the
    CPTSA had had a "stabilizing effect . . . on the finances of . . . Atlantic City and
    the casino gaming industry during the first five years of the law." N.J.S.A.
    52:27BBBB-19.1(c).      According to the Legislature, "Atlantic City's overall
    financial condition [was] more stable since the casino gaming properties began
    making PILOT payments" and that "financial stability benefit[ed] the casinos,
    their employees, property taxpayers in Atlantic City, and all New Jersey
    residents." Ibid. The Legislature, however, expressed concern that the financial
    stability might be "adversely impacted by certain provisions in the [then] current
    A-0420-22
    9
    version of the" CPTSA.       N.J.S.A. 52:27BBBB-19.1(d).       The Legislature
    specifically referenced, among other things, the calculation of the annual PILOT
    payment. N.J.S.A. 52:27BBBB-19.1(d).
    In the 2021 amendment, the Legislature, among other adjustments,
    redefined GGR for 2021 through 2026, adding this sentence to its definition:
    "For the purpose of determining the amount of the [PILOT] pursuant to this
    section, gross gaming revenue shall not include revenue derived from Internet
    casino gaming and Internet sports wagering during calendar years 2021 through
    2026 as determined by the" Division of Gaming Enforcement.             N.J.S.A.
    52:27BBBB-20(a).      The Legislature also reset and reduced the casinos'
    aggregate PILOT obligation to $110 million for 2022 and between $100 and
    $120 million for 2023 through 2026, subject to two percent annual increases
    under certain circumstances. N.J.S.A. 52:27BBBB-20(c)(3)(e)-(h).
    On December 21, 2021, plaintiffs in the County action filed an application
    for an order to show cause seeking an order enjoining defendants from taking
    any action to enact or implement the provisions of the Senate and Assembly bills
    regarding the 2021 amendment to the CPTSA. In an accompanying certification,
    Atlantic County's County Executive asserted the Amendment would have the
    effect of reducing the casinos' Aggregate PILOT Payment and that reduction
    A-0420-22
    10
    would "violate the [c]onsent [o]rder by reducing Atlantic County's share of the
    Aggregate Pilot Payment . . . ." The court entered the order to show cause the
    next day, scheduling a hearing for February 8, 2022. The court also issued a
    letter, stating plaintiffs' counsel had advised the court the Governor had signed
    the legislation the prior evening and advising the parties plaintiffs' allegation the
    State had violated the June 18, 2018 consent order "can be addressed" at the
    scheduled hearing.
    After hearing argument, the court on February 25, 2022, entered an order
    finding the State had violated the terms of the consent order, declining to enjoin
    defendants from implementing the 2021 amendment "except to the extent they
    are subject to sanctions and/or damages," and scheduling a hearing "on the
    remainder of [p]laintiffs' application for relief regarding sanctions and/or
    damages against [d]efendants as may be necessary, proper, and appropriate as a
    result of the violation" of the consent order.
    In a written opinion, the court explained its view that "the key issue to be
    decided in this application [was] whether there was a breach" of the consent
    order and its decision to view plaintiffs' order to show cause seeking an
    injunction "as an application to enforce a settlement agreement or an application
    to enforce litigants' rights under Rule 1:10-3." The court found defendants had
    A-0420-22
    11
    breached the consent order. While acknowledging "the State can generally
    amend a statute to address market conditions that have arisen since the passage
    of the initial legislation and to protect various stakeholders," the court rejected
    defendants' arguments because under those arguments defendants "could have
    entered into the agreement with [p]laintiffs . . . and immediately thereafter
    amended the definition of [GGR] and thereby dramatically impacted the amount
    the County would receive under the settlement agreement."
    The court found "it was not the intention of the parties, as set forth in the
    settlement agreement, to permit [d]efendants to unilaterally change the
    definition of [GGR] so as to fundamentally alter the agreement and the
    reasonable expectations of the parties."     The court noted the definition of
    Aggregate Pilot Payment in the consent order included a cite to the CPTSA but
    did not include after that cite the following language: "as the Act may be
    amended from time to time at the sole discretion of the State of New Jersey."
    The court concluded that it was not enjoining the parties from implementing the
    2021 amendment but would address later plaintiffs' remedy for the breach of the
    consent order.
    The court denied defendants' subsequent reconsideration motion on May
    2, 2022. On May 16, 2022, the court conducted a case management conference
    A-0420-22
    12
    concerning plaintiffs' application for damages and sanctions based on the court's
    finding defendants had breached the consent order.
    After hearing argument, the court entered an order on July 29, 2022,
    requiring "[d]efendant" to pay the County $2,362,500 within five days of the
    order; the two remaining quarterly payments of $5,568,750 for the year 2022 on
    August 15, 2022, and November 15, 2022; and "quarterly payments for the years
    2023 through 2026 pursuant to the terms of the [c]onsent [o]rder" with the
    "amount of PILOT owed to the County" for those years being "calculated by (1)
    applying the terms of the 2018 [c]onsent [o]rder, (2) applying the provisions of
    the Act prior to the Amendment, and (3) calculating [GGR] to include internet
    gaming and internet sports wagering revenue." The court directed plaintiffs to
    submit a fee application and denied plaintiffs' request for compound daily
    interest and compensation for County employees.
    In a written opinion, the court found defendants had to "remit the award
    shortfall amount to the County," specifically "a portion of the PILOT to the
    County in accordance with the mathematical formula as set forth in the [c]onsent
    [o]rder and in accordance with the provisions of the 2016 Act . . . and the pre-
    amendment definition of GGR . . . ." Finding the February 25, 2022 order had
    put defendants on notice they would be held "liable not only for damages
    A-0420-22
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    resulting from the breach, but also for sanctions," the court held defendants had
    willfully violated the court's February 25, 2022 and May 2, 2022 orders by
    making on May 15, 2022, a "deficient payment to the County (pursuant to the
    Amendment instead of the [c]onsent [o]rder)." Based on its conclusion "the
    State made a 'calculated decision' to willfully violate multiple [c]ourt [o]rders
    when they [sic] issued the deficient May 15, 2022 payment," the court awarded
    plaintiffs attorneys' fees and costs "associated with this action incurred on or
    after May 15, 2022."
    In an August 23, 2022 order and opinion, the court awarded plaintiffs
    $176,045.63 in attorneys' fees and costs. On August 29, 2022, the court stayed
    its July 29, 2022 and August 22, 2022 orders.
    On the same day it issued the stay of the orders in this case, the trial court
    entered an order and opinion in Liberty & Prosperity 1776, Inc. v. State, No.
    ATL-L-170-22 (Law Div. Aug. 29, 2022), in which the court held the Act was
    constitutional, but the 2021 amendment was not. (Slip op. at 39). We have since
    affirmed the aspect of the order finding the Act constitutional and reversed the
    aspect finding the 2021 amendment unconstitutional.         Liberty & Prosperity
    1776, Inc. v. State, No. A-0487-22 (App. Div. Oct. 21, 2024).
    A-0420-22
    14
    Defendants State of New Jersey and Governor Philip D. Murphy appeal
    from the February 25, May 2, July 29, and August 23, 2022 orders. They argue
    the trial court erred in finding the 2021 Amendment was a breach of the consent
    order based on the terms of the consent order, contract law, and the
    unmistakability doctrine; the July 29 and August 23, 2022 orders were not
    supported by law or the record; and the court erroneously required a duplicative
    payment in its July 29, 2022 order. Because the court failed to consider or
    resolve the ambiguous nature of the parties' agreement and decided issues of
    intent without conducting a plenary hearing, we vacate the orders and remand
    for proceedings consistent with this opinion.
    II.
    "'A settlement agreement between parties to a lawsuit is a contract' . . .
    'governed by [the general] principles of contract law.'" Savage v. Twp. of
    Neptune, 
    472 N.J. Super. 291
    , 305 (App. Div. 2022) (first quoting Nolan v Lee
    Ho, 
    120 N.J. 465
    , 472 (1990); then quoting Globe Motor Co. v. Igdalev, 
    225 N.J. 469
    , 482 (2016) (alteration in original)). "[C]ontract interpretation is . . .
    'subject to de novo review by an appellate court.'" Boyle v. Huff, 
    257 N.J. 468
    ,
    477 (2024) (quoting Kieffer v. Best Buy, 
    205 N.J. 213
    , 222 (2011)). "Thus,
    '[w]e accord no special deference to the trial court's . . . interpretive analysis and
    A-0420-22
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    look at the contract with fresh eyes.'" 
    Ibid.
     (quoting GMAC Mortg., LLC v.
    Willoughby, 
    230 N.J. 172
    , 183 (2017) (internal quotation marks omitted)).
    "A court's objective in construing a contract is to determine the intent of
    the parties." Kernahan v. Home Warranty Adm'r of Fla., Inc., 
    236 N.J. 301
    , 320
    (2019). "The plain language of the contract is the cornerstone of the interpretive
    inquiry; 'when the intent of the parties is plain and the language is clear and
    unambiguous, a court must enforce the agreement as written, unless doing so
    would lead to an absurd result.'" Barila v. Bd. of Educ. of Cliffside Park, 
    241 N.J. 595
    , 616 (2020) (quoting Quinn v. Quinn, 
    225 N.J. 34
    , 45 (2016)). "The
    court's role is to consider the agreement's terms 'in the context of the
    circumstances under which it was written,' 'accord to the language a rational
    meaning in keeping with the expressed general purpose[,]' and apply the
    agreement accordingly." Accounteks.Net v. CKR Law, LLP, 
    475 N.J. Super. 493
    , 504 (App. Div. 2023) (alteration in original) (quoting Conway v. 287 Corp.
    Ctr. Assocs., 
    187 N.J. 259
    , 269 (2006)). The "court's task [i]s 'not to rewrite a
    contract for the parties better than or different from the one they wrote for
    themselves.'" Globe Motor Co., 
    225 N.J. at 483
     (quoting Kieffer, 
    205 N.J. at 223
    ). "To the extent that there is any ambiguity in the expression of the terms
    of a settlement agreement, a hearing may be necessary to discern the intent of
    A-0420-22
    16
    the parties at the time the agreement was entered and to implement that intent."
    Quinn, 
    225 N.J. at 45
    .
    "A contract is ambiguous if its terms are 'susceptible to at least two
    reasonable alternative interpretations.'" Capparelli v. Lopatin, 
    459 N.J. Super. 584
    , 604 (App. Div. 2019) (quoting Nester v. O'Donnell, 
    301 N.J. Super. 198
    ,
    210 (App. Div. 1997)). "When a contract is ambiguous in a material respect,
    the parties must be given the opportunity to illuminate the contract's meaning
    through the submission of extrinsic evidence." 
    Ibid.
     "If an ambiguity exists,
    then resolution of the document's intended meaning is a fact issue." In re Trust
    of Nelson, 
    454 N.J. Super. 151
    , 161 (App. Div. 2018). "Disputes of material
    fact should not be resolved on the basis of certifications . . . ." Palmieri v.
    Palmieri, 
    388 N.J. Super. 562
    , 564 (App. Div. 2006). Presented with a fact issue,
    "the court must conduct an evidentiary hearing." In re Trust of Nelson, 
    454 N.J. Super. at 163
    .
    Because an essential term of the parties' settlement agreement was
    ambiguous, the trial court erred in finding defendants had breached the consent
    order without first conducting a plenary hearing to resolve that ambiguity and
    determine the parties' intent.    In the consent order, the parties defined
    "Aggregate Pilot Payment" as "the aggregate payment received, in a particular
    A-0420-22
    17
    year, by Atlantic City from the Atlantic City casinos pursuant to and under the
    Casino Property Tax Stabilization Act, N.J.S.A. 52:27BBBB-18 et seq." The
    parties didn't state, one way or the other, whether that definition referenced only
    the current version of the Act or subsequent versions. The court noted the
    definition of Aggregate Pilot Payment in the consent order did not include
    language specifying that "the Act may be amended from time to time at the sole
    discretion of the State of New Jersey." But the definition also did not include
    language specifying that it was limited to the current version of the Act and did
    not encompass any subsequent versions. And the agreement placed on the
    record on April 20, 2018, equally lacks clarity. When asked by the court to
    provide the terms of the settlement, counsel for the State answered, "for 2019
    through and including 2024, . . . the County will be provided with 13.5% of
    whatever the Aggregate Pilot Payment happens to be under the statute for each
    year." (Emphasis added). Counsel did not say – as plaintiffs incorrectly assert
    in their brief – that amount would be "computed based on the . . . Act that existed
    that day."
    The trial court did not resolve that ambiguity surrounding the definition
    of Aggregate Pilot Payment by conducting a plenary hearing. Without resolving
    that ambiguity, the trial court could not determine the parties' intent and
    A-0420-22
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    whether, in fact, that parties had reached a mutual agreement. See Cumberland
    Farms, Inc. v. N.J. Dep't Env't Prot., 
    447 N.J. Super. 423
    , 438-39 (App. Div.
    2016) ("[u]nless there is 'an agreement to the essential terms' by the parties,
    however, there is no settlement in the first instance" (quoting Mosley v. Femina
    Fashions Inc., 
    356 N.J. Super. 118
    , 126 (App. Div. 2002))). Accordingly, we
    vacate the February 25, 2022 order and the subsequent orders under appeal,
    which were based on the breach found in that order, and remand, directing the
    trial court to conduct an evidentiary hearing to resolve that ambiguity and
    determine the parties' intent.
    Defendants argue the trial court's finding of a breach was also precluded
    by the "unmistakability doctrine." We are not persuaded by that argument. The
    New Jersey Supreme Court addressed the unmistakability doctrine in Berg v.
    Christie, 
    225 N.J. 245
     (2016), a case in which the Court considered whether the
    legislative suspension of State pension cost-of-living adjustments "contravened
    a term of the contract right granted under the earlier enacted 'non-forfeitable
    right' statute," 
    id.
     at 252 (citing N.J.S.A. 43:3C-9.5), and whether "the
    Legislature [must] express unequivocal intent to contract" to overcome "the
    general presumption against finding a contract that is created by a statute," id.
    at 260. The Court cited Spina v. Consolidated Police and Firemen's Fund
    A-0420-22
    19
    Commission, 
    41 N.J. 391
    , 404-05 (1964), in which the "Court acknowledged
    that the Legislature could, if it wished, impose contractual obligations on itself
    . . . [b]ut to do so, the Court required a high bar for the creation of contracts by
    statute because contractual language in a statute cuts off the legislative
    prerogative to revisit policy choices." Berg, 
    225 N.J. at
    260-61 (citing Spina,
    
    41 N.J. at 404-05
    ). The Court held "[b]ecause the Legislature cedes significant
    sovereign power by the creation of a legislative contract, the clear indication, or
    unmistakability, standard is designed to prevent that power from being yielded
    too easily." Id. at 264. Even considering defendants' circuitous analysis of the
    United States Supreme Court's plurality opinion in United States v. Winstar
    Corp., 
    518 U.S. 839
     (1996), we are not convinced that the unmistakability
    doctrine, which as analyzed by the Court in Berg, 
    225 N.J. at 261
    , clearly applies
    to the Legislature's decision to "impose contractual obligations on itself"
    through statutory contracts, equally applies to an agreement of limited temporal
    scope into which the State freely entered to resolve pending litigation.
    Because we vacate the February 25, 2022 order, we do not reach the
    parties' substantive arguments regarding the July 29 and August 23, 2022 orders,
    which were premised on the February 25, 2022 order.
    A-0420-22
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    Given that the motion judge considered this matter in multiple sequential
    orders, we respectfully deem it most prudent to have the case on remand
    reassigned to a different judge who can approach the matter from a fresh
    perspective. See Graziano v. Grant, 
    326 N.J. Super. 328
    , 349 (App. Div. 1999)
    (stating the power to remand a case to a different judge "may be exercised when
    there is a concern that the trial judge has a potential commitment to his or her
    prior findings."); see also Freedman v. Freedman, 
    474 N.J. Super. 291
    , 308
    (App. Div. 2023) (remanding a matter to a different judge as the same judge
    "may have a commitment to [his or] her prior findings").
    Vacated and remanded for proceedings consistent with this opinion. We
    do not retain jurisdiction.
    A-0420-22
    21
    

Document Info

Docket Number: A-0420-22

Filed Date: 10/21/2024

Precedential Status: Non-Precedential

Modified Date: 10/21/2024