LAKE GRINNELL ASSOCIATION VS. LAWRENCE POST (DC-002498-15, SUSSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-3224-15T2
LAKE GRINNELL ASSOCIATION,
Plaintiff-Respondent,
v.
LAWRENCE POST, a/k/a LARRY
POST and KAREN YORK,
Defendant-Appellants.
_________________________________
Submitted July 11, 2017 – Decided October 26, 2017
Before Judges Nugent and Accurso.
On appeal from Superior Court of New Jersey,
Law Division, Sussex County, Docket No. DC-
002498-15.
Carter, Van Rensselaer & Caldwell, PC,
attorneys for appellants (William J. Caldwell,
on the brief).
Fein, Such, Kahn & Shepard, PC, attorneys for
respondent (Alvin L. Darby, on the brief).
PER CURIAM
Defendants Lawrence Post and Karen York own a lakefront
residence and enjoy an appurtenant easement for use of the lake,
Lake Grinnell, in Sussex County. They appeal from a Special Civil
Part order for summary judgment requiring them to pay $2,158.61
as their pro rata share of maintenance fees for the lake and a
dam. Because genuine issues of material fact should have precluded
summary judgment, we vacate the order and remand for further
proceedings.
Plaintiff Lake Grinnell Association (the Association)
commenced this collection action by filing a single-page complaint
in the Special Civil Part. The collection complaint's first three
counts state:
FIRST COUNT: There is due from defendant(s)
the sum of $2,050.83, for easement maintenance
and/or dues for Lake Grinnell Association.
Payment has been demanded and has not been
made.
SECOND COUNT: Plaintiff(s) sue(s)
defendant(s) for easement maintenance and/or
dues for Lake Grinnell Association upon the
promise by defendant(s) to pay the agreed
amount. Payment has been demanded and has not
been made.
THIRD COUNT: Plaintiff(s) sue(s) defendant(s)
easement (sic) maintenance and/or dues for
Lake Grinnell Association upon the promise of
defendant(s) to pay a reasonable price for the
same. Payment has been demanded and has not
been paid.
The Association demanded judgment in the amount of $2,050.83 plus
interest, fees, and costs.
The complaint was false in several respects. As the summary
judgment motion would disclose, the Association was not seeking
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dues from defendants. Contrary to the complaint's second and
third counts, defendants had never made a promise to pay dues,
maintenance fees, or "a reasonable price for same." In fact,
there had been a longstanding dispute between the Association and
defendants and their predecessors about defendants' right to enjoy
the appurtenant easement and their obligations for doing so. Thus,
underlying what appeared to be a relatively small collection action
was a claim for equitable relief requiring adjudication of the
benefits and burdens of dominant and servient estates.
Four months after filing its complaint, the Association filed
a summary judgment motion. The Association supported the motion
with a certification from its vice-president. The certification
and attachments establish that the Association was formed as a
non-profit corporation in 1946. According to the certificate of
incorporation, seven individuals formed the Association for the
following purposes:
1. To encourage the development and
growth of Lake Grinnell . . . ; to coordinate
and unify the interest and influence of the
owners of properties at said Lake Grinnell and
the residents thereof for a more effectual
protection and promotion thereof; to formulate
and carry into effect all projects for the
improvement of the health, general welfare,
and the cultural and recreational requirements
of the residents and users of Lake Grinnell;
to aid in the development of any legitimate
enterprise that will tend to increase the
facilities and advantages of Lake Grinnell,
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and to promote general good order and
government.
2. To purchase or otherwise acquire and
construct and to hold, maintain, buy, levy,
convey, invest, use, enjoy and distribute both
real and personal property or any interest
therein, and to borrow moneys for said
purposes for the uses and benefit of the
members of this organization and for the
promotion of the objects of this corporation.
Seventeen years later, in 1963, forty-one association members
with properties around the lake contributed funds to the
Association. The Association used the funds to acquire title to
approximately thirty-six acres of lake bottom from the Lehigh and
Hudson River Railroad Company. The lake is approximately one mile
long and consists of approximately forty-five acres. The deed
conveying title to the lake bottom acreage was expressly "[subject]
to the rights of others to use the waters of Lake Grinnell."
According to the vice-president's certification, the homeowners
who contributed funds to purchase the lake bottom property are now
designated as "owner-members" under the Association's by-laws.
The Association's vice-president further averred that since
1963, the Association has assumed responsibility for weed control
and water quality maintenance. Additionally, the Association has
taken on the responsibility of paying real estate taxes, liability
insurance premiums, and fees to "legal counsel to protect [the
homeowners'] property interests and quality of life." As of the
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date the vice-president filed his certification, weed control was
the largest annual expense.
The vice-president explained that the Association's
Treasurer's Report for the previous year is presented at an annual
July meeting. The Association's fiscal year ends June 30. The
"homeowners" vote to approve the report.1 Non-members of the
Association, such as defendants, are then assessed a proportionate
share of those items in the Treasurer's Report representing the
previous year's maintenance of the lake and dam.
The vice-president attached to his certification the
treasurer's reports for the fiscal years beginning with 2009-2010
and ending with 2013-2014. The vice-president also attached to
his certification the "Book Account" for each defendant. The Book
Account was printed on the Association's letterhead, included the
names and addresses of defendants as "tenants in common," and
contained the following under the designation, "Book Account":
RE: 29 Lake Grinnell Lane
2010 lake maintenance 195.95
2010 dam assessment 400.00
2011 lake maintenance 199.82
2012 lake maintenance 215.67
2013 lake maintenance 232.49
2013 maintenance assessment 500.00
2014 lake maintenance 306.90
$2,050.83
1
The certification is not clear as to whether non-members are
permitted to vote or challenge the report.
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The vice-president explained in his certification that in
2010 the Association levied a $400 dam assessment "against all
[fifty] homeowners, for expenses incurred and to be incurred in
connection with inspections, reports, surveys and repairs required
by the New Jersey Department of Environmental Protection, Dam
Safety Section." The vice-president further certified that "[a]ny
unused portion of the $400 [would] be used for future dam
expenses." According to the vice-president's certification, in
2013, the Association assessed a $500 maintenance fee against all
fifty homeowners as the result of the Association having incurred
$25,000 in legal fees "in 2012-2014 to protect the water quality
of the lake from a threatened quarry operation on the adjoining
property. This was a necessary expense to maintain the excellent
quality of water in Lake Grinnell. Refer to Treasurers (sic)
Reports showing the disbursements." The reports referenced in the
certification have a line item entitled "Legal" with no other
explanation.
The vice-president did not explain when the alleged Book
Accounts were prepared or when the Association notified defendants
of the assessments contained in the so-called Book Accounts. The
vice-president's certification contained the conclusory assertion
that defendants' balances from the Book Accounts were due and
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owing, and they had adamantly refused to pay any maintenance or
dam expenses.2
Defendants disputed much of the vice-president's
certification and filed a certification from Lawrence Post in
opposition to the Association's summary judgment motion. He
averred his parents purchased defendants' lakefront property in
1959, four years before the Association purchased the lake bottom
land. Thereafter, the Association attempted to exclude non-
members from using the lake. This resulted in a lawsuit in which
the court dismissed the Association's complaint and issued a
judgment in favor of defendants' predecessor in title. The court
determined that defendants and other members not part of the
Association had "acquired from their respective grantors an
easement appurtenant to the lands described in [the] Deeds in the
waters of Lake Grinnell."3
Defendant Post next certified that in 2001, the New Jersey
Department of Environmental Protection notified the municipality
and the Association that a dam required periodic inspection.
2
This averment directly contradicts the assertion in counts two
and three of the complaint that defendants promised to pay either
the assessments or the reasonable value of the services the
Association performed.
3
A copy of the court's oral decision and implementing order are
included in the record on appeal.
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According to Post, "[t]his [need for inspection] occurred because
195 feet of the shoreline is [the municipality's road] and the
road has a spillway beneath the pavement, installed when the road
was improved to its present state in 1900 to release water during
10, 50, and 100 year storm events." Post claimed the Association
disputed liability and responsibility for the dam for many years,
until 2015, when the municipality and the Association signed a
shared responsibility agreement. Post asserts the Association
entered the agreement based on the regulatory definition of a
dam's "owner" or "operator," and by virtue of the Association's
unauthorized use of the dam for various purposes.
Post further asserted that in July 2006, the Association
"began a financial offensive against [defendants] . . . when it
demanded seven years of delinquent 'dues' and 'maintenance and
repair costs.'" Further, Post claims that notwithstanding the
judgment entered against the Association in the earlier lawsuit,
the Association has threatened defendants' water rights in Lake
Grinnell. Post asserted defendants had responded to every
Association demand for payment of dues and maintenance costs by
reiterating they were not association members, wanted nothing to
do with the Association's initiatives, and could not be held
responsible by the Association for debts they did not incur,
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particularly those related to the improper and unauthorized use
of what defendants considered the municipal dam and spillway.
In 2015, in a letter from the Association's counsel to
defendants, the Association, through counsel, finally conceded
defendants "[were] not . . . member[s] of the Association and
. . . that under those circumstances, [defendants were] not
obligated to pay [Association] dues." The same letter asserted,
notwithstanding defendants' non-membership in the Association,
defendants were legally "obligated to contribute to the
maintenance and repair of [their] easement." Defendants disputed
legal responsibility for maintenance fees, particularly fees
involving the dam.
Based on these moving and opposing certifications, and the
decision and order filed in the Association's previous lawsuit,
the judge sitting in the Special Civil Part granted summary
judgment in favor of the Association. The judge concluded that
while defendants had no contractual obligation to contribute
toward maintenance of the easement, because they were owners of
the easement's dominant estate, they had, along with the right to
the use of the easement, the legal duty to contribute toward its
maintenance.
The judge also determined the Association, as owner of the
majority of the land beneath the lake, had authority to make
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assessments against non-member property owners to cover the costs
of needed repairs to the dam. With respect to the dam, the judge
concluded that since defendants began enjoying the benefit of
their easement, "the lake and dam have undoubtedly suffered wear
and tear over the years." Lastly, the judge determined the fees
assessed by the Association were reasonable.
Defendants also raised as defenses collateral estoppel, the
entire controversy doctrine, and res judicata. The judge rejected
these defenses and filed an implementing order. This appeal
followed.
A party is entitled to summary judgment when, viewed in the
light most favorable to the non-moving party, "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." R. 4:46-
2; accord Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520,
528-29 (1995). Our review of an order granting summary judgment
is de novo. Jones v. Morey's Pier, Inc., 230 N.J. 142, 153 (2017);
Bhagat v. Bhagat, 217 N.J. 22, 38 (2014) ("An appellate court
reviews an order granting summary judgment in accordance with the
same standard as the motion judge.").
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Here, the motion record did not show there was no genuine
issue as to any material fact challenged. Moreover, the parties
had not developed an adequate record on which the court could
adjudicate the fact-sensitive equitable considerations underlying
what appeared from the complaint to be a relatively small
collection action. To the contrary, in order to ascertain the
Association's relatively minor legal claim, the court was required
to adjudicate the parties' rights and obligations concerning an
appurtenant equitable easement. Such an adjudication has long-
term implications, including the possible future liability of
defendants to contribute to the expenses of maintenance or perhaps
replacement of an existing dam.4
Indisputably, defendants have an easement appurtenant to
their property to use the waters of Lake Grinnell for boating,
fishing, bathing, and other recreational purposes. "An easement
creates a nonpossessory right to enter and use land in the
possession of another and obligates the possessor not to interfere
with the uses authorized by the easement." Restatement (Third)
of Prop.: Servitudes § 1.2(1) (2000). The term "'[a]ppurtenant'
4
In view of the significant underlying equitable issues, we
question whether the Special Civil Part should have decided this
matter and not transferred the case to the Chancery Division.
Civil actions cognizable in the Special Civil Part, with exceptions
not relevant here, are those "seeking legal relief when the amount
in controversy does not exceed $15,000." R. 6:1-2(a)(1).
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means that the rights or obligations of a servitude are tied to
ownership or occupancy of a particular unit or parcel of land."
Id. § 1.5(1). "[T]he interest in land with which [an easement]
runs may be called the . . . 'dominant' estate." Id. §1.1(1)(b).
The interest in land subject to an easement "may be called the
'burdened' or 'servient' estate." Id., § 1.1(1)(c).
In Island Improvement Association v. Ford, 155 N.J. Super.
571, 574 (App. Div. 1978), a case concerning maintenance of private
roads in a privately developed residential area, a panel of this
court, "[c]onviced that with the benefit ought to come the burden,"
held that "absent agreement to the contrary, . . . the obligation
to maintain [an easement] devolves upon the dominant tenant."
(Citing 2 Thompson, Real Property, § 428 at 709 (1961)). The
panel emphasized "[t]his is certainly the rule where the easement
is solely for the benefit of the dominant estate." Id. at 574-
75. In so holding, the panel explained, "[i]n our judgment there
are compelling equitable reasons to apply the rule to the situation
before us even though there may well be incidental use of these
roads by others than the individual landowners." Id. at 575
(emphasis added).
In the case before us, we can glean from the record no
evidence from which one can conclude there are "compelling
equitable reasons" to require defendants to contribute to
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maintenance of the dam. That is not to say such reasons either
do or do not exist. The summary judgment record contains
insufficient information to support either conclusion.
The Association relies upon Lake Lookover Property Owner's
Association v. Olsen, 348 N.J. Super. 53 (App. Div. 2002). In
that case, the owners of property surrounding an artificially
constructed lake appealed from an order requiring similarly
situated property owners to contribute to the cost of repairing
and reconstructing a dam on the lake. Id. at 54. The defendants'
lakeside lots were created when the developers created the lake
by constructing the dam in question. Id. at 54-55. The court
held "the several property owners hold 'separate easements' in the
same servient estate (Lake Lookover) and thus have a duty to each
other to contribute to the cost of repairs and maintenance that
are required to preserve that lake." Id. at 67.
Additionally, in rejecting the defendant's argument that the
Lake Lookover Property Association had adopted an improper role
and assumed duties it had no right to assume with respect to
operation of the dam, the court noted the original development
company as well as the Department of Environmental Protection
(DEP) had deemed the property association the de facto operator
of the entire lake community. Id. at 69. The court noted the
characterization of the property owner as a de facto operator of
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the entire lake community was supported by the evidence adduced
before the trial court, which established the association had
"consistently maintained that the lake [was] the center of the
. . . community." Ibid.The community was created by the original
developers of the lake and builders of the
dam. The homes were built on the lots laid
out by the original developers of the lake and
the surrounding area are there because of the
lake. In 1997, when the [court] initially
ordered a lowering of the water level in order
to reduce pressure on the dam, it was the
Association that led the effort to induce [the
court] to stay the order - which [it] finally
did. It was the Association that pointed out
the dire consequences of such action in the
past, and the likelihood that there would be
similar adverse effects in the future. So far
as appears, none of the defendants disagree
with the Association's taking the lead role
in that earlier litigation or in the
negotiations with the Development Company and
the DEP.
[Ibid.]
The case now before us has significant factual differences
from the facts in Lake Lookover. According to the certifications
in the present case, Lake Grinnell was not formed by a dam; it is
a naturally occurring lake. The record contains scant evidence
concerning the construction of the dam and its purpose, though
defendants claim the municipality built the dam in conjunction
with the improvement of a municipal road. In addition, here,
unlike in Lake Lookover, the parties presented the trial court
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with virtually no details about what role the Association played
with respect to prior use of the dam; if, when, and why the
Association operated the dam; and why the Association agreed to
bear fifty-percent of the responsibility for the dam's maintenance
during the DEP litigation. Perhaps most significantly, there is
no evidence on the motion record about how the dam's operation
contributes to defendants' enjoyment of the easement, unlike Lake
Lookover, where without the dam there would be no lake.
Aside from the issues concerning the dam, the summary judgment
record does not support the judge's finding that the maintenance
fees the Association charged defendants were reasonable. For
example, the Association's conclusory assertion that fees paid to
an attorney regarding a neighboring use of property was necessary
to maintain the quality of water in Lake Grinnell is not supported
by any underlying facts or even any description of the nature of
the role the attorney played.
To be clear, we are not suggesting defendants have no
obligation to contribute a fair share to the maintenance of the
appurtenant easement they enjoy. Nor should this opinion be
construed as suggesting that defendants either do or do not have
to contribute to the costs of maintaining the dam. We merely hold
that on the scant summary judgment record there are inadequate
15 A-3224-15T2
facts from which a court can analyze and resolve the equitable
considerations underlying the parties' contentions.
For these reasons, we vacate the order for summary judgment
and remand this matter, in the first instance, to the Chancery
Division. There, the judge can conduct a preliminary conference,
determine what discovery is needed to resolve the parties' claims,
determine whether other parties should be added, and determine
whether this action should remain in the Chancery Division.
The order of summary judgment is vacated. This matter is
remanded to the Chancery Division for further proceedings
consistent with this opinion. We do not retain jurisdiction.
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