Opinion
DOCKET NO. A-5466-14T2
12-01-2016
HOMESTEAD AT MANSFIELD HOMEOWNERS ASSOCIATION, INC., Plaintiff-Appellant, v. HOMESTEAD AT MANSFIELD, INC., HOMESTEAD CABLE TV, INC., MICHAEL V. LAINO, JACQUELINE S. TOY, CCG SPV I, LLC, NEW CINGULAR WIRELESS PCS, LLC, d/b/a CINGULAR WIRELESS, as successor to Motorola, Inc., DEUTSCHE BANK TRUST COMPANY AMERICAS, and COLUMBUS SATELLITE TOWER, LLC, Defendants-Respondents, and CCG SPV I, LLC, NEW CINGULAR WIRELESS, as successor to Motorola, Inc., and DEUTSCHE BANK TRUST COMPANY OF AMERICA, Third-Party Plaintiffs, v. MICHAEL V. LAINO and JACQUELINE S. TOY, Third-Party Defendants.
James G. O'Donohue argued the cause for appellant (Hill Wallack LLP, attorneys; Mr. O'Donohue, of counsel and on the briefs). Philip B. Seaton argued the cause for respondents Homestead at Mansfield, Inc., Homestead Cable TV, Inc., Michael V. Laino, Jacqueline S. Toy and Columbus Satellite Tower, LLC (Law Office of Philip B. Seaton, attorneys; Mr. Seaton and Kit Applegate, on the brief). Stephen R. Knox argued the cause for respondent New Cingular Wireless PCS, LLC (Bressler, Amery & Ross, P.C., attorneys; Mr. Knox and Gerd W. Stabbert, Jr., on the brief). William J. McGuire, Jr. argued the cause for respondents CCG SPV I, LLC and Deutsche Bank Trust Company Americas (Fidelity National Law Group, attorneys; Mr. McGuire, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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. Before Judges Fisher, Ostrer and Leone. On appeal from the Superior Court of New Jersey, Chancery Division, Burlington County, Docket No. C-59-14. James G. O'Donohue argued the cause for appellant (Hill Wallack LLP, attorneys; Mr. O'Donohue, of counsel and on the briefs). Philip B. Seaton argued the cause for respondents Homestead at Mansfield, Inc., Homestead Cable TV, Inc., Michael V. Laino, Jacqueline S. Toy and Columbus Satellite Tower, LLC (Law Office of Philip B. Seaton, attorneys; Mr. Seaton and Kit Applegate, on the brief). Stephen R. Knox argued the cause for respondent New Cingular Wireless PCS, LLC (Bressler, Amery & Ross, P.C., attorneys; Mr. Knox and Gerd W. Stabbert, Jr., on the brief). William J. McGuire, Jr. argued the cause for respondents CCG SPV I, LLC and Deutsche Bank Trust Company Americas (Fidelity National Law Group, attorneys; Mr. McGuire, on the brief). PER CURIAM
In this appeal, we examine whether a developer, which retained a utility easement on a homeowners association's property, exceeded the easement's scope by allowing telephone antennae to be placed on the developer's tower on the burdened property because persons outside the development also benefited. Recognizing, as did the chancery judge, that the easement does not expressly preclude services that incidentally benefit others, we affirm for the most part the summary judgment entered in defendants' favor.
I
In commencing this 2014 chancery action, plaintiff Homestead at Mansfield Homeowners Association, Inc. (the homeowners association) sought to quiet title to the utility parcel and to eject defendant Homestead at Mansfield, Inc. (the developer) and other defendants, from that parcel. The homeowners association asserted, among other things, that the developer had exceeded its easement rights or otherwise unduly burdened that easement. The disputes concerning this easement were resolved by the chancery judge on cross-motions for summary judgment in defendants' favor, thereby triggering the homeowners association's appeal.
The initial complaint also named, as defendants: Homestead Cable TV, Inc.; CCG SPV I, LLC; New Cingular Wireless, PCS, LLC; and Deutsche Bank Trust Company Americas. In later pleadings, the homeowners association asserted claims against Michael V. Laino, Jacqueline S. Toy, and Columbus Satellite, LLC.
We are obligated, as was the chancery judge, to apply the Brill standard and assume the truth of the homeowner association's factual assertions; that standard also provides the homeowners association with all favorable inferences flowing from those facts. Townsend v. Pierre, 221 N.J. 36, 59 (2015).
Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
In adhering to this standard, we observe that, between 1981 and 1983, the developer sought to create a planned real estate development, known as Homestead at Mansfield, on property it owned in Mansfield Township. The homeowners association was formed to manage the common elements and facilities.
In October 1983, pursuant to the Planned Real Estate Development Full Disclosure Act, N.J.S.A. 45:22A-1 to -56, the developer registered with the Department of Community of Affairs and filed a declaration setting forth various covenants, conditions and restrictions, including its reservation of a utility easement, which was described as creating for the developer:
A blanket and non-exclusive easement . . . for the purpose of installation, maintenance, repair and replacement of (i) all sewer, water, power and telephone, pipes, lines, mains, conduits, waters, poles, transformers, master television antennas or cable television facilities and any and all other equipment or machinery necessary or incidental to the proper functioning of any utility systems serving the Property; or (ii) any other improvements thereto, including the right of ingress and egress, which easements shall be for the benefit of (a) declarant for so long as declarant, its successors and assigns shall be engaged in the construction, development and sale of Homes on the Property; and (b) the Homeowners Association on a perpetual basis in connection with the proper discharge of its responsibilities with respect to the Homes or Common Property.An additional provision, Section 3(h), described the developer's easement rights upon cessation of the construction and sale of homes within the development. As the parties concede, Section 3(h) governs the rights at issue in this suit; it states:
Any utility company or entity furnishing utility service, including master or cable television or electronic security service to the Property, its agents and employees shall have a blanket, perpetual and non-exclusive easement to enter the Property, or any part thereof, in order to read meters, service or repair utility lines and equipment and do everything and anything else necessary in order to properly maintain and furnish utility service to the Property and Homes.The parties' disputes turn on the scope of Section 3(h).
To understand the nature of their disputes and each party's participation in the operative facts, we briefly outline the activities on the utility parcel and the past transactions which conveyed the rights to the easement that followed its creation.
II
In 1984, the developer's wholly-owned subsidiary — defendant Homestead Cable TV, Inc. (HTV) — built a 150-foot steel tower on the utility parcel for the purpose of providing cable television service to the development as well as a security link-up to the Mansfield Township Police Department.
In 1985, the developer deeded the 1.794-acre utility parcel to the homeowners association, subject to the easement described above. In 1986, the tower was also utilized to provide cellular telephone service for the development's residents and the surrounding communities; in this regard, HTV entered into a lease agreement which granted Motorola, Inc. access to install on the tower and maintain four eight-foot antennae.
In 1993, the developer ceded its three executive board seats on the homeowners association and transitioned full control of the "common facilities and areas" to the homeowners association. This transition was finalized by way of a 1996 settlement agreement, which obligated the developer to pay the homeowners association $300,000 in exchange for a general release "from any and all claims of liability arising from, or out of, any activities undertaken by the [d]eveloper from the beginning of time" until execution of the settlement agreement. In moving for summary judgment, the developer and others asserted that, during negotiations leading up to the settlement agreement, the homeowners association never claimed ownership of the tower or the affixed antennae nor did it claim HTV's construction of or use of the tower and utility parcel violated the easement's scope.
In 2006, HTV assigned the lease to Motorola's successor, defendant New Cingular; the lease term and the amount of rent were also adjusted. This equipment, as before, functioned as the primary server for cellular subscribers within the development as well as others beyond. In 2011, HTV merged with the developer and assumed HTV's rights and interests in the tower.
There is no dispute that existing technology rendered it impossible for New Cingular to provide cellular service to the homes within the development without also providing service to others outside its boundaries.
In 2012, the developer, in exchange for $800,000, assigned the Motorola lease to CCG SPV I (CCG), thereby giving CCG a telecommunications easement which provided exclusive use of the tower and non-exclusive access to the utility parcel. This "Easement Purchase and Assignment of Lease Agreement," which was recorded with the county clerk, contained the developer's incorrect assertion that it owned the utility parcel. No party disputes that this representation is incorrect and that the homeowners association has been the true owner of title to the utility parcel since 1985. The developer attributes this inaccurate representation to a "scrivener's error."
In 2012, the developer sold the tower to Columbus Satellite, LLC. Completing the transactions that gave rise to the disputes pleaded in this action, in 2013, CCG assigned its interest in the "Easement Purchase and Assignment of Lease Agreement" to defendant Deutsche Bank Trust Company Americas.
III
In considering the parties' cross-motions for summary judgment — all of which addressed the meaning of the easement's terms and the legal and equitable significance of the many transactions we have outlined — the chancery judge denied the homeowners association's motion for partial summary judgment and granted defendants' cross-motions for summary judgment, resulting in a dismissal of the complaint in its entirety.
In considering the homeowners association's contention that the judge erroneously dismissed its pleaded causes of action, we begin by recognizing what cannot be disputed. First, the developer undeniably retained for itself, at the time ownership was transferred to the homeowners association, an easement on the utility parcel and, pursuant to the easement's terms, the developer permissibly erected a steel tower on the utility parcel. Second, the tower was used, pursuant to the easement's terms, to provide cellular telephone service to the development; this required the placement of antennae on the tower. Third, these antennae incidentally provided service to surrounding areas as well. And, fourth, the transfers that followed — to the extent they conveyed rights set forth in the easement — were not inconsistent with the homeowners association's ownership rights.
Put in legal terms that guide our decision, the developer possessed an easement, Tewksbury v. Jersey Cent. Power & Light Co., 159 N.J. Super. 44, 49 (App. Div. 1978), aff'd o.b., 79 N.J. 398 (1979) (recognizing that "[a]n easement is an interest in land owned by another"), to the utility parcel that was assignable because it was an easement in gross, Rosen v. Keeler, 411 N.J. Super. 439, 452 (App. Div. 2010). Such an easement imbues its holder with considerable property rights. As our Supreme Court has recognized, a landowner may not, "without the consent of the easement holder, unreasonably interfere with the latter's rights or change the character of the easement so as to make the use thereof significantly more difficult or burdensome." Tide-Water Pipe Co. v. Blair Holdings Co., 42 N.J. 591, 604 (1964). And, as we recently observed, "[t]here is no authority for the proposition that the owner of the property subject to an easement can simply renounce the easement." Van Horn v. Harmony Sand & Gravel, Inc., 442 N.J. Super. 333, 345 (App. Div. 2015). On the other hand, it is understood "there is, arising out of every easement, an implied right to do what is reasonably necessary for its complete enjoyment, that right to be exercised, however, in such reasonable manner as to avoid the unnecessary increases in the burden upon the landowner." Tide-Water Pipe Co., supra, 42 N.J. at 604.
In ascertaining whether an easement holder's use exceeds a granted right, courts examine the instrument that establishes the right "as a whole" and construe that instrument in a manner that "carr[ies] out the intent of the parties." Hyland v. Fonda, 44 N.J. Super. 180, 187 (App. Div. 1957). "[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." Ibid. In other words, if the grant is "plain and unambiguous in the light of the circumstances surrounding its execution," then courts will not look behind or beyond it. Boss v. Rockland Elec. Co., 95 N.J. 33, 38 (1983).
The homeowners association asserts that the developer and HTV exceeded the scope of Section 3(h) by allowing Motorola to use the tower because Motorola's antennae not only provided service to the development but to the surrounding community as well. In essence, the homeowners association claims the intent underlying the easement limited the services it was expected to provide to the homeowner association; that is, the homeowners association contends the easement holder was entitled to use the property solely and exclusively for benefit of the homeowners association and the development's residents, and no one else.
We agree with the chancery judge that the language of Section 3(h) does not support the homeowners association's restrictive interpretation. Although it is fair to assume the easement's essential and primary purpose was to benefit the development's residents, there is no dispute that the uses to which the easement has been put actually do provide a benefit to the homeowners; the gravamen of the homeowners association's claim is that the use also improperly benefits others not intended or contemplated by the easement. The easement's language, however, does not preclude this possibility. Nothing in Section 3(h) suggests that use of the easement to do something "necessary in order to properly maintain and furnish utility service to" the development's residents becomes impermissible if it also benefits others or that the homeowners association might preclude any use or eject any user that incidentally provides a benefit to others.
We construe an easement's terms as we would construe any other instrument. See, e.g., Hammett v. Rosensohn, 26 N.J. 415, 423 (1958); Poblette v. Towne of Smithville, 355 N.J. Super. 55, 63 (App. Div. 2002). Nothing in the terms used to express the easement's contours supports the homeowners association's particular interpretation. The only phrase that arguably comes close — that which allows the easement user to do that which is "necessary . . . to properly maintain and furnish utility service to the Property and Homes" — is unavailing. That language must be understood in the context in which it was found. See, e.g., Shelton v. Restaurant.com, Inc., 214 N.J. 419, 440 (2013); Isetts v. Borough of Roseland, 364 N.J. Super. 247, 256-58 (App. Div. 2003).
So examined, we observe that the easement gave those acting within its scope the express authority "to read meters, service or repair utility lines and equipment and do everything and anything else necessary in order to properly maintain and furnish service to the Property and Homes." When considered in context, the "'necessary' phrase" was included as the means of describing what might be done by a user upon entry onto the utility parcel, such as reading the meters, and cannot fairly or reasonably be construed as barring uses necessary to provide service to the development's residents which also benefit others. In short, when illuminated by its context, the "'necessary' phrase" may not be reasonably or plausibly interpreted as if Section 3(h) stated: "necessary . . . to . . . furnish utility service exclusively to the Property and Homes." To adjudicate the parties' claims as if the word "exclusively" actually appeared within the easement's terms would not be interpretation but distortion — a drastic and impermissible rewriting of the easement's terms. See, e.g., Grow Co. v. Chokshi, 403 N.J. Super. 443, 464 (App. Div. 2008).
In addition, the chancery judge correctly rejected the homeowners association's implausible contention that the use of the easement for regional cellular service unduly burdens the utility parcel, increases traffic in and out of the utility parcel, poses an unreasonable risk of injuries to workers or residents, and troubles the development with "anonymous people coming on the [homeowners association's] property unchecked." We agree with the chancery judge's analysis of these contentions:
[T]he antennae used by Motorola and New Cingular are quite similar to the master cable television antennae for which the tower was constructed in the first place. Thus, [the homeowners association] cannot simultaneously argue that the installation of Motorola's antennae constitutes an increased burden on the servient estate and that it failed to notice their presence for nearly thirty years because they are indistinguishable from the cable television antennae. It is well-settled that there is an implied right to use the easement for what is reasonably necessary to effectuate the purpose of the easement, see Boss, supra, 95 N.J. at 42, and the court finds that usage of the tower here to be just that.
We also agree with the chancery judge's assessment of the claim that the developer's transactions with other entities following the easement's creation somehow enhanced or expanded the granted rights:
As for the 2012 CCG Agreement, neither the access easement nor the utility easement create any new rights or enlarge those rights held by [the developer] at the time. [T]he provision of cellular services does not exceed the scope of Section 3(h)'s language, and as such neither of the easements granted to CCG go beyond it either. With respect to the
exclusive easement, . . . [the developer] did not grant any rights greater than those it already held. Rather, [it] granted an exclusive easement to use the tower it owned; this easement only allows CCG to prevent others from using the tower owned by [the developer], not the [u]tility [p]arcel itself, and thus does not create or grant any right to property owned by [the homeowners association].With one exception, which we later discuss, the chancery judge correctly described the nature of the transactions and recognized the undisputed fact that the developer's successors and assignees made no greater use of the utility parcel than permitted the developer when the easement was created.
IV
In advocating for its interpretation and construction of the easement's terms, the homeowners association sought not only to quiet title to the utility parcel and ejectment of defendants therefrom, but also an award of damages based on what it claims was a slander of title, unjust enrichment, fraud, and conversion. With one exception, we affirm the summary dismissal of these claims for the reasons we have outlined in rejecting the claims that the developer and its successors and assignees had exceeded its easement rights or had unduly burdened the easement.
We find it unnecessary to reach the contention that the 1996 settlement agreement somehow bars this lawsuit. Although we agree the settlement illuminates an understanding of the homeowners association's knowledge of the easement's past use and the tardiness of its contention that the current use was unduly burdensome, the settlement agreement could not bar claims arising after its formation, and certainly could not serve to defeat the quiet title and related claims arising from the Easement Purchase and Assignment of Lease Agreement, which was not formed until sixteen years after the settlement. --------
The one exception relates to the fact that, in the Easement Purchase and Assignment of Lease Agreement, the developer expressly represented its ownership of the utility parcel. There is no dispute about the inaccuracy of this statement and, as the opponent of a summary judgment motion, the homeowners association was and remains entitled to an assumption that this misrepresentation was more than just a "scrivener's error," as self-servingly asserted by the developer. We conclude that whatever the intent the homeowners association is entitled to relief.
If the incorrect representation was made with malice, either express or implied, Peters Well Drilling Co. v. Hanzula, 242 N.J. Super. 16, 24-25 (App. Div. 1990), then the homeowners association would have an actionable slander of title claim. If, on the other hand, the statement was innocently uttered, the homeowners association remains entitled to relief by the way of its quiet-title action. N.J.S.A. 2A:62-1 provides that a property owner may "maintain an action . . . to settle the title to such lands as to clear up all doubts and disputes concerning the same" when its title is "denied or disputed." The recorded Easement Purchase and Assignment of Lease Agreement places in doubt or disputes the homeowners association's ownership of the utility parcel; its title is "sufficiently enshroud[ed]" by this recorded agreement as to permit maintenance of the homeowners association's quiet title action. See Suser v. Wachovia Mortg., FSB, 433 N.J. Super. 317, 325-26 (App. Div. 2013). The judicial response to this cloud "must be assessed in view of its particular facts and the magnitude of the threat to the plaintiff's title and use of the property." Id. at 326 n.4.
After close examination of the record, we are satisfied there are sufficient doubts about the inclusion of the developer's claimed ownership of the utility parcel as to require reversal of summary judgment insofar as it dismissed the quiet title and slander of title causes of action. The scope of relief turns on a determination of the intent underlying the wrongful assertion of ownership.
V
We find insufficient merit in any other argument of the homeowner association that we have not specifically addressed, or any argument that may be discerned from its submissions, to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed in part, reversed in part, and remanded for further proceedings in conformity with this opinion. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION