1530 Owners Corp. v. Americana Assocs.
| Decision Date | 28 August 2020 |
| Docket Number | DOCKET No. BER-C-281-19 |
| Parties | 1530 OWNERS CORP., GARNIK AZARNIA, JO ANN CROSS, and MOE MARSHALL, Plaintiffs, v. AMERICANA ASSOCIATES, THE OLNICK ORGANIZATION, INC., ROBERT OLNICK ASSOCIATES OF NEW JERSEY (d/b/a ROBERT OLNICK CORPORATION), JOHN DOES 1-25, and XYZ CORPORATION 1-25, Defendants. |
| Court | New Jersey Superior Court |
NOT TO BE PUBLISHED WITHOUT APPROVAL OF THE COMMITTEE ON OPINIONS
OPINIONAppearances:
Cheryl Siegel, (Buckalew, Frizzell & Crevina LLP, attorneys) for Plaintiffs
Michael B. Kramer (Michael B. Kramer & Associates, attorneys) for Defendants
HON. EDWARD A. JEREJIAN, P.J.Ch.
This matter comes before the Court by way of Motion to Dismiss the Complaint pursuant to R. 4:6-2(e) and to the extent necessary converting it to a Motion for Summary Judgment and disposed of pursuant to R. 4:46, filed on January 24, 2020, by Defendants Americana Associates, the Olnick Organization, Inc., Robert Olnick Associates of New Jersey (d/b/a Robert Olnick Corporation, John Does 1-25 and XYZ Corporation 1-25 ("Defendants"), by and through counsel Michael B. Kramer & Associates, Michael B. Kramer, Esq. appearing on Pro Hac Vice admission pursuant to R. 1:21-2. On March 16, 2020, Plaintiffs 1530 Owners Corp., Garnik Azarnia, Jo Ann Cross and Moe Marshall ("Plaintiffs"), by and through counsel Buckalew Frizzel and CrevinaLLP, Cheryl Siegel, Esq. appearing, filed opposition to Defendants' Motion. On April 20, 2020, Defendants filed a reply to Plaintiffs' opposition. The Court heard oral argument on June 19, 2020.1
The issue in dispute derives from the conversion of an apartment building located in Fort Lee, New Jersey, to a cooperative ownership property (the "Colony"), with Defendant Americana Associates ("Defendant Americana") serving as the sponsor of the cooperative conversion in 1985. The rental building, with an address of 1530 Palisade Avenue, Fort Lee, New Jersey (the "Building"), consists of four hundred eighty-one (481) apartments. As a result of the cooperative conversion, Defendant Americana formed the corporate entity 1530 Owners Corp. (the "Corporation") to serve as the owner of the cooperative apartment building and to oversee the cooperative apartment's affairs. The Articles of Incorporation include the following provision setting forth the Corporation's main role:
[t]he primary purpose of this Corporation is to provide residences for its shareholders by leasing to them, under proprietary leases, apartments in the building owned by the Corporation, and each of its shareholders shall be entitled solely by reason of his ownership of shares in the Corporation to a proprietary lease entitling him to occupy for dwelling purposes an apartment in the building under said leases.
On July 25, 1985, a closing of title occurred where Defendant Americana conveyed the Building and corresponding land to the Corporation (the "Closing Date"). In addition, on this same date, Defendant Americana entered into an offering plan (the "Offering Plan") in which they would sell apartments and corresponding shares of the Corporation to resident tenants residing in the Building; these shares were to be sold at a discount. Moreover, these sales of shares wouldgive rise to a long-term proprietary lease for each resident's own apartment. Per the Offering Plan, if any of the Building's tenants chose to not purchase any of the Corporation's shares appurtenant to apartments, then these unsold shares (the "Unsold Shares") would be possessed by Defendant Americana. Defendant Americana would then retain the responsibilities and obligations of the proprietary lease that belonged to these unsold apartments and their corresponding Unsold Shares.
The Offering Plan sets out the following in regards to any Unsold Shares, the rights or restrictions surrounding the Unsold Shares, and any obligations of a holder of the Unsold Shares:
Sponsor-Seller represents and agrees to sell or transfer to one or more financially responsible natural persons, by no later than the third anniversary of the Closing Date, all then remaining Unsold Shares held by it. (Complaint, Exhibit A, page 61)
In addition, the Offering Plan also states:
The Unsold Shares shall retain their character as such (regardless of sale or transfer) until the same are purchased, and the apartment to which the same related is occupied, by a purchaser for bona fide occupancy (by himself or a member of his family) or the holder of Unsold Shares (or a member of his family) becomes a bona fide occupant of the apartment. No holder of Unsold Shares shall be restricted in the ability to sublease or sell the Apartment to which the shares are allocated for so long as such share retain their character as Unsold Shares. (Complaint, Exhibit A, page 63).
To date, there are Unsold Shares still held by Defendant Americana, which were never purchased by the residents of the Building and were not sold to any other individuals. Defendants contend that the Offering Plan, Bylaws, and Proprietary Lease are silent as to any obligation for the holder of Unsold Shares to sell said shares for occupancy by a specific date. Defendants also argue that the Offering Plan allows the holder of Unsold shares to sublet the unsold apartments and to engage in transfers of the Unsold Shares to third parties.
To the contrary, Plaintiffs contend that Defendant Americana has an obligation under the Offering Plan to sell all of its shares to individuals for occupancy, and accordingly they filed the Complaint in this action to assert these alleged obligations.
Thus far, four hundred twenty-nine (429) out of four hundred eighty-one (481) apartments in the Building have been sold. Defendant Americana holds fifty-two (52) apartments and twenty-five thousand four hundred seventy-five (25,475) Unsold Shares.
Ultimately, on October 22, 2019, Plaintiffs filed the Complaint in this action claiming that Defendant Americana's inability to transfer the Unsold Shares to individuals for occupancy by July 25, 1988 (three years after the Closing Date) was in breach of the terms of the Offering Plan.
Pursuant to R. 4:6-2(e), if matters outside of the pleading are proffered and not excluded by the court, then a motion to dismiss, for failure to state a claim upon which relief can be granted, shall be treated as a motion for summary judgment. Here, Defendants' Motion to Dismiss shall be elevated to a Motion for Summary Judgment and shall be disposed of per the standard set forth in R. 4:46.
Summary judgment is designed to "avoid trials which would serve no useful purpose and to afford deserving litigants immediate relief." Judson v. Peoples Bank & Trust Co., 17 N.J. 67, 74 (1954). Thus, the court shall grant a summary judgment motion "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits . . . 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." N.J.S.A. 4:46-2(c).
In order to satisfy its burden of proof on a summary judgment motion, the moving party must show that no genuine issue of material facts exists. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 528-29 (1995). Once the moving party satisfies its burden, the burden then shifts to the non-moving party to present evidence that there is a genuine issue for trial. Ibid. The non-moving party may not solely rely on denials or allegations made in an answer to defeat a motion for summary judgment. See Cortez v. Gindhart, 435 N.J. Super. 589, 606 (App. Div. 2014). Instead, the non-moving party must respond with affidavits meeting the requirements of R. 1:6-6 as otherwise provided in this rule and by R. 4:46-2(b), setting forth specific facts showing that there is a genuine issue for trial.
In determining whether the existence of a genuine issue of material fact precludes summary judgment, the court must "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 fact-finder to resolve the alleged disputed issue in favor of the non-moving party." Brill, 142 N.J. at 540. Even if there is a denial of essential fact, the court should grant a motion for summary judgment if the rest of the record, viewed most favorably to the party opposing the motion, demonstrates the absence of a material and genuine factual dispute. See Rankin v. Sowinski, 119 N.J. Super. 393, 399-400 (App. Div. 1972).
Defendants contend that the primary reason for dismissing Plaintiffs' claims is due to the fact that these claims were filed more than two decades after the applicable statute of limitations time period expired. Accordingly, Defendants point to the governing documents between the parties and claim that these documents clearly express when Plaintiffs' claims were ripe for filing, and that now, the window of time to file these claims has expired.
Defendants note that Plaintiffs' claims are centered around the fact that Defendant Americana did not transfer the Unsold Shares within three years of the Closing Date. Given that the Closing Date, in which the Offering Plan went into effect and the Corporation was given control of the Building, was on July 25, 1985, this alleged three-year window to transfer the Unsold Shares would have been July 25, 1988. As such, Defendants argue that Plaintiffs' claims against them would have commenced on July 25, 1988, and the applicable six-year statute of limitations to bring these claims would have expired on July 25, 1994.
Plaintiffs argue that the statute of limitations is twenty years as opposed to six years because their claims involve real property and thus N.J.S.A. §2A:14-7 should apply.
N.J.S.A. §2A:14-7 states "[e]very action at law for real estate shall be commenced...
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