Dworman v. Mayor & Bd. of Aldermen, etc., Morristown, Civ. A. No. 1133-73.

CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
Writing for the CourtHoyt, Jeffers & Weiland by Henry M. Hoyt, Morristown, N. J., for defendant Town of Morristown
Citation370 F. Supp. 1056
PartiesLester J. DWORMAN, Plaintiff, v. The MAYOR AND BOARD OF ALDERMEN, the GOVERNING BODY OF the TOWN OF MORRISTOWN and the Town of Morristown, in the County of Morris, a municipal corporation, Defendant, Third Party Plaintiff, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Third Party Defendant.
Docket NumberCiv. A. No. 1133-73.
Decision Date15 January 1974

370 F. Supp. 1056

Lester J. DWORMAN, Plaintiff,
The MAYOR AND BOARD OF ALDERMEN, the GOVERNING BODY OF the TOWN OF MORRISTOWN and the Town of Morristown, in the County of Morris, a municipal corporation, Defendant, Third Party Plaintiff,

Civ. A. No. 1133-73.

United States District Court, D. New Jersey.

January 15, 1974.

370 F. Supp. 1057
370 F. Supp. 1058
370 F. Supp. 1059
Clapp & Eisenberg by Jerome C. Eisenberg, Newark, N. J., for plaintiff

Hoyt, Jeffers & Weiland by Henry M. Hoyt, Morristown, N. J., for defendant Town of Morristown.

Villoresi & Flanagan by Alfred J. Villoresi, Boonton, N. J., for defendant Mayor & Board of Aldermen of Morristown.

Jonathan L. Goldstein, U. S. Atty. by Amos Gern, Asst. U. S. Atty., Newark, N. J., for third-party defendant HUD.

LACEY, District Judge:

This matter is before this court on plaintiff's motion for summary judgment. Fed.R.Civ.P. 56. Plaintiff, Lester Dworman, is sole owner of the Dworman Company and a citizen of the State of New York. Defendants are the Town of Morristown (the Town), a municipal corporation of the State of New Jersey, and its Mayor and Board of Aldermen. This court's jurisdiction is founded upon diversity of citizenship. 28 U.S.C. § 1332.

Plaintiff's complaint charges that defendants, having failed even to commence construction of an indoor parking facility in Morristown, and to connect the utilities required to operate plaintiff's now partially completed office building therein, have breached their agreement of July 8, 1970 (Agreement). The complaint seeks a declaratory judgment that the Agreement has been breached by defendants, that plaintiff has no duty to perform further thereunder, and damages. By way of alternative relief, plaintiff would have this court enter a decree of specific performance against the defendants, directing them to carry out the terms of the Agreement by constructing the garage and installing the utilities, or to permit plaintiff to perform these tasks for them.

By this motion, plaintiff now seeks the aforesaid relief, except for a determination of damages.


In February 1965 the Town embarked upon a federally aided urban renewal project, the Hollow Redevelopment Project; and in March 1966 initiated a similar project, which was thereafter merged with a portion of the first project to create the Speedwell Avenue Urban Renewal Project. The latter, the subject of the dispute herein, was to receive funds promised by the United States Department of Housing and Urban Development (hereinafter HUD). Disputes as to the sufficiency of HUD's financial assistance are the subject of defendants' third-party complaint against it.

Plaintiff, through a corporation controlled by him, had submitted a proposal to become the redeveloper for the Speedwell Avenue Project. By July 1967 his application had been approved by HUD and the Town, by resolution of its governing body, had designated plaintiff as redeveloper. Plaintiff, the Mayor and Aldermen, acting as the "Local Public Agency,"1 (hereinafter Agency), and

370 F. Supp. 1060
the Town itself, entered into a preliminary Sponsorship Agreement outlining the general concept of the Speedwell Avenue Project. A parking garage of not more than 3,000 car spaces was to be built and owned by the Town. Atop the garage a concrete slab was to be constructed, upon which plaintiff would in turn construct a retail shopping mall. The Town, with plaintiff's approval, was to select an architect to plan the garage

Between 1967 and July 1970 the Town and the Agency apparently fulfilled their obligation to acquire the property, clear the renewal site, and relocate the displaced residents. Plaintiff during this period agreed to construct an additional structure, a ten-story office building, on the project site.

On July 8, 1970, the Town, the Agency, and the plaintiff entered into the Agreement allegedly breached. Generally, the Agreement provided for the construction of the garage, the retail shops, and the ten-story office building in seven interlocking construction phases. The Agreement consisted of two parts: Part I, setting forth the terms and conditions negotiated by the three parties; and Part II, basically provided by HUD, but amended by the parties, a "Standard Form of Lease of Land for Private Redevelopment." The amendments are reflected in section 14 of the Agreement, entitled "Modifications of Part II."

Under the Agreement, the Agency was to convey land to the Town for the construction of the garage and lease sufficient surface and air rights to plaintiff to erect the office building and shopping mall. Following the required submission by plaintiff's architects of preliminary and then final plans, and approval thereof by the Agency, the phased construction was to begin.

Phase I of the plan required plaintiff to commence construction of the office building within five months of the approval of final construction plans and to complete it within 14 months of its commencement. Section 5(a)(i). After plaintiff's completion of 30 percent of the office building, the Town was to commence construction of the parking garage (Phase A), and was to have the Phase A section of the Garage completed within six months of the completion of Phase I. Section 13(f)

The lease term, during which plaintiff was to be in possession of the aforementioned air and subsurface rights, was not to commence until the following three events occurred: 1) The Agency approved "Final Construction Plans"; 2) The Agency or the Town provided plaintiff with 300 temporary, but easily accessible parking spaces; and 3) "The Town had been duly authorized to sell parking facility bonds or other bonds necessary to finance construction of Phase A of the Parking Garage." (Section 3). Moreover, Section 3 of the lease also required both a written notice to plaintiff of the above occurrences and the execution of a supplemental agreement, before the 52-year lease term was to begin. There is no evidence before me to indicate occurrence of the conditions to commencement.

After Phase I was to be completed and Phase A begun, the plaintiff and the Town were to construct under Phases II and III, and Phases B and C respectively. These later phases, however.

370 F. Supp. 1061
are not material to the breaches of the Agreement alleged herein

Between July 8, 1970 and the commencement of construction by plaintiff in November 1972, several events have, or are alleged to have, occurred. Bernard Shaw, the architect hired by the Town to draw the garage plans, failed to finish the needed plans before he was replaced in that position by Porter and Ripa, Associates, the present architects. Both the Town's architect and officials of the Town itself state that as early as late 1970 the parties expressly agreed that the phasing concept in the written agreement was to be abandoned in favor of a single phase construction approach and that all building plans now in existence have been drafted on that basis. The Town, in fact, passed a resolution in May 1973 requesting its attorneys to negotiate an amendment to the Agreement providing for the elimination of the phasing concept. Defendants claim that the plaintiff's attorneys represented that no amendment was necessary while plaintiff asserts that he merely refused to accept the Town's proposed changes.

The defendants, in their supporting affidavits, also claim that the plans submitted by plaintiff's architect for the above-garage mall imposed a significantly greater amount of weight upon the parking garage pillars than the 100 pounds per square foot "live weight" contemplated in Paragraph 1.a. of Schedule G of the Agreement.2 More specifically, the affidavits submitted by defendants state that plaintiff's proposed construction plans would require as much as 1,900 pounds per square foot of weight carrying capacity on some portions of the slab. These changes, they assert, would increase the cost of the garage construction by hundreds of thousands of dollars. Moreover, they claim, by way of Alderman Goodman's affidavit, that notice of the changes was not given to defendants until shortly after submission of preliminary plans to the New Jersey Division of Labor and Safety in July of 1972.

Plaintiff, however, denies the existence of any weight overload and claims that any changes in the plans were so minor that they would create little if any additional expense. The affidavit of plaintiff's construction manager states that the additional weight requirements are only necessary in isolated areas for support of decorations such as fountains; that the required changes should only cost $10,000 (out of $20,000,000 for the project); and that such spot changes are a common occurrence in the industry.

There is little doubt, however, that the real obstacle to the timely construction of the Speedwell Project is the Town's failure to obtain adequate financing for the construction of the parking garage. During 1971 and 1972, defendants claim, numerous conferences were held for the purpose of devising a satisfactory financing arrangement. Moreover, a socalled "Blue Ribbon Panel," appointed by the then Mayor Cattano, studied the project and recommended alternate means of financing, in particular, the issuance of general obligation bonds by the Town, the issuance of bonds by the Morristown Parking Authority, and a lease-back arrangement whereby plaintiff himself would construct the garage for the Town. None of these plans was adopted.

According to defendants, the issuance of general obligation bonds was rejected early in the course of discussions. By virtue of N.J.S.A. 40A:2-6 (1973), Morristown, like other municipalities, was and continues to be limited in the

370 F. Supp. 1062
amount of indebtedness it may incur without State authorization. Affidavits of Town...

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