Speedwell, LLC v. Town of Morristown
| Decision Date | 24 February 2023 |
| Docket Number | 21cv18796 (EP) (JRA) |
| Parties | SPEEDWELL, LLC, SPEEDWELL ASSOCIATES NO. 1, LP, AND SPEEDWELL ASSOCIATES NO. 4, LP, Plaintiffs, v. TOWN OF MORRISTOWN, et al., Defendants. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
This suit concerns a contractual dispute arising from a multi-phase plan to redevelop certain real property in Morristown, New Jersey (“Area in Need of Redevelopment”). Plaintiffs, who are developers, bring this suit against the Town of Morristown (“Town”), Town employees and/or affiliates, and a private developer following a property redevelopment dispute. Plaintiffs allege a series of claims, including, inter alia, breach of contract claims and constitutional claims. Defendants separately move to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and/or 12(b)(1). The Court decides Defendants' motions without oral argument. See Fed.R.Civ.P. 78(b); L.Civ.R.78(b). For the reasons set forth below Defendants' motions will be GRANTED and any remaining state law claims will be REMANDED to state court.
Plaintiffs are developers, who own certain property in Morristown, New Jersey. D.E. 1, Ex. A (“Compl.”) ¶¶ 24-26. Plaintiffs have the same principal place of business located in Morristown, New Jersey. Id. Speedwell, LLC holds title to Block 5803, Lots 6, 1.0, and 1.03 on the Tax Map of the Town of Morristown. Id. ¶ 24. Speedwell Associates No. 1, LP holds title to Block 5803, Lots 2 and 4 on the Tax Map of the Town of Morristown. Id. ¶ 25. Speedwell Associates No. 4, LP holds title to Block 5803, Lots 3 and 5 on the Tax Map of the Town of Morristown. Id. ¶ 26.
Defendants were all involved in the plan to redevelop the Area in Need of Redevelopment. The Town is a municipal corporation of New Jersey with offices located in Morristown, New Jersey. Id. ¶ 27. Timothy Dougherty is its mayor (“Mayor”). Id. ¶ 28. Topology NJ, LLC (“Topology”) is a municipal planning and development firm, with its principal place of business located in Newark, New Jersey, that the Town retained and paid to assist in matters related to the “Area in Need of Redevelopment.” Id. ¶ 29. Phil Abramson is a Topology employee, who has served as the Town's official Town Planner concerning matters relevant to this case (“Town Planner”). Id. ¶ 30. John Inglesino is special counsel to the Town (“Special Counsel”). Id. ¶ 31. Morristown Development LLC and Morristown Urban Renewal Phase II, LLC (collectively, “Morristown Development”) are affiliated private development firms appointed as the developer of the Area in Need of Redevelopment and are party to the 2015 Settlement Agreement and the Temporary Easement Agreement, discussed below. Id. ¶ 32.
In 1999, Plaintiffs proposed that the Town designate certain property, which included Plaintiffs' properties, as an Area in Need of Redevelopment. Id. ¶ 5. In 2004, the Town decided to move forward with a multiphase plan to redevelop the Area in Need of Redevelopment (“Redevelopment Plan”). Id. ¶ 6. In 2008, the Town's Council adopted the Redevelopment Plan via ordinance. Id.
Phases One and Two of the Redevelopment Plan were to be developed on interior parcels located in the Area in Need of Redevelopment. Id. Plaintiffs controlled more than one-third of the Phase Two properties through a 99-year leasehold interest. Id. Phase Three was to be developed after the completion of Phases One and Two on street-facing parcels in the Area in Need of Redevelopment. Id. Plaintiffs owned most of the Phase Three parcels. Id. Phase Four was to be developed last. Id. Plaintiffs did not own any Phase Four parcels. See id.
In September 2011 and November 2012, the Town passed two additional ordinances adopting specific plans for the Area in Need of Redevelopment (“2012 Redevelopment Plan”). Id. ¶ 8. The 2012 Redevelopment Plan provided that Phase Three development could include up to 156 residential units and 25,000 square feet of commercial space, and would have a duration of fifty years. Id.
In May 2013, development of Phase One began. Id. ¶ 10. Development of Phase Two was expected to begin one year later. Id.
The Town and the Morristown Parking Authority (“MPA”) filed suit against Plaintiffs, claiming that Plaintiffs had never exercised their 99-year leasehold interest over the one-third of Phase Two properties they controlled, and thus, that interest was void. Id. In January 2015, the parties entered into a Settlement Agreement resolving this dispute (“2015 Settlement Agreement”). Id. ¶ 11. Pursuant to the 2015 Settlement Agreement's terms, Plaintiffs relinquished control over more than one-third of the parcels located in the Phase Two development area to enable the MPA to sell the property to the Phase Two developer. Id. The 2015 Settlement Agreement also provided: (1) MPA would convey to Plaintiffs two street-facing parcels for $950,000 and Plaintiffs would release their 99-year leasehold interest; (2) the Town would “immediately, continuously, timely without unreasonable delay, diligently work in good faith with [Plaintiffs] to develop an agreed to plan and amendment to the [2012 Redevelopment Plan] and to designate [Plaintiffs'] designated entity as redeveloper of the Phase Three parcels[;]” and (3) the Town agreed that Plaintiffs “may apply to the Town to be designated as redeveloper of the Phase Three Parcels immediately and the Town shall promptly and without delay review [the application] and, if [Plaintiffs] reasonably demonstrate[] to the Town [that they have] the financial and managerial ability to develop the project, qualify [Plaintiffs] as the redeveloper of Phase Three.” Id.
In May 2015, the Town adopted revised plans for the Area in Need of Redevelopment via ordinance (“2015 Redevelopment Plan”). Id. ¶ 109. The 2015 Redevelopment Plan reduced the permitted residential units referenced in the 2012 Redevelopment Plan for Phase Three. Id.
In March 2016, Plaintiffs executed a temporary easement agreement (“Temporary Easement Agreement”). Id. ¶ 19, 90-92. The Temporary Easement Agreement granted the Town a temporary pedestrian easement, which was to be terminated when Phase Three development took place and the easement would be relocated to another location. Id. ¶ 92, 227-30. Under this agreement, Morristown Development was expected to perform all inspections, maintenance, and repairs on the easement. Id. ¶¶ 18, 229-30.
Beginning in July 2016, Plaintiffs presented multiple development proposals to the Town Planner concerning Phase Three. See Id. ¶¶ 108-223. In September 2018, the Town Defendants informed Plaintiffs that the Town would not accept Plaintiffs' development proposals that did not comply with the 2015 Redevelopment Plan, even if they complied with the 2012 Redevelopment Plan. See Id. ¶ 138.
Beginning in January 2019, the Town issued a series of summonses to Plaintiffs for trash accumulation on the temporary easement. Id. ¶ 240.
In February 2019, the Town again adopted revised plans for the Area in Need of Redevelopment via ordinance (“2019 Redevelopment Plan”). Id. ¶ 252.
In August 2019, the Special Counsel made written and verbal statements concerning plans for the Area in Need of Redevelopment and Plaintiffs' role in those plans. See Id. ¶¶ 259-79. In November 2019, the Mayor made certain statements concerning the same. See Id. ¶¶ 287-90.
In November 2019, Plaintiffs filed their original federal suit against Defendants asserting nearly identical claims as those asserted now (“Speedwell I”). See Speedwell, LLC, et al. v. Town of Morristown et al., No. 19-cv-19820. In February 2020, Plaintiffs filed an amended complaint in that same suit. Defendants moved to dismiss Speedwell I and those motions were fully briefed. In September 2020, the Court ordered discovery to begin. The parties also engaged in unsuccessful settlement discussions. In September 2021, before Defendants' respective motions to dismiss were decided, Plaintiffs withdrew their federal suit and filed a substantially identical suit in New Jersey Superior Court. See Speedwell, LLC, et al. v. Town of Morristown, et al., Dkt. No. MRS-L-1900-21 (N.J. Sup. Ct. Sept. 8, 2021).
Defendants timely removed that suit to federal court, D.E. 1, and moved to dismiss, respectively. Plaintiffs moved to remand the suit back to state court, D.E. 14-1, but the Court (Almonte, Mag. J.) denied that motion after finding that removal to federal court was proper. See D.E. 27.
Plaintiffs bring numerous claims against Defendants. Plaintiffs' claims include: violations of 42 U.S.C. § 1983 (“Section 1983”) caused by Defendants' impairment of contracts, violations of the Fourteenth Amendment's Due Process Clause, and violations of the Fifth Amendment's Takings Clause; civil conspiracy, in connection with Plaintiffs' Section 1983 claims; fraudulent inducement; fraud - present promise without the intent to perform; breach of contract; breach of the covenant of good faith and fair dealing; tortious interference with contract; defamation; and violation of the New Jersey Constitution Contract Clause. See Compl. at 111-123.
Plaintiffs seek a myriad of different forms of relief against Defendants, including, inter alia, specific performance, compensatory damages, punitive damages, and attorneys' fees. Id. at 123-24.
Defendants' respective motions to dismiss are the subject of this Opinion. The Special Counsel moves to dismiss Plaintiffs' defamation claim, which is brought against the Special Counsel and the Mayor pursuant to Rule 12(b)(6). D.E. 37-2 (“SC Mot.”). Separately, Morristown Development moves to dismiss Plaintiffs' Section 1983 conspiracy claim and civil conspiracy claim...
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