You are on page 1of 35

WOODMONT PROPERTIES, LLC

Plaintiff,
v.
LEHIGH ACQUISITION CORP. and
YORKVILLE ADVISORS,tLLC
Defendants.
i SUPERIOR COURT OF NEW JERSEY
I CHANCERY DIVISION
I : ~ : ~ : : ~ - C - 1 5 - 1 1
CIVIL ACTION
MEMORANDUM OF LAW ON BEHALF OF PLAINTIFF WOODMONT
PROPERTIES, LLC IN OPPOSITION TO DEFENDANTS' MOTION TO DISMISS
Of Counsel:
Paul A. Rowe
Darren C. Barreiro
On the Brief:
Darren C. Barreiro
Justin P. Kolbenschlag
Greenbaum, Rowe, Smith, and Davis LLP
Metro Corporate Campus One
P.O. Box 5600
Woodbridge, New Jersey 07095
(732) 549-5600
Attorneys for Plaintiff
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT ...................................................................................... , ............. 1
STATEMENT OF FACTS ............................................................................................................. 3
LEGAL ARGUMENT .................................................................. : ................................................. 9
POINT I .............................................................................................................................. 9
'
THE LEGAL STANDARD FOR A MOTION TO DISMISS ........................................... 9
POINT II ........................................................................................................................... 10
WOODMONT HAS STATED A COGNIZABLE CLAIM OF BREACH
OF CONTRACT/SPECIFIC PERFORMANCE .............................................................. 10
POINT III .......................................................................................................................... 18
WOODMONT HAS STATED A COGNIZABLE CLAIM OF BREACH
OF COVENANT OF GOOD FAITH AND FAIR DEALING ........................................ 18
POINT IV .......................................................................................................................... 21
WOODMONT HAS STATED A COGNIZABLE CLAIM OF
PROMISSORY ESTOPPEL ............................................................................................. 21
POINT V ........................................................................................................................... 22
WOODMONT HAS PLED ITS COMMON LAW FRAUD CLAIM
WITH SUFFICIENT PARTICULARITY. ....................................................................... 22
POINT VI. ......................................................................................................................... 24
WOODMONT HAS STATED A COGNIZABLE CLAIM OF UNJUST
ENRICHMENT ............................................................................. : .................................. 24
POINT VII ........................................................................................................................ 26
DEFENDANTS' MOTION MUST BE DENIED, AS THE
ALLEGATIONS OF THE COMPLAINT RAISE NUMEROUS ISSUES
OF FACT .......................................................................................................................... 26
CONCLUSION ............................................................................................................................. 29
-i-
TABLE OF AUTHORITIES
Abeles v. Adams Engineering Co.,
64 N.J. Super. 167 (App. Div. 1960), modified 35 N.J. 411 (1961) ......................................... 13
Banco PopularN. Am. v. Gandi,
1'84 N.J. 161 166 (2005) ................................................... .' ......................................................... 9
Berg Agency v. Sleepworld-Willingboro, Inc.,
136 N.J. Super. 369 (App. Div. 1975) ...................................................................................... 14
Berlin Med. Assocs., P.A. v. CMI N.J. Operating Corp.,
2006 N.J. Super. Unpub. LEXIS 2966 (App. Div. Aug. 3, 2006) ............................................ 27
Borough of W. Caldwell v. Borough of Caldwell,
26 N.J. 9 (1958) ........................................................................................................................ 11
Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs.,
182 N.J. 210 (2005) .................................................................................................................. ~ 1 8
Callahan v. Stanley Works,
306N.J. Super. 488 (LawDiv.1997) ....................................................................................... 10
Callano v. Oakwood Park Homes Corp.,
91 N.J. Super. 105 (App. Div. 1966) ........................................................................................ 24
Camden County Energy Recovery Assocs. v. N.J. Dep't of Environ. Prot., 320
N.J. Super. 59, 64 (App. Div. 1999), affd, 170 N.J. 246 (2001) ............................................. 27
Caputo v. Nice-Pak Prods., Inc.,
300 N.J. Super. 498 (App. Div.), certif. denied 151 N.J. 463 (1997) ....................................... 25
Centex Homes Corp. v. Boag,
128 N.J. Super. 385 (Ch. Div. 1974) .................................................................................. 16, 17
Coastal Oil Co. v. Eastern Tankers Seaways Corp.,
29 N.J. Super. 565 (App. Div. 1954) ........................................................................................ 13
Craig v. Suburban Cablevision, Inc., 140 N.J. 623, 626 (1995) ..................................................... 9
Enriquez v. W. Jersey Health Sys.,
342 N.J. Super. 501 (App. Div.), certif. denied 170 N.J. 211 (2001) ...... ~ .......... : ..................... 25
-ii-
First Nat. State Bank of N.J. v. Commonwealth
Fed. Sav. and Loan Ass'n ofNorristown, Pa.,
455 F. Supp. 464 (D.N.J. 1978) .......................................................................................... ,,...... 17
Fischetto Paper Mill Supply, Inc. v. Quigley Co., Inc.,
3 N.J. 149 (1949) ...................................................................................................................... 22
Friendship Manor, Inc. v. Greiman,
244 N.J. Super. 104 (App. Div. 1990) ...................................................................................... 16
Great Atlantic & Pacific Tea Co., Inc. v. Checchio,
335 N.J. Super. 495 (App. Div. 2000) ...................................................................................... 28
Iliadis v. Wal-Mart Stores, Inc.,
191 N.J. 88 (2007) .................................................................................................................... 25
In re Carlisle Homes,
103 B.R. 524 (Bankr. D.N.J. 1988) .......................................................................................... 16
In re Envtl. Ins. Declaratory Judgment Actions,
149 N.J. 278 (1997) .................................................................................................................. 16
Jersey City Redevelopment Agency v. Clean-0-Mat Corp.,
289 N.J. Super. 381 (App. Div. 1996) ...................................................................................... 16
Jewish Center of Sussex County v. Whale,
86 N.J. 619 (1981) .................................................................................................................... 22
Keifhaber v. Y annelli,
N.J. Super. 139 (App. Div. 1950) ............................................................................................. 13
K-T Corp. v. JB Assocs.,
2009 N.J. Super. Unpub. LEXIS 2087, 11-12 (App. Div. Aug.4, 2009), certif.
denied 200 N.J. 550 (2009) ................................................................................................. 14,, 15
Lobiondo v. O'Callaghan,
357 N.J. Super. 488 (App. Div.), certif. denied 127 N.J. 224 (2003) ....................................... 22
Louis Schlesinger Co. v. Wilson,
22 N.J. 576 (1956) .................................................................................................................... 22
Malaker Corp. Stockholders Protective Committee v. First Jersey Nat. Bank,
163 N.J. Super. 463 (App. Div. 1978), certif. denied 79 N.J. 488 (1979) ................................ 21
McBarron v. Kipling Woods, L.L.C.,
365 N.J. Super. 114 (App. Div. 2004) ................................................................................ 12, 14
-iii-
Morales v. Santiago,
217 N.J. Super. 496 (App. Div. 1987) ...................................................................................... 14
Murphy v. Implicito, 392 N.J. Super. 245, 265 (App. Div. 2007) ................................................ 11
NCP Litig. Trust v. KPMG LLP, 187 N.J. 353, 365 (2006) ........................................................... 9
Onorato Constr., Inc. v. Eastman Constr. Co.,
312 N.J. Super. 565 (App. Div. 1998) (quoting§ 90(1) ofthe Restatement of
Contracts, 2d.) .......................................................................................................................
1
•••• 21

Printing Mart-Morristown v. Sharp Elecs., 116 N.J. 739, 772 (1989) ............................................ 9
Salomon v. Eli Lilly & Co.,
98 N.J. 58 (1984) ...................................................................................................................... 10
Seidenberg v. Summit Bank,
348 N.J. Super. 243 (App. Div. 2002) ...................................................................................... 19
Sons of Thunder, Inc.,
148 N.J. at 421) ......................................................................................................................... 18
State, Dep't of Treasury, Div. oflnv. ex rel. McCormac v. Qwest
Communications Intern., Inc.,
387 N.J. Super. 469 (App. Div. 2006) ...................................................................................... 23
Toll Bros., Inc. et al. v. Bd. of Chosen Freeholders ofthe County of Burlington et
al.,
194 N.J. 223 (2008) .................................................................................................................. 21
Velantzas v. Colgate-Palmolive Co., Inc.,
109 N.J. 189 (1988) .................................................................................................................. 10
VRG Corp. v. GKN Realty Corp.,
135 N.J. 539 (1994) .................................................................................................................. 25
Weichert Co. Realtors v. Ryan,
128 N.J. 427 (1992) ............................................................................................................ 11, 24
Wilson v. Amerada Hess Corp.,
168 N.J. 236 (2001); Sons ofThunder, Inc. v. Borden, Inc., 148 N.J. 396
(1997) ........................................................................................................................................ 18
R. 4:5-2 ......................................................................................................................................... 25
R. 4:5-6 ......................................................................................................................................... 25
-iv-
R. 4:6-2(e) ..................................................................................................................................... 27
-v-
PRELIMINARY STATEMENT
Defendants' Lehigh Acquisition Corp. ("Lehigh") and Yorkville Advisors, LLC
("Yorkville") (collectively, "Defendants") Motion to Dismiss should be denied, as Defendants'
motion does not identify a single pleading deficiency with regard to Woodmont Properties,
LLC's ("Plaintiff' or "Woodmont") Complaint. Defendants do nothing more than challenge the

accuracy olcertain of the facts set forth in the Complaint while ignoring other critical facts in the
Complaint prior to the taking of any dispovery. If the Court accepts all facts set forth in
Plaintiffs Complaint as true for purposes of the motion, it is clear that Plaintiff established its
prima facie case for all of the claims therein.
Defendants selectively argue "facts" before the Court while ignoring other facts set forth
in the Complaint. However, when all facts set forth in the Complaint are properly accepted as
true, it is clear that Defendants: (1) led Woodmont into believing that Woodmont and Defendants
were joint venture partners; (2) induced Woodmont to provide substantial and valuable
development services in reliance upon Defendants' representations; (3) breached their agreement
to make Woodmont a joint venture partner; (4) represented to Woodmont that Lehigh would sell
the property located at 555 South Street, Cranford, New Jersey (the "Property") to Woodmont;
(5) then entered into a Letter of Intent ("LOI") by which the parties were to execute a formal
Purchase and Sale Agreement; ( 6) agreed to extend the deadline contained therein and agreed to
all of the terms of the Purchase and Sale Agreement required by the LOI; (7) breached the LOI
by failing to negotiate in good faith contrary to an express term in the LOI; (8) refused to draft
the Purchase and Sale Agreement containing the terms agreed to by the parties as a way to cause
the deadline in the LOI to expire (even though Defendants already had agreed to extend such
deadline); and (9) by improperly attempting to terminate the LOI thereafter.
-1-
1317017.01
Having breached their agreement to make Woodmont their joint venture partner, and
recognizing the substantial exposure for their conduct, Defendants initiated a scheme to lure
Woodmont into signing an LOI to purchase the Property always intending to breach that
agreement and never intending to actually sell the Property to Woodmont.
Based on these facts, and properly attributing all reasonable inferences to Woodmont,

Woodmont's Complaint states clear causes of action for Breach of Contract/Specific
Performance, Breach of the Covenant of Good Faith and Fair Dealing, Promissory Estoppel,
Fraud and Unjust Enrichment. Defendants' Motion simply put misses the mark of the applicable
standard for a motion to dismiss. It should be denied.
-2-
1317017.01
STATEMENT OF FACTS
For the purpose of evaluating this Motion, the facts and all inferences therefrom set forth
herein must be accepted by the Court. Beginning on or about July 8, 2009, Woodmont began
discussing a potential joint venture concerning the Property with Defendants. See Plaintiffs
Complaint (the "Complaint") dated February 3, 2011, attached as Exhibit A to the Certification
I
of Darren C. Barreiro, Esq. ("Barreiro Cert.") at Defendants advised Woodmont that they
were seeking a joint venture partner to help them obtain approvals for development of the
Property, as Defendants had limited development experience. Complaint at
After interviewing several developers, Defendants selected Woodmont to be their joint
venture partner. Complaint at Woodmont delivered a joint venture term sheet to
Defendants but, rather than agree to a joint venture agreement, the parties elected to implement
the joint venture by forming an LLC with the company Operating Agreement defining the
parties' rights and obligations. Complaint at Defendants' counsel prepared an initial draft
of the Operating Agreement and forwarded it to Woodmont on October 7, 2009. Complaint at

The parties continued to negotiate some of the details of the Operating Agreement during
the fall of 2009. Complaint at During those negotiations, Defendants led Woodmont to
believe that Woodmont was their partner and in fact held Woodmont out to their professionals
and others as Defendants' partner. Complaint at Woodmont believed them.
In reliance upon Defendants' commitments and representations, Woodmont provided
extensive development services with respect to the Property. Complaint at 24.
Consistent with Defendants' prior representations and actions, by email dated January 7,
2010, Defendants' attorney acknowledged and represented that an agreement on the language of
the Operating Agreement had in fact been reached. Complaint at Then, on February 4,
-3-
1317017.01
2010, Defendants advised Woodmont by email that the Operating Agreement was on the desk of
David Gonzalez, Defendants' General Counsel, awaiting execution and again, by e-mail dated
February 16, 2010, assured and represented to Woodmont that the deal was done and that they
were merely waiting for Mr. Gonzalez to return from a vacation in order to execute the
Operating Agreement. Complaint at
;
Meanwhile, Defendants asked Woodmont to assist in the mediation of a builders remedy
suit that had been filed against Cranford with respect to the Property. Complaint at In
reliance on Defendants' representations and conduct, Woodmont continued to assist Defendants
with the builders remedy litigation, and various approvals itwas seeking from the Township.
Complaint at
Despite the fact that all of the material terms were agreed upon and a written agreement
had been drafted, in May 2010, Defendants refused to sign the Operating Agreement and
breached their agreement to make Woodmont their joint venture partner. Complaint at
When Woodmont threatened to bring claims against Defendants as a result of their breach of the
agreement to make Woodmont their joint venture partner, Defendants (through the broker on the
project) presented Woodmont with an offer to sell the Property to Woodmont to resolve the
dispute. Complaint at After negotiations with the broker,. the resolution of the dispute
between Defendants and Woodmont culminated in the execution of the LOI. Complaint at
The Letter of Intent
On or about November 1, 2010, Lehigh offered, and on November 3, 2010 Woodmont
accepted, the terms of the LOI, pursuant to which Woodmont agreed to purchase the Property
from Lehigh for $4,000,000 subject to certain adjustments and conditions. Complaint at
Exhibit A.
-4-
1317017.01
The LOI, inter alia, provided Woodmont with fifty-five (55) days to complete due
diligence and required that the parties execute a more formal Purchase and Sale Agreement
within twenty-five (25) days. Complaint at Importantly, the LOI also obligated both
parties to negotiate the formal Purchase and Sale in good faith. Complaint at Exhibit A at
5. It is noteworthy that Defendants ignore this provision of the LOI in the motion to dismiss .

Defendants' Refusal to Sign the Formal Purchase and Sale Agreement
Initially, Defendants agreed to have their counsel draft the Purchase and Sale Agreement.
The LOI states:
Upon receipt, a Purchase Agreement shall be prepared and
forwarded to the Purchaser's counsel for his/her review within 7
days of receipt.
LOI at p.6
1
. Thereafter, the parties agreed to split the cost of the drafting. Complaint at
However, after approximately one week after the LOI became effective, Defendants advised
Woodmont that, contrary to the above quoted provision in LOI and their subsequent
agreement to split the cost with plaintiff, they would not pay for their lawyer to draft the
Purchase and Sale Agreement. Complaint at
Despite Defendants' breach of their requirement to prepare the contract, Woodmont
proceeded to draft a form of Purchase and Sale Agreement, and on November 9, 2010, sent it to
Defendants for review and comment. Complaint at Defendants, however, refused to issue
written comments to the initial draft and refused to redline any suggested changes insisting that
they be provided with a "new" draft. Complaint at In response, Woodmont had several
telephone conferences with Defendants regarding changes to the draft Purchase and Sale
Agreement? Complaint at On or about November 18, 2010, Woodmont forwarded to
1
Defendants ignore this provision of the LOI in the motion to dismiss.
2
Defendants fail to acknowledge this allegation in the Complaint.
-5-
1317017.01
Defendants a revised Purchase and Sale Agreement incorporating the changes the parties agreed
to during the telephone conferences. Complaint at 'lf38.
During the week of November 22, 2010, the parties and counsel conducted additional
conference calls to discuss, inter alia, an issue that had arisen relating to the deposit and escrow.
Complaint at 'lf38. During these negotiations, Defendants agreed to extend the LOI's 25 day
f I
period within which a formal Purchase and Sale Agreement was required to be signed, provided
that a resolution of the deposit issue was reached.
3
Complaint at 'lf39.
On November 23, 2010, the parties agreed upon a resolution of the deposit issue thus
extending, consistent with the parties' agreement, the 25 day period within which a formal
Purchase and Sale Agreement was required to be signed.
4
Complaint at '1!40-41. On November
24, 2010, Woodmont asked Defendants to confirm the extension in writing. Complaint at 'lf42.
In response, on November 24, 2010, Defendants agreed to have their counsel modify the
Purchase and Sale Agreement to incorporate the change to the deposit/escrow provision to which
the parties had agreed during the prior conference calls but ignored W oodmont' s request to
confirm their prior agreement to extend the 25 day period.
5
Complaint at 'lf43.
On December 2, 2010, Woodmont sent an email to Defendants asking when it could
expect the revision to the Purchase and Sale Agreement. Complaint at 'lf44. Defendants did not
respond. Complaint at 'lf44. Accordingly, on December 3, 2010, Woodmont once again
requested comments from Defendants on the draft Purchase and Sale Agreement and that
Defendants confirm in writing the extension of the 25 day period. Complaint at 'lf45.
3
In their motion to dismiss, Defendants ignore this allegation in the Complaint.
4
In their motion to dismiss, Defendants ignore this allegation in the Complaint.
5
In their motion to dismiss, Defendants ignore these allegations in the Complaint.
-6-
1317017.01
Finally, on December 3, 2010, Defendants responded, inter alia, that the outstanding
issues on the Purchase and Sale Agreement had only been resolved the week before, and that
their counsel who would be making the agreed upon changes to the Purchase and Sale
Agreement was on vacation. Complaint at Once again, Defendants ignored Woodmont's
request that Lehigh confirm the previously agreed upon extension of the 25 day deadline in
writing. Complaint at 7.
Notwithstanding numerous requests by Woodmont for Defendants to make the agreed
upon changes to the draft Purchase and Sale Agreement, Defendants took no action to make the
agreed upon changes despite their undertaking to do so. Complaint at Defendants never
provided any drafts of the Purchase and Sale Agreement nor any written or redline comments to
the draft that Woodmont had prepared. Instead, on December 20, 2010, Defendants sent
Woodmont a letter purporting to terminate the LOI on the grounds that Lehigh and Woodmont
failed to execute a binding Purchase and Sale Agreement within 25 days of the LOI. Complaint
at
Woodmont's Due Diligence and Assistance to Defendants on Redevelopment
After execution of the LOI, Woodmont requested that Defendants provide certain
additional specific due diligence materials relating to the condition of the Property, including
various environmental and engineering reports. Complaint at The LOI provided Plaintiff
with 55 days to conduct due diligence. Complaint at Exhibit A at 2. A list of the initial due
diligence materials Woodmont requested of Defendants was attached to the LOI. Complaint at
Exhibit A.
On December 2, 2010, Woodmont requested via email certain additional environmental
and geotech reports and other material. Complaint at On December 8, 2010, Woodmont
-7-
1317017.01
again requested additional due diligence materials, and again sought the due diligence covered
by its initial due diligence request outlined in the Complaint. Complaint at ~ 5 3 .
Despite Woodmont' s requests, Defendants refused to provide any of the due diligence
Woodmont requested. Complaint at ~ 5 4 . Hindsight reveals that Defendants' refusal to provide
the due diligence was in furtherance of their scheme to have the time period in the LOI expire so
that they did not have to sell the Property, and at the same time exploiting and receiving
Woodmont' s development expertise.
During the time the negotiations of the LOI and draft Purchase and Sale Agreement were
taking place, Defendants also were in the process of obtaining approval of a Redevelopment Plan
for the Property. Complaint at ~ 5 5 . Defendants requested that Woodmont provide comments to
the Redevelopment Plan, which would affect the Property being purchased by Woodmont.
Complaint at ~ 5 6 . On or about November 24, 2010, Woodmont provided comments on and
suggested changes to the Redevelopment Plan to Defendants' counsel in a good faith effort to
assist Defendants and move the Redevelopment Plan forward. Complaint at ~ 5 7 .
The logical inference that can be made from all of these allegations is that Defendants
stalled the negotiation and refused to draft or execute the Purchase and Sale Agreement so that
they could argue the twenty-five (25) day execution period had passed and terminate the LOI -
all in bad faith and in breach of Defendants' express obligations under the LOI.
-8-
1317017.01
LEGAL ARGUMENT
POINT I
THE LEGAL STANDARD FORA MOTION TO DISMISS
New Jersey law is clear that in reviewing a complaint on a motion to dismiss, all doubt
must be resolved in favor of the plaintiffs and "a trial court should grant a dismissal 'in only the
rarest of instances."' NCP 'Litig. Trust v. KPMG LLP, 187 N.J. 353, 365 (2066) (quoting
Printing Mart-Morristown v. Sharp Elecs., 116 N.J. 739, 772 (1989)). The New Jersey Supreme
Court has held that "the test for determining the adequacy of a pleading [is] whether a cause of
action is 'suggested' by the facts." Printing Mart, 116 N.J. at 746.
"A court's review of a complaint is to be 'undertaken with a generous and hospitable
approach,' and the court should assume that the nonmovant's allegations are true and give that
party the benefit of all reasonable inferences."' NCP Litig. Trust, 187 N.J. at 365 (emphasis
added) (quoting Printing Mart, 116 N.J. at 746). In addressing a motion to dismiss pursuant toR.
4:6-2(e), "the Court is not concerned with the ability of plaintiffs to prove the allegation
contained in the complaint." Printing Mart, 116 N.J. at 746 (citation omitted). "If 'the
fundament of a cause of action may be gleaned even from an obscure statement of claim,' then
the complaint should survive this preliminary stage." NCP Litig. Trust, 187 N.J. at 365 (quoting
Craig v. Suburban Cablevision, Inc., 140 N.J. 623, 626 (1995)).
While the New Jersey Supreme Court has recently suggested that dismissal is appropriate
where "the complaint states no basis for relief and discovery would not provide one," it thereby
implied that where discovery may further illuminate a cause of action, the party asserting the
cause of action should be permitted to proceed. Banco Popular N. Am. v. Gandi, 184 N.J. 161,
166 (2005) (emphasis added). This is analogous to the summary judgment context, where the
Court has warned that final disposition of a case may be premature when the matter is not yet
-9-
1317017.01
"ripe" for consideration, such as where discovery of the facts relevant to the cause of action is
not yet complete. See Velantzas v. Colgate-Palmolive Co., Inc., 109 N.J. 189, 193 (1988);
Salomon v. Eli Lilly & Co., 98 N.J. 58, 61 (1984).
Defendants have not remotely met the strict legal standard in order to prevail on a motion
to dismiss because the Complaint sets forth viable causes of action. When the facts set forth in
I
Woodmont's Complaint and all legitimate inferences therefrom are properly accepted as true for
purposes of this motion, Woodmont has pled prima facie claims for Breach of Contract/Specific
Performance (Count One), Breach of the Covenant of Good Faith and Fair Dealing (Count Two),
Promissory Estoppel (Count Three), Fraud (Count Four) and Unjust Enrichment (Count Five).
No discovery whatsoever has taken place in this case and no responsive pleadings have been
filed. Applying this deferential standard, Defendants' motion should be denied in its entirety.
6
POINT II
WOODMONT HAS STATED A COGNIZABLE CLAIM OF
BREACH OF CONTRACT/SPECIFIC PERFORMANCE.
A. Woodmont Has Alleged the Necessary Elements to State a Breach of
Contract Claim.
Defendants argue that W oodmont fails to state a claim for breach of contract because the
LOI expired by its terms. However, Defendants miss the point, as Defendants agreed to sell the
Property to Woodmont (Complaint at ~ 5 9 ) , the parties extended the 25 day period within which a
Purchase and Sale Agreement was to be drafted (Complaint at ~ 6 4 ) , the parties agreed on all
6
Even when a court finds that a defendant's motion to dismiss should be granted, the dismissal
should normally be without prejudice. As New Jersey courts have consistently held, "motion[s]
to dismiss should be granted only in rare instances and ordinarily without prejudice" in order to
permit the plaintiff to file an amended complaint. Smith v. SBC Commc'ns, Inc., 178 N.J. 265,
282 (2004) ; Callahan v. Stanley Works, 306 N.J. Super. 488, 492-93 (Law Div. 1997) ("A
motion to dismiss for failure to state a claim should only be granted in the rarest of instances and
if granted, it should be without prejudice in order to allow the plaintiff to file an amended
complaint.").
-10-
1317017.01
material terms of the Purchase and Sale Agreement (Complaint at and the LOI
required Defendants to negotiate in good faith (Complaint at

Plaintiff has alleged: ( 1) that the promise to sell the Property and the promise to negotiate
in good faith in the LOI were valid, binding contracts (Complaint at (2) that Defendants
breached the agreement to sell the Property and the promise to negotiate in good faith by

refusing to (a) incorporate the material terms that had been agreed upon by the parties, (b)
negotiate in good faith and (c) proceed to a closing of the sale of the Property (Complaint
65); and (3) plaintiff continues to suffer irreparable harm as a result (Complaint 69).
This is all that is necessary to successfully state a claim for breach of contract. See,
Murphy v. Implicito, 392 N.J. Super. 245, 265 (App. Div. 2007) ("To establish a breach of
contract claim, a plaintiff has the burden to show that the parties entered into a valid contract,
that the defendant failed to perform his obligations under the contract and that the plaintiff
sustained damages as a result.").
In order for a contract to be enforceable, the parties are only required to be in agreement
on the essential terms. "A contract arises from offer and acceptance, and must be sufficiently
definite 'that the performance to be rendered by each party can be ascertained with reasonable
certainty."' Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992) (quoting Borough of W.
Caldwell v. Borough of Caldwell, 26 N.J. 9, 24-25 (1958)). "Thus, if parties agree on essential
terms and manifest an intention to be bound by those terms, they have created an enforceable
contract." Id. The "mere anticipation of a written memorialization of an oral agreement does not
7
Defendants argues that Y arkville was not a signatory to the LOI, did not participate in the
negotiations and, therefore, cannot be liable to Plaintiff. (Defendants' Brief at p.1 0, n.7).
However, the e-mails Defendants attach to their motion papers clearly demonstrate that
Yorkville was actively involved in the negotiation of the terms of the Purchase and Sale
Agreement. See Certification of Steven R. Klein, Esq. ("Klein Cert."), Exhibits B through F.
-11-
l3l70l7.0l
as a matter of law vitiate an oral contract if the elements of a contract are contained in the oral
agreement." McBarron v. Kipling Woods, L.L.C., 365 N.J. Super. 114, 116 (App. Div. 2004)
(holding that issue of whether parties intended to be bound to preliminary agreement despite
contemplation of formal, written agreement was question for trial).
As the McBarron Court explained, "whether a valid oral contract was made or whether
oral agreements were intended not to bind the parties until a written contract was executed, is
solely a matter of intent determined in large part by a credibility evaluation of witnesses ... [t]he
cases are legion that caution against the use of summary judgment to decide a case that turns on
the intent and credibility of the parties." I d. at 117 (citations omitted).
Here, after execution of the LOI, the parties engaged in negotiation over the material
terms of the Purchase and Sale Agreement. See Complaint at On or about November
23, 2010, the parties resolved the remaining outstanding issue and extended the 25 day period
within which a formal Purchase and Sale Agreement was required to be signed. Complaint at
At this juncture, all of the material terms of the contract had been agreed upon by the
parties.
Despite repeated requests by Woodmont for Defendants to make the agreed upon changes
to the draft Purchase and Sale Agreement, Defendants took no action to make the agreed upon
changes despite their undertaking to do so. Complaint at Rather, on December 20, 2010,
Defendants sent Woodmont a letter purporting to terminate the LOI on the grounds that Lehigh
and Woodmont failed to execute a binding Purchase and Sale Agreement within 25 days of the
LOI. Complaint at Defendants' eleventh hour attempt to renege on the sale is ineffective,
however, as the parties agreed upon all material terms and only the mere formalization of the
agreement through the Purchase and Sale Agreement remained.
-12-
1317017.01
Additionally, with all material terms of the sale agreed upon, the only reason a formal
Purchase and Sale Agreement was not executed was because defendants refused to incorporate
the agreed upon terms in the Purchase and Sale Agreement. Complaint at ~ 3 6 and ~ 4 8 .
Defendants actually seek to rely upon their own refusal to sign the Purchase and Sale
Agreement within 25 days to escape liability. However, Defendants cannot use their own default

to their advantage. Coastal Oil Co. v. Eastern Tankers Seaways Corp., 29 N.J. Super. 565, 577
(App. Div. 1954); see also Keifhaber v. Yannelli, 9 N.J. Super. 139, 142 (App. Div. 1950)
(" ... he who prevents a thing from being done may not avail himself of the non-performance
which he has himself occasioned."); Abeles v. Adams Engineering Co., 64 N.J. Super. 167, 178
(App. Div. 1960), modified 35 N.J. 411 (1961) ("One cannot utilize advantageously his own
default as an exit or escape from the performance of his contractual obligations.").
In Coastal Oil, the Appellate Division noted:
It is well established as a principle of fundamental justice that if a
promisor prevents or hinders the occurrence or fulfillment of a
condition in a contract, and the condition would have occurred or
would have been fulfilled except for such hindrance or prevention
on the part of the promisor, then the performance of the condition
is excused and the liability of the promisor is fixed regardless of
failure to fulfill the condition.
29 N.J. Super. at 577.
It was Defendants who unilaterally refused to draft the Purchase and Sale Agreement
after a 7 day delay, despite their obligation under the LOI to draft it and to negotiate in good
faith. It was Defendants who refused to execute the formal Purchase and Sale Agreement.
Defendants cannot now be rewarded for hindering the execution of the formal agreement.
Additionally, Defendants bound themselves under the LOI to draft and negotiate the
Purchase and Sale Agreement in good faith. It is well settled that parties may "effectively bind
themselves by an informal memorandum where they agree upon the essential terms of the
-13-
1317017.01
contract and intend to be bound by the memorandum, even though they contemplate the
execution of a more formal document." Berg Agency v. Sleepworld-Willingboro, Inc., 136 N.J.
Super. 369, 373-74 (App. Div. 1975). Whether a preliminary agreement such as a letter of intent
"is binding is a matter of the parties' intent." Morales v. Santiago, 217 N.J. Super. 496, 501
(App. Div. 1987). If the parties "intend to be bound by their preliminary agreement and view the
later written contract as merely a memorialization of their agreement, they are bound by the
preliminary agreement." Id. at 501-02.
Importantly, in determining whether the parties intended to be bound by a preliminary
agreement, a Court must consider not only language of the preliminary agreement itself, but also
the circumstances behind the agreement's preparation and the course of dealings between the
parties both before and after the agreement was executed. See McBarron, 365 N.J. Super. at 116-
17. Such an finding of the parties' intent is largely determined by credibility evaluations after
trial and is typically not appropriately decided on a motion to dismiss or motion for summary
judgment. I d. at 117.
Here, the LOI bound Defendants to negotiate the terms of the Purchase and Sale
Agreement in good faith. Defendants rely upon K-T Corp. v. JB Assocs., 2009 N.J. Super.
Unpub. LEXIS 2087, 11-12 (App. Div. Aug. 4, 2009), certif. denied 200 N.J. 550 (2009) (copy
attached as Exhibit B to Barreiro Cert.), an unpublished decision, for the proposition that the LOI
is not binding. However, the K-T Corp. decision was not made based upon a pre-answer motion
to dismiss. Rather, in K-T Corp., there was a 5-day trial regarding, inter alia, the issue of
whether the parties intended to be bound by the preliminary agreements despite the fact that the
preliminary agreements "contain[ ed] multiple indications that the parties did not intend it to be a
binding agreement." I d. at * 8-9, 13 Despite the fact that the first sentence of the letter of intent
-14-
1317017.01
inK-T Corp. stated that the letter was "non-binding," the Court thoroughly analyzed at trial the
intent of the parties through both the language of the applicable agreement and the detailed
testimony presented. Id. at 13-22.
Conversely, here, Defendants have moved to dismiss based solely on the language of the
LOI while attempting to preclude Defendants from demonstrating the parties intent to be bound
by the LOI or even taking any discovery regarding the intent of the parties or the circumstances
surrounding the execution of the LOI and the negotiation of the Purchase and Sale Agreement.
Defendants' request for a finding regarding the parties' intent is premature and improper on this
motion to dismiss.
Indeed, Defendants omit from their motion recognition that plaintiffs Complaint alleges
that (i) Defendants failed to provide an initial draft of the Purchase and Sale Agreement after a
critical 7 day delay (Complaint at (ii) Woodmont had several telephone conferences with
Defendants regarding changes to the draft Purchase and Sale Agreement. (Complaint at (iii)
during negotiations, Defendants agreed to extend the 25 day period within which a formal
Purchase and Sale Agreement was required to be signed pursuant to the LOI Complaint at
40-41; and (iv) despite undertaking to do so, Defendants refused to incorporate the agreed upon
changes to the Purchase and Sale Agreement. (Complaint at The execution of the LOI,
coupled with the subsequent agreement on the material terms of the Purchase and Sale
Agreement, which is confirmed in the e-mails attached to Defendants' motion, evidences a
meeting ofthe minds between the parties regarding the terms of the sale of the Property.
Most importantly, Defendants totally ignore the term of the LOI that required them to
negotiate the Purchase and Sale Contract in good faith. Plaintiffs Complaint clearly alleges that
Defendants breached this provision of the LOI. Affording plaintiff all reasonable inferences, the
-15-
1317017.01
Complaint states a claim for breach of contract. A motion to dismiss pursuant toR. 4:6-2(e), in
view of the allegations of the Complaint and the language of the LOI, is merely a perpetuation by
the Defendants of their bad faith that has led the parties to this court.
B. Contracts For The Sale Of Real Property Are Specifically Enforceable As A
Matter Of Law.
It is axiomatic "[t]he principle underlying the specific remedy is
equity's jurisdiction to grant relief where the damage remedy at law is inadequate." Centex
Homes Corp. v. Boag, 128 N.J. Super. 385, 389 (Ch. Div. 1974); see also In re Envtl. Ins.
Declaratory Judgment Actions, 149 N.J. 278, 294 (1997) ("[s]pecific performance is appropriate
when relief at law, money damages, provides inadequate compensation for the breach of an
agreement"); Jersey City Redevelopment Agency v. Clean-0-Mat Corp., 289 N.J. Super. 381,
404 (App. Div.), certif. denied 147 N.J. 262 (1996) ("[t]he principle underlying the specific
performance remedy is equity's jurisdiction to grant relief where monetary damages would not
make the non-breaching party whole.").
"It is a well-settled equitable principle that contracts for the sale of real property are
specifically enforceable by the purchaser." In re Carlisle Homes, 103 B.R. 524, 539 (Bankr.
D.N.J. 1988). "There is a virtual presumption, because of the uniqueness of land and the
consequent inadequacy of monetary damages, that specific performance is the buyer's
appropriate remedy for the vendor's breach of the contract to convey." Friendship Manor, Inc. v.
Greiman, 244 N.J. Super. 104, 113 (App. Div. 1990), certif. denied 126 N.J. 321 (1991)
(emphasis added); In re Carlisle Homes, 103 B.R. at 539 ("[p]resumptively, real property is
unique and damages at law are an inadequate remedy for breach of a contract to sell") (citation
omitted); First Nat. State Bank of N.J. v. Commonwealth Fed. Sav. and Loan Ass'n of
Norristown, Pa., 455 F. Supp. 464, 469 (D.N.J. 1978), affd 610 F.2d 164 (3d Cir. N.J. 1979)
-16-
1317017.01
(applying New Jersey law) ("[t]he traditional approach has been to assume that the remedy at
law for such a contract is inadequate and incomplete.") (emphasis added).
In Centex Homes, the court explained the long-standing rule that specific performance is
the standard remedy in all contracts for the sale of real property:
[I]n applying this doctrine the courts of equity have established the further
rule that in general the legal remedy of damages is inadequate in all
agreements for the sale or letting of land, or of any estate therein; and
therefore in such class of contracts the jurisdiction is always exercised,
and specific performance granted, unless prevented by other and
independent equitable considerations which directly affect the remedial
right of the complaining party.
128 N.J. Super. at 389 (emphasis added).
Here, Woodmont seeks specific performance of an agreement to sell real property.
Plaintiffs Complaint properly alleges: (1) that there was a valid agreement to sell the Property
(Complaint at 'i(59); (2) Defendants breached that agreement by failing to proceed with a closing
of the sale of the Property (Complaint at 'i(65); (3) the Property is a unique parcel of land
(Complaint at 'i(67); (4) Woodmont is ready, willing and able to complete the purchase of the
Property (Complaint at 'i(68); and (5) Defendants' breach has caused Woodmont to suffer
continuing irreparable hami (Complaint at 'i(69).
Once again, Defendants fail to identify any pleading deficiency with regard to Count I of
plaintiffs Complaint. Plaintiffs complaint alleges all the necessary elements of the cause of
action. At most, Defendants' arguments regarding the expiration of the LOI, the extension
thereto, the intent of the parties and Defendants' bad faith in negotiating and terminating the LOI
raise questions of fact that are disputed and may not support a motion to dismiss.
-17-
1317017.01
POINT III
WOODMONT HAS STATED A COGNIZABLE CLAIM OF
BREACH OF COVENANT OF GOOD FAITH AND FAIR
DEALING.
Although the LOI contains an express provision requiring Defendants to perform in good
faith, even if it did not, the New Jersey Supreme Court has made clear that the covenant of good
( I
faith and fair dealing is implicit in every contract made under the laws of New Jersey. S e e , ~ ,
Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 214
(2005); Wilson v. Amerada Hess Corp., 168 N.J. 236, 244 (2001); Sons of Thunder, Inc. v.
Borden, Inc., 148 N.J. 396, 420 (1997).
The covenant of good faith and fair dealing directs that "neither party shall do anything
which will have the effect of destroying or injuring the right of the other party to receive fruits of
the contract .... " Wilson, 168 N.J. at 245 (citing Sons of Thunder, Inc., 148 N.J. at 421). Stated
differently, "[g]ood faith performance or enforcement of a contract emphasizes faithfulness to an
agreed common purpose and consistency with the justified expectations of the other party."
Brunswick Hills Racquet Club, Inc., 182 N.J. at 224 (citation omitted).
Generally, '"[s]ubterfuges and evasions' in the performance of a contract violate the
covenant of good faith and fair dealing 'even though the actor believes his conduct to be
justified."' Id. (quoting Restatement (Second) of Contracts § 205 comment d (1981 )).
To state a cognizable claim for breach of the covenant of good faith and fair dealing, a
plaintiff must allege: (1) the existence of a contract; (2) that the defendant acted in bad faith with
the purpose of depriving the plaintiff of its rights or benefits under the contract; and (3) that
plaintiff suffered damages as a result. See generally Brunswick Hills Racquet Club, Inc., 182
N.J. at 224-25.
-18-
1317017.01
A court should be particularly hesitant to grant a motion to dismiss on a claim for breach
of the covenant of good faith and fair dealing. See Seidenberg v. Summit Bank, 348 N.J. Super.
243, 254 (App. Div. 2002) ("the implied covenant of good faith and fair dealing continues to
develop, and in light of the covenant's essential factors as discerned from the existing case law,
we cannot say, in examining the unadorned record in this case, that an actionable claim cannot be
found in plaintiffs' allegations.").
In Seidenberg, the Law Division dismissed plaintiffs' claim of breach of the covenant of
good faith and fair dealing and held that plaintiffs were not claiming a breach of the implied
covenant but rather were seeking to prove the existence of an oral agreement allegedly made
beyond the four corners of the written agreements between the parties in violation of the parol
evidence rule. Id. at 253.
The Appellate Division reversed, holding that plaintiffs' claim was not barred by the
parol evidence rule because a claim for breach of the covenant of good faith and fair dealing
focuses on the defendant's performance and termination of the contract. Id. at 258-59. The Court
explained the liberal standard applicable to reviewing a plaintiffs claim for breach of the
covenant of good faith and fair dealing:
Id. at 260.
1317017.01
In this case, the second amended complaint alleges circumstances
which, if proven, might support a claim based upon [defendant's]
termination of their relationship. To some extent, plaintiffs alleged
there was an expectation--despite the express contractual right of
[defendant] to terminate--that the relationship would last until they
reached retirement age. This contention would, on its face, fall
within that type of implied covenant claim prohibiting a party from
terminating a contractual relationship in bad faith notwithstanding
the expressed right to do so.
-19-
Woo elmont had an expectation that Defendants would negotiate the terms of the Purchase
and Sale Agreement in good faith as specifically set forth in the LOI. This is precisely the type
of allegation contemplated by the breach of the covenant of good faith and fair dealing cause of
action.
Plaintiff has alleged all the necessary elements to state a claim of breach of the covenant
c
of good faith and fair dealing. Plaintiff has alleged that the parties executed the LOI, which
expressly and impliedly obligated the parties to negotiate a formal Purchase and Sale Agreement
in good faith (Complaint at and Defendants delayed making changes to the draft Purchase
and Sale Agreement, despite the fact that all material terms had been agreed to, in an effort to
allow the 25 day period by which a formal agreement was to be executed to expire (Complaint at
The parties agreed to extend the 25-day period so that Defendants could make the
agreed upon changes. Thereafter, Defendants refused to incorporate the additional material terms
that had been agreed to and to proceed with a closing of the sale in an effort to allow the 25 Day
period set forth in the LOI to expire. Finally, Plaintiff alleges that it suffered damages as a result
of Defendants' breach of the covenant of good faith and fair dealing (Complaint at
Rather than challenge whether plaintiffs Complaint properly sets forth the elements of
the cause of action (it does), Defendants argue that the "objective evidence shows that Lehigh
was negotiating with Plaintiff in good faith." See Defendants' Brief at 2. Defendants selectively
place evidence, including e-mails, before the Court prior to any discovery being conducted.
Defendants ignore the numerous phone conversations referenced in plaintiffs Complaint and the
allegation that Defendants specifically agreed to extend the 25-day deadline. However, for
purposes of this motion, all facts set forth in the Complaint must be accepted as true. When all
facts as set forth by Woodmont are accepted as true, it is clear that Defendants acted in bad faith.
-20-
13l70l7.0l
Regardless, such an analysis is premature and misplaced on a motion to dismiss prior to
the taking of any discovery and before a trial. Defendants' arguments that they negotiated
pursuant to the LOI in good faith unequivocally presents a question of fact. The pleading states a
cause of action for breach of the obligation of good faith and fair dealing, and should not be
, dismissed.
POINT IV
WOODMONT HAS STATED A COGNIZABLE CLAIM OF
PROMISSORY ESTOPPEL.
The Doctrine of Promissory Estoppel provides that "[a] promise which the promisor
should reasonably expect to induce action or forbearance on the part of a promisee or third
person and which does induce such action or forbearance is binding if injustice can be avoided
only be enforcement of the promise." Onorato Constr., Inc. v. Eastman Constr. Co., 312 N.J.
Super. 565 (App. Div. 1998) (quoting § 90(1) of the Restatement of Contracts, 2d.). The
essential justification for the doctrine is avoidance of substantial hardship or injustice were the
promise not to be enforced. Malaker Corp. Stockholders Protective Committee v. First Jersey
Nat. Bank, 163 N.J. Super. 463, 484 (App. Div. 1978), certif. denied 79 N.J. 488 (1979).
New Jersey Courts will apply promissory estoppel where there is: (1) a clear and definite
promise; (2) made with the expectation that the promisee will rely on it; (3) reasonable reliance
upon the promise; and (4) which results in definite and substantial detriment. Toll Bros., Inc. et
al. v. Bd. of Chosen Freeholders of the County of Burlington et al., 194 N.J. 223,253 (2008).
Plaintiff has alleged all the elements of a cause of action of promissory estoppel.
Woodmont alleges that Defendants made clear and definite promises to Woodmont that
Woodmont would be Defendants' joint venture partner and, after breaching that promise, they
promised that Lehigh would sell the Property to Woodmont. Complaint at ~ 7 9 . Woodmont
-21-
1317017,01
further alleges that Defendants made such promises with the expectation that Woodmont would
rely upon them and that Woodmont did in fact reasonably rely upon the promises by providing
extensive development services with respect to the Property. As a result, Woodmont suffered a
detriment. Indeed, Defendants made these promises to sell the Property to W oodmont to gain
the benefit of Woodmont' s development expertise, and to compromise Woodmont' s prior claims
I I
against Defendants relating to the Joint Venture Agreement. Complaint a t ~ ~ 80-81.
8
Once again, Defendants have not, and cannot, explain how Woodmont's pleading is
deficient. Rather, Defendants seek to contest the factual allegations of Woodmont's Complaint,
which is improper on this motion to dismiss.
9
POINTV
WOODMONT HAS PLED ITS COMMON LAW FRAUD
CLAIM WITH SUFFICIENT PARTICULARITY.
The elements of common law fraud or misrepresentation are: (1) a false representation of
fact; (2) made by defendant; (3) with knowledge that it is false; ( 4) with the intent to deceive
plaintiff; (5) upon which representation plaintiff relies to his or her detriment; (6) sustaining a
loss. See Jewish Center of Sussex County v. Whale, 86 N.J. 619, 624 (1981); Louis Schlesinger
Co. v. Wilson, 22 N.J. 576, 585-86 (1956); Fischetto Paper Mill Supply, Inc. v. Quigley Co.,
Inc., 3 N.J. 149, 152-53 (1949).
8
Defendants argue in their breach of contract brief section that the LOI is not binding, but in the
Promissory Estoppel brief section, claim that the LOI negated Defendants' prior promises and
representations. Defendants cannot have it both ways and attempt to use the LOI as a sword and
a shield.
9
Defendants cite to Lobiondo v. O'Callaghan, 357 N.J. Super. 488, 500 (App. Div.), certif.
denied 127 N.J. 224 (2003) in support of their argument that plaintiff fails to state a claim for
promissory estoppel. However, the issue in Lobiondo was whether the plaintiff in that case
presented sufficient evidence at trial to support a claim for promissory estoppel. The case has
absolutely no relevance to the sufficiency of Woodmont' s pleading on this pre-answer motion to
dismiss.
-22-
1317017.01
The heightened fraud pleading requirements set forth in the Court Rules provides that the
"particulars ofthe wrong, with dates and items if necessary, shall be stated insofar as practicable.
Malice, intent, knowledge, and other condition of mind of a person may be alleged generally." R.
4:5-8(a). See also State, Dep't of Treasury, Div. of Inv. ex rel. McCormac v. Qwest
Communications Intern., Inc., 387 N.J. Super. 469, 484 (App. Div. 2006).
Woodmont' s Complaint sets forth the required elements to state a cause of action for
common law fraud. Woodmont alleges that: (1) Defendants made misrepresentations to
Woodmont that Woodmont would be their joint venture partner and then that Lehigh would sell
the Property to Woodmont (Complaint at (2) Defendants had knowledge of the falsity of
their statements (Complaint at (3) Defendants made the misrepresentations to induce
Woodmont to provide development services with respect to the Property (Complaint at (4)
Woodmont relied upon the misrepresentations by providing extensive services with respect to the
Property (Complaint at 87); and (5) Woodmont suffered damages as a result. (Complaint at

Woodmont' s . Complaint pleads a claim of common law fraud with the requisite
specificity pursuant toR. 4:5-8(a). Woodmont provides, as specifically as possible, the dates and
substance of the fraud. Specifically, Woodmont alleges that in late July 2009, Defendants
selected Woodmont as their joint venture partner (Complaint at 0) and that, during
negotiations in the fall of 2009, Defendants led Woodmont to believe that Woodmont was their
joint venture partner (Complaint at
Defendants incorrectly argue that pre-LOI discussions cannot form the basis of plaintiffs
fraud claim. See Defendants' Brief at 19. Defendants' argument misses the mark, as W oodmont
alleges that it was fraudulently induced by Defendants to enter into the LOI. Further,
-23-
1317017.01
Defendants' argument that "there were no material misrepresentations ... nor was there an intent
to deceive on the part of the [Defendants]" (see Defendants' Brief at 20) is specifically disputed
by plaintiff and premature. Woodmont's Complaint sets forth, with specificity, Defendants'
misrepresentations and fraudulent conduct, which must be accepted as true at this stage of the
proceeding.
The facts set forth m Woodmont' s Complaint, accepted as true, demonstrate that
Woodmont acted at all times in good faith, and Defendants made fraudulent misrepresentations
designed to cause Woodmont to believe that it would become Defendants' joint venture partner
and, subsequently, that Lehigh would sell the Property to Woodmont. Woodmont alleges that at
the time Defendants made the misrepresentations, Defendants had no intention to make
Woodmont their partner or to sell Woodmont the Property. Complaint a t ~ 86. Thus, Woodmont
has sufficiently pled a cause of action of common law fraud.
POINT VI
WOODMONT HAS STATED A COGNIZABLE CLAIM OF
UNJUST ENRICHMENT.
Woodmont's Complaint pleads a cause of action for unjust enrichment sufficient to
withstand a R. 4:6-2 motion. It is well settled that a person shall not be allowed to enrich himself
unjustly at the expense of another, and that accordingly, courts have fashioned equitable
remedies to prevent such a circumstance. See generally Callano v. Oakwood Park Homes Corp.,
91 N.J. Super. 105, 108 (App. Div. 1966). A party is permitted to recover in quasi-contract
"when one party has conferred a benefit on another, and the circumstances are such that to deny
recovery would be unjust." Weichert Co. Realtors v. Ryan, 128 N.J. 427, 437 (1992) (citations
omitted).
-24-
1317017.01
In order to establish a claim for unjust enrichment, the plaintiff must show both that (1)
defendant received a benefit, and (2) retention of that benefit would be unjust. See Iliadis v.
Wal-Mart Stores, Inc., 191 N.J. 88, 110 (2007); see also VRG Corp. v. GKN Realty Corp., 135
N.J. 539, 554 (1994) (holding that to succeed on a claim for unjust enrichment, a plaintiff must
prove that the "defendant received a benefit and that retention of that benefit without payment
would be unjust").
Although Woodmont has alleged a claim for breach of contract, a party is permitted to
plead in the alternative. R. 4:5-2; R. 4:5-6. It is well settled in New Jersey that a plaintiff may
plead alternative or inconsistent claims in the same complaint. R. 4:5-6 (permitting alternative
and inconsistent pleadings). See, also, Enriquez v. W. Jersey Health Sys., 342 N.J. Super. 501,
526 (App. Div.), certif. denied 170 N.J. 211 (2001).
A pleader may proceed simultaneously on the alternative counts of breach of contract and
unjust enrichment, but may only recover under one theory. See Caputo v. Nice-Pak Prods., Inc.,
300 N.J. Super. 498, 504 (App. Div.), certif. denied 151 N.J. 463 (1997) (concluding "that a
plaintiff who has attempted to prove both breach of contract and unjust enrichment need not
choose which one will go to the jury, as long as there is sufficient evidence as to both.") It is
only recovery under two inconsistent theories that is prohibited. Id.
W oodmont alleges that, in reliance upon Defendants' promises that W oodmont would
become their joint venture partner and, subsequently, that Lehigh would sell the property to
Woodmont, it: (1) provided extensive development services to Defendants, including but not
limited to assisting Defendants in obtaining various approvals; (2) assisted Defendants with
regard to a builders remedy litigation; and (3) assisted Defendants' with the Redevelopment
-25-
1317017.01
Plan. Complaint at ~ 1 6 , 17, 22, 24, 56-57, 91. Woodmont has not been compensated for its
valuable services, from which Defendants benefited significantly.
Indeed, Woodmont alleges that Defendants received an economic benefit as a result of
Woodmont's services and, as a result, Defendants have been unjustly enriched. Complaint at
~ 94. Defendants' argument that Defendants "have not been unjustly enriched at Plaintiff's
I I
expense" (see Defendants' Brief at 23) is disputed (as set forth in the Complaint), premature, and
misinterprets the standard on a motion to dismiss. That is so profoundly a fact in issue that one
can only wonder what the Defendants were thinking when they filed this motion. Upon a liberal
reading of the pleading, the facts necessary to plead a cause of action for unjust enrichment are
set forth in the Complaint. (See Complaint, Count V). Defendants' motion to dismiss this count
should be denied.
POINT VII
DEFENDANTS' MOTION MUST BE DENIED, AS THE
ALLEGATIONS OF THE COMPLAINT RAISE
NUMEROUS ISSUES OF FACT.
This matter is in its preliminary stages. Defendants have not yet filed an answer and no
discovery has taken place.
10
For the reasons set forth above, Defendants have failed to demonstrate that the allegations
in plaintiff's Complaint are unsupportable or insufficient as a matter of law. The allegations in
the Complaint and Defendants' arguments against them raise a host of factual issues that must be
the subject of discovery before the merits of plaintiff's claims may be adjudicated, which will
likely require a trial.
10
To the extent the Court determines to convert Defendants' Motion to Dismiss into a Motion
for Summary Judgment pursuant toR. 4:6-2(e), Plaintiff respectfully requests the opportunity to
submit Certifications supporting the allegations in the Complaint.
-26-
1317017.01
The case law is clear that dismissal of a complaint is only appropriate where the
complaints states no basis for relief and further discovery would never provide such a basis. See
Camden County Energy Recovery Assocs. v. N.J. Dep't of Environ. Prot., 320 N.J. Super. 59, 64
(App. Div. 1999), aff'd, 170 N.J. 246 (2001). The case law is also clear that any doubt should be
resolved in favor of the plaintiff, who is entitled to every reasonable inference of fact. See Point
I, infra.
In Berlin Med. Assocs., P.A. v. CMI N.J. Operating Corp., 2006 N.J. Super. Unpub.
LEXIS 2966 (App. Div. Aug. 3, 2006) (copy attached as Exhibit C to Barreiro Cert.), four health
care providers filed suit against, inter alia, a preferred provider organization ("PPO") alleging
that the PPO breached the providers' respective contracts and they were each owed additional
compensation. Plaintiffs attached their contracts to the Complaint. Id. at *5.
Prior to any discovery taking place, defendants filed a motion to dismiss under R. 4:6-
2( e) based upon an alleged failure to state a claim upon which relief may be granted. I d. at *6.
The trial court granted the motion in its entirety and dismissed the Complaint. Id. at *7. On
appeal, plaintiffs argued that the trial court erred in finding that the contractually based claims
were not viable prior to discovery being taken. Id. Defendants, on the other hand, argued that
plaintiffs' claims, "which were largely predicated on contractual documents either attached to or
referred to in the complaint, were properly disposed of prior to the completion of discovery." Id.
at 6-7.
The Appellate Division found that there was ambiguity in the contractual language and
held that, as a result, it was "premature for the motion judge to resolve the issue in favor of
defendants before discovery and a potential trial to ascertain the intent of the parties." I d. at * 13
-27-
1317017.01
(citing Great Atlantic & Pacific Tea Co., Inc. v. Checchio, 335 N.J. Super. 495, 502 (App. Div.
2000)). The Court reasoned:
Although it may be appropriate on a motion to dismiss for a court
to consider exhibits attached to a complaint ... the applicable test
for whether a complaint survives such a motion under R. 4:6-2(e)
merely requires that the non-movant show that a cause of action is
"suggested" by the pleaded facts
We simply cannot tell from the face of the contract documents
which interpretation is most faithful to the intent of the parties.
We are also deprived . of any parol evidence or other extrinsic
proofs, such as deposition transcripts and other documentation, that
might aid us in divining what was intended in the contract on this
score.
I d. at 14-15. The Appellate Division vacated the dismissal and remanded for further discovery
and proceedings. Id. at 16.
Similarly, this Court should resolve any doubt raised by Defendants in favor of
permitting Plaintiff to take discovery in order to appropriately and adequately respond to the
fact-based arguments raised by the Defendants.
-28-
1317017.01
CONCLUSION
For all of the foregoing reasons, Woodmont respectfully requests that Defendants'
motion to dismiss be denied in its entirety.
Dated: June 29, 2011
1317017.01
GREENBAUM, ROWE, SMITH & DAVIS LLP
Attorneys for Plaintiff

-29-