NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2025-14T3
MORGAN STREET DEVELOPERS URBAN
RENEWAL COMPANY, L.L.C.,
Plaintiff-Respondent,
v.
CITY OF JERSEY CITY,
Defendant-Appellant.
________________________________
Argued April 12, 2016 — Decided August 30, 2016
Before Judges Reisner, Leone & Whipple.
On appeal from the Superior Court of New
Jersey, Law Division, Hudson County, Docket
No. L-3080-14.
Jeremy Farrell, Corporation Counsel, and
Michael
Dougherty,
Assistant
Corporation
Counsel, argued the cause for appellant (Mr.
Farrell, attorney; Mr. Dougherty, on the
briefs).
Eugene T. Paolino argued the cause for
respondent (Genova Burns LLC, attorneys; Mr.
Paolino, of counsel and on the brief; Celia
S. Bosco and Michael C. McQueeny, on the
brief).
PER CURIAM
Defendant,

the

City

of

Jersey

City

(City),

appeals

a

November 7, 2014 order requiring the City to pay to plaintiff
Morgan Street Developers Urban Renewal Company, L.L.C. (Morgan)

 $2,119,891 that was paid to the City by Vector Urban Renewal
Associates II, L.P. (Vector).

We reverse.
I.

The following facts were admitted or undisputed.
Vector

obtained

located

in

established

title

the
by

to

a

Exchange

the

City

piece

of

Place
under

real

North

the

(Property)

Redevelopment

Local

Housing Law, N.J.S.A. 40A:12A-1 to -73.

estate

In 2001,

Area

Redevelopment

and

Vector was an approved

urban renewal entity under N.J.S.A. 40A:20-5 of the Long Term
Tax Exemption Law (LTTEL), N.J.S.A. 40A:20-1 to -22.
Vector

planned

to

construct

on

the

Property

a

project

comprised of a fifty-story residential tower with approximately
417 market-rate residential condominium units; a parking garage
with approximately 210 parking spaces; and a ground floor retail
unit of approximately 6700 square feet (collectively "the Vector
Project").

Vector filed an application with the City for a long

term tax exemption for the Vector Project.
On July 14, 2005, Vector entered into a Financial Agreement
with

the

findings

City.
based

In
on

the
the

Financial
Vector

Agreement,

Project

as

the

City

described

made

above,

including that the Vector Project would generate revenue for the
City in the form of an Annual Service Charge of approximately
$1,908,041.

In return for Vector's promise to build the Vector

2

A-2025-14T3

 Project, and Vector's other covenants, the City approved a tax
exemption under LTTEL, lasting at least twenty years, "for all
the Improvements to be constructed and maintained in accordance
with the terms and conditions of this Agreement."

In lieu of

any taxes on the improvements to be constructed, Vector agreed
to pay an "Annual Service Charge," which for the first six years
would be 16% of Vector's annual gross revenue.
agreed

to

pay

an

affordable

housing

Vector also

contribution

(AHC)

of

$635,550 in three installments of $211,850.
Also on July 14, 2005, Vector and the City entered into a
Prepayment Agreement.

That Agreement recited that Vector had

been authorized by the City to construct the Vector Project,
that Vector recognized the Annual Service Charge payable with
respect to the Vector Project would not accrue to the City until
the

Vector

Project

was

completed,

and

that

the

City

was

immediate need of funds during the current fiscal year.

in

Vector

agreed to pay before June 1, 2006, "$1,908,041, representing a
Prepayment of one full year's estimated Annual Service Charge."
The City agreed to reimburse Vector, without interest, from the
Annual

Service

Agreement,

or,

Charges
if

otherwise

inadequate,

due

from

under

any

the

Financial

conventional

taxes

assessed on the improvements.

3

A-2025-14T3

 On

January

10,

2006,

Vector

obtained

financing

for

the

Vector Project through a $24,000,000 note and a mortgage issued
by North Fork Bank, and subsequently held by its successor by
merger, Capital One, N.A.1
City

the

$1,908,041

Later in 2006, Vector paid to the

prepayment

and

the

first

$211,850

AHC

installment.
Nonetheless, Vector failed to actually develop the Vector
Project.

The City's Tax Collector certified that Vector never

initiated

construction,

and

never

paid

any

Annual

Service

Charges or conventional taxes for improvements.
Morgan's complaint alleged as follows.
under the mortgage.

Vector defaulted

Capital One brought a foreclosure action

against Vector, and obtained a judgment against Vector on April
19, 2010.

On or about April 18, 2011, Morgan purchased the

mortgage note from Capital One.

After a sheriff's sale, a deed

of foreclosure transferred ownership of the Property to Morgan
on November 22, 2011.
On April 4, 2013, the Jersey City Redevelopment Authority
(JCRA) designated Morgan as the redeveloper of the Property.

On

November 25, 2013, Morgan applied to the City for a five-year
tax exemption under the Five-Year Exemption and Abatement Law
(FYEAL), N.J.S.A. 40A:21-1 to -21.
1

In its FYEAL application,

We refer to both banks collectively as "Capital One."

4

A-2025-14T3

 Morgan

said

residential
units;

a

it

rental
parking

anticipated
tower

with

garage

constructing

a

fifty-story

approximately

447

market-rate

with

144

parking

spaces;

and

approximately 10,611 square feet of retail space (collectively
"the Morgan Project").
In

its

$1,908,241

FYEAL

application,

prepayment

and

$211,850

Vector to the City in 2006.
[Morgan]

can

demonstrate

Morgan

sought

AHC

credit

installment

for
paid

the
by

The City responded that, "unless

that

it

received

an

assignment

of

Vector's financial agreement and prepayment agreement, it is not
entitled to receive credit for any payments made by Vector."
The City later emailed that Morgan could seek a declaratory
judgment ruling that Morgan "owns the assets of the now bankrupt
Vector" and "has title to" Vector's payments.

The City added

that Morgan's AHC payments in the interim would be accepted as
paid "under protest," and that if Morgan obtained a favorable
judicial ruling, the City would provide credit and a refund.
On April 29, 2014, Morgan and the City entered into a Tax
Agreement.

The Tax Agreement recited that Morgan had applied to

construct the Morgan Project described above.

The City agreed

that it would grant a five-year tax exemption under FYEAL for
the construction of the Morgan Project.

The agreement called

for Morgan to pay a varying percentage of the real estate taxes

5

A-2025-14T3

 otherwise

due

over

the

five

years.

The

Tax

Agreement

also

required Morgan to pay AHC installments totaling $686,417.2
Thereafter,
seeking

a

Morgan

declaratory

filed

a

judgment

complaint
that

Morgan

against
was

the

City

entitled

to

"repayment" of the $1,908,041 prepayment, and credit for the
$211,850 AHC installment, paid by Vector.

The Law Division

granted Morgan's application for an order to show cause, and
proceeded summarily.
After

hearing

argument,

the

Law

Division

issued

the

November 7, 2014 order of judgment ordering the City to credit
Morgan for Vector's $1,908,041 prepayment and the $211,850 AHC
installment, for a total "Judgment Amount" of $2,119,891.

The

court ordered the City to credit the Judgment Amount against any
real estate taxes, special assessments, or service charges under
the Tax Agreement.

The City appeals.
II.

Under the Declaratory Judgment Act, N.J.S.A. 2A:16-50 to 62, "[a] person interested under a deed, will, written contract
or

other

determined

writing
any

constituting

question

of

a

contract,

construction

or

.

.

.

may

validity

have

arising

2

Because we reverse on other grounds, we need not consider
whether the provision in the Tax Agreement that it "constitutes
the entire Agreement between" the City and Morgan bars Morgan's
suit despite the City's earlier emails.

6

A-2025-14T3

 under the instrument, statute, ordinance, contract or franchise
and

obtain

relations

a

declaration

thereunder."

of

rights,

N.J.S.A.

status

or

2A:16-53.

other

Here,

the

posed is the construction of the pertinent contracts.

legal
issue

"When a

trial court's decision turns on its construction of a contract,
appellate review of that determination is de novo." Manahawkin
Convalescent v. O'Neill, 217 N.J. 99, 115 (2014).
courts

give

interpretation

'no
and

special
look

at

Ibid. (citation omitted).
parties'
statutory

competing

claims

provisions

review applies."

as

deference
the

to

contract

"Appellate

the

trial

court's

with

fresh

eyes.'"

"Further, to the extent that the
require

well,

the

that

we

same

de

construe
novo

certain

standard

of

Selective Ins. Co. of Am. v. Hudson E. Pain

Mgmt. Osteopathic Med., 210 N.J. 597, 605 (2012).

We must hew

to that standard of review.
III.
As the City points out, Morgan did not pay the $1,908,041
prepayment or the $211,850 AHC installment for which Morgan now
wants credit.

Vector made those payments to the City, under a

Financial Agreement and Prepayment Agreement between Vector and
the City.

Morgan was not a party to either agreement.

Nothing

in Morgan's agreements with the City or the JCRA gives Morgan
any right to credit for Vector's payments.

7

Indeed, Morgan's

A-2025-14T3

 Redevelopment Agreement and Tax Agreement do not even mention
Vector, the Financial Agreement, the Prepayment Agreement, or
Vector's payments under those agreements.
Moreover, though Morgan owns the same Property as Vector
once

owned,

project.

Morgan
The

apartments,

not

Morgan

while

condominiums.

is

the

The

proposing

Project
Vector

Morgan

to

construct

proposes
Project

Project

to

build

proposed

involves

the

more

same

rental

to

build

residential

units, fewer parking spaces, and a larger retail space than the
Vector Project.

The Vector Project was awarded a twenty-plus-

year long-term tax exemption under LTTEL, whereas the Morgan
Project

got

a

five-year

tax

exemption

under

FYEAL,

under

different terms and under different agreements with the City.
However,

the

Law

Division

accepted

several

arguments

by

Morgan why Morgan should get credit for Vector's payments.
A.
The Law Division looked to the Financial Agreement and the
Prepayment Agreement, and their use of the term "entity," and
ruled that those agreements allowed the rights thereunder to be
transferred to successors in interest and thus to Morgan.
1.
The

Financial

Agreement

stated

that

"[t]he

term

Entity

within this Agreement shall mean Vector" and "shall also include

8

A-2025-14T3

 any

subsequent

purchasers

and

successors

in

interest

of

the

Project, provided they are formed and operate under the Law."
The Financial Agreement defined "Project" as the specific Vector
Project described above, and as the building "to be constructed
and tax exempted under this Agreement."

The Financial Agreement

defined the "Law" as the "Long Term Tax Exemption Law," the
Mayor's executive order "relating to long term tax exemption,"
the ordinance "which authorized the execution of this Agreement"
giving Vector a long-term tax exemption, "and all other relevant
Federal, State or City statutes, ordinances, resolutions, rules
and regulations."
There
Financial

are

ample

Agreement

reasons
do

not

why

these

encompass

provisions

Morgan.

of

First,

the
as

discussed further below, there was no evidence that Morgan is a
purchaser
Project.

or

successor

in

interest

of

Vector

or

the

Vector

Rather, Morgan purchased the Property from Capital One

at a sheriff's sale, and proposed the different Morgan Project.
Second, Morgan and the Morgan Project are not operating
under the "Law" as defined in the Financial Agreement, namely
LTTEL and the implementing executive order and ordinance for
long-term tax exemptions, which are expressly designated as the
"Governing Law" of the Financial Agreement.

Any purchaser or

successor in interest would necessarily have to be operating

9

A-2025-14T3

 under LTTEL to obtain the long-term tax exemption under LTTEL.
Instead, Morgan obtained a tax exemption under FYEAL, under a
different

ordinance

and

subject

to

significantly

different

terms.
The Law Division stressed that Morgan was legally formed
under the Limited Liability Company Act, N.J.S.A. 42:2B-1 to 70.

We note that Morgan's amended certificate of formation in

2011 stated that it was being formed in accordance with LTTEL.
However, Morgan was not operating under the "Law" as defined in
the Financial Agreement, which required the entity to be both
formed

"and"

"'[T]he

operating

word

import[.]'"

"and"

under

both

LTTEL

carries

with

it

"and"
natural

other

laws.

conjunctive

Pine Belt Chevrolet v. Jersey Cent. Power & Light

Co., 132 N.J. 564, 578 (1993) (citation omitted).
Third, the Financial Agreement established procedures and
requirements
Project."

for

becoming

"successors

in

interest

of

the

Under the agreement's "Assignment and/or Assumption"

provision, Vector would have to make a "written application" to
the City seeking its "consent to a sale of the Project and the
transfer of this Agreement."

Specified conditions would have to

be met by Vector and "the new Entity," including that Vector was
"not

then

in

default

of

this

Agreement,"

that

Vector's

"obligations under the Agreement [will be] fully assumed by the

10

A-2025-14T3

 new Entity," and that Vector must "pay the City a transfer fee
equal

to

2%

of

the

required

by

N.J.S.A.

transfer

of

the

then

current

Annual

40A:20-10d."

Project,

shall

Service

Moreover,
be

void

Charge

"[a]ny

unless

advance by Ordinance of the Municipal Council."

as

sale

or

approved

in

Here, none of

these prerequisites were satisfied.
The Law Division acknowledged that Vector and Morgan "did
not

comply"

assumption

with

of

the

Vector's

However,

the

court

Morgan's

rights

Financial
rights

ruled

under

Agreement's

by

were

the

expressly

successor

non-compliance
Financial

provisions were "administrative."
provisions

a

provisions
in

should

Agreement

for

interest.

not

vitiate

because

those

In fact, those contractual

authorized

or

required

by

LTTEL.

LTTEL permits transfer of a project "to another urban renewal
entity, as approved by the municipality in which the project is
situated,

which

contractual

other

urban

obligations

of

renewal
the

entity

transferor

financial agreement with the municipality."
5(e).
of

the

shall

assume

all

entity

under

the

N.J.S.A. 40A:20-

Only if those conditions are met does "the tax exemption
improvements

thereto

and,

to

the

extent

authorized

pursuant to [N.J.S.A. 40A:20-12], land shall continue and inure
to the transferee urban renewal entity."

N.J.S.A. 40A:20-10(a);

see N.J.S.A. 40A:20-6.

11

A-2025-14T3

 "[W]hen the terms of [the] contract are clear, it is the
function of a court to enforce it as written and not to make a
better contract for either of the parties."
Newark, 195 N.J. 526, 545-46 (2008).
statutory

language
to

is

clear

enforce

the

on

its

Similarly, "[w]hen the
face,"

court's

terms."

Parsons v. Mullica Twp. Bd. of Educ., __ N.J. __, __

compliance

provisions.3

with

accordance

"sole

is

required

in

a

function

(2016) (slip op. at 13).

statute

McMahon v. City of

with

its

Thus, the Law Division should have
these

statutory

and

contractual

Morgan has no rights under the Financial Agreement

because it failed to comply with these requirements.4

3

Thus, the Tax Court has held that a transfer of ownership of a
redevelopment entity is effective under LTTEL "only if the
change resulted in a transfer of the Project for which the
statutes require municipal consent and approval."
Town of
Secaucus v. City of Jersey City, 20 N.J. Tax 384, 402 (Tax Ct.
2002).
The Law Division cited the Tax Court's ruling that,
"where full disclosure was made contemporaneously with the
occurrence of the transaction, the failure to obtain approval of
the City at the time should not automatically be fatal to the
effectiveness of the transfer and invalidate the tax exemption,"
and the City could consent at a later date.
Id. at 403.
However, there was no showing of full disclosure to the City
before Morgan's acquisition of the Property; acquiring the
Property did not result in the transfer of the Project; the City
has not consented to such a transfer; and Morgan also failed to
meet other prerequisites.
4

The Law Division cited Jersey City Municipal Code 304-12(D),
but that provision addressed transfer of a five-year tax
exemption, not Vector's long-term tax exemption.
Even if that
provision applied here, it provided that "the exemption shall
continue and the agreement shall remain in effect" only if "the
(continued)
12

A-2025-14T3

 Most notably, Morgan does not claim that it is assuming
Vector's obligations under the Financial Agreement, including
the obligation to build the Vector Project as described above.
Indeed, at appellate oral argument, Morgan's counsel confirmed
that Morgan was not taking on Vector's obligations under the
agreement.

Moreover,

Morgan's

FYEAL

application

and

Tax

Agreement show that it is proposing to build the Morgan Project,
not the different Vector project.

We see no reason to allow

Morgan to claim the benefits of the Financial Agreement while
refusing

its

obligations.

"If

a

party

were

allowed

to

'repudiate the unfavorable parts of a contract and claim the
benefit of the residue,' it would amount to unjust enrichment
and would bind the parties 'to a contract which they did not
contemplate.'"

Cty. of Morris v. Fauver, 153 N.J. 80, 97 (1998)

(citation omitted).
The Law Division recognized that Morgan was "not seeking to
step in the shoes of Vector."

Nonetheless, the court ruled that

Morgan was entitled to "relief" to prevent a windfall to the
City.

However,

Morgan

seeks

credit

or

reimbursement

for

Vector's payments under the Financial Agreement without assuming
(continued)
new owner will continue to use the property pursuant to the
qualifying conditions."
Ibid.
As set forth above, Morgan did
not "meet the conditions for qualifying for the exemption" under
LTTEL and the Financial Agreement. Ibid.

13

A-2025-14T3

 Vector's obligations under that agreement, so any "relief" would
be a windfall to Morgan.
Thus,

Morgan

acquired

only

the

Property

not

the

Vector

Project, is not operating under LTTEL, is not a party to or
assuming the obligations of the Financial Agreement, and is not
the successor in interest of the Vector Project.

Therefore,

Morgan has no right under the Financial Agreement to credit for
Vector's

payments

under

that

agreement.

Morgan

cannot

use

Vector's payments as credit against Morgan's own obligation to
make

tax

and

AHC

payments

in

different

amounts,

for

the

different Morgan Project, under the different Tax Agreement.
2.
Turning to the Prepayment Agreement, that agreement defined
"entity" solely as Vector.

The agreement mentioned successors

in only one provision: "For each of the first four (4) years
that the Entity or its successors pay Annual Service Charges,
the

Entity

shall

be

entitled

to

a

reimbursement

of

the

Prepayment" from "the Annual Service Charges otherwise due under
the

Financial

Agreement."

Nothing

in

that

clause,

or

the

remainder of the Prepayment Agreement, stated that any entity
other than Vector could receive reimbursement or credit.
Morgan argues that the Prepayment Agreement incorporates
the Financial Agreement, such as its definition of "Entity."

14

A-2025-14T3

 Even if true, Morgan is not a successor in interest of the
Vector

Project

"Entity,"

and

under
has

the

not

Financial

met

the

Agreement's

other

definition

prerequisites

of

of

that

agreement.
For all these reasons, Morgan has no right under Vector's
Financial

Agreement

or

Prepayment

Agreement

to

credit

or

reimbursement based on Vector's payments.
B.
The Law Division also ruled that Morgan acquired the right
to credit for Vector's payments under the mortgage.

However,

the mortgage was between Vector as the mortgagor and Capital One
as the mortgagee.
Vector

mortgaged

improvements,"
property,

Morgan was not a party to the mortgage.

and

"all

possession,

the

"real

the

estate,

claim,

and

property,"
right,

demand

"buildings,

title,

interest,

whatsoever

of

the

Mortgagor, as well in law as in equity, of, in or to the same."
However,
Agreement,
payments

the
the

mortgage

makes

Prepayment

thereunder.

no

reference

Agreement,

Vector

or

mortgaged

to

the

Vector's
the

Finance

rights

Property,

or
not

Vector's rights under those agreements.
The Law Division cited the mortgage's provision that in the
event of default, "[t]he Mortgagee is given and granted full
power and authority to do any act or thing which the Mortgagor

15

A-2025-14T3

 or successors or assigns of the Mortgagor . . . might or could
do

in

connection

with

Mortgaged Premises."

the

management

and

operation

of

the

Morgan argues redevelopment legislation

similarly allows a mortgagee to "enter into possession of the
project and operate the same" under the financial agreement for
the project.
-10.

N.J.S.A. 55:17-8(a); see N.J.S.A. 55:17-1, -5, -9,

Even assuming these contractual or statutory provisions

would have allowed Capital One post-default to undertake the
Vector Project, or seek reimbursement or credit owed to Vector,
there is no evidence that Capital One did so.

Instead, it

appears Capital One simply foreclosed on the Property and then
sold the Property at sheriff's sale.
Morgan's complaint alleged that months before the sheriff's
sale,

Morgan

"purchased

the

mortgage

note

from

Capital

One,

becoming the successor-in-interest to Capital One, and obtaining
all of its rights pursuant to the Mortgage."5

Even if true,

there is no evidence that Morgan exercised the powers of the
mortgagee mentioned above.

Instead, Morgan bought the Property

at sheriff's sale and was not "willing and able to assume the
performance

of

the

terms

financial arrangement."

and

provisions

of

the

lease

or

N.J.S.A. 55:17-8(f).

5

The City did not admit the allegation, Morgan submitted no
document to prove it, and the sheriff's deed of foreclosure
listed Morgan solely as the purchaser.

16

A-2025-14T3

 The Law Division also cited the mortgage's provision that
"[a]ll

of

the

terms,

covenants,

provisions,

and

conditions

herein contained shall be for the benefit of, apply to, and bind
the successors and assigns of the Mortgagor and the Mortgagee,
and are intended and shall be held to be real covenants running
with the land[.]"

However, the referenced "terms, covenants,

provisions, and conditions" are those of the mortgage, not every
unmentioned

contract

Vector

ever

entered

into

regarding

the

Property or the Project.
Nothing in the Financial Agreement or Prepayment Agreement
indicated

that

Vector

or

the

City

covenant[s] run with the land."

"intend[ed]

that

the[ir]

See Aronsohn v. Mandara, 98

N.J. 92, 101 n.4 (1984) (quoting H. Tiffany, Real Property §
848, at 264-65 (3d ed. Supp. 1984)).
"Assignment

and/or

Assumption"

To the contrary, the

provision

of

the

Financial

Agreement made clear that the rights and obligations thereunder
were "personal" to Vector unless the prerequisites for transfer
were satisfied.

See Caullett v. Stanley Stilwell & Sons, Inc.,

67 N.J. Super. 111, 118 (App. Div. 1961).

Therefore, Vector's

rights under those agreements do not run with the land.6

6

To support its contrary conclusion, the Law Division cited a
sentence in LTTEL that "[w]hen housing is to be constructed,
acquired or rehabilitated by an urban renewal entity, the land
upon which that housing is situated shall be exempt from
(continued)
17

A-2025-14T3

 Thus, the mortgage did not grant rights under the Financial
Agreement or Prepayment Agreement after the sheriff's sale.
C.
The Law Division also ruled that Morgan acquired all the
rights of Vector when title to the Property was transferred to
it pursuant to the sheriff's foreclosure sale.

However, the

"Sheriff's Corrective II Deed of Foreclosure" supplied by Morgan
does

not

mention

the

Vector's

Financial
rights

Agreement,
or

the

payments

Prepayment

Agreement,

or

under

those

agreements.

The deed transferred the Property, not the Project.

The Law Division cited the deed's recitation of the April
19, 2011 judgment in Capital One's foreclosure action against
Vector.
Property

That judgment described the mortgaged premises as the
together

with

"the

rights,

liberties,

privileges,

hereditaments and appurtenances thereunto belonging."

Another

provision of the deed "discharged to the party of the second
part," Morgan, the Property "with the appurtenances, privileges,
and

hereditaments

appertaining."

thereunto

belonging

or

in

any

way

Those stock provisions were taken from the form

(continued)
taxation for a limited period as hereinafter provided."
N.J.S.A. 40A:20-12.
However, the Financial Agreement granted
only a tax exemption on improvements, not the land, on which it
required taxes be paid. In any event, Morgan failed to meet the
prerequisites of LTTEL and the Financial Agreement for the
transfer of any exemption.

18

A-2025-14T3

 sheriff's foreclosure sale deed incorporated in N.J.S.A. 2A:5064(a)(6).

That

stock

language

refers

to

the

rights

to

the

Property, not to Vector's rights under the Financial Agreement
and Prepayment Agreement.
A sheriff's deed provides the purchaser at a foreclosure
sale with "clear title to the property."

Highland Lakes Country

Club & Cmty. Ass'n v. Franzino, 186 N.J. 99, 106 n.2 (2006)
(citing N.J.S.A. 2A:50-30).

It does not provide the purchaser

with the contractual rights of the mortgagor or mortgagee under
agreements that were not the subject of the foreclosure or sale.
Thus, the sheriff's deed did not transfer to Morgan any rights
under the Financial Agreement or Prepayment Agreement.
D.
The

Law

Division

demand

for

credit

result

in

a

$2,118,891."

for

windfall

was

concerned

Vector's
for

that

payments

Jersey

City

rejecting
to
in

the
the

Morgan's

City

"would

amount

of

The court stressed that the City "never repaid or

otherwise reimbursed Vector."

The court rejected the City's

argument that Vector defaulted, finding no proof that the City
sent Vector notice of default, gave Vector sixty days to cure
the default, or issued Vector written notice of termination, as
required under the Financial Agreement.

The court noted the

Financial Agreement and Prepayment Agreement contained no other

19

A-2025-14T3

 provision

for

forfeiture

of

Vector's

payments.

The

court

concluded that retention of Vector's payments "would result in
Jersey City being unjustly enriched."
Moreover,

the

Law

Division

expressed

"misgivings"

that

Vector was required to enter into the Prepayment Agreement.

The

court could not find any statutory or case law allowing this
type of agreement, which constituted "an interest-free loan to
Jersey City."

The court did "not opine on the legitimacy of

Jersey

use

City's

of

Prepayment

Agreements,"

but

found

it

"seriously questionable."
We

need

not

address

whether

any

rights

of

Vector

were

violated by the Prepayment Agreement, by Vector's prepayment of
an Annual Service Charge, or the non-repayment to Vector of that
prepayment or the first AHC installment after Vector failed to
build the Vector Project.
abandoned

its

agreements

Nor need we address whether Vector
or

never

made

the

payments

which

trigger reimbursement or credit, as the City contends.

Those

could have been potential issues if there had been litigation
between the City and Vector, but there is no indication that
Vector or Capital One ever raised any of those issues.
However,

those

issues

could

not

be

raised

in

this

litigation, to which neither Vector nor Capital One was a party.
This

litigation

was

brought

by

20

Morgan,

a

stranger

to

the

A-2025-14T3

 agreements between Vector and the City.
succeed

to

Prepayment
whether

Vector's
Agreement,

Vector's

rights
it

rights

under

was
were

the

Because Morgan did not
Financial

irrelevant
violated.

in

Agreement

this

Whether

or

litigation
or

not

the

City's retention of Vector's payments constituted a windfall to
the City, Morgan has no right to reimbursement or credit for
Vector's payments.
Accordingly, we reverse the order of judgment.

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