ANSWER TO COUNTERCLAIM. FIRST COUNT Counter-Claim for Declaratorv Judgment

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1 FILED TEAM #1 MAY Z MARAZITI, FALCON & HEALEY, L.L.P 150 John F. Kennedy Parkway Short Hills, New Jersey (973) Attorneys for Plaintiff, City ofhoboken SUPERIOR COURT 9F N.J COUNTY OF HUD::;,ON CIVIL DIVISION #2 CITY OF HOBOKEN, a municipal corporation of the State of New Jersey, v. Plaintiff, SHIPYARD ASSOCIATES, L.P., Defendant. SUPERIOR COURT OF NEW JERSEY LAW DIVISION HUDSON COUNTY DOCKET NO. HUD-L-1238-l2 CIVIL ACTION PLAINTIFF'S ANSWER AND AFFIRMATIVE DEFENSES TO THE COUNTERCLAIM OF DEFENDANT Plaintiff, City of Hoboken ("Plaintiff'), by way of Answer and Affirmative Defenses to the Counterclaim of defendant, Shipyard Associates, L.P. ("Defendant"), says: 1. Admitted. 2. Admitted. ANSWER TO COUNTERCLAIM FIRST COUNT Counter-Claim for Declaratorv Judgment 3. Plaintiff admits that on or about December 7, 1997, Shipyard, the Planning Board and Plaintiff entered into a developer's agreement. As to the remainder of the allegation { C.l }

2 contained in paragraph 3 of Defendant's counterclaim, the developer's agreement speaks for itself. 4. The allegations contained in paragraph 4 of Defendant's counterclaim are statements of legal opinion, as opposed to statements of fact, and as such are improper. To the extent any further response is required, the allegations ofparagraph 4 are denied. 5. The allegations contained in paragraph 5 of Defendant's counterclaim are statements oflegal opinion, as opposed to statements of fact, and as such are improper. To the extent any further response is required, the allegations ofparagraph 5 are denied. 6. The allegations contained in paragraph 6 of Defendant's counterclaim are statements of legal opinion, as opposed to statements of fact, and as such are improper. To the extent any further response is required, the allegations ofparagraph 6 are denied. 7. The allegation contained in paragraph 7 of Defendant's counterclaim is a statement of legal opinion, as opposed to a statement of fact, and as such is improper. To the extent any further response is required, the allegations of paragraph 7 are denied. 8. The allegation contained in paragraph 8 of Defendant's counterclaim is a statement of legal opinion, as opposed to a statement of fact, and as such is improper. To the extent any further response is required, the allegations ofparagraph 8 are denied. WHEREFORE, Plaintiff demands judgment dismissing the Counterclaim with prejudice, awarding Plaintiff interest, costs and attomeys' fees and granting such other relief as the Court may deem just and proper. {96906.DOC.l} 2

3 SECOND COUNT Counter-Claim for Breach of the Duty of Good Faith 9. The allegation contained in paragraph 9 of Defendant's counterclaim is a statement of legal opinion, as opposed to a statement of fact, and as such is improper. The 1997 Agreement speaks for itself. 10. The allegations contained in paragraph 10 of Defendant's counterclaim are statements of legal opinion, as opposed to statements of fact, and as such are improper. To the extent any further response is required, the allegations ofparagraph 10 are denied. 11. The allegations contained in paragraph 11 of Defendant's counterclaim are statements of legal opinion, as opposed to statements of fact, and as such are improper. The 1997 Agreement speaks for itself. To the extent any further response is required, the allegations ofparagraph 11 are denied. 12. The allegations contained in paragraph 12 of Defendant's counterclaim are statements oflegal opinion, as opposed to statements of fact, and as such are improper. To the extent any further response is required, the allegations ofparagraph 12 are denied. 13. The allegations contained in paragraph 13 of Defendant's counterclaim are statements of legal opinion, as opposed to statements of fact, and as such are improper. To the extent any further response is required, the allegations ofparagraph 13 are denied. 14. The allegations contained in paragraph 14 of Defendant's counterclaim are statements oflegal opinion, as opposed to statements of fact, and as such are improper. To the extent any further response is required, the allegations ofparagraph 14 are denied. WHEREFORE, Plaintiff demands judgment dismissing the Counterclaim with prejudice, awarding Plaintiff interest, costs and attorneys' fees and granting such other relief as the Court may deem just and proper. {96906.DOC.l } 3

4 AFFIRMATIVE DEFENSES FIRST AFFIRMATIVE DEFENSE (Failure to State a Legally Cognizable Claim) Defendant's counterclaims should be dismissed in whole or in part for failure to state a claim against Plaintiffupon which relief may be granted. SECOND AFFIRMATIVE DEFENSE (Failure to Name an Indispensable Party) Defendant's counterclaims should be dismissed and/or limited because Defendant has failed to name the Planning Board of the City of Hoboken CPlanning Board") as a counterdefendant. The Planning Board adopted a Resolution dated January 7, 1997 approving Defendant's application for preliminary site plan approval and preliminary major subdivision approval CPlanning Board's Resolution"). Defendant's counterclaim against Plaintiff alleges that the 1997 Agreement is ancillary to and dependent upon the Planning Board's Resolution. Defendant's counterclaim against Plaintiff seeks a judgment declaring that Defendant has the right to request a change of the Planning Board's Resolution, and declaring that Shipyard is not precluded by the 1997 Agreement (to which the Planning Board is also a party) from requesting a change of the Planning Board's Resolution. The 1997 Agreement states: "Except as herein otherwise specifically provided, no subsequent alterations, amendments or changes to this Agreement shall be binding upon either party unless reduced to writing and signed by each party." (Emphasis added). THIRD AFFIRMATIVE DEFENSE (Avoidable Consequences) the doctrine of avoidable consequences. Any damages, losses or expenses incurred by Defendant in connection with any actions taken by or on behalf of Defendant for the purpose of (96906.DOC.l} 4

5 modifying the 1997 Resolution are attributable to either no one's liability, the liability of a third party or third parties other than Plaintiff, or to actions and/or omissions attributable to Defendant. FOURTH AFFIRMATIVE DEFENSE (Promissory Estoppel) the doctrine ofpromissory estoppel. Defendant promised to develop the Tennis Pavilion, Tennis Courts, Parking Spaces and Public Access Improvements on Development Block G in strict accordance with the Architectural Plans. Defendant expected that Plaintiff would rely on the aforementioned promise, and Plaintiff did rely on that promise in entering into the 1997 Agreement. Defendant's failure to provide these developments have deprived and continue to deprive the City of Hoboken public of recreational opportunities and waterfront access, to the detriment of the public health and welfare of the City ofhoboken, Defendant's failures in these regards also have caused and continue to cause Plaintiff to lose tax revenue and meaningful opportunities to improve certain property which is owned by Plaintiff and which abuts Development Block G, and to foster and enhance economic development. FIFTH AFFIRMATIVE DEFENSE (Equitable Estoppel) the doctrine of equitable estoppel Defendant represented to Plaintiff that Defendant would develop the Tennis Pavilion, Tennis Courts, Parking Spaces and Public Access Improvements on Development Block G in strict accordance with the Architectural Plans to induce Plaintiff to enter into the 1997 Agreement. Plaintiff has relied upon Defendant's representations in entering into the 1997 Agreement; however, Defendant has failed to, and does not intend to, provide the Tennis Pavilion, Tennis Courts, Parking Spaces and Public Access hnprovements on {96906.DOC.l) 5

6 Development Block G in strict accordance with the Architectural Plans. Consequently, Defendant has deprived and continues to deprive the City of Hoboken public of recreational opportunities and waterfront access, and has deprived and continues to deprive Plaintiff of tax revenue and meaningful opportunities to improve certain property which is owned by Plaintiff and which abuts Development Block G, and to foster and enhance economic development. SIXTH AFFIRMATIVE DEFENSE (Estoppel) the doctrine of estoppel. Defendant voluntarily agreed, and represented its intent, to provide the Tennis Pavilion, Tennis Courts, Parking Spaces and Public Access Improvements on Development Block G in strict accordance with the Architectural Plans. Defendant also voluntarily entered into, and represented its intent to be bound by, the 1997 Agreement. Defendant has failed to, and does not intend to, provide the Tennis Pavilion, Tennis Courts, Parking Spaces and Public Access Improvements on Development Block G in strict accordance with the Architectural Plans. Defendant instead intends to construct two new eleven-story residential buildings on Development Block G. Consequently, Defendant has deprived and continues to deprive the City of Hoboken public of recreational opportunities and waterfront access, and has deprived and continues to deprive Plaintiff of tax revenue and meaningful opportunities to improve certain property which is owned by Plaintiff and which abuts Development Block G, and to foster and enhance economic development. SEVENTH AFFIRMATIVE DEFENSE (Unclean Hands) the doctrine of unclean hands. Defendant induced Plaintiff to enter into the 1997 Agreement by {96906.DOC.l ) 6

7 promising to provide the Tennis Pavilion, Tennis Courts, Parking Spaces and Public Access Improvements on Development Block G in strict accordance with the Architectural Plans. After Plaintiff and Defendant had entered into the 1997 Agreement, Defendant sought State and/or federal approvals for the development of new residential buildings on Development Block G instead ofthe Tennis Pavilion, Tennis Courts, Parking Spaces and Public Access Improvements, in substantial deviation from Defendant's contractual obligation to construct such improvements, without first seeking the consent of Plaintiff or otherwise discussing Defendant's plans with Plaintiff. Defendant has developed most, if not all, of the residential (1,160 units), commercial retail (63,200 square feet) and parking (approximately 1,460 spaces) components of the Project for Defendant's private profit, without providing the Tennis Pavilion, Tennis Courts, Parking Spaces and Public Access Improvements on Development Block G. Defendant's acts and omissions in this regard have deprived and continue to deprive the City of Hoboken public of recreational opportunities and waterfront access. Defendant's acts and omissions also have deprived and continue to deprive Plaintiff of tax revenue and meaningful opportunities to improve certain property which is owned by Plaintiff and which abuts Development Block G, and to foster and enhance economic development. EIGHTH AFFIRMATIVE DEFENSE (Equitable Fraud) the doctrine of equitable fraud. Defendant misrepresented to Plaintiff that Defendant intended to provide the Tennis Pavilion, Tennis Courts, Parking Spaces and Public Access Improvements on Development Block G in strict accordance with the Architectural Plans. Upon information and belief, Defendant intended that Plaintiff would rely on said misrepresentation. upon Defendant's misrepresentation in entering into the 1997 Agreement. Plaintiff relied Consequently, {96906.DOC.I} 7

8 Defendant has deprived and continues to deprive the City of Hoboken public of recreational opportunities and waterfront access, and has deprived and continues to deprive Plaintiff of tax revenue and meaningful opportunities to improve certain property which is owned by Plaintiff and which abuts Development Block G, and to foster and enhance economic development. NINTH AFFIRMATIVE DEFENSE (Good Faith and Fair Dealing) The claims for relief set forth in Defendant's counterclaim are barred and/or limited because Plaintiff has at all relevant times acted in good faith toward Defendant and dealt fairly with Defendant. Plaintiffreserves the right to amend its Answer and Affirmative Defenses and/or to assert additional defenses upon completion ofdiscovery. MARAZITl, FALCON & HEALEY, L.L.P. Attorneys for Plaintiff, City ofhoboken Dated: May 15, 2012 By: Joseph J.Maraziti, Jr. ~ (96906.DOC.l) 8