Kean loses right of first refusal

In ongoing Merck property legal battle, court rules against university

File Photo Kean University had been hoping its right of first refusal on an adjacent property would hold up, but a superior court judge ruled the school has no such right, opening the door for a private developer to purchase the land.
File Photo
Kean University had been hoping its right of first refusal on an adjacent property would hold up, but a superior court judge ruled the school has no such right, opening the door for a private developer to purchase the land.

UNION — Late Monday a Superior Court judge ruled Kean University has no legal claim to the right of first refusal on 50-acres of Merck property fronting Morris Avenue.

This means the developer who was negotiating last year with Merck to buy the property can move forward with his attempt to purchase the parcel of land.

Throwing a wrench into things, though, is the fact there is a 45-day window for an appeal of the decision, although the court ruling makes it clear there is little room for discussion on the matter.

In the meantime, newly appointed Union Mayor Manuel Figueiredo implored university leadership “to move forward in adherence with the court’s decision and begin working in concert for the betterment of the university, township and county.”

“This decision by the Superior Court is a welcome relief to taxpayers throughout the township and county,” said the mayor. “These last months have been an unnecessary financial drain on Kean University, Union Township and Union County and it is very unfortunate that the bill for these frivolous claims has been fronted by taxpayers everywhere.”

“With the court decision we can begin to move forward with the land sale offer put forward by Russo Developers that will provide critical property tax relief for residents and remove a contentious legal hurdle from our ongoing relationship with Kean University,” Figueiredo said, adding the university has been suffering through “skyrocketing tuitions, plummeting bond ratings, drastic decreases in enrollments and the national press microscope brought on by the purchase of the $219,000 conference table.”

“I am hopeful that today’s court decision will be instrumental in allowing Kean University leadership to get back on a more thoughtful, productive course with Union Township and surrounding areas,” the mayor added.

According to the 11-page decision by Superior Court Judge Katherine R. Dupuis, although Kean University has continued to maintain they were given the legal right to buy the property by the Kean family heirs, the “covenant” referred to was not legally binding.

Dupuis explained in her ruling that the Kean family had nothing in writing to back this up, which made the claim null and void.

In fact, Dupuis said the “right of first refusal” that Kean was using as a basis for their legal right to buy the land violates the Rule Against Perpetuities, which must to be in writing to be legally valid.

The decision followed months of legal wrangling between the university, Russo Development — the private developer in negotiations for more than a year with Merck to purchase the property — and the township, who stood to lose more than $4 million in potential property taxes if the ruling went in Kean’s favor.

The entire issue goes back to the last will and testament of John Kean, Stewart B. Kean and Mary Alice Reynolds in 1926, who actually executed this “covenant” allowing the land to be transferred by a Kean heir throughout “perpetuity,” or forever. Dupuis pointed out that while Kean relied heavily on this covenant, the term “covenant” in a trust “lends no greater contractual rights.”

Furthermore, the Superior Court judge argued that when the trust terminated in 1997, the assets from the Kean family were transferred to John Kean individually, and therefore any “right of first refusal” ended at that time.

“The trust cannot have an heir,” ruled Dupuis, explaining that the university failed to present any written proof that John Kean “may be the successor” to the trust mentioned in the 1926 will. This would relate directly to his legal ability to give to the university the right to have first crack at buying the 50-acre parcel of land.

Further, John Kean never pursued a legal “assignment” of the right of first refusal when the trust terminated in 1997. He would have had to do so prior to the trust ending, and Dupuis said “he failed to do so.”

Dupuis said that although on April 8, 2014, John Kean assigned, in writing, what he believed to be his right of first refusal to the Kean University Board of Trustees, he did not have the legal right to do so.

In the end, Dupuis said, the court was left to decide if the right of first refusal was “properly” transferred to John Kean. She found that legally he had no enforceable interest because that interest was “never conveyed to him in writing to him from the trust.”