Bonner Properties, Inc. v. Planning Bd. of Franklin Tp.

• Citation: 449 A.2d 1350,185 N.J.Super. 553
• Parties: BONNER PROPERTIES, INC., a Delaware Corporation and Quail Brook, Inc., a New Jersey Corporation, Plaintiffs, v. PLANNING BOARD OF the TOWNSHIP OF FRANKLIN, Somerset County, New Jersey, The Mayor and Council of the Township of Franklin, and the Township of Franklin, A Municipal Corporation, Defendants.
• Decision Date: 11 June 1982
• Court: Superior Court of New Jersey

Page 553

185 N.J.Super. 553

449 A.2d 1350

BONNER PROPERTIES, INC., a Delaware Corporation and Quail

Brook, Inc., a New Jersey Corporation, Plaintiffs, v. PLANNING BOARD OF the TOWNSHIP OF FRANKLIN, Somerset County,

New Jersey, The Mayor and Council of the Township

of Franklin, and the Township of

Franklin, A Municipal

Corporation, Defendants.

Superior Court of New Jersey, Law Division,

Somerset County.

Decided June 11, 1982.

Frederic K. Becker, Woodbridge, for plaintiffs (Wilentz, Goldman & Spitzer, Woodbridge, attorneys; Lawrence J. Freundlich, Woodbridge, on the brief).

Dennis Alan Auciello, New Brunswick, for the Planning Board of the Township of Franklin.

Stanley Cutler, Somerset, for the Mayor and Council of the Township of Franklin, and the Township of Franklin.

MEREDITH, J. S. C.

This complaint in lieu of prerogative writs centers on the question of whether a municipality, after approving a developer's plans for a condominium project, may deny him permission to amend those plans so that ownership of the common elements in the project would be severed from ownership of its individual units and so that unit ownership would include ownership of the plot of land upon which the unit improvements are to be constructed.

I

On June 23, 1976 the Planning Board of Franklin Township granted tentative approval to 1020 Associates to construct a planned unit development on some 700 acres of its property located within the township. The resolution of approval provided for construction in seven phases extending over a period of 15 years. It contemplated that approximately 375 acres in the development would be devoted to commercial, industrial and recreational uses, including public parkland and common open space. The remainder of the tract would be used for residential purposes and would ultimately include 244 single-family units, 1228 townhouse units, and 985 apartment units. The resolution further provides that "all multi-family dwelling units shall be constructed substantially in accordance" with certain floor plans submitted to the planning board; however, par. 25 states that

... the right is reserved to the applicant to apply to the Planning Board from time to time to consider the change of said plans as market demands may dictate and in order to put to use new concepts and ideas. No changes in any such plans shall be made without the formal approval of the Planning Board of the Township of Franklin and it is the expressed intent of the Planning Board to maintain the overall integrity of the plan as now presented.

On August 26, 1976, 1020 Associates conveyed to Bonner Properties, Inc. all rights under the aforementioned resolution as well as title to the 700-acre tract in question. Bonner then proceeded to expend "substantial monies" to provide utility, sewer, water and road facilities to the entire development.

In March 1979, within the time limit set out by the resolution, Bonner applied for final approval of Phase I, Section A, B, and C, of the development (hereinafter "Phase I"), a lateral project of 334 condominium units and common elements to be constructed on some 47 acres of the development tract. At about the same time, on March 6, 1979, Bonner transferred title to Phase I to Quail Brook, Inc., a wholly-owned subsidiary of Bonner. Although the deed of conveyance was recorded on March 13, 1979, the planning board was allegedly without knowledge of the transfer when it granted Bonner final approval for Phase I, on April 11, 1979. Later, on March 6, 1981 Quail Brook entered into agreement with Kaufman and Broad of New Jersey, Inc., which provided for the sale of the subject property to Kaufman for $3,006,000, but this agreement is not directly relevant here.

On May 21, 1981 Quail Brook applied to the planning board for an amendment to its April 11, 1979 resolution of final approval. Under the proposed amendment the 334 residential units would be sold, not as condominiums but in "fee simple form." This term is admittedly inaccurate in that condominium properties are also typically held in fee simple. What the proposed amendment sought was rather an extension of the unit property held in fee simple to include not only the improvements but also the plot of ground on which they are to rest, thereby necessitating subdivision of the 47-acre tract. In addition, whereas condominium owners hold an undivided interest in the common elements of a project, under the amended Quail Brook regime the common elements would be owned by an incorporated nonprofit homeowners' association. As was to be the case under the original plan, the homeowners' association would have the responsibility of managing the common elements. Further, in both cases membership in the homeowners' association and the right to enjoy the common elements would arise only in conjunction with the ownership of the residential units.

Quail Brook sought the amendment described above in order "to utilize new concepts and ideas" and "to meet present market conditions ... and be fully competitive in the housing market." On June 10, 1981, after considering the evidence with respect to the proposed amendment, the planning board concluded that the reasons advanced in its support were outweighed by the "detrimental effect of the proposed change upon the Township," including possible taxation and aesthetic difficulties. The board therefore resolved to deny the requested amendment. This decision was affirmed by the Franklin Township Council on October 22, 1981 by a vote of 5 to 3, with one abstention. Two of the majority votes were cast by persons who were members of the planning board when it decided to reject the proposed amendment.

On November 18, 1981 Bonner Properties filed this complaint in lieu of prerogative writs. Bonner alleges that the decisions of the planning board and township council were unreasonable, arbitrary and capricious in that the requested amendment seeks "relief associated with the form of ownership of real property, [which] cannot be denied as a matter of law." Bonner also contends that the township council should have granted Bonner's motion to disqualify from the council proceedings in regard to the matter the two councilmen who had considered it while members of the planning board.

Thereafter, on January 29, 1982, this court approved a consent order permitting Bonner to amend its complaint to include Quail Brook as an additional plaintiff. Bonner and Quail Brook then moved for summary judgment. Defendants, in turn, filed answers, counterclaims and motions for summary judgment on the counterclaims. Plaintiffs responded by filing a cross-motion for summary judgment to dismiss the counterclaims. The issues raised and argued by the parties with respect to the merits of these motions will be considered after two preliminary questions are resolved: standing and ripeness for summary judgment.

II

A

Defendants argue that neither Bonner nor Quail Brook has standing to prosecute this action--Bonner in that it did not apply for the resolution amendment and Quail Brook in that the conveyance of the subject property to it on March 16, 1979 by Bonner was void ab initio.

In arguing that Quail Brook lacks standing defendants rely on N.J.S.A. 40:55D-55, which states:

If, before final subdivision approval has been granted, any person transfers or sells or agrees to transfer or sell, except pursuant to an agreement expressly conditioned on final subdivision approval, ... any land which forms a part of a subdivision for which municipal approval is required by ordinance pursuant to this act, such person shall be subject to a penalty not to exceed $1,000.00, and each lot disposition so made may be deemed a separate violation.

In addition to the foregoing, the municipality may institute and maintain a civil action

a. For injunctive relief; and

b. To set aside and invalidate any conveyance made pursuant to such a contract of sale....

... Any such action must be brought within 2 years after the date of the recording of the instrument of transfer, sale or conveyance of said land or within 6 years, if unrecorded.

This argument fails for the following reasons.

First, it is uncontradicted that the deed conveying title to the subject property from Bonner to Quail Brook was recorded on March 13, 1979 in the Office of the Somerset County Clerk. Therefore, an action seeking relief under the quoted statute could have been brought against plaintiffs only within two years after that date. Since the counterclaims relying on the statute were in fact brought in February 1982, they are barred. Nor can defendants avoid this result by invoking the "discovery rule." Under this rule a cause of action will not accrue in an appropriate case "until the injured party discovers, or by exercise of reasonable diligence and intelligence should have discovered, facts which form the basis of a cause of action." O'Keeffe v. Snyder, 83 N.J. 478, 491, 416 A.2d 862 (1980). The discovery rule applies only "in relation to an accrual period of limitations" and not to a period of limitations "based upon a fixed objective event." Presslaff v. Robins, 168 N.J.Super. 543, 546, 403 A.2d 939 (App.Div.1979). The rule would seem to be particularly inapplicable where the purpose of the objective event named in a statute is to obviate claims of justifiable ignorance. Further, the planning board knew or should have known of the conveyance in that (i) the plans submitted to it in March 1979 state on their cover page: "Applicant and Owner, Quail Brook, Inc. (A Wholly Owned Subsidiary of Bonner Properties, Inc.);" (ii) a legal notice published by the township's director of planning at page 14 of the April 19, 1979 issue of the Somerset Spectator states: "... the Franklin Township Planning Board ... on April 11, 1979 ... GRANTED: Final approval with conditions to Site Plan # 286-1F, Quail Brook, Inc. (Bonner PUD) Phase I (A, B and C)."

Second, the conveyance of the subject property...