Hansen Found., Inc. v. City of Atl. City

Decision Date03 December 2020
Docket NumberNo. 1:19-cv-18608 (NLH/AMD),1:19-cv-18608 (NLH/AMD)
Citation504 F.Supp.3d 327
Parties The HANSEN FOUNDATION, INC. et al., Plaintiffs, v. CITY OF ATLANTIC CITY, Defendant.
CourtU.S. District Court — District of New Jersey

HILLMAN, District Judge

The matter involves a dispute between a home-living facility for individuals dealing with drug and alcohol addiction

and the City of Atlantic City over the City's enforcement of various zoning provisions of its City Code. Plaintiffs challenge two separate provisions of the City Code, and allege a series of violations of federal, state, and constitutional law regarding these provisions and the actions taken by the City in the course of this dispute. Currently pending before the Court are both partiescross-motions for summary judgment. For the reasons expressed below, both motions will be granted in part and denied in part.


The Court takes its facts from the parties’ statements of material fact submitted pursuant to Local Civil Rule 56.1(a). Plaintiff Hansen House, LLC ("Hansen House") is a New Jersey limited liability corporation and subsidiary of Plaintiff Hansen Foundation, Inc., a nonprofit organization whose mission is to provide affordable, long-term, safe recovery residences, access to treatment, community programs, and the tools needed to lead healthy productive lives for people both new to and in long-term recovery. Plaintiff Rienna Rebetje is a disabled individual in recovery from substance abuse, and a resident at the home at the center of this dispute.

In March 2019, Hansen House purchased a single-family home located at 16 South Tallahassee Avenue, Atlantic City, New Jersey. Hansen House sought to make the property, which it named "Serenity House," available to women in recovery from alcoholism and substance abuse. Serenity House is located within Atlantic City's R-2 Zoning District.

On March 7, 2019, the City notified Hansen House that it was in violation of City Ordinance § 194-1(B) requiring a certificate of occupancy prior to the establishment of a new occupation. Over two months later, in May 2019, Hansen House moved residents of another of its homes to the Serenity House, which it alleges was necessary after the residential lease at the other home lapsed. By Hansen House's admission, it did not obtain a certificate of occupancy before its residents moved into Serenity House. (ECF No. 25-2 at ¶ 9).

In June 2019, Hansen House received a notice of a violation from the City's Department of Licensing & Inspections following an inspection of the house, because it had begun to install an H.V.A.C. system without first obtaining a construction permit as required by N.J.A.C. 5:23-2.16. Accordingly, the City's Department of Licensing & Inspections issued a "stop work order" pursuant to N.J.A.C. 5:23-2.14. Then, on July 10, counsel for Hansen House sent a letter to the City's Building and Subcode Official, Anthony Cox. (ECF No. 1-1, Compl. Ex. F). The letter laid out arguments similar to those Plaintiffs would later make in this lawsuit. Specifically, the letter asserted that Serenity House was properly classified as a "single-family residence," argued that if it were not, a "reasonable accommodation" in the form of a waiver or modification of the City's zoning ordinances and a corresponding certificate of occupancy must be granted, and stated that if the City did not permit Serenity House to operate as planned, the City faced liability from suit under federal anti-discrimination law.

It was not until July 15, 2019, almost two months after Hansen House moved residents into Serenity House without obtaining a certificate of occupancy and a few days after Plaintiffs sent the letter described above, that the City filed a municipal complaint against Serenity House for "failure to obtain an ‘occupancy permit’ before new occupancy occurred," in violation of City Code § 194-1B. (ECF No. 1-1, Complaint Ex. G). Plaintiffs responded to this complaint by submitting an application for a Certificate of Land Use Compliance ("CLUC") on July 18, which sought to register the house as a single family home. Under the City Code, a CLUC is a prerequisite for certain forms of housing to receive a certificate of occupancy.

That same day, Plaintiffs received an order to vacate the Serenity House. The order was sent by Dale Finch, Director of the City's Department of Licensing and Inspections, and stated that it was based on both "a pattern of disregard for code requirements," and the "absolute prohibition against a community residence at this specific location" under City Code § 152-1. (ECF No. 1-1, Compl. Ex. J). Section 152-1 governs "(family) community residence[s]," which the provision makes clear is the City Code's term for "housing for persons with disabilities," and mandates that "[c]ommunity residences, except as required by state law, ... be at least 660 linear feet in any direction from the closest existing community residence." Plaintiffs have not been forced to actually vacate the residence.

The next day, July 19, 2019, Serenity House's CLUC application was denied by City Zoning Officer Barbara Woolley-Dixon. The parties met to discuss the situation on August 16, at which meeting representatives for Hansen House were provided with the denied CLUC application. (ECF No. 1-1, Compl. Ex. I). The application listed multiple procedural requirements for the CLUC form that had not been fulfilled, and also included a note stating that Serenity House was in violation of § 152-1's distance requirement; the parties dispute whether the procedural violations, or § 152-1, were the actual reason for the denial. At this meeting, the possibility of Serenity House being classified as a "group family household" was also discussed; while the parties’ briefs further dispute which side made the suggestion, Plaintiffs’ initial Statement of Undisputed Material Facts acknowledges that "Ms. Hansen [ ] proposed to file another CLUC as a ‘group family household’ under City Code Section 163-66." (ECF No. 25-2 at ¶ 21).

Two weeks later, on July 30, Hansen House filed an appeal and a request for an interpretation of the City's zoning provisions with the City's Zoning Board of Adjustment. The filing appealed what they characterized as the City's denial of their CLUC because of a determination that Serenity House was a community residence governed by the distance requirement of § 152-1, argued that Serenity House was in fact a group family household under § 163-66, and alternatively requested an interpretation by the Zoning Board as to exactly what form of housing Serenity House constituted. (ECF No. 1-1, Compl. Ex. L).

At some point after submitting their appeal and request for an interpretation, Plaintiffs apparently realized that pursuant to § 163-66B, group family households are barred from the R-2 district that Serenity House is located in, and filed a supplement to their appeal on September 5. (ECF No. 1-1. Compl. Ex. M). That supplement again requested that the CLUC denial be overturned, arguing that the denial had occurred because of the City's determination that Serenity House was a community residence governed by § 152-1, and again argued that Serenity House was and should be characterized as a single family home permitted in the R-2 district.

A few weeks later, on September 24, the Zoning Board sent Plaintiffs a letter regarding the deficiencies in their appeal and request for an interpretation. (ECF No 1-1, Compl. Ex. N). The letter made clear that the Zoning Board was unable to review their application based purely on procedural grounds: Plaintiffs had failed to pay the filing fee and attach multiple documents providing information related to the ownership of the house as required under New Jersey law and the City Code. It further explicitly stated that "the City lacks sufficient information to characterize the use of the property and takes no position on same."

Two days later, on September 26, 2019, Plaintiffs filed their complaint in the Superior Court of the State of New Jersey, Atlantic County. (ECF No. 1-1). The complaint asserts both facial challenges to Sections 152-1 and 163-66B, as well as a number of as-applied challenges and claims based on Defendant's actions throughout this process. Specifically, the complaint brings claims under the following federal statutes: The Fair Housing Act ("FHA"), 42 U.S.C. § 3602 et. seq. (Counts I-III); the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12132 et. seq. (Count IV); the Rehabilitation Act of 1973 ("RHA"), 29 U.S.C. § 791 et. seq. (Count V); 42 U.S.C. § 1983 (Count VI); the Fourteenth Amendment of the United States Constitution (Count VII); the New Jersey Law Against Discrimination ("NJLAD"), N.J.S.A. 10:5-1 et. seq. (Count VIII); and the New Jersey Civil Right Act ("NJCRA"), N.J.S.A. 10:6-1 et. seq. (Count IX).

On October 2, 2019, Defendant removed the case to this Court. (ECF No. 1). On March 3, 2020, Plaintiffs filed a motion for summary judgment on each of their claims. (ECF No. 25). Defendants responded by filing their own cross-motion for summary judgment. (ECF No. 26). Finally, on June 29, 2020, Plaintiffs filed a reply brief in further support of their motion. (ECF No. 30).

I. Subject Matter Jurisdiction

The Court has original federal question jurisdiction over Plaintiff's federal claims under 28 U.S.C. § 1331, and has supplemental jurisdiction over the New Jersey state law claims...

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