Lake Shore Estates, Inc. v. Denville Tp. Planning Bd.

• Court: New Jersey Superior Court – Appellate Division
• Writing for the Court: The opinion of the court was delivered by LANDAU
• Citation: 255 N.J.Super. 580,605 A.2d 1106
• Parties: LAKE SHORE ESTATES, INC., a New Jersey Corporation, Plaintiff-Respondent/Cross-Appellant, v. DENVILLE TOWNSHIP PLANNING BOARD, Mayor and Municipal Council of the Township of Denville and the Township of Denville, Defendants-Appellants/Cross-Respondents.
• Decision Date: 15 March 1991

Page 580

255 N.J.Super. 580 605 A.2d 1106 LAKE SHORE ESTATES, INC., a New Jersey Corporation,
Plaintiff-Respondent/Cross-Appellant,
v.
DENVILLE TOWNSHIP PLANNING BOARD, Mayor and Municipal
Council of the Township of Denville and the
Township of Denville,
Defendants-Appellants/Cross-Respondents. Superior Court of New Jersey,
Appellate Division. Argued Nov. 26, 1990.
Decided March 15, 1991.

[605 A.2d 1107]

Page 581

Joel A. Murphy, Morristown, for defendants-appellants/cross-respondents (Murphy & Kurnos, attorneys; Joel A. Murphy, on the brief).

Lawrence S. Berger, Morristown, for plaintiff-respondent/cross-appellant (Berger & Bornstein, attorneys; Bruce D. Nimensky, on the brief).

Before Judges DREIER, ASHBEY and LANDAU.

Page 582

The opinion of the court was delivered by LANDAU, J.A.D.

These are cross-appeals from a judgment in the Superior Court, Law Division, entered February 4, 1989, but certified as a final judgment on May 26, 1989. R. 4:42-2. Part of the rationale for the order was contained in a letter decision dated January 17, 1989. The appeals also require reference to various administrative and legal proceedings surrounding the efforts by plaintiff-respondent/cross-appellant Lake Shore Estates, Inc. (Lake Shore) to develop an area of Denville characterized by steep and rugged topography sloping toward a lake.

The February 4, 1989 order as finally certified embodies prior interlocutory determinations made during the course of the long history of this case. Defendants-appellants/cross-respondents Denville Township Planning Board (Board), Mayor and Municipal Council of the Township of Denville, and the Township of Denville (collectively, "Denville") appeal from the determination by the trial judge that a so-called "steep slope" ordinance and a zoning ordinance which imposed two-acre minimum lot size in the zone occupied by the tract could not be applied by the Board in reviewing a preliminary subdivision proposal submitted by Lake Shore, and from the reversal of its denial of preliminary subdivision approval. Lake Shore cross-appeals from the determination to the extent that it affirmed the Board's denial of its proposal for cluster housing development. Under the February 4, 1989 order, Lake Shore can reapply for subdivision approval with further proofs. ¹

The principal issues raised are whether the trial judge correctly refused to apply the "time of decision" rule when he considered Denville's municipal ordinances, and whether the Board acted arbitrarily in denying Lake Shore's subdivision plan which called for cluster development.

Denville and the Board argue that the most recent subdivision application by Lake Shore constituted, and was understood

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to [605 A.2d 1108] be, a new application and should be subject to all ordinances and regulations. They also say that the lands in question properly require protection under the Freshwater Wetlands Protection Act. Lake Shore disputes these contentions and argues that we should reverse the denial of cluster development.

On August 19, 1976, Lake Shore applied to the Board for sketch plat approval of a proposed subdivision for its 170.8 acre tract. In November 1977, the Board approved Lake Shore's "sketch plat concept" for a proposed subdivision which then utilized an "open space," i.e., cluster, design.

In June 1979, Lake Shore submitted an application to the Board for preliminary major subdivision approval, predicated upon a cluster zone plan. One month later, Denville adopted a land use ordinance entitled "Development Regulations Within Areas of Steep Slopes." In January 1980, responding to the adoption of this ordinance, Lake Shore submitted a supplemental application to the Board which included a request for variance from the recently-adopted steep slope ordinance.

After several public hearings, the Board adopted a resolution on March 22, 1984, which denied both preliminary major subdivision approval and the variance request. Lake Shore filed a complaint in lieu of prerogative writs, seeking to reverse the Board's decision. It asserted that the steep slope ordinance was unconstitutional.

On February 7, 1985, a Law Division judge found that the Board's determination was procedurally flawed and remanded the matter to the Board with a direction that each Board member must review the transcripts of any meeting that the member failed to attend and that the Board then vote again regarding the subdivision proposal.

The Board again adopted a resolution which denied the application for preliminary major subdivision approval and the variance request. Lake Shore sought to reverse by filing another complaint in lieu of prerogative writs, asserting arbitrariness of the Board's decision and a declaration that the steep slope ordinance was unconstitutional.

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Following trial in February 1986, the present trial judge found that Denville's steep slope ordinance was unconstitutional and invalid. As Lake Shore's preliminary major subdivision application had been considered by the Board under that steep slope ordinance, the Board's denial of the subdivision proposal thereunder was deemed a nullity.

It was suggested that Lake Shore could submit a new application to the Board, to be considered on its merits. The oral decision was embodied in a judgment dated March 17, 1986, which provided that in the event Denville adopted a new ordinance, Lake Shore could, on motion, challenge the ordinance "or the effect such ordinance shall have on any future or pending application submitted by plaintiff for preliminary subdivision approval."

On August 6, 1986, Lake Shore once again applied to the Board for preliminary major subdivision approval. On the previous day, August 5, 1986, Denville had adopted a modified version of the former steep slope ordinance. On September 17, 1986, Lake Shore filed a complaint in lieu of prerogative writs challenging the constitutionality of Denville's 1986 steep slope ordinance.

In addition, while the subdivision application was pending, Denville adopted Ordinance No. 27-86 on October 7, 1986, rezoning the subject property and others into an R-1B-Residential District, which increased minimum lot size from 40,250 square feet to two acres. This drastically lessened the number of potentially buildable lots on Lake Shore's property.

Lake Shore moved, as permitted by the previous judgment dated March 17, 1986, seeking a determination that the new steep slope ordinance and the two-acre ordinance should not be applied to its pending preliminary major subdivision application. Lake Shore asserted that the "time of decision rule" should not prevail.

Following a hearing on Lake Shore's motion in March 1987, the trial judge rendered an opinion in which he recognized that [605 A.2d 1109]

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"perhaps the idea of requiring large lots in place of smaller lots is a sensible way to deal with steep slopes" and "it might very well be sensible zoning to upgrade lot sizes in areas where there are steep slopes." He accepted as correct for purposes of the motion that the zoning changes were not just applicable to Lake Shore's property but to large areas throughout the municipality, and represented "a general effort ... to head in the direction of larger lot size requirements in areas where there are critically steep slopes." No consideration was given to the constitutionality of the two ordinances.

The trial judge also ruled in that determination, later embodied in a judgment of March 28, 1987, that the Board had an inherent authority, even without ordinance, to review any application in terms of sound engineering principles related to steep slopes. Nonetheless, he concluded that neither the steep slope ordinance nor the two-acre zoning ordinance could be applied to "Plaintiff's pending subdivision application No. MP-86-23 and accompanying variance applications...."

The trial judge reasoned that the effect of the amendments unfairly burdened the plaintiff and rendered ...