Before Judges Havey, A.A. Rodr¡guez and Collester.
The opinion of the court was delivered by: Havey, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
On appeal from Superior Court of New Jersey, Law Division, Mercer County.
This is Mount Laurel *fn1 litigation. Intervenors, Maneely Princeton Partnership (Maneely) and Dr. and Mrs. Charles Akselrad (Akselrad) are the owners of two tracts of land previously zoned for affordable housing as part of a 1985 settlement of an exclusionary zoning action instituted by Affordable Living Corporation against defendant West Windsor Township. Consent orders were entered in October 1985, rezoning intervenors' sites for exclusionary development as part of the overall compliance plan approved by Judge Serpentelli and incorporated into an October 1, 1985 consent judgment.
In 1997, the Township rezoned intervenors' sites to non-Mount Laurel uses, deleting them from the Township's compliance plan. On May 1, 1998, the trial court entered a conditional final judgment of compliance and repose in a builder's remedy action instituted by Toll Brothers against the Township. In that judgment the court authorized the Township to delete intervenors' sites from the compliance plan, and deemed the 1985 consent judgment "as having expired."
In these back-to-back appeals, intervenors challenge the deletion of their sites from the Township's compliance plan, arguing that the action was contrary to the rules of the Council on Affordable Housing (COAH) and violated their vested rights under the 1985 consent orders. We reverse and remand for further proceedings. In our view, Rule 4:50- 1(e) provides the appropriate framework for resolution of the dispute before us. That rule allows relief from judgment where "it is no longer equitable that the judgment . . . should have prospective application . . . ." Applying Fed. R. Civ. P. 60(b)(5) (the federal equivalent of Rule 4:50-1(e)), the federal courts have established practical and equitable standards for relief from consent judgments entered in public- interest litigation. We adopt those standards and remand with direction that they be applied in determining whether provisions of the 1985 consent orders and consent judgment affecting intervenors' properties should be vacated.
A detailed review of the procedural history is necessary. In March 1984, Affordable Living Corporation instituted exclusionary zoning litigation against the Township. Affordable Living and the Township reached a tentative settlement, which included plans to rezone intervenors' properties for exclusionary development. Both intervenors had other plans for the properties, and objected to the rezoning. Both Akselrad and Maneely settled with the Township. In October 1985, a consent judgment was entered which, among other things, declared the Township in compliance and granted the Township repose from further Mount Laurel litigation until July 22, 1991. At the same time, consent orders were entered delineating the rights and obligations of both Maneely and Akselrad.
In May 1993, Toll Brothers, owner of a 293-acre tract, instituted an action seeking a site-specific builder's remedy, alleging that the Township's fair-share plan was defective due to unreasonable zoning constraints, market conditions and other factors. *fn2 After a lengthy trial, Judge Carchman rendered a written opinion, reported at 303 N.J. Super. 158 (Law Div. 1996), declaring the Township's zoning ordinance in violation of Mount Laurel II, and awarding Toll Brothers a builder's remedy to construct a development of single-family and multiple-family dwellings, including 175 affordable rental units.
In March 1997, intervenors received notice that the Township had proposed to delete their sites for affordable housing. Intervenors moved unsuccessfully to intervene in the action instituted by Toll Brothers. Judge Carchman advised intervenors that they should attempt to enforce whatever rights they had under the 1985 consent judgment and consent orders. However, the Affordable Living litigation, resulting in the 1985 consent judgment, was consolidated with the Toll Bros. proceedings "for limited purposes." Intervenors then moved to enforce their rights under the 1985 consent judgment and consent orders, and the motions were consolidated with the Toll Bros. litigation. After extensive testimony, the trial court rendered a written opinion and entered the May 1, 1998 conditional final judgment of compliance and order of repose. As part of that judgment, the Township was authorized to delete intervenors' sites and, as noted, treated all orders entered in the original Affordable Living litigation as "having expired." These appeals followed.
Maneely's site, zoned for affordable units as part of the October 1985 consent judgment, is situate directly across the street from Toll Brothers' property. Maneely's total holdings exceed 200 acres, forty- two of which are developable. Akselrad's site consists of approximately forty-four acres, a substantial portion of which is developable.
Prior to the 1985 settlement and consent judgment, Maneely owned additional sites (sites 4 and 6) as well as the 200-acre site, the subject of this litigation (site 2). In December 1982, the Planning Board approved a development proposal (not involving the construction of affordable housing) on sites 4 and 6. However, during the Affordable Living litigation, Maneely was informed by the Township that the approval was of no force or effect. Maneely thereupon intervened in the Affordable Living litigation and filed a separate action in lieu of prerogative writs defending its pre-existing rights relating to its approved sites.
Prior to the 1985 consent judgment, the Akselrad property was zoned for office building use (ROM-1). Akselrad had retained an engineering firm to perform a feasibility study for development of an office complex. He intervened in the Affordable Living litigation in order to preserve the ROM-1 zoning. It was his view that the settlement agreement between Affordable Living and the Township, rezoning his property, would depreciate its value.
In July 1985, Maneely and the Township entered into a settlement which provided in part that Maneely's 200-acre tract would be rezoned for high-density inclusionary development. The settlement was incorporated into an October 15, 1985 consent order which provided in part as follows:
No party to this action shall amend any of the terms and conditions of this order, nor shall any land use ordinances of West Windsor Township affecting Maneely lands be amended without the written consent of the other parties. In the absence of such consent, the parties shall have the right to make application to the Court for a ruling. Any changes relating to the Mt. Laurel obligation whether consented to by the parties or not, shall require a Court Order.
In 1996, a Maneely representative met with John Madden, the Township Planner, and the Township's Director of Community Development, at which time Madden asked Maneely to submit a preliminary proposal for affordable housing. Thereafter, Maneely reached a tentative agreement with Orleans Builders, an experienced developer of multi-family housing, including affordable housing, to build 308 townhouses on the site, with a twenty-percent set-aside. Jerry Orleans, Chairman of Orleans Builders, testified that he was "absolutely certain" that a strong market would exist for the 308 townhouses proposed to be developed on Maneely's site. He cautioned that the only way to provide sewer service to the project was through a pump station. Timothy Boylan, a Maneely representative, testified that an agreement existed with Toll Brothers whereby Maneely's property could have sewer access once Toll Brothers developed its contiguous site. Boylan conceded that there had been no discussion between Maneely and Toll Brothers about accessing Maneely's site through the pump stations Toll Brothers intended to construct on its site.
Akselrad also settled with the Township. The October 1, 1995 consent order, incorporating the settlement, reserved fifteen acres of the tract as ROM-1 to accommodate an office complex of 120,000 square feet. The remainder of the tract was to be rezoned for inclusionary development. If the Township's fair-share obligation was to be reduced, Akselrad was to have a "right of first removal," under which he could opt out of any obligation to build affordable housing by paying the Township's affordable housing trust fund a sum of $3,300 per low or moderate income unit removed from the compliance plan. As was the case with Maneely, the consent order precluded changing the terms of the agreement as follows:
FURTHER ORDERED that no party to this action shall amend any of the terms, conditions, provisions, rights, obligations, etc. contained in this Order, nor shall any land use Ordinances of West Windsor Township which affect the Akselrads' tract (the ROM-1 portion and/or the re-zoned R4B portion) be enacted without the written consent of all parties, and in the absence of such consent, the parties hereto shall have the right to make application to the Court for appropriate relief.
In 1987, Akselrad submitted a proposed office complex plan to the Planning Board, but with no sewer, plans could not proceed. In 1995, Akselrad learned that sewer facilities might become available through the south branch of the Duck Pond Run interceptor, resulting from the planned commercial development of adjacent property. In August 1995, Akselrad contracted to sell the property to Westminster Realty, the proposed developer of the nearby Copperfield/Windsor Ponds development. In November 1996, a month after Judge Carchman rendered his opinion in the Toll Bros. litigation, Westminster submitted a concept plan to the Planning Board for a development of 352 dwelling units in several three- story buildings, including seventy-two affordable units.
After receiving Judge Carchman's opinion, Township officials undertook a comprehensive reevaluation of the compliance plan. According to Madden, the Township decided it needed "new goals and a new approach." He stated that the Township decided to facilitate only "projects that were in the pipe line, the approval pipe line," and removed sites that were not capable of generating affordable unit credits. Accordingly, in March 1997, the land use element of the master plan was amended to delete intervenors' sites, as well as others, because, according to Madden, Judge Carchman had questioned the viability of these sites for inclusionary development. Madden also explained that the Township wanted to move "away from reliance on the use of inclusionary housing projects with its large market-price housing component" in favor of "more direct methods of producing affordable housing such as non-residential zoning incentives, regional contribution agreements, and municipal or non-profit housing sponsorship." The amended land use element recommended rezoning of the sites for research, office, and manufacturing.
Intervenors contend that they were indispensable parties under Rule 4:28-1, and should have been joined either at the commencement of the Toll Bros. litigation or, at the latest, when the ...