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Toll Brothers, Inc. v. Township Of "West Windsor

August 16, 2000

TOLL BROTHERS, INC., A DELAWARE CORPORATION, PLAINTIFF-RESPONDENT,
v.
TOWNSHIP OF WEST WINDSOR, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY LOCATED IN MERCER COUNTY, MAYOR AND COUNCIL OF THE TOWNSHIP OF WEST WINDSOR, AND THE PLANNING BOARD OF THE TOWNSHIP OF WEST WINDSOR, DEFENDANTS-APPELLANTS.



Before Judges Havey, A.A. Rodr¡guez and Collester.

The opinion of the court was delivered by: Per Curiam

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 1, 2000

On appeal from Superior Court of New Jersey, Law Division, Mercer County, whose opinion is reported at 303 N.J. Super. 518 (Law Div. 1996).

The following discussion addresses issues not discussed in Judge Carchman's opinion reported at 303 N.J. Super. 518 (Law Div. 1996).

Within weeks after Judge Carchman delivered his opinion, Toll Brothers submitted a revised builder's remedy which, after months of negotiation and mediation by the court-appointed master, John Lynch, evolved into a proposal for 1,165 units: 400 single-family detached, 130 townhouses and 635 apartments, 175 of which would be affordable to low and moderate income families. Ultimately, it was determined that the Township would be entitled to an additional 115 rental bonus credits, thereby satisfying 290 units of its fair-share obligation. By April 18, 1997, Judge Carchman had resolved all of the remaining disputes between Toll Brothers and defendants over the builder's remedy, and Toll Brothers revised its fair-share plan. As approved by Judge Feinberg in March 1998, the revised plan deleted sites 1, 2, 7 and 8 of the original compliance plan, added several other sites or projects, and utilized a Regional Contribution Agreement with the City of Trenton.

I.

Defendants argue that Tolls Brothers was not entitled to a builder's remedy because it failed to act in good faith. They claim that Toll Brothers should have continued negotiations to revise the zoning ordinance or sought a variance before filing suit. Defendants' good faith argument relies on selected quotes from Southern Burlington County N.A.A.C.P. v. Township of Mount Laurel, 92 N.J. 158 (1983) (Mount Laurel II), including:

Builder's remedies will be afforded to plaintiffs in Mount Laurel litigation where appropriate, on a case-by-case basis. Where the plaintiff has acted in good faith, attempted to obtain relief without litigation, and thereafter vindicates the constitutional obligation in Mount Laurel-type litigation, ordinarily a builder's remedy will be granted, provided that the proposed project includes an appropriate portion of low and moderate income housing and provided further that it is located and designed in accordance with sound zoning and planning concepts, including its environmental impact. [92 N.J. at 218 (emphasis added).]

Thus:

Care must be taken to make certain that Mount Laurel is not used as an unintended bargain-ing chip in a builder's negotiations with the municipality, and that the courts not be used as the enforcer for the builder's threat to bring Mount Laurel litigation if municipal approvals for projects containing no lower income housing are not forthcoming. Proof of such threats shall be sufficient to defeat Mount Laurel litigation by that developer. [Id. at 280.]

Judge Carchman awarded a builder's remedy because Toll Brothers succeeded in the litigation and proposed to build a substantial amount of affordable housing. Toll Brothers, Inc. v. Township of West Windsor, 303 N.J. Super. 518, 575 (Law Div. 1996). A developer is entitled to a builder's remedy if (1) it succeeds in Mount Laurel litigation, (2) it proposes a project with a substantial amount of affordable housing, and (3) the site is suitable, i.e., the municipality fails to meet its burden of proving that the site is environmentally constrained or construction of the project would represent bad planning. Mount Laurel II, supra, 92 N.J. at 279-80; Allan-Deane Corp. v. Bedminster Township, 205 N.J. Super. 87, 138 (Law Div. 1985); J.W. Field Co., Inc. v. Franklin Township, 204 N.J. Super. 445, 450 (Law Div. 1985); Orgo Farms & Greenhouses, Inc. v. Colts Neck Township, 204 N.J. Super. 585, 588-89 (Law Div. 1985); AMG Realty Co. v. Warren Township, 207 N.J. Super. 388, 447 (Law Div. 1984). Although, as defendants point out, the COAH mediation process under the Fair Housing Act (FHA), N.J.S.A. 52:27D-301 to -329, is favored over the use of builder's remedy litigation, the structure of the FHA is to encourage municipalities to avoid the threat of a builder's remedy by entering the administrative process. Hills Dev. Co. v. Bernards Township, 103 N.J. 1, 35-36 (1986). Municipalities declining to subject themselves to COAH's jurisdiction "will be subject to litigation and the remedies provided by Mount Laurel II." Ibid.

We are unaware of any case where a builder has met the three-prong test entitling it to a builder's remedy and failed to act in good faith. Indeed, Judge Serpentelli in J.W. Field Co, Inc., supra, 204 N.J. Super. at 454, observed that, in his experience, "it is very difficult to prove that a suit has been brought unnecessarily or as a leverage mechanism."

In any event, we find no bad faith here. Beginning in September 1992, Toll Brothers corresponded with the Planning Board concerning a plan for developing site 6 with 670 single-family dwellings, which would generate 100 affordable units. In December 1992, it presented the Board with a conceptual plan for 671 single-family dwellings, fifty affordable rental units and satisfaction of the additional fifty units through a Regional Contribution Agreement. Thereafter, Toll Brothers withdrew its request to rezone the property because the Township's interest and cooperation began to diminish in December 1992, and the Township Planner's report of March 17, 1993, was highly critical and completely unsupportive of the rezoning proposal. Throughout the summer and fall months of 1993, Toll Brothers continued communications with the Planning Board, cautioning that amended zoning ordinances would be necessary to implement the project. During case management conferences, Toll Brothers' counsel stated that it would "very much like to settle the case," and would do so on terms more favorable to the Township than it would be prepared to offer after the pending COAH regulations took effect. Clearly, it was to Toll Brothers' advantage to reach a settlement rather than commit to several years of litigation. Defendants' suggestion that Toll Brothers should have sought variances for its project is of dubious merit. The size of the property, its importance in the Township's ...


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