Before Judges Havey, Parrillo and Hoens. On appeal from the Superior Court of New Jersey, Law Division, Salem County, Docket No. L-2861-00.
The opinion of the court was delivered by: Havey, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
In this appeal, we revisit the question to what extent land-use litigation may be settled. Defendant Planning Board of the Town of Hammonton granted SMA Land Developers, LLC (SMA) a conditional-use approval for a twenty-nine lot cluster residential development on a twenty-four acre site. However, the Board denied SMA's application for a subdivision. SMA challenged the denial by an action in lieu of prerogative writs against the Board, and also sought damages against three individual Board members under 42 U.S.C.A. § 1983. In a separate action, plaintiffs challenged the grant of the conditional-use approval.
During the pendency of the SMA suit, the Board invited SMA's attorney to appear at a closed session of the Board to discuss settlement. As a result of the discussion, SMA's and the Board's attorney prepared a proposed consent order which provided for a remand to permit the Board to consider SMA's separate"by-right" subdivision plan.*fn1 After the trial court refused to sign the consent order, SMA proceeded with its by-right application which was granted by the Board.
SMA now appeals from a judgment which invalidated the subdivision approval. In entering the judgment, the trial court held that the Board's closed-meeting settlement conference with SMA's attorney violated both the Open Public Meetings Act (OPMA), N.J.S.A. 10:4-6 to -21, and the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -136, and so tainted the subsequent Board proceedings that the approval could not stand. We reverse. Although the closed session with SMA's attorney may not have been permitted under the"pending litigation" exception to the OPMA, see N.J.S.A. 10:4-12b(7), no"action" on the proposed settlement agreement was taken during the meeting. See N.J.S.A. 10:4-15a. Further, considering the record of the subsequent Planning Board public hearings on the by-right application from an objective viewpoint, we conclude that those proceedings suffered no taint as a result of the settlement conference. Consequently, the Board's approval is sustained.
SMA is the contract purchaser of a twenty-four acre tract situate in the Town of Hammonton. The property is located in the Rural/Residential zone under the Town's Land Development Code, which permits cluster, residential development as a conditional use. In November 1999, SMA applied for conditional use and subdivision approvals for a twenty-nine lot residential, cluster development on its site. On June 7, 2000, the Board granted SMA's conditional use approval. However, on July 5, 2000, the Board denied the subdivision application by a three to-three vote.
On August 31, 2000, plaintiffs filed an action in lieu of prerogative writs challenging the conditional-use approval. In turn, SMA filed a separate action challenging the denial of its subdivision application. The complaint also charged three Board members (defendants James Matro, Jr., Salvatore Colasurdo and Vincent Maione), who had voted to deny the application, with violating 42 U.S.C.A. § 1983 by"willfully, maliciously, [and] intentionally" disregarding SMA's property rights.
On October 26, 2000, plaintiffs' attorney wrote to the trial court advising of his intention to move at a later date to consolidate plaintiffs' and SMA's complaints. However, before any consolidation order was entered, SMA's attorney was invited to a closed meeting with the Board, its attorney and the attorneys representing the individual-member defendants, for the purpose of discussing settlement of SMA's action. The three Board members, who had been personally sued, attended the meeting.
During the meeting, the Board's attorney explained that two suits were pending and that one approach in resolving both actions was for SMA to abandon its conditional-use approval and to reapply for a"cookie-cutter" subdivision which would comply with Township ordinances without the necessity of variance approvals. The attorneys for both the Board and SMA stated that this approach would essentially moot plaintiffs' challenge to SMA's conditional-use approval, and give the developer the opportunity to proceed with its"by-right" subdivision application.
SMA's attorney reminded the Board that it had already granted his client a conditional-use approval and stated that, because he was"very comfortable" with SMA's position as to the denial of its subdivision application, he would not hesitate to pursue his action. However, because litigation"takes time and money on everybody's part," SMA would consider settlement of the litigation. Referring to SMA's prior subdivision plan which had been rejected by the Board, he stated:
We had an absolute by-right before this Board one time already.... We're in Court litigating over that now. That's why we're going to win. It's a by-right and we're going to win.... But, I'm trying to avoid having to get to that process. We will give you an absolute no-variance, no waiver, no de minimus exception plan that my client will build if he has to build, and you, as a matter of law, have to approve.
But we will only do it if it's in a controlled setting of a settlement. We're not going to do it through another six, eight, ten, eight whatever months of beating down these ridiculous hearings, when we've already done this already.... If we're going to wait that long, we'll litigate, and we'll win.
The attorneys suggested submitting a proposed consent order to the trial court staying the litigation pending a hearing on SMA's by-right plan.
Board members present at the meeting expressed concern that some members of the public would not even be amenable to a by right subdivision. SMA's attorney responded that the record of the prior hearings could be marked and made part of the by-right hearings, and the public would have a full opportunity to comment on and object to the changes in the plans presented by SMA. The Board's attorney assured the Board that objecting parties"may come back and challenge [any approval] later on." He added:
I recommend giving a lot of latitude, because the public has a right to be heard. And these people, they live in the area. They'll want to come in and state their feelings. Whether they are -- I mean, they're not trained lawyers. They're coming in as common people and stating their feelings.....
[Y]ou still have to have a public hearing on subdivisions, even if it's a by-right plan.
SMA's attorney explained that the by-right application would call for twenty-seven lots, rather than twenty-nine (the density approved as a conditional use), that the size and dimensions of the lots would comply with the Township's ordinances, and that the residential site improvements would adhere to governing standards.
The attorneys for the three individually-named defendants insisted that their clients not take a position on any possible settlement. As a result, one Board member observed that discussing settlement without participation by these members was a"moot point" because, without them, the Board had no quorum. When the Board discussed who could vote on the settlement proposal, one member reminded the others that:"[y]ou're not voting to approve the application." SMA's attorney also noted that the Board's"approval" was only an agreement to enter into a consent order prepared by the attorneys.
The Board did not act upon the settlement proposal during the November 1, 2000 meeting because of a lack of quorum of eligible members. However, several members expressed a desire to move"in resolving this" by settlement because of the undue expense to the Township in prolonging litigation. One Board member remarked:
Well, I would argue that the applicant has constitutional rights and is entitled to something. Okay? That we entertain a resolution of the litigation is for purposes beyond that. It's for trying to take away the litigation against these [individual Board] members personally. It's for trying to come to some resolution of this thing, which is not going to be adversely to our -- to our taxpayers. My God, we can't spend a dollar to look at our ordinance, but we can spend zillions of dollars to litigate this thing.
At executive sessions held on November 8 and November 15, 2000, attended only by the Board members and their attorney, the settlement proposal was discussed. Site design and improvements regarding the future application were considered. One Board member stated,"[w]e're not going to allow [SMA] to get off the hook on terms of making sure that there's no off-site -- adverse off-site impacts on drainage." He added that the Board, during any future application, must consider whether the layout was consistent with the zoning ordinance, and whether there is adequate drainage and enough storm-water management basins to resolve any off-site drainage problem. At the conclusion of the November 8 meeting, the Board voted, during the public segment of the meeting, in favor of a resolution directing its attorney:
to pursue a consent order which would provide for the abandonment of SMA['s] conditional use approval on [its] proposed cluster application, abandon [its] pending claims against the planning board and its members in exchange for a consideration by the planning board for an expedited review process of a conventional bi-right (sic) subdivision of the proposed property without variances.
A form of consent order was prepared and signed by counsel providing for a stay of the SMA action pending a remand to the Planning Board:
for a hearing on an amended application for preliminary/final subdivision approval for the SMA property; and the parties having agreed that the Planning Board's review of the amended preliminary/final subdivision application pursuant to an expedited schedule will provide the opportunity for settlement of the within litigation and is preferable to the time and expense involved in pursuing this litigation........
The amended preliminary/final subdivision application to be submitted by SMA shall consist of the Town of Hammonton Planning Board Subdivision Application form and Subdivision Plans conforming with Hammonton Ordinance Section 175-67, and professional review escrow fees required by Hammonton Ordinances. All documents and reports submitted by SMA in connection with its prior cluster subdivision application shall be accepted by the Town of Hammonton Planning Board as part of the amended preliminary/final subdivision application. No additional documentation shall be required for a complete application.
The application will propose a conventional subdivision showing minimum lots of 22,000 square feet conforming with the bulk requirements of Hammonton Ordinance Section 175-150 and the Residential Site Improvement Standards, N.J.A.C. 5:21-1, et seq. The applicant shall not request any variances, but may request waivers, exceptions or de minimus exceptions (from the RSIS) as it deems appropriate.
The proposed order also provided that:
In the event that the amended preliminary/final subdivision application submitted by SMA is approved by the Town of Hammonton Planning Board with no conditions or with conditions acceptable to SMA, SMA shall file a Stipulation of Dismissal dismissing the pending action with prejudice. In this event, all ...