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Aspen Contracting Corp. v. Board of Adjustment of the Township of Berkeley

June 8, 2007


On appeal from the Superior Court of New Jersey, Law Division, Ocean County, L-1161-05.

Per curiam.


Argued April 30, 2007

Before Judges Seltzer and C.L. Miniman.

Plaintiffs, Aspen Contracting Corporation (Aspen) and Anthony Douvris, appeal from an April 11, 2006, order dismissing the first count of their two-count complaint in lieu of prerogative writs. The first count of the complaint sought to reverse a decision of defendant Zoning Board of Adjustment of the Township of Berkeley ("defendant" or "the Board") that denied bulk variances to each of three separate, but adjacent, undersized lots.*fn1

Aspen purchased three contiguous lots, designated as Lots 1, 2, and 3, in Block 1433 on the Township of Berkeley tax map in June 2004. The lots, each of which contained 18,238 square feet, had been the subject of a 1984 subdivision and conformed in all respects to the existing ordinance. Douvris was employed by Aspen and testified that in July 2004 he agreed to purchase the middle lot from Aspen for $112,000, which was one-third of the price paid by Aspen for the three lots.

At the time this agreement was reached, Berkeley Township was considering an ordinance that would increase the required lot size to 130,680 square feet. Both Douvris and Aspen's principal, Gus Makris, denied knowing of the pending zoning change when they entered into the agreement to sell the middle lot to Douvris. They learned of that pending zoning change at some time in late August or early September, after their agreement but before Aspen delivered a deed to Douvris on September 10, 2004. The ordinance became effective September 14, 2004, and the deed to Douvris was recorded some twelve hours later. Douvris paid for the property by giving $1000 cash to Aspen together with a mortgage for the balance. The mortgage was repaid within a month, when Douvris had secured a credit line.

Douvris testified before the Board that when the zoning ordinance became effective, he offered to sell the property back to Aspen but that Makris would not consider the offer until the result of this anticipated variance application was known. Douvris also indicated that he was financially unable to purchase either or both of the lots retained by Aspen. Makris essentially confirmed that testimony but ultimately indicated that he would not "pay fair market value for that lot from Mr. Douvris." He was not asked if he would pay $112,000 for the lot.

Plaintiffs also obtained testimony from Frank Baer, an engineer, respecting the effect of the variances. He testified that "we had been aware that there had been some drainage problems in the area. There's concerns with drainage in the area." He testified, however, that whatever was necessary to alleviate the drainage problems would be addressed. Finally, he indicated that it was not possible to acquire additional land abutting the three-lot parcel.

The drainage system Baer proposed required the installation of a basin spanning the three lots. The engineer indicated that the basin would permit percolation of excess water but gave no indication of the percolation rate and provided no quantitative analysis of the effect of the basin on the development of the lots or neighboring property. He specifically recognized that he would "have to do soil [boring] there and whatnot to ascertain the time frame which the water would percolate into the ground."

The Board adopted three resolutions denying the applications on April 13, 2005. They were identical except for the name of the applicant and the designation of the lot. The Board determined that, despite the contrary testimony, both Aspen and Douvris knew "of the impending rezoning of the subject property when Aspen entered into a Contract to sell the middle lot to Mr. Douvris in July, 2004." The Board also rejected Makris's claim that he did not wish to purchase the Douvris lot. The Board further found that the transfer of Lot 2 was "an attempt to avoid the impact of rezoning and [any hardship sustained by the parties] is therefore self created." Accordingly, the Board concluded that the hardship required for an N.J.S.A. 40:55D-70c(1) variance could not be shown. The Board finally determined that plaintiffs could not show that the variances would be granted without impairing the public good because "very difficult drainage conditions exist on the three lots in question and that their development as individual building lots containing large single family homes has the potential to adversely effect surrounding properties."

Plaintiffs filed the prerogative writs action to which we have alluded. Judge Eugene D. Serpentelli heard argument on March 30, 2006, and, in a comprehensive, thoughtful oral opinion, affirmed the denial of the applications, finding that the Board's conclusions were appropriately based on substantial credible evidence in the record. We review Judge Serpentelli's decision by applying the same standard; that is, we determine if the Board's conclusions were adequately grounded in the record. Booth v. Rockaway Bd. of Adj., 50 N.J. 302, 306 (1967); Kramer v. Seagirt Bd. of Adj., 45 N.J. 268, 296-97 (1965). We agree with Judge Serpentelli's analysis and decision and affirm substantially for the reasons given by him in his March 30, 2006, opinion. We add the following brief comments.

We need not attach any significance to the knowledge of either Douvris or Makris of the impending zoning change to decide the issues presented by this appeal. We do note, however, that the purchaser of an undersized lot is entitled to a variance to the same extent that the seller would have been. See Harrington Glen, Inc. v. Leonia Mun. Bd. of Adj., 52 N.J. 22, 28 (1968); Wilson v. Mountainside, 42 N.J. 426, 452-53 (1964). Nor need we reconcile the language in Herman v. Parsippany-Troy Hills Bd. of Adj., 29 N.J. Super. 164, 171 (App. Div. 1953) (noting that a "purposeful" attempt "to avoid the restrictions of [an] expected ordinance" justifies denial of a variance) with that of Jock v. Wall Zoning Bd. of Adj., 184 N.J. 562, 592 (2005) (noting that the purchase of properties in separate names to avoid merger of adjoining lots "is an entirely legitimate practice").*fn2

Whatever Aspen's right to a variance for the three lots, had they not been separated, the sale to Douvris, before the effective date of the ordinance, created three non-conforming, isolated lots. Our law has always required an owner of such an isolated lot, as a condition of a bulk variance application, to demonstrate an attempt to sell the subject lot or to acquire abutting land. The failure to sell the property for fair value supports a finding "that since [the owner] is able to receive full price for the property, exceptional hardship no longer exists and, therefore, the requested variance should not be granted." Nash v. Morris Twp. Bd. of Adj., 96 N.J. 97, 106 (1984). Similarly, the hardship inherent in owning an undersized lot may be ...

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