On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-344-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lisa, Lihotz and Simonelli.
Plaintiff, Wilmark Building Contractors (Wilmark), is a home builder and developer, and was the contract purchaser of a 265-acre parcel of land in Readington Township (the property) owned by plaintiff, Lackland & Lackland (Lackland). Wilmark sought to acquire the property, obtain subdivision approval, and develop it for residential use. These back-to-back appeals arise from plaintiffs' challenge of actions by Readington Township (Township), Readington Township Planning Board (Planning Board), and Readington Township Board of Health (Board of Health) that impeded Wilmark's plans for the site. Wilmark was not able to obtain land use approvals to develop the property, and its contracts with Lackland have expired.
Two pretrial rulings are implicated in the appeal issues:
(1) Judge Pursel granted partial summary judgment in favor of plaintiffs declaring null and void Township ordinance section 906.2.41, which required that the Board of Health grant soil suitability approval before a subdivision application could be deemed complete for Planning Board consideration; and (2) Judge Bartlett denied defendants' motion to dismiss Wilmark for lack of standing, holding that because the purchase contracts expired, Wilmark was confined to a facial challenge to the Township ordinance.
Plaintiffs unsuccessfully challenged ordinance 43-98, adopted on December 21, 1998, which created the agricultural residential (AR) zone, which encompasses the property. This change in zoning cut the maximum permitted density of residential units in half.
Judge Ashrafi conducted a thirty-three day bench trial. Much of the trial testimony and evidence focused on the applicable septic regulations, plaintiffs' failed attempt to obtain development approvals, and Julia Allen's actions, in her position as a member of the Board of Health and in other official capacities, to impede Wilmark's progress. The judge found Allen's actions improper and that they improperly influenced the Board of Health in frustrating plaintiffs' efforts to obtain soil suitability approvals. He therefore limited Allen's participation in any future application pertaining to the property, enjoined the Board of Health from applying septic regulations differently to plaintiffs compared to other applicants, and ordered the Board to consider promptly and fairly any septic suitability application filed by plaintiffs, using the regulations in effect in March 1997 for a period of two years from the date of judgment (rather than the more stringent regulations adopted in 1998). Judge Ashrafi dismissed all remaining claims with prejudice.
Also relevant to some issues raised here are actions that have been filed in federal court. Wilmark and its sole owner, Mark Hartman, filed a federal action against defendants in this case and three individuals who served as Township officials, alleging violations of 42 U.S.C.A. § 1983, the Fifth Amendment of the United States Constitution, and Article I of the New Jersey Constitution. Lackland filed a similar complaint and the cases have been consolidated. The claims in federal court relate to actions involving the property involved in this appeal as well as three other parcels in the Township.
In A-2190-05T1, Lackland asserts: (1) Judge Ashrafi improperly applied the test set forth in Riggs v. Township of Long Beach, 109 N.J. 601, 610-11 (1988), and erred in failing to find that ordinance 43-98 was enacted for an unlawful purpose; (2) he erred in failing to find that ordinance 43-98 was invalid due to vagueness, that it delegated too much discretion to the Planning Board, and that it was arbitrary and capricious as applied to the property; (3) his remedy for actions caused by the improper conduct of Julia Allen was not sufficient; (4) he erred by ruling that a local board of health may adopt any standard by simply stating it is not less restrictive than those required by the New Jersey Department of Environmental Protection (DEP); (5) he erred by dismissing the civil rights claims with prejudice; and (6) he improperly restricted proofs, evidence, and arguments.
In A-2341-05T1, Wilmark contends: (1) Judge Ashrafi erred in resolving claims as to Wilmark that were not before him and in departing from Judge Bartlett's pretrial ruling; and (2) the trial record should be reopened.
The Township and Board of Health have cross-appealed in both cases. They argue that section 906.2.41, requiring Board of Health septic suitability approval as a checklist requirement, is authorized under N.J.S.A. 40:55D-10.3 and Judge Pursel's conclusion that the requirement violates N.J.S.A. 40:55D-22b was erroneous.
We briefly set forth the relevant procedural history. In their nine-count complaint in lieu of prerogative writs,*fn2 plaintiffs challenged: (1) the June 29, 1999 resolution of the Board of Health denying septic approvals; (2) section 906.2.41 as unlawful; (3) "down-zoning" (i.e. changing existing zoning to a lower density) of the property as arbitrary and capricious as applied; (4) ordinance 43-98 as ultra vires; (5) the minimum open space set-aside in the AR zone; (6) the lack of standards in ordinance 43-98 regarding the location of open space; (7) certain provisions in the Board of Health septic regulations as unlawful; (8) down-zoning as a violation of plaintiffs' substantive due process rights; and (9) down-zoning as inconsistent with the requirement that the Township engage in comprehensive planning.
Plaintiffs moved for partial summary judgment challenging, among other things, the completeness provision of section 906.2.41. On February 4, 2000, Judge Pursel granted partial summary judgment, declaring section 906.2.41 null and void.
On February 6, 2003, Judge Bartlett signed a consent order, bifurcating the trial so that all claims, including damages, would be tried first, followed by the issue of quantification of damages, if any. After Wilmark's purchase contracts expired, defendants moved to dismiss Wilmark from the case. On April 4, 2003, Judge Bartlett denied the motion to dismiss Wilmark for lack of standing, but held that Wilmark was confined to a facial challenge because it no longer had an interest in the property that would support any as-applied challenges.
Trial commenced before Judge Ashrafi on November 30, 2004. On February 2, 2005, after plaintiffs rested, the judge dismissed the Planning Board from the case. The trial concluded on February 15, 2005. On November 16, 2005, Judge Ashrafi issued a comprehensive 102-page written decision disposing of all remaining issues. On the same date, final judgment was entered, dismissing with prejudice: (1) counts three, four, and six (the challenge to ordinance 43-98 (creating the AR zone) on its face); (2) count five (the assertion that ordinance 43-98 is unconstitutional, and arbitrary, capricious, or unreasonable as applied to plaintiffs' property); (3) counts one and seven (the claims that septic approvals that establish setback distances exceed the authority granted to the Township and are arbitrary, capricious, or unreasonable); (4) part of count one (the challenge to the Board of Health decisions that plaintiffs must prove the absence of an artesian condition on certain building lots by means of hydraulic head tests, as required by N.J.A.C. 7:9A-5.8(g)); and (5) counts eight and nine (claims that down-zoning of the property was a violation of plaintiffs' substantive due process rights and was inconsistent with the requirement that the Township engage in comprehensive planning).
Judge Ashrafi ruled that certain actions of the Board of Health regarding plaintiffs' septic suitability applications filed in March 1997 were capricious and unreasonable, and motivated by a goal harbored by at least one Board of Health member (Allen) to obstruct and delay the applications. He ordered: (a) the Township septic regulations in effect as of March 1997, unless superseded by Federal, State, or County regulations to the contrary, shall be used for two years from the date of judgment to evaluate septic suitability applications submitted by Lackland or its assignee; (b) Allen be disqualified from official or indirect participation in the Board of Health or Planning Board as it pertains to adjudicating any applications brought regarding the property; (c) the Board of Health and Planning Board be enjoined and prohibited from permitting Allen to participate directly or indirectly in any manner beyond that permitted to other Township residents in decisions pertaining to the property; and (d) the Board of Health be enjoined and prohibited from applying septic regulations differently and unequally to plaintiffs from their application to other property owners and applicants, and the Board of Health must consider septic suitability applications filed by plaintiffs or their assignees promptly and fairly.
These appeals and cross-appeals followed.
We reject defendants' cross-appeal arguments and affirm Judge Pursel's partial summary judgment order declaring section 906.2.41 null and void. We are satisfied that Judge Ashrafi's factual findings are well supported by the trial record and that his legal analysis and conclusions were correct. We deem it appropriate, however, to modify the remedy he ordered, by directing that the Hunterdon County Department of Health, rather than the local Board of Health, act upon all soil suitability and septic applications for the property by plaintiffs or their assignees, applying the Township regulations in effect in March 1997, and we toll the two-year time period for the time consumed by this appeal. In all other respects, we affirm the final judgment entered by Judge Ashrafi.
The property consists of two lots, 26 and 40, in block 64. Lackland and Wilmark entered into two written contingent contracts, both dated April 17, 1996, one for each lot, that required Wilmark to pursue at its own cost and within certain time constraints the approvals necessary to develop the property. Wilmark sought to obtain a residential subdivision approval. In February 1999, the contracts expired.
In April 1996, Hartman appeared before the Planning Board to devise a working plan for development of the property. In July 1996, Wilmark's site engineer prepared the first layout plan for the 110-acre lot 26, a thirty-three lot subdivision. The Planning Board checklist required that an applicant obtain Board of Health location approval for all septic systems prior to making an application to the Planning Board for subdivision approval. Due to this requirement, Wilmark never made an application to the Planning Board for any subdivision or site plan approvals.
Under N.J.A.C. 7:9A-5.1 to -5.10, an applicant that seeks to use septic systems, must first obtain a soil suitability approval, which is a determination that the soil in the chosen locations on the site is suitable for treatment and disposal of effluent and that it is possible to safely design a septic system on the lot. The applicant must then design each individual septic system and obtain approval of the design. A local board of health has the authority to grant or deny a soil suitability approval and to grant or deny design approval, or to delegate this authority to a county board of health.
The Township ordinance also requires that a primary septic discharge area and a reserve area be set aside for potential future use in case of failure of the system in the primary location. Both must be approved by the Board of Health. No application for preliminary subdivision approval will be declared complete by the Planning Board until the applicant has received a septic suitability location approval.
In May and June 1997, Wilmark appeared before the Board of Health, seeking septic suitability location approvals for ten of thirty-three proposed lots. Acting upon Allen's motion, the Board of Health denied approval of proposed lot 2, as well as all other proposed lots, and required that additional testing be undertaken during the wet season, between January and April. In January 1998, Wilmark performed the wet season testing. In May 1998, the Board of Health considered the wet season testing on proposed lots 1 and 5. During the hearing, Allen questioned the adequacy of wet season testing due to what she claimed was a drought condition in early 1998. She maintained that conflicting data had been submitted. There was also concern about an artesian condition, which she stated would preclude location of a septic system. Despite approval of the technical aspects of the testing by the County Health Department, the Board of Health voted to deny septic approval for proposed lots 1 and 5 of block 26, based on this conflicting information.
In September 1998, on reconsideration after changes to the submission, the Board of Health granted septic approval for lots 1 and 5, the only two which were approved, and this was eighteen months after Wilmark filed its application.
In November 1998, Wilmark sought approval of five proposed lots. At that meeting, Robert Starcher, a hydrogeologist hired by the Board of Health, opined that there was an artesian condition on proposed lot 6. Thus, despite a recommendation of approval from the County Health Department, the Board of Health required more testing, including a hydraulic head test. Wilmark appeared before the Board of Health in December 1998 and January 1999, but the Board did not approve any proposed lots. Instead, it required new wet season testing, because January had insufficient rainfall.
On November 4, 1996, the Township adopted ordinance 22-86, which increased open space required for properties that did not have preliminary approval for development. When Wilmark entered into contracts with Lackland, the property was in the Township's Rural Residential (RR) zone, which provided for three-acre residential zoning with clustering. On May 18, 1998, the Township adopted ordinance 17-98, which imposed new requirements for underground water storage tanks on any developments that had not already received preliminary approval.
On September 16, 1998, the Township amended its septic testing ordinance by adopting ordinance 98-2, making it more difficult to obtain approval. Ordinance 98-2 provided that all prior testing would be grandfathered for one year from the effective date of the ordinance, but after that date testing would have to be done under the new standards.
On November 23, 1998, the Planning Board adopted a Master Plan Amendment calling for the establishment of the AR district. On December 21, 1998, the Township rezoned a large area, including the subject property, as AR by adopting ordinance 43-98, which required clustered six-acre zoning for residential lots on the site.
Under the AR zone, properties of forty acres or more must have: (1) a minimum open space set-aside of seventy percent; (b) a minimum lot circle of 200 feet; (c) a minimum lot circle not more than 125 feet from the street right-of-way; (d) each building lot must have a minimum of 65,000 square feet of contiguous useable land; (e) the open space parcel shall contain a minimum of sixty-five percent of the unconstrained tract area; (f) clustering is mandatory rather than optional; and (g) the preserved open space area shall be configured in such a manner as to facilitate continuing or future agriculture use.
Hartman believed that Wilmark was not being treated fairly by Township officials and hired private investigators who, between July 1999 and October 2001, posed as purchasers of the property and met with Allen and other Township officials. They tape-recorded twenty-five hours of conversations, which were admitted into evidence, that purportedly demonstrated the purposeful obstruction of plaintiffs' development plans motivated by a desire to depress land values and make it easier for the Township to preserve open space.
On April 30, 2002, Wilmark and Hartman filed a complaint in federal court, alleging violations of 42 U.S.C.A. § 1983, the Fifth Amendment of the United States Constitution, and Article I of the New Jersey Constitution. The suit was brought against the Township, Board of Health, and Planning Board, as well as Allen, Beatrice Muir, and Ronald Monaco, who were Township officials. The complaint addressed not only the property that is the subject of this action, but three additional properties in the Township.
In another federal complaint dated November 21, 2002, against the Township, Board of Health, Planning Board, the Township's governing body, and various individual Township officials, Lackland asserted claims of an illegal taking, denial of substantive and procedural due process, and violations of the Fifth and Fourteenth Amendments of the United States Constitution, Article 1 of the New Jersey Constitution, 42 U.S.C.A. § 1983, and the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163. That complaint refers only to the property that is the subject of this action.
After consolidation of these cases, on November 30, 2006, District Judge Stanley R. Chesler dismissed with prejudice as time-barred all of Lackland's and Wilmark's federal constitutional claims against the Township and Board of Health as they relate to the property that is the subject of this action.
Judge Ashrafi heard extensive technical expert testimony during trial, and numerous reports were admitted into evidence. We briefly summarize this testimony.
Russell Sterling, plaintiffs' real estate appraiser, testified as to the value of the property under three different zoning scenarios. Robert Vance and Richard Reading, defendants' valuation experts, set forth appraisals of the property under two sets of zoning requirements as of October 8, 2001.
Plaintiffs' civil engineer, Joseph Jaworski, discussed a lot density analysis of the property, to determine the number of lots that could be placed on the property under different zoning scenarios. Helen Heinrich, a professional planner hired by plaintiffs, discussed the ability to continue to farm the property. She testified that the Township's use of the Agriculture Development Area (ADA), a district set up by the County under the Agricultural Retention and Development Act (ARDA), N.J.S.A. 4:1C-11 to -48, as a boundary for the AR zone, was improper.*fn3
Andrew Higgins, an expert in wastewater issues hired by plaintiffs, refuted the Board of Health's reading of data and claimed there was no artesian condition on the property. He claimed there was no need for reserve areas for septic systems and that lot 40 is not suitable for agriculture.
Creigh Rahenkamp, a professional planner hired by plaintiffs, testified as to why ordinance 43-98, which created the AR zone, should be invalidated. Mark Remsa, another professional planner hired by plaintiffs, opined that RR zoning was reasonable for the property, but that AR zoning was not.
Philip B. Caton, defendants' expert in land use planning, and the prime author of ordinance 43-98, testified about the process of the adoption of the ordinance. Michael Sullivan, a professional planner hired by defendants, opined that AR zoning is appropriate for the property. Francis J. Banish III, another professional planner hired by defendants, testified that AR zoning was consistent with the Township's 1998 Master Plan Amendment and with the purposes of the MLUL, and it is a reasoned response to a range of planning objectives.
Matthew J. Mulhall, a geologist and hydrogeologist, testified for defendants about the environmental constraints on the property, including why wet season testing is justified and why there is an artesian condition on the site. James E. Coe, an expert in engineering and wastewater management, testified for defendants about why it is reasonable to require two disposal fields per lot and about reasons for other requirements in the Township ordinance. Paul W. Ferriero, an engineer, testified for defendants about the ...