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Township of Hamilton v. Fieldstone Associates

April 24, 2008

TOWNSHIP OF HAMILTON, IN THE COUNTY OF MERCER, A MUNICIPAL CORPORATION IN THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
FIELDSTONE ASSOCIATES, L.L.P., DEFENDANT-RESPONDENT/CROSS-APPELLANT.
TOWNSHIP COUNCIL IN THE TOWNSHIP OF HAMILTON, INTERVENOR-APPELLANT/CROSS-RESPONDENT. SAVE HAMILTON OPEN SPACE, INTERVENOR-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Mercer County, L-2622-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued April 10, 2008

Before Judges Parrillo, S.L. Reisner and Baxter.

These two appeals, which we have consolidated for purposes of this opinion, arise from an unsuccessful effort by the Hamilton Township Council (Council) to repudiate the settlement of a condemnation case, and an unsuccessful attempt by a citizen group, Save Hamilton Open Space (SHOS), to intervene in the trial court proceedings.*fn1 Finding no merit in either appeal, we affirm the trial court orders dated November 30, 2006, February 13, 2007, March 23, 2007, and April 3, 2007, substantially for the reasons stated in Judge Linda Feinberg's oral opinion placed on the record on November 30, 2006, and her written opinions dated February 1, 2007 and April 3, 2007.*fn2

I.

The procedural history and facts of this case are discussed in detail in Judge Feinberg's eighty-two page written opinion dated February 1, 2007, and her twenty-five page opinion issued April 3, 2007, and they need not be repeated here. We have summarized below the facts most pertinent to the issues on this appeal.

At the center of this dispute is a fifty-acre tract of land in Hamilton Township, known as Klockner's Woods. The property, which contains wetlands and woodlands, is in a residential zone, and its owner, Fieldstone Associates, Inc., was actively seeking to build a residential housing development on the land. In response to significant local opposition to the development, and in an effort to preserve open space, the Township Planning Board included the site in its Open Space and Recreation Plan, and the Township filed a condemnation action to acquire the property.

Fieldstone initially contested the condemnation, claiming that it was an illegal effort to prevent the land from being developed. At the court's urging, the parties entered into settlement negotiations, and eventually agreed on a price of $4.1 million for the land. Pursuant to an authorizing resolution of the Township Council, the Township attorney signed a consent order pursuant to which the Township would pay $4.1 million for the property.

At the time the Council authorized the settlement, the Township had several million dollars in funds previously appropriated, through Ordinance No. 20-020, for the purpose of acquiring property for open space preservation. However, the Township wanted to avoid spending all of that money on the property, by applying for Green Acres funding and other available State and county grants or loans. Therefore, the settlement provided that the Township could either pay the settlement amount within a short period of time, or could delay paying the $4.1 million for a period of one year while the Township explored funding options. In the latter case, the settlement committed the Township to pay Fieldstone monthly interest on the $4.1 million until the Township paid the principal amount.

After the court entered the consent order in June 2005, considerable public controversy developed in the Township over the amount of the settlement. The opposition was apparently founded on the belief that the property was either worthless swampland, or that, at a minimum, its capacity for development had been vastly overstated and its value artificially inflated. At the next election, the voters elected a majority of Council members who were opposed to the settlement. Also during this period, the Township experienced delay in its application to the Department of Environmental Protection (DEP) for funding for the acquisition. The delay was caused primarily by the DEP's concerns over the extent of wetlands on the property and the number of developable lots on the land, both of which factors would affect its value and hence the amount of grant or loan money the agency would extend for the purchase of the property.

As a result of the delay, on September 16, 2005, Fieldstone filed a motion to enforce the settlement. The Township attorney, acting at the direction of the Mayor who supported the settlement, filed a cross-motion asking the court to modify the settlement to eliminate the Township's obligation to pay interest pending its payment of the $4.1 million. The trial court delayed adjudicating both applications, pending expert studies to delineate the wetlands on the property and to determine the number of lots that could be developed. Additionally, the trial court permitted the Township Council, which had hired its own attorney, to intervene on the issue of funding for the settlement. The Council also moved to vacate the consent order, contending that the formerly-constituted Council's resolution authorizing the settlement was ultra vires.

Eventually, expert studies determined that the land could be developed despite the presence of wetlands, and that the number of developable lots was the same or nearly the same as the number of lots on which the Township contended the $4.1 million settlement price was based. The land was also appraised at a value of $3.7 million. All of this evidence undercut the objectors' contentions that the land was worthless swamp or capable of only very limited development. After receiving this documentation, the DEP issued a "letter of interpretation" (LOI) accepting the Township's expert report concerning the extent of wetlands on the property, and the Legislature appropriated $4.125 million to provide no-interest loan money to cover up to 75% of the Township's cost to acquire the property. See L. 2006, c. 68, par. 4b.

On October 16, 2006, after the DEP issued its LOI, SHOS filed a motion to intervene in the action, contending that it wished to present evidence that the property was not worth the $4.1 million purchase price. At the time SHOS filed its motion, it did not have such evidence to present to the court. Rather, SHOS sought time to obtain an expert report designed to rebut the LOI; its motion also anticipated a further request for a plenary hearing on the issue of environmental constraints on development of the property. In an oral opinion placed on the record on November ...


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