August 8, 2008
JOHN E. CLIFF, KENNY MILLER, MICHELLE GADALETA AND RUSSELL THOMSON, PLAINTIFFS-APPELLANTS,
CITY OF SOUTH AMBOY, AND PLANNING BOARD OF SOUTH AMBOY, DEFENDANTS-RESPONDENTS, AND
SPIRO MARTINI, SPIRO MARTINI REAL ESTATE, LLC, AND S.A. HOLDING COMPANY, LLC, DEFENDANTS.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-1332-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: March 12, 2008
Before Judges Axelrad, Payne and Messano.
Plaintiffs, residents of the City of South Amboy ("City"), one of whom is a former manager of the subject property ("property"), appeal from an order dismissing their complaint in lieu of prerogative writs challenging the City's 2003 designation of the property as in need of redevelopment and adopting a redevelopment plan on the ground that a Planning Board ("Board") member recommending the City's action had been a consultant who found the land to be subject to redevelopment and who prepared the redevelopment plan. We affirm.
Defendant S.A. Holding Company, LLC ("S.A. Holding") owns the property located at 3630 Route 35 North, South Amboy, known as Block 90, Lots 3 and 6, upon which was operated a club known as "Delilah's Den." Following protracted litigation and a Superior Court bench trial in July 1998, but before the court's decision, Delilah's Den, 86 Broad Street Corporation, and S.A. Package Goods, Inc., later designated as S.A. Holding, (collectively "Delilah's Den") entered into a Stipulation of Settlement with the City of the state and federal actions on the City's injunctive claim and Delilah Den's constitutional challenge to denial of a use variance. The July 30, 1998 Settlement provided that Delilah's Den would abandon its "sexually oriented business" within two years, extended for twenty-four months by a September 5, 2001 Amendment, and the property would be included in a redevelopment area, subject to a redevelopment plan.
In accordance with the agreement, in September 2002, the City authorized the Board to undertake a preliminary investigation to determine whether the property was in need of redevelopment. Angelo Valetutto, of AJV Engineering, Inc., the City's Zoning Officer and Class II Planning Board member, N.J.S.A. 40:55D-23a, was retained to prepare the planning report, which recommended the property be designated as an area in need of redevelopment. Following a public hearing, by Resolution #1-2003 dated February l8, 2003, the Board recommended to the City Council that the property be designated as a redevelopment area.*fn1 Valetutto voted in favor of the Resolution, which passed four to zero, with one abstention. On March l9, 2003, the City Council unanimously adopted Resolution #88-03 designating the property in need of redevelopment. Valetutto was then retained by the Board to prepare a redevelopment plan. Following a public hearing, the Board, including Valetutto, unanimously adopted Resolution #24-2003 on October 29, 2003, recommending that the City Council adopt the redevelopment plan. Following a public hearing, the City Council adopted the redevelopment plan by Ordinance #34-03 on second reading on December 1, 2003, which was published on December 4, 2003. Delilah's Den did not oppose any of these actions.
The City then moved to enforce the Amended Stipulation when Delilah's Den failed to abandon its sexually oriented business by September 2003. On December 23, 2004, the court held that a challenge to the City's redevelopment plan was untimely and entered judgment in favor of the City incorporating the settlement and enjoining Delilah's Den from operating its sexually oriented business. By emergent order of January 6, 2005, we vacated the order requiring Delilah's Den to close "immediately" and remanded for an evidentiary hearing on Delilah Den's breach of contract claim, and specifically making no findings on the merits, afforded Delilah's Den with an opportunity to argue that the City's alleged delays in finalizing a redevelopment plan prejudiced the ability of Delilah's Den to convert the property to an alternative use. We also stated that "Delilah's Den is not entitled to litigate, in this action, a challenge to the validity of the redevelopment plan; such a challenge could and should have been raised by way of an action in lieu of prerogative writs."
The day before the remand hearing, on March 30, 2005, S.A. Holding and Delilah's Den filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code*fn2 and thereby automatically stayed the final disposition of the state court action and allowed the business to continue to operate. On July 7, 2005, Delilah's Den filed a complaint against the City, Board, its mayor and attorney in the United States District Court and also sought to remove the state court litigation to the District Court. Delilah's Den then filed a motion to reject the Settlement Agreement with the City as an executory contract under Section 365 of the Bankruptcy Code, which the court denied by order and opinion of December 22, 2006, finding the City had substantially performed its obligations under the Settlement Agreement. Delilah's Den failed to raise a conflict of interest argument with respect to Valetutto before the trial court, Appellate Division, or Bankruptcy Court.
On January 30, 2007, John Cliff, the general manager of Delilah's Den for about ten years, with other plaintiff residents, filed a Complaint in Lieu of Prerogative Writs, later amended, and an Order to Show Cause against the City, Board, and S.A. Holding, seeking to invalidate the actions of the Board and City Council designating the property in need of redevelopment and approving the redevelopment plan for the property based on Valetutto's conflict of interest in being both a voting member of the Board and the professional engaged to prepare planning reports for consideration by the Board and City Council. The property owner joined in the requested relief by cross-claim. The City and Board asserted as separate defenses in their answers that plaintiffs filed the complaint as the agent, servant or employee of Delilah's Den and the action was time-barred and barred by the doctrines of laches, estoppel, collateral estoppel and res judicata.
The City and Board filed a motion to dismiss the complaint and cross-claim pursuant to Rule 4:6-2(e), which was granted by Judge Hurley following oral argument and memorialized in a June 4, 2007 written decision and order. The judge found plaintiffs' objections to the redevelopment untimely and the complaint barred by the forty-five day deadline of Rule 4:69-6(a). In doing so, the judge rejected plaintiffs' request to relax the rule's time limitation in "the interest of justice," Brunetti v. Borough of New Milford, 68 N.J. 576, 585-87 (1975), specifically finding that "[a]t all times it was a matter of public record that Mr. Valetutto was a member of the Planning Board and that he was retained to prepare a planning report and a redevelopment plan for the Property to be reviewed by the Planning Board[,]" "[t]here were public hearings held at each stage of the redevelopment process" and "[a]ny objections to the redevelopment designation, including objections based on  Mr. Valetutto's purported conflict of interest, should have been made within the proscribed time period." The judge also found a potential conflict of interest as the result of Valetutto's participation both as a consultant and as a voting Board member but found the Board's actions voidable not void. He concluded that the effect of any purported conflict was diluted by the subsequent public hearings of the Board and City Council and the ultimate approval of the Board's recommendations by the City Council.
On appeal, plaintiffs contend they met the exception to the forty-five day deadline in that they were seeking to vindicate the public interest by seeking to overturn tainted proceedings involving local public officials and governmental entities. They urge that no prejudice would result from the extension and allowing them their day in court, as the City has taken no action to begin redevelopment of the property. As further support of their position, plaintiffs cite our recent opinion in Harrison Redevelopment Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008), in which we recognized instances for extension of the forty-five day period in the interests of justice for challenges by property owners to a designation for redevelopment under the Local Redevelopment and Housing Law where the municipality provided inadequate notice. Substantively, plaintiffs argue that the substantial taint of Valetutto's multiple conflicts and violations of government ethics statutes, dual responsibilities, and potential financial incentive to vote to approve designation of the redevelopment zone to secure additional work drafting the redevelopment plan make invalidation of the Board's and City Council's actions the only appropriate remedy.
We are not persuaded by plaintiffs' arguments and affirm substantially for the reasons articulated by Judge Hurley. Rule 4:69-6(a) provides that "[n]o action in lieu of prerogative writs shall be commenced later than 45 days after the accrual of the right to the review, hearing or relief claimed." The underlying purpose of the time limitation is to "give an essential measure of repose to actions taken against public bodies." Washington Twp. Zoning Bd. of Adjustment v. Washington Twp. Planning Bd., 217 N.J. Super. 215, 225 (App. Div.), certif. denied, 108 N.J. 218 (1987). Pursuant to Rule 4:69-6(c), extension of the forty-five day limitation may be permitted "where it is manifest that the interest of justice so requires." As the trial judge recognized, an extension may be available in a case involving "important public rather than private interests which require adjudication or clarification." Brunetti, supra, 68 N.J. at 586. The record supports the trial court's conclusion that plaintiffs failed to present a basis to relax the deadline or to overcome the validity of the municipal action in adopting the redevelopment designation under all the circumstances, including the extensive litigation history concerning the property.
In analyzing the public interest and public policy considerations, we are also cognizant that Cliff is not a disinterested resident of the City but, as a long-term manager of Delilah's Den, has a strong financial interest in having the establishment continue to operate. Although we do not condone Valetutto's dual role, considering the timing of this action as filed only after all other avenues to relief to Delilah's Den had been exhausted in its multiple actions, it is logical to assume that Cliff is seeking to advance the private interest of Delilah's Den by attempting another bite of the apple, rather than seeking to vindicate the public interest. Harrison Redevelopment is inapplicable as it involved notices to property owners, which plaintiffs are not.