November 13, 2008
WILLIAM HNATT, PLAINTIFF-APPELLANT/CROSS-RESPONDENT,
PATRICIA GANT, KAREN A. PYHEL, DEFENDANTS-RESPONDENTS/CROSS-APPELLANTS, AND BRICK TOWNSHIP ZONING BOARD OF ADJUSTMENT, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2995-06-PW.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 16, 2008
Before Judges Parrillo, Lihotz and Messano.
In this action in lieu of prerogative writs, plaintiff William Hnatt appeals from an order of the Law Division upholding the Brick Township Board of Adjustment's (Board) grant of variances to defendants Patricia Gant and Karen Pyhel (defendants) to construct a single-family residence on an undersized lot (lot 15). Defendants cross-appeal from that portion of the order conditioning grant of the variances on removal of a third-floor "bonus" room from defendants' proposed development plans. We affirm.
Plaintiff owns neighboring lot 14 on Nejecho Drive in Brick Township. Waterfront lots 14, 15 and 16 are located in the Township's R-7.5 zone and are contiguous, all created under the Old Map Filing Act or by conveyance with reference to an old metes and bounds description. Historically, lot 15 shared common ownership with lot 14 twice, once "for a two-year period from 1946 to 1948, and [then for] a one-year period from 1970 to 1971." For a period of five years, from 1978 to 1983, lot 15 was owned by the owners of lot 16, William Gross and his wife, Dolores. In 1983, the Grosses conveyed lot 15 to their son, William Gross, Jr. Thereafter, in a series of conveyances, the son transferred to his three siblings, defendants Patricia Gant and Karen Pyhel, and John Gross, each a twenty-five percent interest in lot 15.*fn1
This history is relevant because under the doctrine of merger, contiguous, undersized or substandard lots that come into common legal title theoretically merge and therefore cannot be individually sold or developed without subdivision approval. Jock v. Zoning Bd. of Adj. Of Wall, 184 N.J. 562, 578, 581 (2005). A variance is precluded because the individual lot owner cannot demonstrate undue hardship that was not self-created. Ibid.
Despite this well-recognized land use principle, the Township never took action to set aside any of the transfers of lots 14, 15 or 16 as improper subdivisions. On the contrary, in response to an inquiry about potential development of lot 15, Brick Township Zoning Officer Sean Kinnevy advised a local realtor, in a letter dated November 21, 1995, that lot 15 could be developed without a variance: "After further clarification, it has been determined that the referenced property, located in the R-7.5 zone, is a buildable lot under Section 190-158.B of the Township Code. No zoning variance is required." The letter was copied to the Township's Business Administrator and Municipal Planner. Eight years later, on March 21, 2003, Kinnevy wrote another realtor about the potential development of lot 15, repudiating his earlier advice and informing that a variance would be required:
The referenced property is located in the R-7.5, Single-family residential zone, in which the minimum lot width required is 75 feet and the minimum lot area required is 7,500 square feet, as per Section 290-11 of the Township Code.
The letter dated November 21, 1995 is no longer valid. Section 190-158.B of the Township Code was repealed on May 14, 1996 by Ordinance No.354-2C-96.
In order to build on the lot, a variance must first be approved by the Zoning Board of Adjustment.
In 2005, after receiving CAFRA permits to develop lot 15, defendants applied to the Board for variances under N.J.S.A. 40:55D-70c(1) and (2) to construct a single-family residence on the undersized lot. Specifically, defendants applied for variances in minimum lot area (7500 sq. ft. required, 6292 sq. ft. provided); lot width (75 ft. required, 51 ft. provided); front setback (25 ft. required, 17 ft. provided); combined yard setback (15 ft. required, 12.1 ft. provided); and maximum building coverage (30 percent required, 35 percent provided). Before applying for the variances, however, defendants had submitted certified letters to the adjoining property owners soliciting offers to purchase lot 15 at its fair market value as if variances had been granted, but the owners of lots 14 and 16 were not interested.
The Board held public hearings on defendants' application. Plaintiff, represented by counsel, appeared and objected, citing the preclusive doctrine of merger and challenging the Board's jurisdiction. Prior to the hearings, defendants submitted revised dimensions of their single-family dwelling, which reduced the total building coverage to 31.15 percent, conformed the combined yard setback, and increased the front setback to 18 ft. in accordance with off-street parking standards.
At the start of the hearing, the Board ruled that defendants were "not barred or prohibited from going forward based on the doctrine of merger" because "[t]his unique circumstance, where [lot] 15 was owned by both the owners to either side[,] might act to stop the owner at either 14 or 16, as the case may be, from advancing the doctrine of self-created hardship against the other neighbor." It was noted, in this regard, that lot 15 was created under the Old Map Filing Act, and that the Township zoning officer had represented that lot 15 was a valid building lot.
At the hearing, Charles Lindstrom, a project engineer and planner, testified to the dimensions of the property and defendants' revised proposal. According to Lindstrom, the revised total lot coverage, at 31.15 percent, was calculated by using the 125-foot lot depth stated in the Brick Township tax map for lot 15. Based on a new calculation using the mean high waterline of 1.44 provided by New Jersey's Bureau of Coastal Engineering, and used in the application of the Coastal Permit Program, the actual lot depth was greater than 125 feet, making the total lot coverage less than the required 30 percent. It was also Lindstrom's opinion that defendants' proposed dwelling, while technically requiring a variance, conformed to existing neighborhood development and the Brick Township master plan, as the proposal did not offend the aesthetics of the surrounding area and the lot was of equal size to seven other lots already developed.
At the conclusion of the evidence, after entering factual findings and discussing whether to accept the plans as submitted or to attach conditions, the Board deadlocked, with three voting in a straw poll for the original plans and three voting for the plans without the third-floor bonus room, concerned that the bonus room would result in a dwelling that would not conform to the elevation line of the surrounding houses. Because it was clear that the Board did not intend to deny the variance application based on such concern, the Board's attorney clarified that a final deadlocked vote would act as a denial. After further deliberation, the Board tallied the final vote, with five voting to grant the variance subject to elimination of the bonus room, and one voting against the condition. The Board memorialized its factual findings and conclusions of law in a resolution dated August 2, 2006, including the conditions on which the application was approved. Two of these conditions, which are related and the subject of defendants' cross-appeal, are:
3. The architectural plans of the dwelling are approved only to the extent of the combined first and second living levels shown on these plans. The third living level, labeled as the "bonus room" is not approved.
4. The area above the second living level (in the middle of the proposed dwelling) shall be revised to provide a roof having an approximate height of five feet, subject to meeting requirements of the municipal building code. The area above the second living level shall contain no windows and no livable area. The revised architectural plan shall be subject to review and approval of the Board Engineer.
Plaintiff moved to set aside the Board's resolution in his complaint in lieu of prerogative writs. The matter was tried in the Law Division, at the conclusion of which Judge Grasso, in his October 23, 2007 opinion, affirmed the Board's decision, finding that the Board did not act arbitrarily, capriciously, or unreasonably. Specifically, the court ruled that the Board was estopped from applying the principles of merger and of claiming self-created hardship because (1) Brick Township "had the opportunity on two separate occasions to exercise its right under N.J.S.A. 40:55D-55 to invalidate a transfer of Lot 15 when it was held in common ownership . . . yet the municipality took no action to set aside the conveyances"; (2) defendants "have never owned any lot contiguous" to lot 15; (3) there has been no common ownership of lot 15 with another lot since 1983; (4) Brick Township had identified lot 15 as a separate lot on its tax maps predating the 1983 transfer and has continued to do so; (5) taxes on lot 15 have been assessed in accordance with a separate and isolated undersized lot; and (6) Zoning Officer Kinnevy's letters "either directly or implicitly confirmed the existence of the Property as an independent lot that was potentially buildable with the grant of variances." Moreover, the Board acted well within its power in granting the conditional hardship variance, as the requirements of N.J.S.A. 40:55D-70(c)(1) and (2), as well as the five-part test on the validity of conditions, were satisfied.
The court also addressed plaintiff's procedural arguments, finding that (1) defendants' attorney did not prejudicially and impermissibly interrupt the Board's deliberations, "but merely interjected three times to clarify exactly what defendants were seeking"; (2) the Board's attorney did not attempt to influence the Board's decision, but simply "refocused the Board's discussion on the effect of a three-to-three vote by explaining . . . the legal consequences of a tie vote"; and (3) that there was no evidence that a board-member had a disqualifying conflict of interest.
Lastly, the court briefly addressed plaintiff's other two contentions: that the Board should not have considered the defendants' offer to sell the subject lot at its fair market value as if variances were approved, and that the mean high waterline should not have been used to calculate the total lot coverage. As to the former, the court found that settled law supports the use of fair market value as if variances were approved, and as to the latter, that use of the mean high waterline cannot be arbitrary if it is a standard well-used by the State of New Jersey.
On appeal, plaintiff raises the following issues:
I. THE TRIAL COURT ERRED BY FINDING THAT DEFENDANTS' HARDSHIP WAS NOT SELF-CREATED.
A. THE TRIAL COURT WAS CORRECT IN FINDING THAT THE SUBJECT PROPERTY HAD MERGED WITH THE ADJOINING UNDERSIZED PROPERTY.
B. AS A MATTER OF LAW, BECAUSE THE SUBJECT PROPERTY AND THE ADJACENT LOT 16 MERGED, THE APPLICANTS CANNOT DEMONSTRATE UNDUE HARDSHIP THAT WAS NOT SELF-CREATED, AND THEREFORE CANNOT MEET THE REQUIREMENTS FOR VARIANCE RELIEF.
II. THE TRIAL COURT ERRED BY APPLYING THE DOCTRINE OF EQUITABLE ESTOPPEL.
A. THE RECORD WAS INSUFFICIENT TO SUPPORT THE APPLICATION OF ESTOPPEL.
B. THE REQUIREMENTS OF EQUITABLE ESTOPPEL WERE NOT PRESENT.
III. THE TRIAL COURT ERRED BY FINDING THAT THE SUBJECT PROPERTY SHOULD HAVE BEEN OFFERED FOR SALE AT FAIR MARKET VALUE AS IF VARIANCES WERE APPROVED.
IV. THE TRIAL COURT ERRED BY AFFIRMING THE BOARD'S DECISION, WHERE THE BOARD FAILED TO TAKE INTO ACCOUNT LOT AREA PERIODICALLY FLOWED BY TIDAL WATERS.
V. THE TRIAL COURT ERRED BY FAILING TO REMAND THE MATTER TO THE BOARD IN LIGHT OF PROCEDURAL DEFECTS.
A. THE BOARD'S DECISION WAS PROCEDURALLY DEFECTIVE IN THAT THE BOARD INAPPROPRIATELY PERMITTED SUBSTANTIAL COMMENT FROM COUNSEL AFTER THE CLOSE OF THE PUBLIC HEARING AND DURING THE COURSE OF THE BOARD'S DELIBERATIONS.
B. THE BOARD'S DECISION WAS PROCEDURALLY DEFECTIVE BECAUSE THE BOARD'S ATTORNEY INAPPROPRIATELY DIRECTED THE BOARD TO ADOPT A RESOLUTION OF APPROVAL WHEN THE BOARD WAS ABOUT TO VOTE TO DENY THE APPLICATION DUE TO IMPASSE.
Defendants, on cross-appeal, assert the following:
I. CONDITIONS NUMBER 3 AND 4 OF THE BOARD'S RESOLUTION OF APPROVAL ARE UNREASONABLE CONDITIONS WARRANTING EXCISION BY THE COURT
Having considered these contentions in light of the record and applicable law, we affirm substantially for the reasons stated in Judge Grasso's thorough opinion of October 23, 2007. We add only the following comments.
Merger is derived from Loechner v. Campoli, 49 N.J. 504, 512 (1967), where it was held that "[t]he separation of Lots 189 and 190 from the balance of the lots owned by plaintiff[,]" even though filed under the Old Map Act, required subdivision approval.*fn2 Here, it is undisputed that, theoretically, lot 15 merged with lot 16 during the period of common ownership by the Grosses from 1978 to 1983. Lot 15 was substandard and filed under the Old Map Act; therefore, the Gross' transfer of the property to their son required subdivision approval to effectuate present day zoning laws. Jock, supra, 184 N.J. at 579-81.
Therefore, without a finding of estoppel, merger would preclude defendants from obtaining a variance because they would not be able to demonstrate hardship under N.J.S.A. 40:55D-70(c)(1) that was not self-created. Jock, supra, 184 N.J. at 591. "[S]elf-created hardship requires an affirmative action by the landowner or a predecessor in title that brings an otherwise conforming property into non-conformity." Ibid. (citing Barnes Land Corp. v. Bd. of Adjustment of Wyckoff, 174 N.J. Super. 301, 304 (App. Div. 1980) (finding plaintiffs' hardship self-created because predecessor in title had divided conforming property)).
As noted, however, the doctrine of equitable estoppel operates to preclude any finding of self-created hardship. "[M]unicipal action taken after the course of many years, which misleads a property owner as to the status of its property, may estopp [sic] the municipality from refusing to grant a variance on the basis of self-created hardship." Simeone v. Zoning Bd. of East Hanover, 377 N.J. Super. 417, 423 (App. Div. 2005) (citing Scardigli v. Borough of Haddonfield Zoning Bd. of Adjustment, 300 N.J. Super. 314, 319-20 (App. Div. 1997)).
In Simeone, we applied equitable estoppel to overcome self-created hardship because disallowing a variance would have resulted in "a lot either zoned into inutility or salable only to the adjacent owner probably at forced sale rates." Id. at 425. Moreover, the subject property in Simeone had been assessed as a separate lot for tax purposes; the owners had paid taxes on the lot; and the municipality never took action against the property as an improper subdivision since its creation in 1965. Ibid.
We are satisfied that the doctrine of equitable estoppel was appropriately applied in this case. Defendants have never owned any lots adjacent to the subject property. The property has existed as an isolated lot for over twenty years, since 1983. Before that time, the municipality never took action to invalidate two different transfers of lot 15, either in 1971 or in 1983. Just the opposite, the Township's zoning officer, on two separate occasions seven years apart, issued letters that either directly or implicitly confirmed that lot 15 was developable. In fact, similar undersized waterfront lots in the neighborhood have been developed. Lastly, without variances, the property will continue unused, raising the distinct possibility that it may be sold to adjoining owners at forced sale rates.
Plaintiff nevertheless argues that equitable estoppel does not apply in the absence of any evidence the defendants relied on the Township's representations. The doctrine of equitable estoppel is that one may, by voluntary conduct, be precluded from taking a course of action that would work injustice and wrong to one who with good reason and in good faith has relied upon such conduct. An estoppel . . . may arise by silence or omission where one is under a duty to speak or act. It has to do with the inducement of conduct to action or non-action. [Middletown Twp. Policemen's Benevolent Ass'n Local No. 124 v. Twp. of Middletown, 162 N.J. 361, 367 (2000) (citing Summer Cottagers' Ass'n of Cape May v. City of Cape May, 19 N.J. 493, 503-04 (1955)).]
We disagree with plaintiff that there was no reliance because the letters were not addressed to defendants. At the very least, the letters demonstrate the Township's knowledge of lot 15's potential development, and it was the Township's continued inaction in spite of this knowledge, together with its inaction between 1971 and 1983 and since 1983 to invalidate the transfers of lot 15, that reasonably lead defendants to believe that they were in possession of a separate, properly divided lot, and induced them to advance its planned development. Moreover, the Township's correspondence was directed in both instances to professional real estate agents presumably acting on behalf of defendants or others having an interest in contracting with defendants. While plaintiff is correct that Scardigli involved an applicant induced to act on erroneous information from the municipality, a circumstance not presented here, in Simeone, we found significant the municipality's inaction over forty years. Under similar circumstances here, it was proper to invoke the doctrine of equitable estoppel to overcome a finding of self-created hardship, thereby allowing the Board to consider the merits of defendants' application.
Considering the merits of the application, we find no reason to interfere with the ultimate grant of variance relief in this case. A zoning board's decision on a variance may be set aside only when arbitrary, capricious or unreasonable. Cell South v. Bd. of Adj. of West Windsor Twp., 172 N.J. 75, 81 (2002); New Brunswick Cellular Tel. Co. v. Borough of So. Plainfield Bd. of Adj., 160 N.J. 1, 14 (1999). Local officials familiar with their community's characteristics and interests are best equipped to pass on variance applications, and must be given wide latitude in the exercise of their delegated discretion. Kramer v. Bd. of Adj., Sea Girt, 45 N.J. 268, 296 (1965). "[C]courts ordinarily should not disturb the discretionary decisions of local boards that are supported by substantial evidence in the record and reflect a correct application of the relevant principles of land use law." Lang v. Bd. of Adj. of N. Caldwell, 160 N.J. 41, 58-59 (1999).
"To receive a variance under N.J.S.A. 40:55D-70c, applicants must satisfy two criteria: (1) that they will suffer exceptional or undue hardship if the variance is not granted --the so-called positive criteria; and (2) that the variance will not result in a substantial detriment to the public good or the zoning plan -- the so-called negative criteria." Nash v. Bd. of Adj. of Morris, 96 N.J. 97, 102 (1984). The positive criteria have been satisfied here because the lot is undersized and cannot be brought into conformity because the neighbors refused to buy at fair market value as if the variance had been granted, or to sell their property; and the hardship was not self-created.*fn3 The negative criteria have been satisfied as well because, as Lindstrom testified, defendants' proposed dwelling conformed to existing neighborhood development and the Brick Township master plan, the lot was of equal size to seven other lots already developed, and the proposal did not offend the aesthetics of the surrounding area. Therefore, with both the positive and negative criteria satisfied, the record demonstrates sufficient and credible evidence to support the grant of the variances.
The Board also properly considered the mean high water line*fn4 as the correct measurement from which to calculate the total building coverage at 31.15 percent, instead of considering the "periodically diminished area of dry land available," as plaintiff contends. But not only does plaintiff fail to provide any calculations to demonstrate the extent of the increase alleged, he acknowledges that the mean high water line is "undoubtedly an accepted standard of measurement." Indeed, the mean high water line is used by the State of New Jersey in the application of the Coastal Permit Program and, therefore, we find that its use here in calculating total lot coverage was neither arbitrary, capricious, nor unreasonable.
We find plaintiff's remaining arguments to be without merit, not warranting discussion in this opinion. R. 2:11-3(e)(1)(E).
As to defendants' cross-appeal, we are equally satisfied that the Board's decision to condition the variances on removing the third-floor room, despite its conformance to the ordinance, was appropriate. It is well-settled that a board may reasonably condition variances to protect the public interest. See Berninger v. Bd. of Adj. of Midland Park, 254 N.J. Super. 401, 405 (App. Div. 1991), aff'd o.b., 127 N.J. 226 (1992); Urban v. Planning Bd. of Manasquan, 124 N.J. 651, 661 (1991). A five part test is used in determining the validity of such conditions. According to Rathkopf, The Laws of Zoning and Planning, § 40.02 (4th ed. 1987), cited in Orloski v. Planning Board, 226 N.J. Super. 666, 672 (Law Div. 1988), aff'd o.b., 234 N.J. Super. 1 (App. Div. 1989):
To be valid, conditions must (1) not offend against any provisions of the zoning ordinance; (2) not require illegal conduct on the part of the permitee; (3) be in the public interest; (4) be reasonably calculated to achieve some legitimate objective of the zoning ordinance; and (5) not be unnecessarily burdensome to the landowner.
Apropos to this test, where a party comes into ownership of a single lot that does not meet the area and dimension requirements of the current zoning law, and that party does not own adjoining land, the lot is considered to be isolated and non-conforming. Jock, supra, 184 N.J. at 578 (2005) (citing Davis Enterprises v. Karpf, 105 N.J. 476, 481 (1957)). With non-conforming, isolated lots, part of an applicant's burden in obtaining variance relief is proving that it will not detrimentally affect the surrounding properties. Nash, supra, 96 N.J. at 102. As such, the impact of an applicant's proposal on the surrounding area is an important consideration, and if a finding of detrimental effect would justify denial of the variance altogether, a fortiori, it would allow for approval with conditions aimed at eliminating the adverse impact.
Here, the Board reasoned that the third level was "not in keeping with the character of the number of living levels in similarly situated properties"; would "adversely impact structures on adjoining Lots 14 and 16"; would not provide a desirable visual environment; and that the height of the house would not conform with the height lines of other houses in the neighborhood. Clearly, the Board's condition limiting the height of the proposed dwelling to less than what the ordinance allows was designed to meet neighborhood aesthetics, and therefore, to advance a legitimate objective of the zoning ordinance, despite its technical conformity. As such, the imposition of the condition was wholly within the Board's authority, Dallmeyer v. Lacey Twp. Bd. of Adj., 219 N.J. Super. 134, 145 (Law Div. 1987); see also Urban, supra, 124 N.J. at 661 ("Thus, aesthetics, access, landscaping, or safety improvements might all be appropriate conditions for approval of a subdivision with variances") (citing Orloski, supra, 226 N.J. Super. at 672), and was neither arbitrary, capricious, nor unreasonable.