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Craig H. Taylor Holdings, L.L.C. v. Township of Pittsgrove


July 17, 2009


On appeal from the Superior Court of New Jersey, Law Division, Salem County, Docket No. L-323-06.

Per curiam.


Argued March 16, 2009

Before Judges Carchman and Simonelli.

Plaintiff Craig H. Taylor Holdings, L.L.C. filed an application for bulk variances for construction of a single-family home on its property designated as Lot 9, Block 503 on tax map of defendant Township of Pittsgrove (Lot 9). Defendant Pittsgrove Township Planning Board (Board) denied the application, resulting in plaintiff filing a complaint in lieu of prerogative writs, which included an inverse condemnation claim. Plaintiff appeals from the August 1, 2008 order denying its summary judgment motion and granting summary judgment to defendants on plaintiff's inverse condemnation claim.

On appeal, plaintiff contends that the judge erred by failing to expand the doctrine of equitable estoppel to preclude the Township from asserting a self-created hardship. We affirm.

The following facts are relevant to our review. Homayoon Sadeghian (Sadeghian) owned the former Lot 9, which is located in the R-1 zone. He filed a minor subdivision application for that lot to divide it into two lots: (1) Lot 9, comprised of .434 acres with a lot width of 90 feet and a lot depth of 210 feet; and (2) Lot 9.01, comprised of 7.3409 acres. On or about October 2, 2001, Sadeghian received the subdivision approval. Deeds were recorded for each lot on January 22, 2002. Both lots conformed to the Township's Zoning Ordinance, and remained undeveloped after the subdivision approval.

In July 2002, the Township amended the Pittsgrove Township Land Use Development Ordinance (Zoning Ordinance) for the R-1 zone. For single-family homes, the amendment required a minimum lot size of 2 acres, lot width of 200 feet, and lot depth of 250 feet. As a result of the amendment, Lot 9 became an undersized lot.

On March 26, 2004, Sadeghian conveyed Lot 9.01 to Delex, Inc. (Delex) without subdivision approval. A deed was recorded on or about April 16, 2004.

On September 15, 2005, Sadeghian entered into an agreement to sell Lot 9 to plaintiff, with the closing scheduled for March 15, 2006. Prior to the closing, on or about October 19, 2005, plaintiff filed an application for bulk variances pursuant to the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163, for lot size, lot width, and lot depth. Plaintiff submitted with the application a title report, which included the deed for Lot 9, recorded January 22, 2002, and a 200-foot certified property list issued by the Township's tax collector, which showed Delex as the owner of Lot 9.01. Closing of title to Lot 9 occurred on March 15, 2006, prior to the Board's final disposition of the application.

On August 16, 2006, the Board voted unanimously to deny the application. The Board memorialized its decision by Resolution 06-24, dated October 3, 2006, wherein it found that the lots merged as a single lot for zoning purposes because they remained under Sadeghian's common ownership after the July 2002 amendment to the Zoning Ordinance; that Sadeghian's conveyance of Lot 9.01 to Delex created an unlawful subdivision; and that the hardship that [plaintiff] cites as a basis for variance relief was self-created by the action of [Sadeghian], and also by [plaintiff's] representative's*fn1 own decision to cause [plaintiff] to purchase the property without the development approvals that he himself knew would be required, and subject to the limitations of the existing zoning regulations and the consequences that resulted from Sadeghian's actions.

On November 9, 2006, plaintiff filed a complaint in lieu of prerogative writs, seeking reversal of the Board's denial of the requested variances as arbitrary, capricious and unreasonable. Alternatively, plaintiff claimed inverse condemnation. The parties filed summary judgment motions. The motion judge found that the Board's denial of the variances was not arbitrary, capricious or unreasonable. Accordingly, the judge entered an order on January 15, 2008, granting defendants' motion and denying plaintiff's motion.*fn2

The judge later addressed the inverse condemnation issue, which is the subject of this appeal. She found that:

Essentially, [plaintiff's] argument is that the property has been zoned into idleness and that constitutes a taking. That proposition, if it is found to be so, is an accurate statement of the law. If the property is zoned into idleness and there are no intervening factors, then under the appropriate circumstances, a taking is said to have occurred.

However, as the defendant points out, there are other factors to be considered in determining the outcome of the application. . . . And indeed, it's not disputed that there are other uses permitted.

Plaintiff takes issue with what those issues are and points out that variances would be required for any and all of those other uses. But the reality is that there are in fact other uses. And so, it's not 100 percent accurate to say that the property has been zoned into inutility.

But even if we were to assume that the plaintiff is correct and this property has been zoned into idleness, plaintiff faces other issues and other problems that impair the result that the plaintiff seeks.

So what I'm saying on that first point is that there are technically other uses. We have however, more significantly to my view of it, the fact that this is a self-created hardship. And there really is no dispute but that it is a self-created hardship in the sense that it was the action of the predecessor in title that gave rise to the hardship.

Clearly under the law, a claim for inverse condemnation must be dismissed if the basis for the claim stems from a self-created hardship. . . .

Because of the self-inflicted hardship, the Doctrine of Merger applies and would control the situation to plaintiff's detriment and would frankly be the end of the inquiry on this application but for the argument of estoppel, which the plaintiff raises, taking the position that because the township did nothing to vitiate the transfer, the township can't now be heard to raise the self-inflicted hardship argument. . . .

Counsel have briefed and have argued the pertinent cases on this issue. My conclusion . . . is that the case is more akin to the situation in [Dalton v. Ocean Twp. Bd. Of Adj., 245 N.J. Super. 453 (App. Div.) certif. denied, 126 N.J. 324 (1991)] and somewhat to the situation in [Fox v. Township of W. Milford, 357 N.J. Super. 123 (App. Div. 2003) certif. denied, 176 N.J. 279 (2003)], and much less akin to that found in [Scardigli v. Borough of Haddonfield Zoning Bd. of Adj., 300 N.J. Super. 314 (App. Div. 1997)]. Scardigli supports the notion that under certain circumstances, estoppels would work to overcome the merger and self-created hardship arguments.

And after careful consideration, my conclusion is, no, it is not. It does not rise to the level of detrimental reliance that we see in Scardigli. . . . I frankly had a sense that if we were to take all of the items appended to the variance applications and somehow impute special knowledge or require an imposed action on land use "people[,]" we would be embarking on a slippery slope. . . .

And so for those reasons, the Court declines to expand this motion of estoppels to impose the extreme relief of inverse condemnation. So, the application of plaintiff is denied.

On August 1, 2008, the judge entered an order denying summary judgment to plaintiff and granting summary judgment to defendants, dismissing plaintiff's inverse condemnation claim. This appeal followed.

We use the same standard as the trial court when reviewing a summary judgment motion. Jolley v. Marquess, 393 N.J. Super. 255, 267 (App. Div. 2007); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). The motion judge must determine whether the evidence, "when viewed in the light most favorable to the non-moving party," is "sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Rule 4:46-2(c) requires a court to grant summary judgment "if the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment as a matter of law." R. 4:46-2(c); Brill, supra, 142 N.J. at 528-29. If there is no genuine issue of fact, we must then decide whether the lower court's ruling on the law was correct. Prudential, supra, 307 N.J. Super. at 167. Applying these standards, we conclude that the judge properly granted summary judgment to defendants.

The Board denied the variances, finding that the lots had merged under Sadeghian's ownership after the July 2002 amendment to the Zoning Ordinance, and that Sadeghian's conveyance of Lot 9.01 to Delex created an unlawful subdivision. Plaintiff conceded the merger issue at oral argument. Accordingly, there can be no dispute that Sadeghian's conveyance of Lot 9.01 to Delex created an illegal subdivision, and that the hardship plaintiff relies upon was self-created. Jock v. Zoning Bd. of Adjustment, 184 N.J. 562, 578, 591 (2005).

However, plaintiff contends that because the Township did not set aside the conveyance of Lot 9.01 within the two-year period required by N.J.S.A. 40:55D-55, it is equitably estopped from asserting that plaintiff is not entitled to inverse condemnation due to the self-created hardship. Relying on Scardigli, supra, plaintiff argues that the Township had constructive notice of the conveyance of Lot 9.01 to Delex prior to the expiration of the two-year period by virtue of the title report it submitted with its application, which included the deed to Lot 9, recorded January 22, 2002.

Plaintiff also points to the Township's tax assessor's 200-foot certified property list, which plaintiff also submitted with the application, showing Delex as the record owner of Lot 9.01. Plaintiff further points to the Township's receipt of notice pursuant to N.J.S.A. 54:4-31 from the county recording officer of the recording of the deed for Lot 9.01 in April 2004. However, in Dalton, supra, we held that tax records and notice by the county recording officer to the municipality of the recording of a deed do not constitute sufficient notice to invoke estoppel. Dalton, supra, 245 N.J. Super. at 463-65. We also held that to invoke estoppel, there must be "actual notice" of the illegal subdivision by the Township's "land-use people." Id. at 463. See also Fox, supra, 357 N.J. Super. at 127 (finding no estoppel where the municipality's planning officials were unaware of the illegal conveyance within the two-year period).

The question, therefore, is whether the Township had actual notice of the conveyance of Lot 9.01. In answering this question, plaintiff misapplies Scardigli, supra. Scardigli involved three lots: Lot 6, 8 and 9. A prior owner of Lot 6 purchased Lot 8. Scardigli, supra, 300 N.J. Super. at 316-17. In 1979, the owner decided to sell Lot 8 to Cummins, the owner of Lot 9, and was granted a minor subdivision to add a small piece of Lot 6 to Lot 8. Id. at 317. Cummins purchased Lot 8. Thereafter, the zoning ordinance was amended, rendering Lots 8 and 9 undersized. Ibid.

Cummins decided to sell the lots and requested a legal opinion from the municipality as to whether she could sell them separately. Ibid. In December 1992, the planning board's attorney incorrectly advised Cummins that the lots never merged, despite the fact that they were undersized. Ibid. Relying on that opinion, Cummins then sold Lot 9 in 1993. Id. at 318. Shortly thereafter, she sought to sell Lot 8, contingent on the purchaser obtaining bulk variances, which the planning board granted. Ibid. On appeal by an adjacent landowner, we concluded that the planning board's attorney's misrepresentation alone did not constitute adequate grounds for estoppel; however, estoppel applied because the municipality, through that attorney, had advance notice of the sale of the Lot 9 but took no action to set it aside. Id. at 319.

No advance notice of the conveyance of Lot 9.01 existed here; nor was there actual notice, as required by Dalton, supra, 245 N.J. Super. at 463-65. Simply attaching title work and the deed to Lot 9 to the application does not constitute the actual notice required to invoke equitable estoppel.

Having reached this conclusion, we need not address plaintiff's contention that the Board's denial of the application effectively zoned Lot 9 into inutility, or defendants' contention that plaintiff failed to exhaust administrative remedies.


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