June 23, 2010
IZA ACKERMAN, PLAINTIFF-APPELLANT,
HOWELL TOWNSHIP ZONING BOARD OF ADJUSTMENT, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-3329-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 20, 2010
Before Judges Carchman, Parrillo & Lihotz.
Plaintiff Iza Ackerman appeals from a Law Division order affirming defendant Howell Township Zoning Board of Adjustment's (the Board) interpretation of the Howell Township (the Township) zoning ordinance (the ordinance), which prohibited operation of plaintiff's dog breeding business on her residential property.
Plaintiff filed a complaint in lieu of prerogative writs asserting the characterization of her dog breeding hobby as a business was arbitrary and capricious. Following its review, the court concurred with the Board's conclusion finding plaintiff was operating a business and effectively dismissed her complaint. Plaintiff argues the court erred as the facts do not substantiate her activities constituted an impermissible use. We reject plaintiff's arguments and affirm.
Plaintiff owns a four acre property, designated on the Township's Tax Map as Block 183, Lot 98.05. The property includes plaintiff's residence and a storage structure, which has been outfitted with electricity, water and drainage. Plaintiff secured necessary permits to erect the accessory structure by representing she intended to use the building for "personal storage" purposes.
The storage building had been converted and served as a dog kennel. Specifically, the interior is designed with several individual cages used to shelter plaintiff's show dogs. Adjacent to the building are fenced dog runs that comprise a significant portion of plaintiff's yard. Dogs on the inside access guillotine doors, exit the building to the fenced dog runs, then return through the doors to the shelter.*fn1
Plaintiff's property is located in the Agricultural Rural Estate zone (ARE-3), which permits as principal uses agriculture and horticulture, single-family residences, municipal and other public purpose buildings, and community residences for the developmentally disabled and domestic violence shelters with six or less occupants. Permitted accessory uses in the zone are those "customarily incidental and ancillary to a permitted use" as well as "home occupations." Conditional uses include houses of worship, school buildings, and community residences for the developmentally disabled and domestic violence shelters holding more than six but less than fifteen occupants. Township of Howell General Code § 188-69(B).
In late 2006, following a code enforcement inspection, plaintiff and her late husband were issued several municipal court summonses for operating a dog kennel on the property in contravention of the zoning ordinance. Plaintiff was told her operation required a use variance.*fn2 Plaintiff challenged the zoning officer's determination that her operation was a kennel business. She filed a request with the Board seeking an interpretation of the zoning ordinance and asserting "that the keeping and breeding of dogs as a non-business hobby activity" was a permitted use on her property. Alternatively, plaintiff suggested dog breeding was a permitted accessory use in the ARE-3 zone.
The Board concluded plaintiff's activities were consistent with a kennel. Plaintiff appealed the June 11, 2007 resolution rejecting her interpretation and upholding the code officer's determination by timely filing a complaint in lieu of prerogative writs. Following a preliminary case management conference, the Law Division remanded the matter to the Board to conduct "a full hearing without time limitations," affording plaintiff the opportunity to present expert testimony.
The Board's June 8, 2008 resolution, now under review, was adopted following proceedings held January 14, February 25, and April 28, 2008. During the Board hearings, plaintiff explained that she moved to the Township in 2000 and has ever since been breeding and raising German Shepherd show-dogs on her property as "a very expensive hobby" ever since. Currently, she owns eight female dogs, which are housed either in her home or in the storage building. In a typical year, the dogs produced one or two litters of puppies using artificial insemination, a procedure that costs approximately $2,700. If a puppy is not of "champion" show quality, plaintiff sells the animal, receiving approximately $1,000 per dog. On average, she has sold between ten and twelve puppies each year.
Describing herself as one of "the top German [Shepherd] breeders in the [c]ountry," plaintiff explained she feeds and cares for the animals herself, has no sign on the property, and does not advertise the sale of the dogs. Although she had a web site describing her breeding activities, she did not regularly update the webpage.
Plaintiff asserted she neither operated under a registered trade name nor incorporated, as her endeavors do not return a profit. When a dog is sold, purchasers make their checks payable personally to her. She does not report the payments as income or claim offsetting deductions on her income tax returns because "she spends far more per year than she earns." Plaintiff insisted she sells the dogs only to ensure they end up in a home where the animal is valued and to recoup a portion of the artificial insemination cost.
In support of her argument that "raising  dogs [w]as a hobby customarily incidental and ancillary to [her] residential use," she presented expert testimony from Dennis Hudacsko, a licensed professional planner. Hudacsko reviewed the stated ordinance, opining it was meant to regulate things like "animal shelters, boarding kennels or pet shops. It has never been used to regulate what a person has in his backyard in terms of their personal pet or hobby animals[.]" Hudacsko stated plaintiff's receipt of some money for dogs does not make her activities a business; rather, the lack of advertising and failure to make a profit or file tax returns supported her position that she engaged in a hobby, which was outside the scope of the ordinance.
The Township Land Use Officer, Betty Lou Textor, testified her 2006 inspection of plaintiff's property had revealed the structure was "not actually a storage building but rather a dog kennel." Textor noted plaintiff's application to build the structure failed to mention animals would be housed in the building. If it had, the use would have required approval from the county Board of Health. Moreover, plaintiff's permit application to construct the dog runs had been denied.
James Burdick, the assistant code enforcement officer for the Township, took thirty-four photographs of plaintiff's property, which were presented to the Board. Burdick corroborated the characterization of the structure as a "kennel."
After her site visit, Textor notified Kathleen Andrews, a registered Environmental Health Specialist with the Monmouth County Health Department, which is charged with the enforcement of the State sanitary code, including kennel inspections. Andrews investigated plaintiff's activities and observed the fencing and the kennel runs were already up, the pole barn was up [and] it had been modified at that point to include the guillotine doors and the outdoor kennel runs. In addition to that there was electric... and water to the building, there were floor drains present for purposes of washing down and hosing down the kennels[;] however, those floor drains did not connect to a septic [system] which is required[.] [Y]ou cannot just discharge to the ground. They... discharged directly to the ground outside the building.
The Board unanimously voted to deny plaintiff's requested interpretation of the ordinance, determining plaintiff's use was a kennel and required a use variance. The Board's June 9, 2008 resolution concluded:
The failure of [plaintiff] to derive a profit from the sale of pups does not in any way support her contention that she is not operating a business, as many businesses operate at a loss from time to time. The undeniable fact is that in addition to raising some dogs for show purposes, she also is in the business of breeding and selling pups to others, and has a website to advertise availability. Whether or not [plaintiff] filed tax returns, declared income received from puppy sales, or has registered her business with governmental authorities does not impact the Board's determination[.]
The Board... found also that the shed had been converted to an illegal kennel use. The representations made by [plaintiff] when initially applying for a permit to construct the shed was devoid of any mention of dog or kennel uses.... The doors and fencing [in the shed] were added without obtaining the required permits.
Although [plaintiff] urges that the use constitutes a hobby and not a business, in reviewing the totality of the evidence, as shown by photographic evidence, as well as [plaintiff's] own website, and [plaintiff's] own testimony of the routine sale of German Shepherd pups, the Board is satisfied that [plaintiff] is engaged in the business of breeding and selling dogs at her residence[.]
Plaintiff amended her complaint to include the Board's current decision, contending it was arbitrary, capricious, and unreasonable. Before the Law Division, plaintiff distinguished her operation from a "commercial" kennel. She argued there was little practical difference between her activities and simply giving the puppies away - which she believed the Board would have permitted. Additionally, plaintiff maintained that because she operates a separate full-time business, her canine breeding activities are purely recreational.
The Board's arguments before the court focused on plaintiff's sale of dogs, noting her failure to turn a profit was immaterial. The Board asserted that breeding dogs and selling them takes plaintiff's activities "out of the realm of being a permitted use."
In a February 11, 2009 written opinion, the court affirmed the Board's decision, finding plaintiff "engages in an activity which she knows will produce more dogs than she desires to keep," then sells those animals in excess of her personal requirements "and  seeks to gain financially from her bounty." In rejecting plaintiff's reliance on profit and tax issues, the court also observed plaintiff's breeding activities were "systematic" and "intense" and that she had outfitted her property with all "the accoutrements of th[at] trade." This appeal ensued.
Plaintiff's request was filed pursuant to N.J.S.A. 40:55D-70b, which permits the Board to "[h]ear and decide requests for interpretation of the zoning... ordinance[.]" The exercise of this statutory interpretive power is not dependent upon any implementing provision of a local ordinance. Cherney v. Matawan Borough Zoning Bd. of Adj., 221 N.J. Super. 141, 145 n. 1 (App. Div. 1987). "Once made, the board's decision is final and binding as to all interested parties, including enforcement officials, unless successfully appealed." Colts Run Civic Ass'n v. Colts Neck Tp. Zoning Bd. of Adj., 315 N.J. Super. 240, 246 (Law Div. 1998).
In reviewing a zoning board's decision, we are bound by the same standard as the trial court. Grubbs v. Slothower, 389 N.J. Super. 377, 382 (App. Div. 2007). Because of its "'peculiar knowledge of local conditions,'" ibid. (quoting Burbridge v. Mine Hill Tp., 117 N.J. 376, 385 (1990), as well as its "'thorough familiar[ity] with their communities' characteristics and interests[,]'" Fallone Props., L.L.C. v. Bethlehem Tp. Planning Bd., 369 N.J. Super. 552, 561 (App. Div. 2004) (quoting Pullen v. Tp. of S. Plainfield, 291 N.J. Super. 1, 6 (App. Div. 1996)), the Board's factual findings are entitled to "substantial deference and are presumed to be valid." Grubbs, supra, 389 N.J. Super. at 382 (citation omitted). For this reason, the Board's decision "'may be set aside only when it is arbitrary, capricious, or unreasonable.'" Berkeley Square Ass'n, Inc. v. Zoning Bd. of Adj., 410 N.J. Super. 255, 263 (App. Div. 2009) (quoting Cell S. of N.J., Inc. v. Zoning Bd. of Adj., 172 N.J. 75, 81-82 (2002)).
Furthermore, although "[t]he Board's conclusions of law are subject to de novo review[,]... we recognize the board's knowledge of local circumstances and accord deference to its interpretation." Grubbs, supra, 389 N.J. Super. at 383 (quotations omitted).
Plaintiff does not dispute that the operation of a commercial kennel would be a prohibited use. However, marshalling proofs that her operation is not a for-profit commercial enterprise, she views her dog breeding as a hobby, something that qualifies as permitted "incidental and ancillary to the residential use." We reject this contention.
The Township Code defines a kennel as "[a]ny establishment wherein or whereon the business of boarding or selling dogs or breeding dogs for sale is carried on, except a pet shop." Township of Howell General Code § 57-3. Conducting a kennel in one's home is prohibited. See Id. at § 188-64C(2).
The term "business" is not defined by the municipal zoning ordinance. Reliance solely on profit motives or income tax concepts is not determinative. Whether an activity is a business operation in the context of permissible zoning entwines an analysis of the character, extent and impact of the activity on the designated zone.
In the ARE-3 zone, certain "home office" occupations are permitted when the activity is "incidental to the residential use of the premises, are compatible with residential uses, are limited in extent, degree and time, and do not detract from the residential character and quality of the neighborhood[.]" Id. at § 188-64A. However, home occupation uses are precluded when they "have a pronounced tendency once commended, to rapidly increase and escalate beyond the limits permitted and beyond the impacts to be reasonably anticipated from residential purposes and are more suited to professional, business, or agricultural districts[.]" Id. at § 188-64C. Importantly, the zone specifically identifies "[b]oarding and breeding kennels for dogs and cats," as a prohibited home occupation use. Id. at § 188-64C(2).
A review of the totality of all facts and circumstances lead us to concur with the Law Division's determination that plaintiff's activities were a proscribed kennel business. First, plaintiff's breeding activities were not occasional; they were continuing and regular. Each year she bred her female champions, delivering between ten and twelve dogs, most of which are sold.
Second, despite the fact that her primary purpose may not be profit driven, her objectives remained pecuniary. Plaintiff advertises her breeding activities on her website and also notes when a champion succeeds in a dog show. Her reputation as a breeder is the key to selling the not so perfect dogs to unrelated individuals, realizing between ten and twelve thousand dollars each year. The amount of proceeds plaintiff earns cannot be labeled de minimus.
Most assuredly, plaintiff loves her animals and understandably derives pleasure from her efforts in an area where she is expert. However, in the context of the zoning ordinance, her expressed motives do not control whether she is conducting a proscribed business. She sought to maintain or enhance her stature as the "top" German Shepherd breeder in the country, publicizing that reputation on her website to sell dogs that are not champion worthy.
Third, the scope of plaintiff's activities can hardly be characterized as "incidental." Plaintiff constructed an elaborate facility in her backyard equipped to accommodate the breeding and housing of her "pet" champions, as well as those dogs bred and sold. The kennel structure covers much of her yard and is complete with individual fenced cages, electricity, water, drainage and extensive fenced dog runs.
We do not comment on plaintiff's suggestion that if she gave the pups away, her activities would be permitted. Whether the intensity of such a use violates the ordinance is left in the first instance to the Board.
We need not consider plaintiff's argument that her limited sale of bred show dogs is "customarily incidental and ancillary to a permitted use in this zone," as it was not presented to the Board for its review. See ZRB, LLC v. N.J. Dep't of Envtl. Prot., Land Use Regulation, 403 N.J. Super. 531, 536 n.1 (App. Div. 2008) (citing Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973)). The issue before the Board was whether plaintiff's activities constituted a business or kennel. We are satisfied from reviewing the record that the activities conducted on the property fully support the finding that plaintiff was not merely rearing pets or participating in a hobby. She operates a business -- breeding and selling dogs-- and boards as many as twelve to fourteen dogs at one time. These are the three activities encompassed within the definition of a prohibited kennel, not permitted as an ancillary home use, because "by the nature of the investment or operation [they] have a pronounced tendency once commended, to rapidly increase and escalate beyond the limits permitted and beyond the impacts to be reasonably anticipated from residential purposes[.]" Township of Howell General Code § 188-64C. Accordingly, plaintiff's complaint was properly dismissed.