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NJ Capital Partners, LLC v. Oakland Planning Board

July 2, 2010


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9429-06.

Per curiam.


Argued January 20, 2010

Before Judges Wefing, Grall and Messano.

Plaintiff NJ Capital Partners, LLC, appeals from a series of orders entered by the Law Division that limited its recovery of attorneys' fees and costs in this inverse condemnation action against defendant Borough of Oakland (Oakland) to $50,000. We have considered the arguments raised on appeal in light of the record and applicable legal standards. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.


The matter presents a complicated procedural history. Plaintiff owned approximately 50.47 acres of land in Oakland designated as Block 3105, Lot 3 (the property). The property was located in the RA-1 Zone that permitted single-family residences on a minimum lot size of one acre. The topography of the property included numerous rock outcroppings, heavily wooded areas, and some wetlands.

On August 21, 2003, plaintiff submitted a subdivision application to the Oakland Planning Board (the Board) seeking to create fourteen residential lots. The application also sought variances from Oakland's steep slope ordinance, as well as a soil moving permit. Plaintiff asserted that the variances were necessary for access to the property and, if not granted, plaintiff contended that the property was inutile.

Hearings on the application took place before the Board on various dates from November 13, 2003 through June 24, 2004. In the interim, on February 11, 2004, Oakland resolved by formal resolution, Resolution No. 04-08, to apply for grant funds to acquire various parcels of land as part of the borough's open space plan. Oakland's officials subsequently took the necessary steps to apply for the grant, and included plaintiff's property as one of nineteen parcels "considered for . . . purchase" if the funds were received.

By a 5-2 vote, the Board denied plaintiff's development application; on August 12, it approved a memorializing resolution. Among other things, the Board concluded that "strict application of [Oakland]'s steep slope ordinance would not result in any peculiar and exceptional practical difficulties to or exceptional and undue hardship upon [plaintiff]." The Board further concluded "that the granting of the steep slope variances would be detrimental to the public good in that the integrity of the slopes would be substantially compromised thereby creating undue risks and hazards to the public." At the first public meeting of Oakland's municipal council after the Board's denial, at least one councilperson reiterated the borough's continued interest in acquiring the property through grant funding.

On September 20, plaintiff filed a three-count complaint in the Law Division against Oakland, its mayor and one of its councilpersons, and the Board (the first action). Plaintiff alleged that the denial of its application was arbitrary and capricious; that the denial resulted in an inverse condemnation of the property; and that the Board violated the Open Public Meetings Act ("the OPMA"), N.J.S.A. 10:4-6 to -21, during the hearing process.*fn1 Trial on the complaint was bifurcated, with the prerogative writ action proceeding first.

During trial, plaintiff stipulated to the Board's finding that plaintiff had failed to establish the so-called "negative criteria." See N.J.S.A. 40:55D-70(d) ("No variance . . . may be granted . . . without a showing that such variance . . . will not substantially impair the intent and the purpose of the zone plan and zoning ordinance."). On February 7, 2005, the judge issued his letter opinion, affirming the Board's denial of plaintiff's development application and entering judgment in favor of the Board on count one of the complaint.*fn2 The matter proceeded to trial on plaintiff's inverse condemnation claim.

William Lothian, a professional engineer retained by Oakland, testified that there was an alternative access route to the property (the Lothian Plan) that did not require any steep slope variances. Plaintiff's engineer, David Hals, opined that the Lothian Plan was already considered and rejected by the Planning Board; that it was unsafe and unacceptable to the Bergen County Planning Board, whose approval was necessary; and that it deviated from municipal standards. It was undisputed that if the Lothian Plan was not viable, the property was inutile because of a lack of access.

The trial judge issued a letter opinion on January 18, 2006, and concluded that the Board had never formally rejected the Lothian Plan. He reasoned:

What the [c]court does determine is simply that it has not been proven -- by clear and convincing evidence nor by a preponderance -- that the . . . Board['s] refusal to permit the requested access has had the effect of rendering the site inaccessible or inutile. Until the [Lothian Plan] is eliminated as an approvable alternative, no such finding can be made.

The judge dismissed plaintiff's complaint without prejudice, and remanded the matter to the Board. Plaintiff did not seek review of the decision.

The Board held hearings on remand on September 14, 2006 and October 5, 2006, and considered the testimony of Hals and Louis J. Luglio, another expert retained by plaintiff, both of whom opined that the Lothian Plan was unacceptable for a variety of reasons. Lothian also testified, acknowledging that Hals's plan requiring steep slope variances was preferable, and that his plan had significant limitations. He further admitted that in formulating his opinion, he did not make any measurements of the site and could not state whether his proposed access route permitted safe sight lines for vehicular traffic. Nevertheless, by resolution dated November 2, the Board accepted the Lothian Plan as a viable alternative.

On December 19, plaintiff filed another complaint against Oakland, its mayor and council, and the Board (the second action). Plaintiff alleged that the Board's decision adopting the Lothian Plan as a viable access route was arbitrary and capricious; it sought a reversal of the Board's decision, and a "finding that [its] property had been inversely condemned . . . ." The complaint included additional claims for alleged violations of plaintiff's constitutional and civil rights.

The matter was tried before a different Law Division judge. On May 4, 2007, the judge issued an oral opinion on the record as to plaintiff's prerogative writ claim. Essentially, the judge concluded that Lothian's opinion lacked any credibility in light of the engineer's admission that he had not made adequate measurements. He concluded that the Board acted in an arbitrary and capricious manner in approving the Lothian Plan as a viable access alternative. We have not been provided with the order that resulted from the hearing, however, the judge indicated that he would proceed to consider plaintiff's inverse condemnation claim.

Thereafter, the parties engaged in settlement discussions and on September 12 Oakland's counsel sent plaintiff's counsel the following letter:

As a follow-up [sic] to our telephone conversation . . . I indicated . . . that the settlement offer . . . set forth in my correspondence of August 8 . . . remains in effect. You have requested . . . whether the Borough will stipulate to a condemnation of the property.

I advised that the Borough will stipulate that a condemnation of the property has occurred and [plaintiff] may petition the [c]court for fees and expenses pursuant to N.J.S.A. 20:3-26C [sic (hereafter cited as N.J.S.A. 20:30-26(c))].

Plaintiff's counsel responded on September 17:

I have discussed your settlement offer . . . with my client which is set forth in your correspondence dated August 8, 2007 and September 12, 2007.

I am pleased to inform you that my client has accepted your offer subject of course to prompt payment of the land valuation amount of $5.1 million dollars. We are scheduled for a conference with [the judge] today . . . at which time we can discuss the ...

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