May 4, 2012
HAL HOLDING, L.L.C., PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
TOWNSHIP OF MOUNT LAUREL AND MAYOR AND COUNCIL OF THE TOWNSHIP OF MOUNT LAUREL, DEFENDANTS-RESPONDENTS/ CROSS-APPELLANTS, AND GREATER RAMBLEWOOD ASSOCIATION, INTERVENOR-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-2495-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 6, 2011
Before Judges Carchman, Fisher and Baxter.
Plaintiff Hal Holding, LLC, is the owner of approximately 175 acres of land located in Mount Laurel, consisting of two nine-hole golf courses known as the "Red Course" and "White Course," Ramblewood Swim Club and Ramblewood Country Club (collectively the subject property). The subject property, along with a third nine-hole golf course known as the "Blue Course," comprises the Ramblewood Golf Course and Country Club (RGCC). The Blue Course, owned by a non-profit homeowner's association known as Ramblewood Village Club, is leased to plaintiff.
Plaintiff now appeals from an order of the Law Division concluding that three Mount Laurel Township ordinances apply to the subject property and preclude plaintiff from subdividing the property for residential use or otherwise converting the property to a use other than a golf course and country club. Defendants, the Township of Mount Laurel (the Township) and the Mayor and Council of Mount Laurel (collectively defendants), cross-appeal from the dismissal of their counterclaim, which alleged that plaintiff improperly acquired title to the Blue Course and retained a controlling stake in Ramblewood Village Club. We affirm as to both the appeal and cross-appeal.
These are the relevant facts. In February 1961, in a departure from its usual zoning practices, the Township adopted Ordinance 1961-1, which rezoned certain areas of the Township from "farming, commercial or industrial districts" to "R-1 Residence Districts." This zoning amendment permitted plaintiff's predecessor-in-interest, Goodwin Homes, Inc., "to develop a planned golf-course community for 1009 residential dwellings surrounding an 18-hole golf course and country club under a comprehensive zoning scheme."
To ensure that the development would remain a planned golf-course community, the ordinance also placed restrictions on subsequent modification of golf clubs. Section 154-15B(1) of the Township Code, which codified Ordinance 1961-1, provides that:
Whenever an area designated as a golf club is shown on an approved final plat, the tract of land for playing golf, including fairways, tees, greens, hazards and roughs but not including any adjacent area designated as a country club, shall thereafter never be subdivided and used for house building lots.
Two months after adopting Ordinance 1961-1, the Township granted preliminary plat approval to Goodwin Homes for Ramblewood-On-The-Green, a housing development that currently surrounds the subject property. Goodwin Homes, thereafter, developed Ramblewood-On-The-Green and constructed the eighteen-hole golf course and country club. During this process, Goodwin Homes applied for, and obtained, final plat approval for each of the thirteen subdivisions that constitute Ramblewood-On-The-Green. However, neither Goodwin Homes nor plaintiff applied for or obtained final plat approval for the subject property.
In 1966, Goodwin Homes presented a revised master plan for Ramblewood-On-The-Green, which proposed the creation of the Ramblewood Village Planned Unit Development (Ramblewood Village), using Goodwin Homes's remaining 250 acres located adjacent to Ramblewood-On-The-Green. This proposal included the creation of "an additional 9-holes [sic] of golf supplementing the existing 18-hole course now serving the members of the Ramblewood Country Club" - which eventually became known as the "Blue Course" - as well as shops, a business and commercial center, expanded clubhouse facilities, a community center and a variety of housing types. The revised master plan notes:
Unique among single family residential communities, RAMBLEWOOD-ON-THE-GREEN is built as a Country Club Community with an 18-hole golf course around which the residential neighborhoods are grouped. In developing the plan for RAMBLEWOOD VILLAGE, this basic assumption was expanded to include an additional 9-hole Golf Course. This formed the linking element around which all housing types were grouped.
The plan found that the additional nine-hole golf course would "greatly increase the playing capacity" of the golf course and would "give the Club's golf members opportunity for more varied and therefore more interesting play." The plan further provided that Ramblewood Country Club would "grant preferential membership rights to present and future families living in single homes in the community."
In 1967, the Township approved Goodwin Homes's application to create Ramblewood Village. This approval provided, among other things, that, in the event Goodwin Homes or its successors discontinued use of the Blue Course, "said land shall not be used for any other purpose other than open space without first offering to dedicate the same to the Township[.]" No similar provision exists in the approval for the subject property. The approval also contained the following condition:
Goodwin Homes, Inc., shall form . . . a nonprofit corporation called "Ramblewood Village Club[.]" . . . Immediately upon the formation of the Ramblewood Village Club, a Board of Directors shall be established and during the first five (5) years of the existence of Ramblewood Village Club, control of the Board of Directors shall remain in Goodwin Homes, Inc. At the termination of five (5) years . . . appropriate elections shall be held for the purpose of appointing new members to the Board of Directors of the Ramblewood Village Club[.]
Thereafter, Goodwin Homes developed Ramblewood Village and established the Ramblewood Village Club.
In December 1970, Richard Goodwin, as President of both Ramblewood Village Club and Ramblewood Country Club, executed a ninety-nine-year lease, which leased the Blue Course to Ramblewood Country Club. The lease contains no provision for the payment of rent.
In March 1974, the Township issued an amended tentative approval of the remaining sections of Ramblewood Village, which, among other things, required that "[t]he lands to be conveyed to the Ramblewood Village Club will be lien free at the time of the conveyance, and will remain so during the term of this agreement." This approval also required that elections for the directorship of Ramblewood Village Club be held no later than December 31, 1975.
In December 1991, Goodwin, again as President for both Ramblewood Village Club and Ramblewood Country Club, executed an agreement extending the ninety-nine-year lease for an additional fifty years.
On December 1, 2003, the Township adopted Ordinance 2003-30, which, as codified by Township Code Section 154-15B(2), provides that:
[w]henever an area designated as a country club is shown on an approved final plat, the following shall apply to the country club area:
(a) . . . . Country club areas shall never be subdivided and used for house building lots.
In June 2004, Goodwin executed a quitclaim deed conveying the lands comprising the RGCC - including the Blue Course - to plaintiff. Plaintiff, a company controlled by Richard Goodwin's son John Goodwin, reportedly procured a $2.5 million mortgage and $500,000 line of credit to pay for the conveyance.
On July 17, 2006, the Township adopted Ordinance 2006-10, which rezoned plaintiff's subject property as "Outdoor Recreation Conservation." The ordinance further provided that:
Principal permitted uses in the Outdoor Recreation Conservation zone are:
a. Golf course;
b. Golf driving range;
c. Clubhouse including restaurant;
d. Swimming pools;
e. Locker rooms for pools, including showers and bathroom facilities;
f. Cooking and eating facilities associated with the swim club;
g. Golf shop and golf cart building.
According to the ordinance, the Township adopted it in order to implement the following provision of its April 2006 Master Plan Reexamination Report:
[O]pen space and recreation is not as prevalent on the far west side of the
[T]ownship compared to the east side of the
[T]ownship. This is so even though there are large population concentrations on the west side of the [T]ownship. A major open space feature on the west side is the Ramblewood golf course. This golf course provides needed open space from the density of nearby developments. The golf course has been an asset to the community for an estimated fifty years, and is a positive resource contributing to the quality of life throughout the adjacent residential neighborhoods. In order to preserve this amenity the facility should be rezoned to only permit a commercial golf course or any similar open space commercial activity or land use.
The ordinance also cited environmental purposes such as providing for "relief from the stress of nearby urban development," "retention of flora and fauna habitat," "forest preservation," and "porous open ground for water absorption in an area that is developed close to New Jersey Freshwater Wetlands and too close to flood zones." Finally, the ordinance expressed an intent to correct a perceived discrepancy between the subject property's zoning and the manner in which the Township intended the subject property to be zoned. As the ordinance noted:
[T]he present zoning map continues to designate the lands upon which the Country Club is situated as R-1 Residential which is inconsistent with over 36 years of Master Plan designations as either "Commercial," "Golf," "Golf Course," and "public[/]semi[-]public open space" and is further inconsistent with the provisions of the various enactments of the Township governing body beginning in 1964 with the passage of Sections 154-15B(1) and (2) through 2003 with the adoption of the amendment to the Township Code, Section 154-15B(2)[.]
In 2006, plaintiff filed its complaint against defendants seeking to invalidate Ordinance 2006-10. Defendants answered and filed counterclaims. In their third counterclaim, defendants alleged that plaintiff "unlawfully acquired by [d]eed, title to the lands comprising the 'blue course' at Ramblewood Country Club[,]" and that "the principals and/or members of [p]laintiff's limited liability corporation may still retain a controlling stake in the Ramblewood Village Homeowner's Association in violation of the requirements of the Ramblewood Village PUD approvals and the by-laws of the Ramblewood Village Homeowner's Association, which . . . required a substantial divestiture of voting interest in the Homeowner's Association." Defendants sought relief that plaintiff "either reconvey the lands of the 'blue course' to the Ramblewood Village Homeowner's Association or offer to dedicate these lands to the Township" and be ordered to "divest all or a portion of its ownership of shares and voting rights in the Ramblewood Village Homeowner's Association[.]" The Greater Ramblewood Association intervened in the litigation as an interested party.
After the commencement of this action, plaintiff discharged the $3 million lien on the RGCC in June 2007, and issued a corrective deed reconveying the Blue Course to Ramblewood Village Club in August 2009. John Goodwin, Richard Goodwin and Elizabeth Goodwin remain the officers of record for Ramblewood Village Club.*fn1
The parties cross-moved for summary judgment. Judge Michael J. Hogan granted defendants' and intervenor's motions and dismissed the complaint. On plaintiff's motion, he later dismissed the counterclaims as well. Plaintiff appealed, and defendant cross-appealed.
Plaintiff first argues that the motion court erred in holding that Ordinances 1961-1 and 2003-30 apply to the subject property. Specifically, plaintiff asserts that these ordinances do not apply to the subject property because, by their clear and unambiguous terms, the ordinances apply only to golf and country clubs "shown on an approved final plat." As a result, plaintiff maintains the court should look only to those terms --- and not to legislative intent --- to interpret the ordinances, and in doing so, a court would properly conclude that the ordinances do not apply to the subject property because no final plat for the subject property was ever filed. Plaintiff also asserts that the court erred in finding that the conduct of plaintiff and Goodwin Homes "triggered" the ordinances' restrictions by "represent[ing] an implicit, if not explicit acceptance of those restrictions," because: a) it was improper for the court to examine the subjective intentions of the parties; b) the court's conclusions regarding those subjective intentions are belied by the factual record; and c) for such subjective intent to be operative, it must be in writing.
Defendants counter by claiming that the court properly found that the ordinances applied to plaintiff as a result of zoning estoppel. Intervenor also contends that the court's decision should be upheld based on the doctrines of equitable estoppel, substantial compliance, laches, and unclean hands. Finally, intervenor argues that, under the rules of statutory construction, the court properly considered the legislative intent behind the ordinances, which supports a finding that the ordinances apply to plaintiff.
In support of their arguments, defendants and intervenor contend that Ramblewood Village, Ramblewood-On-The-Green, and the RGCC constitute a joint "planned golf-course community," as shown by: statements made in Goodwin's online biography; quotes of Goodwin from a July 11, 1968 news article; sales and marketing brochures for Ramblewood-On-The-Green and Ramblewood Country Club; and a drawing depicting the master plan for Ramblewood Village dated December 1967. In his deposition, Goodwin denied this contention and denied knowledge of or the accuracy of the various representations contained in promotional materials provided by entities under his control. Plaintiff contends, based on Goodwin's testimony, that Goodwin Homes intentionally did not obtain final plat approval for the subject property in order to plan for alternative residential use in the event the golf course should "fall into disuse or otherwise not be viable."
We first address the issue of statutory construction. The rules of statutory construction govern the interpretation of a municipal ordinance. Twp. of Pennsauken v. Schad, 160 N.J. 156, 170 (1999). Under those principles, the court's task "is to determine and effectuate the Legislature's intent." Int'l Schs. Servs., Inc. v. W. Windsor Twp., 207 N.J. 3, 17 (2011) (quoting In re Petition for Referendum on Trenton Ordinance 09-02, 201 N.J. 349, 358 (2010)).
In construing an ordinance, a court should first consider its plain language. Turner v. First Union Nat'l Bank, 162 N.J. 75, 84 (1999). See also Schad, supra, 160 N.J. at 170. When the provisions are clear and unambiguous, they should be given their literal significance, "unless it is clear from the text and purpose of the statute that such meaning was not intended." Turner, supra, 162 N.J. at 84 (citing State v. Butler, 89 N.J. 220, 226 (1982)).
"'[W]here a literal interpretation would create a manifestly absurd result, contrary to public policy, the spirit of the law should control.'" Perrelli v. Pastorelle, 206 N.J. 193, 200 (2011) (citations omitted). "'[W]hen all is said and done, the matter of statutory construction . . . will not justly turn on literalisms, technisms, or the so-called formal rules of interpretation; it will justly turn on the breadth of the objectives of the legislation and the commonsense of the situation.'" Ibid. (citation omitted).
Above all, we "must seek to effectuate the 'fundamental purpose for which the legislation was enacted.'" Schad, supra, 160 N.J. at 170 (quoting N.J. Builders, Owners and Managers Ass'n v. Blair, 60 N.J. 330, 338 (1972)). See also Turner, supra, 162 N.J. at 84 ("[t]he court's ultimate goal in construing a statute is to ensure that the Legislature's plan is effectuated"). For example, "where a statute or ordinance does not expressly address a specific situation, the court will interpret it consonant with the probable intent of the draftsman had he anticipated the matter at hand." Schad, supra, 160 N.J. at 170 (internal quotation marks and citation omitted). "Zoning ordinances generally are liberally construed in favor of the municipality." Id. at 171 (citing Place v. Bd. of Adj. of Saddle River, 42 N.J. 324, 328 (1964)).
Issues of statutory construction are questions of law and are reviewed de novo on appeal. In re Liquidation of Integrity Ins. Co., 193 N.J. 86, 94 (2007).
Here, the motion court held that "Township Code section 154-15B, which is the sum of Ordinances 1961-1 and 2003-30, . . . appl[ies] to the subject property[.]" In doing so, the court noted:
Plaintiff now seeks to rely on a latent ambiguity in the Mount Laurel Township Code section 154-15B that would, by its interpretation, render the regulation moot and inapplicable to any parcel within the Township. However, the relevant history of the parties clearly indicates that the regulation has been intended and is intended to apply to the subject property. Over the course of the preceding decades, [p]laintiff has held itself out to the community-at-large as a golf course and country club while maintaining its facilities and servicing members of the general public, though a final plat was never applied for by [p]laintiff (or its predecessor-in-interest) or issued by the Township. Plaintiff also operated its clubhouse in the same manner, often hosting guests on its premises, though a building permit was never formally applied for by [p]laintiff or issued by the Township. Thus, [p]laintiff cannot now rely upon its own procedural omissions, which would have the effect of unraveling decades of business operation without regard to the surrounding community and those who have depended on its presence.
It is critical to note that
[p]laintiff's predecessor-in-interest . . . played an active and integral role in rezoning the subject property to an R-1 zone in furtherance of its business goals. Around the same time, and before any development began, the Township adopted Ordinance 1961-1, mandating that golf course areas could never be subdivided for residential purposes. Without applying for or obtaining final plat approval,
[p]laintiff's predecessor-in-interest initiated development of the golf course area subject to that limitation. The
[c]court now finds that this conduct "triggered" the restrictions of Ordinance 1961-1 and represented an implicit, if not explicit, acceptance of those restrictions[.]
We subscribe to the judge's view. As plaintiff repeatedly notes, Ordinances 1961-1 and 2003-30 refer to golf and country clubs "shown on an approved final plat," and the subject property is not shown on an approved final plat. However, the Mount Laurel Township Code, when taken as a whole and in context, assumes that one who obtains preliminary approval of a preliminary plat and develops land based upon that approval will file a final plat. Township Code section 138-3 contains the following definitions:
PLAT, FINAL -- The final map of all or a portion of the subdivision which is presented to the Planning Board for final approval in accordance with these regulations and which, if approved, shall be filed with the proper county recording officer.
PLAT, PRELIMINARY -- The map indicating the proposed layout of the subdivision which is submitted to the Secretary for Planning Board consideration and tentative approval[.]
Township Code section 138-12 further provides that "[t]he final plat shall be a refinement of the preliminary plat and shall meet all of the requirements thereof."
Here, plaintiff's predecessor-in-interest Goodwin Homes sought and obtained preliminary plat approval for the subject property. Thereafter, Goodwin Homes developed the property as a golf course and country club, which it has remained for nearly fifty years. To allow a developer to evade its responsibility to obtain final plat approval, operate a business for decades in the absence of that approval, and then claim that its failure to obtain final plat approval insulates its property from the Township's otherwise applicable ordinances, would create an absurd result and be contrary to the intent of the ordinance. See Schad, supra, 160 N.J. at 170. As noted by intervenor, "[t]he drafters of Ordinances 1961-1 and 2003-30 clearly never contemplated that [plaintiff's] predecessor-in-title could avoid obtaining final plat approval for the golf courses and country club." The spirit, rather than the letter, of Ordinances 1961-1 and 2003-30, must control. See Perrelli, supra, 206 N.J. at 200.
As noted by the motion court, the history surrounding these ordinances demonstrates that the Township intended them to apply to the subject property. The Township rezoned the subject property due to the active lobbying efforts of Goodwin Homes, with the belief that the property would be used as a golf and country club to serve the community. Rather than make the rezoning unconditional, the Township enacted Ordinance 1961-1 to restrict the ways in which the soon-to-be-constructed golf course could be later modified. Ordinance 2003-30 placed similar restrictions on the accompanying country club. Based on this history, the Township intended the ordinances to apply to the subject property once development was completed. The golf course and country club were, in fact, completed and have been in active use for decades. To adopt plaintiff's view would unravel and negate the reality of what "has been on the ground," serving the financial interests of plaintiff's predecessor for decades. We cannot countenance such a result. The ordinances apply to the subject property, regardless of whether plaintiff or Goodwin Homes applied for or received final plat approval.
Plaintiff discusses Richard Goodwin's deposition testimony, which, according to plaintiff, suggests that he and his company never intended to operate the subject property as a golf course and country club in perpetuity. Even assuming for the purposes of argument the truthfulness of such testimony, Goodwin's intentions are irrelevant. What are relevant, and what the motion judge credited, are the intentions of the ordinance drafters, as evidenced by the history surrounding the ordinances, including Goodwin's relevant actions. Regardless of Goodwin's now-described subjective intentions, his actions and those of Goodwin Homes induced the Township to rezone the subject property -- and concomitantly to enact Ordinance 1961-1 and likewise "triggered" the ordinance's effect once development was complete.
Plaintiff also notes that while the approvals for Ramblewood Village contain "open space" conditions, the approvals for the subject property did not. However, this difference does not negate the applicability of Ordinances 1961-1 or 2003-30 to the subject property.
Finally, plaintiff asserts that "[u]nder New Jersey law, legal and equitable restrictions in perpetuity on real property cannot be imposed orally or by conduct." Plaintiff cites to authority regarding restrictive covenants to support this claim. See, e.g., Perelman v. Casiello, 392 N.J. Super. 412, 418 (App. Div. 2007); Annunziata v. Millar, 241 N.J. Super. 275, 289 (App. Div. 1990); Hammett v. Rosensohn, 46 N.J. Super. 527, 535 (App. Div. 1957). However, this case does not involve restrictive covenants; it involves municipal ordinances. Plaintiff's cited authority is irrelevant.
Because we uphold the motion court's ruling based upon the principles of statutory construction, we need not address defendants' and intervenor's arguments regarding zoning estoppel, equitable estoppel, substantial compliance, laches, or unclean hands. However, for completeness, we briefly note that these arguments are meritless.
Zoning estoppel does not apply because there are no allegations or evidence that either Goodwin Homes or plaintiff committed fraud when lobbying for rezoning of the subject property. See Trinity Cemetery Ass'n, v. Twp. of Wall, 170 N.J. 39, 42-43 (2001). Equitable estoppel is likewise inapposite because plaintiff did not directly induce the Township to enact Ordinances 1961-1 or 2003-30 or suggest how the ordinances should be worded. See Knorr v. Smeal, 178 N.J. 169, 178 (2003).
Plaintiff's "substantial compliance" with the procedures for obtaining final plat approval cannot be used against plaintiff because the doctrine of substantial compliance protects, rather than makes liable, those who comply with a statute's purpose despite technical defects in execution. See Cnty. of Hudson v. State, 208 N.J. 1, 21-22 (2011); Galik v. Clara Maass Med. Ctr., 167 N.J. 341, 351-52 (2001). Finally, laches and unclean hands do not apply because plaintiff neither inexcusably delayed in asserting its known rights, United States v. Scurry, 193 N.J. 492, 503 (2008), nor committed wrongdoing with respect to the subject matter of this lawsuit, Borough of Princeton v. Bd. of Chosen Freeholders, 169 N.J. 135, 158 (2001).
Plaintiff next argues that the motion court erred in determining that Ordinance 2006-10 -- which rezoned the subject property to "Outdoor Recreation Conservation," thereby prohibiting all uses other than golf course and related uses -- is valid. Specifically, plaintiff asserts that the ordinance lacks a valid purpose, constitutes inverse spot zoning, violates plaintiff's constitutional right to due process and equal protection and constitutes a taking. Plaintiff further claims that summary judgment was improvidently granted because plaintiff was not permitted to conduct discovery regarding the Township's motives for adopting the ordinance. Defendants and intervenor deny these claims. Given the strong presumption of validity enjoyed by zoning ordinances, the motion court did not err in declaring the ordinance valid.
Zoning ordinances enjoy a presumption of validity. Rumson Estates, Inc. v. Mayor and Council of Fair Haven, 177 N.J. 338, 350 (2003). A party attacking the ordinance bears the burden of overcoming the presumption. Ibid.
A plaintiff may overcome this strong presumption of validity by showing that an ordinance, "'in whole or in application to any particular property' is 'clearly arbitrary, capricious or unreasonable, or plainly contrary to fundamental principles of zoning or the [zoning] statute.'" Pheasant Bridge Corp. v. Twp. of Warren, 169 N.J. 282, 289-90 (2001) (citations omitted), cert. denied, 535 U.S. 1077, 122 S. Ct. 1959, 152 L. Ed. 2d 1020 (2002). In evaluating this issue, we do not pass on the wisdom of the ordinance, but rather "engage in a review of the relationship between the means and ends of the ordinance." Id. at 290 (citations omitted). As the Supreme Court has noted: the means selected must have real and substantial relation to the object sought to be attained, and the regulation or proscription must be reasonably calculated to meet the evil and not exceed the public need or substantially affect uses which do not partake of the offensive character of those which cause the problem sought to be ameliorated. [Ibid. (quoting Kirsch Holding Co. v. Borough of Manasquan, 59 N.J. 241, 251 (1971)).]
Generally, a zoning ordinance must satisfy the following objective criteria:
First, the ordinance must advance one of the purposes of the Municipal Land Use Law[,] [N.J.S.A. 40:55D-1 to -163 (MLUL),] as set forth in N.J.S.A. 40:55D-2. Second, the ordinance must be "substantially consistent with the land use plan element and the housing plan element of the master plan or designed to effectuate such plan elements," unless the requirements of that statute are otherwise satisfied. Third, the ordinance must comport with constitutional constraints on the zoning power, including those pertaining to due process, equal protection, and the prohibition against confiscation.
Fourth, the ordinance must be adopted in accordance with statutory and municipal procedural requirements.[*fn2 ]
[Riggs v. Twp. of Long Beach, 109 N.J. 601, 611-12 (1988) (internal citations omitted).]
"If an ordinance has both a valid and an invalid purpose, courts should not guess which purpose the governing body had in mind." Id. at 613 (citing United States v. O'Brien, 391 U.S. 367, 383-84, 88 S. Ct. 1673, 1682-83, 20 L. Ed. 2d 672, 684 (1968)). The Court has noted that an ordinance's purpose must be distinguished from the motives of those who enacted it:
Although the distinction between motive and purpose can be fuzzy, "motive" ordinarily addresses the subjective considerations that move a legislator, and "purpose" speaks to the goals to be achieved. The determination of "purpose" depends on objective factors, such as the terms of the ordinance and its operation and effect, as well as the context in which the ordinance was adopted. [Ibid. (internal citations omitted).]
The motion court upheld application of Ordinance 2006-10 to the subject property. In doing so, the court explained:
Because [p]laintiff challenges Ordinance 2006-10 as a governmental taking, it must carry the burden of establishing that all economically viable use of the subject property has been destroyed by its application. Contrary to [p]laintiff's assertions, the prohibition of residential subdivision of the subject area is, by itself, insufficient under that test; the [c]court recognizes that there is a substantial distinction between proscribing residential development upon a parcel and proscribing any development except for a use that is currently in place. However, because Ordinances 1961-1 and 2003-30 already had the valid cumulative effect of enacting such a prohibition, Ordinance 2006-10 does not restrict the uses of the subject property beyond that which have been in place since before any development took place upon the subject property. Plaintiff has failed to meet [its] burden of demonstrating how Ordinance 2006-10 unconstitutionally modifies the existing status of the subject property, particularly since [p]laintiff has expressed a singular intention of subdividing the subject property for residential development. As such, Mount Laurel Township Code section 154-15B, which is the sum of Ordinances 1961-1 and 2003-30, is found to apply to the subject property and to be constitutionally valid. [(Footnotes omitted).]
The court also noted that "[e]ven if Ordinance 2006-10 were to be struck down as unconstitutional, the prohibition against subdividing the subject property for residential purposes would not be altered."
Plaintiff claims that Ordinance 2006-10 has no valid purpose. However, as defendants and intervenor note, the MLUL provides that the encouragement, promotion and preservation of recreational and open space are valid purposes for an ordinance. See N.J.S.A. 40:55D-2. See also N.J. Shore Builders Ass'n v. Twp. of Jackson, 401 N.J. Super. 152, 167 (App. Div. 2008), aff'd, 199 N.J. 449 (2009). Ordinance 2006-10 notes that it is guided by such purposes. Although, as plaintiff states, the ordinance goes somewhat beyond these purposes by zoning the subject property for only one use when a variety of recreational uses could serve that purpose, we will not pass on the wisdom of the ordinance. See Pheasant Bridge, supra, 169 N.J. at 290.
Defendants focus on a New York case, Bonnie Briar Syndicate, Inc. v. Town of Mamaroneck, 721 N.E.2d 971 (N.Y. 1999), cert. denied, 529 U.S. 1094, 120 S. Ct. 1735, 146 L. Ed. 2d 654 (2000). In Bonnie Briar, the New York Court of Appeals held valid a rezoning that changed plaintiff's private golf course property from residential to recreational use. The court opined:
That defendant Board had before it other less restrictive options to choose from in arriving at its ultimate conclusion with respect to zoning is irrelevant. So long as the method and solution the Board eventually chose substantially advances the public interest, it is not this Court's place to substitute its own judgment for that of the Zoning Board. [Id. at 976.]
Here, as in Bonnie Briar, the Township had the right to draft a less restrictive ordinance. However, we will not substitute our judgment for that of the Township, where the Township's decision is also reasonable.
Plaintiff maintains that the Township has no right to condemn private property or require a land "set aside" for open space or recreational use without payment to the owner of the fair market value of the property, citing Mount Laurel Township v. MiPro Homes, LLC, 379 N.J. Super. 358 (App. Div. 2005), aff'd, 188 N.J. 531 (2006), cert. denied, 552 U.S. 940, 128 S. Ct. 46, 169 L. Ed. 2d 242 (2007), and New Jersey Shore Builders, supra, 401 N.J. Super. 152. However, the Township here did not condemn the subject property; plaintiff still owns the property and is free to use it or sell it, so long as plaintiff does so in accordance with applicable law.
Plaintiff also claims that the ordinance constitutes inverse spot zoning. Inverse spot zoning occurs when a land-use decision "'arbitrarily singles out a particular parcel for different, less favorable treatment than the neighboring ones[.]'" Riya Finnegan, LLC v. Twp. Council of S. Brunswick, 197 N.J. 184, 197 (2008) (quoting Penn Cent. Transp. Co. v. N.Y. City, 438 U.S. 104, 132, 98 S. Ct. 2646, 2663, 57 L. Ed. 2d 631, 633 (1978)). The emphasis of the court's inquiry "is on the arbitrary nature of the decision rather than simply upon whether a particular parcel has received beneficial or detrimental treatment." Ibid.
All parties concede that Ordinance 2006-10 affects, and was intended to affect, only one property: the subject property.*fn3
While the property surrounding the subject property remains in an R-1 Residential Zone and may be used for residential housing, the ordinance rezoned the subject property "Outdoor Recreation Conservation," and as a result, the subject property may not be converted to any use other than a golf course and related uses. Certainly, this change resulted in less favorable treatment of the subject property, especially given that plaintiff has expressed a desire to subdivide the property and construct residential housing.
However, these facts alone do not establish inverse spot zoning. The rezoning must also constitute arbitrary treatment. Here, given that a purpose of the ordinance was to "promote the continuation of open space and natural features adjacent to fully developed residential areas," and the subject property consisted of open space (a golf course) adjacent to fully developed residential areas (Ramblewood-On-The-Green and Ramblewood Village), the disparate treatment here is not arbitrary. As defendants assert, the subject property is not similarly situated to any other property in Mount Laurel. It is the only fully developed golf-course and country club in Mount Laurel . . . . [and] [t]here are no undeveloped tracts remaining in Mount Laurel of such a size that would be suitable for development of a conventionally-sized 18-hole golf course. [(Footnote omitted).]
Also, as intervenor observed, Ordinance 2006-10 is grounded in the findings of the Township's April 2006 Master Plan Reexamination Report, which the Riya Finnegan Court found to be a valid reason for such a zoning change. See id. at 197-98.
Plaintiff also argues that Ordinance 2006-10 violated his constitutional rights to due process and equal protection, and is an unconstitutional taking without just compensation. Specifically, plaintiff claims that the ordinance did so by depriving plaintiff of all substantial or beneficial use and value of his property, lacking a valid public purpose, being arbitrary and capricious, and constituting an improper use set aside. We have previously commented on these issues and add some additional considerations.
Under the United States and New Jersey Constitutions, the Government may not take private property for public use without just compensation. U.S. Const. amend. V; N.J. Const.
art. I, ¶ 20. With regard to whether a zoning change constitutes a taking, "takings analysis makes two fundamental demands of any zoning scheme: it must substantially advance legitimate state interests, and it cannot deny an owner all economically viable use of the land." Gardner v. N.J. Pinelands Comm'n, 125 N.J. 193, 205 (1991) (citing Agins v. Tiburon, 447 U.S. 255, 260, 100 S. Ct. 2138, 2141, 65 L. Ed. 2d 106, 112 (1980)). The landowner bears the burden of establishing that a regulation has destroyed all economically viable use of the property. Moroney v. Mayor and Council of Old Tappan, 268 N.J. Super. 458, 463 (App. Div. 1993) (citation omitted), certif. denied, 136 N.J. 295 (1994).
Here, plaintiff asserts, based on allegations in its pleadings, that "the golf course is not adequately supported by the community and is no longer financially viable." These unsupported allegations fail to meet plaintiff's burden of establishing that Ordinance 2006-10 "destroyed all economically viable use of the property," see ibid., especially considering that diminution of land value, impairment of marketability of land, and reduction of income or profits, when taken alone, do not constitute a taking. Gardner, supra, 125 N.J. at 210. Plaintiff may continue to use its land as a golf course and country club, which is certainly a practical use.
Plaintiff next contends that the motion court improvidently granted summary judgment because plaintiff was in the process of obtaining discovery regarding whether there were improper motives behind passage of Ordinance 2006-10, specifically to reduce the cost of acquisition of the subject property by the Township. However, the presence of improper motives is irrelevant as long as the ordinance has at least one proper purpose. See Riggs, supra, 109 N.J. at 613. As we have concluded, the ordinance does demonstrate proper purposes. Discovery regarding any other motivations behind the ordinance was unnecessary.
We conclude that plaintiff has failed to demonstrate any error and affirm the order of May 4, 2009 granting partial summary judgment to defendants and intervenor and denying partial summary judgment to plaintiff.
We now address the cross-appeal. Defendants argue that the motion court erroneously dismissed count three of its first amended counterclaim. Specifically, defendants allege that the actions of plaintiff and its principals represent improper "self-dealing," and as a result, they seek the opportunity to conduct additional discovery as well as such equitable relief necessary to enforce the conditions of the amended Ramblewood Village approval, including restoration of the Ramblewood Village Club and the immediate election of new trustees for the homeowner's association. Plaintiff asserts that dismissal was proper because plaintiff does not own the land in question, i.e. the Blue Course, and because the Township has no standing to enforce issues regarding the homeowner's association.
Defendants retort that, due to abuse of plaintiff's corporate form, they should be able to pursue their claim under the alter ego doctrine, as well as be permitted to amend its counterclaim to conform to the evidence and name additional parties as necessary. They also maintain that they do have standing because the conditions they seek to enforce are part of the original and amended Ramblewood Village approvals.
Our review of a court's decision to grant a motion to dismiss pursuant to Rule 4:6-2(e) is plenary. Rezem Family Assocs. v. Borough of Millstone, 423 N.J. Super. 103, 114 (App. Div.), certif. denied, 208 N.J. 368 (2011). We owe no deference to the court's conclusions. Ibid.
Under Rule 4:6-2(e), a court may dismiss a counterclaim for "failure to state a claim upon which relief can be granted[.]" The court should grant such a motion "'in only the rarest of instances.'" NCP Litig. Trust v. KPMG LLP, 187 N.J. 353, 365 (2006) (quoting Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 772 (1989)). "[T]he court should assume that the non[-]movant's allegations are true and give that party the benefit of all reasonable inferences." Ibid.
In dismissing defendants' counterclaim, the motion court said:
Plaintiff has persuasively demonstrated that it does not, in fact, hold title to the "blue course." Both the court and the Township have been provided with a corrective deed which shows the Ramblewood Village Homeowner's Association as the record title holder to the blue course. The Township does not dispute the validity of this corrective deed. The Township, therefore, does not appear to have stated a valid claim concerning the ownership of the blue course. Likewise, the $3 million dollar [sic] mortgage lien has been removed. Thus, it is unclear what specific ongoing harm . . . is in need of remedy. For these reasons, this court believes that the [t]hird [c]ounterclaim should be dismissed without prejudice as moot.
The motion judge was correct. Plaintiff does not own the Blue Course, and the $3 million lien has been removed, making these issues moot. Although the reinstatement of Ramblewood Village Club and election of new trustees remain viable issues, defendant has failed to demonstrate any basis for pursuing these issues against plaintiff. It is true that the alter ego and veil piercing doctrines exist "to prevent an independent corporation from being used to defeat the ends of justice, to perpetrate fraud, to accomplish a crime, or otherwise to evade the law." Shotmeyer v. N.J. Realty Title Ins. Co., 195 N.J. 72, 86 (2008) (citation omitted). However, defendants have failed to show any basis for concluding that plaintiff was used to perpetrate misfeasance or fraud regarding the issues relevant to Ramblewood Village Club. Plaintiff did not exist until decades after elections allegedly should have been held.
The judgments are affirmed, and the appeal and cross-appeal are dismissed.