June 15, 2012
KENNETH STATTEL, WILLIAM STATTEL AND ROBERT E. STATTEL TESTAMENTARY DISCLAIMER TRUST, PLAINTIFFS-APPELLANTS,
MAYOR AND TOWNSHIP COUNCIL OF THE TOWNSHIP OF MARLBORO, NEW JERSEY AND THE WESTERN MONMOUTH UTILITIES AUTHORITY, A BODY POLITIC, DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-1906-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 12, 2011
Before Judges Yannotti, Espinosa and Kennedy.
Plaintiffs appeal from an order that dismissed their action in lieu of prerogative writs for failure to exhaust administrative remedies. We affirm.
In February 2005, the Marlboro Planning Board adopted its Comprehensive Master Plan (Master Plan), pursuant to N.J.S.A. 40:55D-89 of the New Jersey Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163. The planning board recommended that defendant, the Township of Marlboro (the "Township" or "Marlboro")*fn1 rezone certain township lots as Land Conservation Zone Districts (LC Districts), which allow for a single-family home on a minimum of five-acre lots. For lots greater than ten acres, LC Districts permit a "cluster option of 55,000 square foot lots with a minimum open space set-aside of 40%[.]" After an earlier effort to adopt an ordinance that implemented these recommendations was invalidated on procedural grounds, defendants adopted Ordinance 2006-15 (the Ordinance) in July 2006.
Plaintiffs own two parcels of land in Marlboro, Lot 53, Block 206, and Lot 18, Block 207, which consist of approximately seventy-eight acres (the Property).*fn2 Prior to the adoption of the Ordinance, the two parcels were zoned R-80, which allowed for single-family homes on a minimum of approximately two-acre plots. The Ordinance expanded the LC Districts and as a result, both of plaintiffs' parcels were included in the LC Districts.
In September 2006, plaintiffs filed an action of lieu of prerogative writs, challenging the application of the Ordinance to the parcels they own. Plaintiffs alleged that their property had been identified by defendant as "a site to be developed for the production of affordable housing" in defendant's December 2005 Third Round Housing Element and Fair Share Plan (HE/FSP) to satisfy its Mount Laurel*fn3 obligations. Plaintiffs stated that the construction of affordable housing would require "a substantially higher development density than is permitted under the LC Zone[,]" and that the inclusion of the Property in the HE/FSP was in contradistinction to its inclusion in the LC Zone. Accordingly, plaintiffs alleged that the LC Districts Zoning designation was arbitrary, capricious and unreasonable as applied to the Property. Plaintiffs sought the invalidation of the Ordinance, an injunction against defendant's adoption of any land use regulation that would restrict the Property to low density residential development, remanding the matter to defendant and requiring the adoption of land use regulations that would permit plaintiffs' "appropriate use and development." Plaintiffs also sought a declaratory judgment that the Ordinance represented a taking without just compensation.
Although it appears that plaintiffs had some plans for development of the Property, it is undisputed that they did not seek any approval from the Township's Zoning Board of Adjustment or planning board for development of the Property after the Ordinance was adopted and before instituting suit.
There followed five years of discovery and motion practice, some of which concerned failures by Marlboro to provide discovery. In July 2010, plaintiffs filed a motion for summary judgment. Defendant filed a cross-motion, in which it raised the argument for the first time that plaintiffs' complaint should be dismissed because they had failed to exhaust administrative remedies prior to instituting suit. The trial court denied plaintiffs' motion for summary judgment, a decision plaintiffs do not appeal. The court granted Marlboro's cross-motion for summary judgment and denied plaintiffs' motion for reconsideration.
In this appeal, plaintiffs argue that the trial court erred in granting summary judgment to defendant because (1) it was "a gross and shocking miscarriage of justice" to dismiss the suit for failure to exhaust administrative remedies after more than five years of litigation and (2) administrative review would have been futile. We have reviewed the record and these arguments in light of the applicable legal principles and are satisfied that they lack merit.
Plaintiffs' action in lieu of prerogative writs was governed by Rule 4:69-5, which provides:
Except where it is manifest that the interest of justice requires otherwise, actions under [R.] 4:69 shall not be maintainable as long as there is available a right of review before an administrative agency which has not been exhausted.
The requirement that administrative remedies be exhausted "is a rule of practice designed to allow administrative bodies to perform their statutory functions in an orderly manner without preliminary interference from the courts." Brunetti v. New Milford, 68 N.J. 576, 588 (1975). When, as here, it is claimed that an ordinance is "arbitrary and unreasonable in its application to the owner's land, and relief in that circumstance may be obtained from a local board of adjustment, the trial court should ordinarily decline to adjudicate an attack upon the ordinance until after the owner has exhausted his remedy to seek relief from the local board of adjustment[.]" Conlon v. Bd. of Pub. Works, Paterson, 11 N.J. 363 (1953); see also Brunetti, supra, 68 N.J. at 588 (noting "strong presumption favoring the requirement of exhaustion of remedies"); 21st Century Amusements Inc. v. D'Alessandro, 257 N.J. Super. 320, 322 (App. Div. 1992); William M. Cox & Stuart R. Koenig, New Jersey Zoning and Land Use Administration, § 35-5 at 872 (Gann 2012).
Plaintiffs argue that it would be "patent[ly] inequit[able]" to permit Marlboro to raise the issue of exhaustion of remedies at this late date. While the delay in advancing this argument is legitimately subject to criticism, plaintiffs' argument that the issue should be barred by the doctrine of laches is unavailing. "[T]he defense of 'laches involves more than mere delay, mere lapse of time. There must be delay for a length of time which, unexplained and unexcused, is unreasonable under the circumstances and has been prejudicial to the other party.'" Mancini v. Twp. of Teaneck, 179 N.J. 425, 437 (2004) (quoting Northwest Covenant Med. Ctr. v. Fishman, 167 N.J. 123, 140 (2001)) (emphasis added). Plaintiffs have not identified any resulting prejudice to them. Therefore, the doctrine of laches does not bar Marlboro from asserting that plaintiffs were required to exhaust administrative remedies before filing suit.
The "interest of justice" clause within R. 4:69-5 excuses exhaustion where: (1) "administrative review will be futile[;]"
(2) "there is a need for prompt decision in the public interest[;]" (3) "the issues do not involve administrative expertise or discretion and only a question of law is involved[;]" and (4) "irreparable harm will otherwise result from denial of immediate judicial relief." Brunetti, supra, 68 N.J. at 589. Plaintiffs contend that they should be relieved of the requirement to exhaust remedies because administrative review would be futile. We are satisfied that this exception does not apply.
Plaintiffs argue it would be "futile" for them to seek a variance because "no variance for Plaintiffs' property could be granted under [N.J.S.A.] 40:55D-70(d), as Marlboro's Master Plan is itself flawed and inconsistent." They contend that they would have to seek local review before the zoning board and that the zoning board could not grant a variance because of the alleged internal inconsistency in the Township's Master Plan.
Exhaustion of remedies is not be required if administrative review will be futile. Brunetti, supra, 68 N.J. at 589.
However, where as here, the challenger has made no effort to seek administrative action prior to filing suit, this exception is not generally available.
Whatever the parameters of the so-called doctrine of futility as an exception to the doctrine of exhaustion of administrative remedies, that exception does not come into play before an applicant for administrative permission even files the request, at least not where the agency has some discretion to grant that request. If an agency cannot provide relief or conclusively resolve the issues, then perhaps resort to the courts becomes appropriate before exhaustion of the administrative process. . . . [A] landowner must give the land-use authority an opportunity to exercise its discretion. That discretion can only be properly exercised when the proposed land use is adequately defined and the permissible uses are evaluated. [United Sav. Bank v. State, 360 N.J. Super. 520, 526 (App. Div.) (internal citations omitted), certif. denied, 177 N.J. 574 (2003).]
See also Palazzolo v. Rhode Island, 533 U.S. 606, 620, 121 S. Ct. 2448, 2459, 150 L. Ed. 2d 592, 609 (2001); OFP, L.L.C. v. State, 395 N.J. Super. 571, 582-583 (App. Div. 2007), aff'd o.b., 197 N.J. 418 (2008).
In Pheasant Bridge Corp. v. Twp. of Warren, 169 N.J. 282, 294 (2001), cert. denied, 535 U.S. 1077, 122 S. Ct. 1959, 152 L. Ed. 2d 1020 (2002), the court found "no justification for requiring plaintiff to seek variance relief" before it invalidated a zoning ordinance as applied to the plaintiff's property. However, that case is clearly distinguishable.*fn4 The plaintiff in Pheasant Bridge had spent years in developing the property pursuant to the zoning ordinance in effect at the time the property was purchased and had a subdivision application pending when the new zoning requirements were adopted. Id. at 286-87. Moreover, there was substantial evidence to show that the environmental concerns that fostered the zoning change did not apply to plaintiff's property. Id. at 288. In distinguishing Pheasant Bridge, the trial court observed that the Property here does not border upon property that has identical physical attributes but is zoned for high density development; it is encumbered with environmental issues the Township sought to address by adopting the Ordinance; and the Property is "fully conforming in the LC zoning district[.]" We agree that Pheasant Bridge is distinguishable and does not provide support for plaintiffs' argument that they were not required to seek variance relief.