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Paul Johnston, Edward Johnston, and Susan Johnston v. City of Cape May

July 19, 2012

PAUL JOHNSTON, EDWARD JOHNSTON, AND SUSAN JOHNSTON, PLAINTIFFS-RESPONDENTS,
v.
CITY OF CAPE MAY, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Cape May County, Docket No. L-407-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: April 18, 2012

Before Judges Axelrad, Sapp-Peterson and Ostrer.

Defendant, the City of Cape May (the City), appeals from an April 6, 2011 order of the Law Division upholding a 1997 agreement between the City and plaintiff property owners removing a deed restriction prohibiting building on the lot and a 2009 Planning Board resolution granting site plan approval for improvements to the restaurant on the property. For the most part, the City challenges many of the municipal actions as ultra vires and either void ab initio or unenforceable. We affirm.

I.

Plaintiffs Paul Johnston, Edward Johnston, and Susan Johnston own Block 1012, Lots 13 and l4 in Cape May, on which they operate the Cove Restaurant. The main building of the restaurant, which seats approximately forty people, is located on Lot 13, while a roofed and enclosed deck seating approximately fifty-six people is located on Lot 14. Lot l4 is a street bed on Third Avenue, vacated by a vacation ordinance, infra.

Plaintiffs sought to rebuild the enclosed deck, and on November 13, 2008, they received a construction permit from the City to "Repair/replace porch dining room floor." However, after work began, City Zoning Officer Mary L. Rothwell sent them a notice on January 16, 2009, advising that the zoning permit was denied, in part, for failing to comply with the conditions imposed by the Planning Board in l997, and requiring them to apply for site plan approval. Two weeks later, the City issued a Stop Construction Order.

Plaintiffs submitted a site plan application to the Planning Board and applied for a Coastal Area Facility Review Act (CAFRA) permit, N.J.S.A. 13:19-1 to -21, from the Department of Environmental Protection. They received CAFRA approval on February 6, 2009. The Planning Board granted site plan approval on April 14, 2009. Pending adoption of a Planning Board resolution, the construction official permitted plaintiffs to proceed with their deck reconstruction.

At a meeting of the City's governing body (Council) on May 5, 2009, it adopted Resolution No. 101-05-2009 following a closed session. Council took the position that plaintiffs did not have the legal authority to continue to maintain a building in the vacated street bed. In the resolution, Council opposed Planning Board approvals for the construction of any improvements in the vacated portion of Third Avenue, reconfirmed the City's easement rights and deed restrictions set forth in the vacation ordinance and deeds of conveyance, and prohibited the construction official from issuing any permits for construction of improvements in the vacated portion of Third Avenue.

Plaintiffs promptly filed a complaint in lieu of prerogative writs and order to show cause against the City,*fn1

seeking to restrain the City from obstructing the Planning Board from memorializing its site plan approval and to direct the issuance of a building permit. Among other issues, plaintiffs asserted that Council's closed session constituted a violation of the Open Public Meetings Act, N.J.S.A. 10:4-6 to -21.

On May 19, 2009, Council adopted a superseding Resolution No. 112-05-2009. The new resolution essentially repeated the prior determination, with the additional request that the Planning Board rehear plaintiffs' application for site plan approval.

Before an answer was filed, plaintiffs filed an amended complaint. The court transferred the matter from the Chancery Division to the Law Division. Following a hearing on the order to show cause, Judge Steven Perskie entered an order on June 26, 2009, requiring the City to promptly re-issue plaintiffs a permit to reconstruct the dining porch, at their own risk, in accordance with the Planning Board's April 2009 site plan approval. The court also ordered the Planning Board to rehear the application for site plan approval.

The City filed an answer and counterclaim seeking: (1) to enjoin or order the removal of construction of the proposed addition or any other permanent structure in the street bed other than the existing deck, and (2) to declare the City's 1997 resolution and agreement removing the deed restriction that prevented building on Lot l4 ultra vires and void as modifying the easement rights and restrictions contained in the vacation ordinance. Plaintiffs filed an answer to the counterclaim.

The Planning Board reheard plaintiffs' application in November 2009 and granted site plan approval. It adopted a memorializing resolution on December 9, 2009, Resolution No. 12-8-2009:1.

Following oral argument on cross-motions for summary judgment, Judge Perskie entered orders on January 28, 2010 denying both motions and granting the City leave to file an amended answer and counterclaim. The City filed an amended answer and counterclaim seeking orders: (1) declaring the City's l997 resolution ultra vires and void to the extent it modified the easement rights and restrictions contained in the vacation ordinance; (2) declaring the proposed addition in violation of the agreement approved by the resolution; (3) restraining the construction of the proposed addition; (4) compelling the removal of the addition or any other structure in the vacated street bed; and (5) declaring the City owns title to the property, ejecting plaintiffs, and awarding it immediate possession and damages.

The parties waived a plenary hearing and consented to resolution by briefs and oral argument, which was conducted by Judge Valerie Armstrong. On April 6, 2011, Judge Armstrong issued a lengthy written opinion and final judgment. The judge:

(1) found the 1997 agreement between the City and plaintiffs to be valid and enforceable and the 2009 Planning Board approval not to violate the 1997 agreement; (2) denied the City's request to eject plaintiffs from their property; (3) did not require plaintiffs to vacate or remove the dining porch improvements on Lot 14 and permitted them to complete the improvements in compliance with the 2009 site approval; and (4) required the City to execute the quitclaim deed required by the 1997 agreement, including an easement for the City to access Lot 14 to repair and maintain the stone jetty and for beach replenishment purposes. Judge Armstrong also dismissed with prejudice the City's answer and counterclaim and amended answer and counterclaim. This appeal ensued.

II.

The City acquired Lot 13 and the appurtenant beach in 1951 for $25. On February 2, 1953, the City passed Resolution No. 24-2-53, which approved the public sale of Lot 13 for a minimum price of $50. The resolution stated that the land was "not needed for public use" and the property was "authorized and directed to be sold in the manner and subject to the terms and conditions prescribed herein." The resolution also contained as a "special term[] and condition[]" of the sale a "No building clause."

The City adopted Resolution No. 31-3-53 on March 3, 1953, authorizing the public sale of the property (Lot 13 but not the appurtenant beach) to the only bidders, Stanley and Margaret Schellenger, for $50. At that time, Stanley Schellenger was the City Clerk. The deed did not include a "no building clause."*fn2

The Schellengers sold the property by deed dated September 11, 1953 to Thomas and Louise Monte for $880. On July 6, 1964, the Montes conveyed the property to Martin and Marilyn Corbett, and the Corbetts subsequently conveyed the property to Chester and Catherine Jastremski on July 1, 1965.

Around the mid-1950s, a stone jetty was constructed on the unimproved portion of Third Avenue, adjacent to Lot 13, and still remains in place.

On August 4, 1965, the City adopted Ordinance No. 195 (vacation ordinance), which vacated a 25' x 140' portion of Third Avenue. Section I of the ordinance provided:

All that certain portion of Third Avenue situate[d] in the City of Cape May . . ., being more particularly described in Section II hereof, which lands are not needed for public use, is hereby vacated and abandoned as a public road, street, and avenue and the public right arising from the ...


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