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A-2466-05T2 (N.J. Super. App. Div. 2007)

Akselrad v. Township of West Windsor (Unpublished)

ZONING; CONSENT ORDERS —Even though a consent order constitutes a binding contract between parties, where a consent order between a property owner and a municipality does not contain any provisions or remedies in the event that the municipality rezones the land in question, a court should not award damages because courts should not make a better contract for the parties than the one those parties had agreed-upon in the first place.

A property owner had a long standing dispute with the municipality where his property was located. Part of the owner’s forty-three acre parcel was rezoned as part of an affordable housing plan implemented as a result of a court ruling. The property owner was an intervenor in the proceedings and obtained a consent order which zoned part of his land to accommodate an office building and the rest to be developed for housing in compliance with the affordable housing program. The consent order also allowed the property owner to keep the remainder of his land out of the housing development if he contributed to the municipality’s affordable housing fund. The order explicitly precluded any changes to the order by any party. Two years later, when the property owner sought to start construction of the office building, he found out that there was no available sewer service to the site. Nearly eight years later, when sewer service looked as if it would become available, he entered into negotiations to sell his property to a developer for a residential housing project with some affordable housing units.

Following the developer’s submission of building plans to the municipality, the municipality rezoned the property owner’s land to exclude it from the affordable housing plan. Instead, it suggested commercial uses for the land. The lower court scheduled a case management conference, including for other similarly situated landowners, to resolve the matter of the property owner’s right to enforce the consent order in light of the municipality’s rezoning of his property. The property owner informed the lower court, by letter, that he would not attend the conference because he did not want to incur additional legal expenses. His letter also mentioned that the developer had terminated the sales agreement. The lower court allowed the property owner to attend a subsequent compliance hearing on the enforcement of consent judgments for those other landowners who attended the case management conference. Ultimately, the lower court allowed the municipality to remove the property owner’s property from the affordable housing plan. Its decision gave the property owner the opportunity to challenge the decision through a prerogative writ action against the municipality. A series of state and federal complaints filed by the property owner against the municipality were dismissed by the respective courts. On appeal, the Appellate Division found that the original consent judgments did not expire after six years and remanded the matter to the lower court for a factual determination as to the municipality’s right to gain relief from the judgment to be based on whether or not the property owner’s property was suitable for the affordable housing plan. The Court directed the lower court to analyze circumstantial changes that would justify the municipality’s relief from the consent order. Prior to the commencement of a trial, the parties entered into a settlement that brought in a second developer to lease the property.

The parties disagreed on whether or not the settlement resolved all of the matters between them and the property owner later brought claims against the municipality of breach of contract and interference with a contractual relationship. The lower court granted the municipality’s request for summary judgment and dismissed all of the property owner’s claims. On the property owner’s appeal, the Appellate Division found that there were no factual issues in the record that would have precluded a summary judgment by the lower court. The Court also upheld the lower court’s dismissal of the property owner’s tortitous interference claims against the municipality. It agreed with the lower court that New Jersey’s laws prohibiting tort claims against public entities were applicable. The Court pointed out that governments cannot be held liable for injuries that occur as a result of the adoption or failure to adopt a law, such as the rezoning by the municipality, and that governmental entities need to be able to make decisions without the threat of tort liability unless a court finds that the public entity was unreasonable in its actions.

On the property owner’s breach of contract claims against the municipality, the Court agreed with the lower court that even though the consent order constituted a binding contract between the parties, the consent order did not contain any provisions or remedies in the event that the municipality rezoned the land. The Court additionally added that, according to the wording of the consent order, the only available remedy was the property owner’s right to have the order enforced by a court. It added that to impose damages would go against the long held legal principle that when the language of a contract is explicit, courts are not to remake a contract into a better one than was agreed to by the parties. The Court noted that the property owner’s claims (which were filed eight years after the alleged breach was known to occur) were barred by a six year statute of limitations and that the property owner was incorrect in his decision to wait for the decisions of the compliance hearings to be reached before bringing its actions against the municipality.

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