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Beauridge at Holmdel, L.P. v. The Township of Holmdel

A-2585-02T5 (N.J. Super. App. Div. 2004) (Unpublished)

MOUNT LAUREL; APPEALS—Adherence to the forty five day time limit for appeals is especially important in the context of Mount Laurel litigation.

To implement its Mount Laurel obligations, a municipality proposed an ordinance to give a developer the option of either building Mount Laurel housing or paying a fee. The developer chose to enter into a development fee agreement with the municipality. For ten years, the developer paid all the fees reflected in the ordinance and in its agreement without objection. Then the developer first protested the fees, alleging that they were “grossly excessive” and illegal under COAH regulations. In its suit to invalidate the agreement, it also alleged that the written agreement had been executed under duress. In response, the municipality argued that the suit was untimely and that the claims were barred because the COAH had previously approved the fees.

The lower court granted the municipality’s motion for summary judgment, agreeing that the complaint was untimely. It ruled the developer should have appealed from COAH’s earlier approval of the fees and that the developer had already waived its objections to the fees. It also ruled that the developer failed to show duress. On appeal, the Appellate Division affirmed, holding that complaints in lieu of prerogative writs must be filed within forty-five days after the right to the review, hearing or relief claimed accrues. It found that the developer’s right to review had accrued on any of five different occasions over the years, each time triggering the forty-five day limit. For example, five years before the current litigation, the developer wrote to COAH complaining that the agreed-upon fees might have been higher than COAH regulations would allow, but affirming that it had agreed to the rate. This showed that the developer knew of the situation at least five years prior to its actual filing of a claim.

The Appellate Division also ruled that adherence to the forty-five day limit was especially important in the context of Mount Laurel litigation, because “sound municipal planning and budget development” demands that municipalities be able to rely on anticipated revenue from their development fee ordinances. The Court saw no reason, “in the interest of justice,” to extend the forty-five day period and affirmed the lower court’s observation that the municipality had reasonably relied on the ordinance.

The Appellate Division also affirmed the lower court’s analysis of the developer’s argument that the COAH did not adjudicate any disputed issue and only affirmed the fee agreement between the parties. The Court pointed out that the COAH is a state agency acting as a quasi-judicial body when performing its substantive certification function. A party that wishes to challenge the COAH’s decision on regulatory matters is required to appeal directly to the Appellate Division. A prerogative writ is not available. That is why the Court affirmed the lower court’s conclusion that the developer’s complaint was barred by its failure to appeal the earlier COAH decision.

Next, the Appellate Division affirmed the lower court’s holding that the developer’s letter to the COAH, more than five years prior to bringing litigation, served to waive any right the developer may have had to protest the fees.

Finally, the Appellate Division rejected the developer’s duress claim. A timely protest is one of the factors that a court looks to in determining the presence of duress. Here, the developer paid the fees for years after entering into the agreement. The developer reaped the benefits of the agreement. Although it paid higher fees over many years, it also enjoyed increased profits as a result of the higher density allowed by the agreement. The Court held that fundamental fairness and the public policy underlying the Mount Laurel process bars a developer from suddenly repudiating an agreement it had embraced for over a decade.

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