Skip to main content

Deland v. The Township of Berkeley Heights

361 N.J. Super. 1, 824 A.2d 185 (App. Div. 2003)

MOUNT LAUREL; SPECIAL MASTERS—A municipality can’t acquire a developer’s land by eminent domain to avoid compliance with a Mount Laurel Compliance Plan; strict conflict of interest rules apply to Mount Laurel special masters.

A developer filed a suit for Mount Laurel relief and the municipality agreed to settle the litigation. That settlement included rezoning of several tracts of land for affordable housing. About six years later, a court entered an order fixing the municipality’s “second round” affordable housing obligation. Thereafter, the developer completed a portion of the project and then sold the balance of the project to another developer, “contingent on receipt of all governmental approvals required for development.” At that point, it was discovered that significant asbestos contamination required remediation and that the wetlands permit for the site had expired. Further, new, larger wetlands had been identified. The municipality, pointing to a new determination that it had already satisfied its Mount Laurel obligations, and taking note that the site in question “had more extensive wetlands and asbestos contamination than had been previously revealed,” sought to rezone the site as “open land.” The lower court denied the municipality’s attempt to delete a significant portion of the developer’s site from its Mount Laurel compliance plan. Essentially, it would not “allow the Mount Laurel doctrine to be weakened by a Township’s amendment to the Compliance Plan and change of zoning where a developer has dealt in good faith to comply with the Compliance Plan to provide Mount Laurel housing.” Apparently in response, the municipality filed an action “to acquire the site by eminent domain for recreational and open space uses.” It also sought to have a long-term special master removed from the matter, “on the ground that he had a disqualifying conflict of interest, which only recently had come to the municipality’s attention… .”

The lower court denied the municipality’s motion and enjoined it from interfering with development of the site “including its acquisition by eminent domain.” Essentially, the Court believed that the municipality’s “planned acquisition of the site was simply an alternative method, devised in response to the court’s denial of its motion for deletion of the site from its compliance planning, for [the municipality] to avoid its obligations under the developer’s agreement… .” It also refused to remove the Special Master.

Apparently, the Special Master had done some work for another developer who shared a common investor with the latest in a series of developers for the site in question. At the time of the earlier consulting work, the Special Master was unaware of the investor’s involvement and was never aware of the extent of that investor’s involvement. The Special Master and the investor met only once. A special consideration for the lower court was that this Special Master had served in the Mount Laurel case for more than thirteen years. Lastly, the lower court supported its decision not to dismiss the Special Master on the basis that any special master’s role is purely advisory and that a court “retains ultimate decision-making authority.” The Appellate Division agreed with the rationale and was especially sensitive that “the current system of appointment of Mount Laurel masters creates the inherent potential for the kind of conflict that arose when [the latest of the series of developers] became a contract purchaser of the [site in question].” The Appellate Division also recognized that “the appointment of a new special master to replace a master who has developed a familiarity with a municipality’s compliance plan may result in additional costs to the parties and delay implementation of the plan.” Nonetheless, the Court concluded that “strict conflict of interest rules should apply to Mount Laurel special masters.” It recognized that a master’s recommendation may only be advisory, but can be “highly influential in some circumstances.” Further, “Mount Laurel cases are matters of great public sensitivity.”

Having concluded that the Special Master should be relieved, the Appellate Division thought there to be no reason to reverse the rest of the lower court’s Mount Laurel based ruling. The Court found that the lower court’s “rulings were primarily legal in nature and [the Appellate Division could] fairly review them without a remand.”

Another important component of the Appellate Division’s decision dealt with the proposed taking of the site by eminent domain for public recreation and other municipal uses. Here, the Appellate Division disagreed with the lower court. “The Legislature has delegated broad authority to municipalities to acquire public property by eminent domain for public uses including recreation and open space.” Therefore, “in the absence of an affirmative showing of fraud, bad faith or manifest abuse, ... a reviewing court [should] not upset a municipality’s decision to use its eminent domain power.” Courts should not enjoin litigation prospectively. Even though the lower court believed that the municipality was seeking to achieve the same result as re-zoning when it proposed to take the property by eminent domain, the lower court “failed to recognize that [the municipality’s] condemnation of the [] site, as currently zoned, would not have the same adverse economic impact upon [the developer] as an order authorizing [the municipality] to delete the site from its Mount Laurel compliance plan and rezone it for another less intense use.” The Court stated that condemnation of the site “should realize the same amount in the eminent domain action brought by [the municipality] as [the property owner] would receive in a sale to a private party such as [to the latest in a series of developers].” If the property owner wished to challenge a taking of property by the municipality, whether based on use for improper purposes or merely to challenge the amount of any condemnation award, it could do so once the municipality commences its condemnation proceeding.

66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 •