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Figa v. Raritan Township Planning Board

A-5007-09T4 (N.J. Super. App. Div. 2011) (Unpublished)

ZONING; APPEALS — When two landowners jointly submit a land use application and the party controlling the application does not wish to appeal the matter, the other party does not have standing to do so.

A landowner learned that a neighbor wanted to develop its land, and approached that neighbor with a proposal that it purchase a portion of that land and submit a development proposal covering both lots to the municipality. The neighbor agreed and the two parties prepared and executed a contract without the assistance of counsel. Under the contract, the neighbor agreed to pay all of the costs incurred to gain approval, to develop a subdivision, and to pay the landowner for a portion of their land to be used for creating lots for the proposed subdivision. The neighbor’s obligation to purchase the land was contingent upon it obtaining approval to create three lots on the land. Further, the neighbor agreed that it would hold the other landowner harmless in the event the subdivision application was rejected and recognized that the landowner would not be financially or legally obligated for the development.

During the application process, which involved eleven hearings, the subdivision plan was modified a number of times in an attempt to meet the objections interposed by surrounding property owners. Nonetheless, the planning board voted to deny the application because the original neighbor had been unable to produce a letter from a utility company that water could be supplied to the proposed development. When the neighbor presented the municipality with the requested letter, the municipality rejected the application again, citing concerns about the lack of an active recreation area, water runoff problems experienced in the neighborhood, and concerns about the preservation of mature trees. The neighbor did not seek judicial relief. However, the landowner sued the planning board to challenge the denial and sued its neighbor for indemnification for counsel fees incurred in connection with the challenge.

The lower court held a case management conference and ruled that the first issue to be decided would be the counsel fee demand. The landowner argued, on appeal, both that the lower court’s direction that the counsel fee issued be decided first was incorrect and that the lower court’s decision on the merits as to that issue was also incorrect. The Appellate Division found that the lower court made no error in directing the structure of the dispute because managing judges enjoy the inherent power to direct the order in which issues are to be addressed. According to the Court, the lower court did not abuse its discretion with this determination.

Turning to the merits of the landowner’s complaint, the Court was satisfied that the lower court was again correct in its analysis. In this contract, the parties addressed nothing further than their respective obligations in connection with the initial application to the municipality. The contract expressly stated that, in the event of rejection, the landowner would retain the property without any further obligation. If the parties had intended to impose additional obligations, this provision would have reflected that intent. The Court found that the absence of any further language spoke volumes.

Next, the Court left undisturbed the lower court’s finding that the landowner lacked standing to challenge the board’s decision. It cited, as binding, a precedential opinion holding that a party who did not control a land use application lacks standing to challenge its denial when the party who did control it does not wish to pursue the matter further. The landowner had also alleged a financial loss amounting to the price the neighbor had agreed to pay for the portion of their property to be purchased. However, the Court found that no loss had been suffered because the parties’ obligations to each other terminated at the time of the application’s denial; standing on this basis was dependent upon a finding that the denial did not terminate the contract.

Finally, the Court rejected the landowner’s argument that its neighbor’s failure to pursue an appeal amounted to a breach of the covenant of good faith and fair dealing implied in every contract. Here, the landowner provided no evidence of bad faith in the neighbor’s decision not to appeal the subdivision denial. In affirming, the Court found that the landowner’s contention that its neighbor must have wanted to avoid having to purchase their property was entirely lacking in evidential support.

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