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Gandolfi v. Town of Hammonton

367 N.J. Super. 527, 843 A.2d 1175 (App. Div. 2004)

ZONING; MEETINGS—Even though a land use board improperly holds a closed door meeting with an applicant, where no decisions or promises are made at the meeting and where the applicant files an “as of right” application, any resulting, otherwise valid, approval of the application will stand.

A local planning board granted a developer a conditional use approval for a residential development, but denied the developer’s application for a subdivision. The developer challenged the denial and sought damages against the three board members who voted against the application. In a separate action, local residents challenged the grant of the conditional use approval. While the developer’s suit was pending, the board invited it to appear at a closed session to discuss the settlement. At this session, the board authorized the developer to pursue a consent order that would provide for the abandonment of its conditional use approval and its claims against the planning board in exchange for consideration by the board for an expedited review process of a conventional by-right subdivision. This plan called for the developer to prepare a plan with dimensions that complied with the municipality’s ordinances, and to propose site improvements that would adhere to governing standards.

After the lower court refused to sign the consent order, the developer proceeded with its “by right” application, which was granted by the board. The lower court, however, invalidated the subdivision approval and held that the board’s closed meeting settlement conference with the developer violated both the Open Public Meetings Act (OPMA), and the Municipal Land Use Law (MLUL). Specifically, the lower court held that the “pending litigation” exception to the OPMA did not apply. This exception permits meetings of the public body to discuss litigation to which the public body is a party. However, the developer’s attorney attended this meeting, while other parties in interest were excluded. It was this selective process that placed the meeting outside of the exception to OPMA, and violated both it and MLUL. For this reason, the lower court held that the closed door meeting tainted the subsequent board proceedings.

The Appellate Division reversed. It ruled that the central issue in the case was the public’s right to notice and to be heard at a public hearing. Therefore, it was necessary to determine if the board’s approval of the “by right” subdivision was so compromised by the closed session that the application could not stand. The Court found it important to prevent any appearance that a municipality bargained away its legislative duties without public scrutiny or political accountability. On the other hand, the Court recognized that land use litigation often settles. In every case where settlement is possible, a court must reconcile the public’s right to notice and involvement with the strong judicial policy in favor of settlement.

The Appellate Division found that no wholesale rezoning took place at the meeting. It also found no contract in which the board agreed to approve the company’s “by right” application. Furthermore, there was no agreement to grant the “by right” application in exchange for the company dismissing its action against the three board members. The board did not bargain away or compromise its duty to enforce the development standards to the detriment of the public good and general welfare. It only agreed to consider a plan that complied with the subdivision and zoning ordinances and other governing standards.

In addition, although the closed session may not have fallen under the “pending litigation” exception to the OPMA, no “action” on the proposed settlement agreement was taken during the meeting. The Court reviewed the subsequent public hearings for the “by right” application and held that they were not tainted by the settlement conference. During the settlement meeting, several board members expressed the view that the developer would not “get off the hook” in terms of adverse off-site drainage impacts and other aspects requiring approval. The Appellate Division also held that these and other such comments did not show a predisposition of the board to grant the “by right” approval. Furthermore, at the public hearings upon filing its application, the developer’s engineer gave extensive testimony concerning the details of the plan in the context of governing ordinances and site-improvement standards. Members of the board, the board’s engineer, the board’s planner questioned the plans and made extensive remarks regarding potential problems. In addition, the attorney representing the opposing residents vigorously cross- examined the developer’s experts. Therefore, the Court held that the settlement discussions conducted during the closed session did not taint the subsequent proceedings. The “by right” plan was subject to independent and exhaustive public scrutiny at duly noticed public meetings. The public’s right to be heard and to participate during the subdivision process was vindicated.

The residents opposing the plan also claimed that the board lacked jurisdiction to hear the application because the lower court had retained jurisdiction of the developer’s action against the board. Generally, once an applicant has received a decision from a board and files an appeal in lieu of prerogative writ, the board is divested of jurisdiction absent a remand. However, based on the facts of this case, the Court held that the board had jurisdiction to consider the “by right” application, despite the absence of a remand. It believed that the “by right” subdivision was an entirely new application to effect a settlement. Its result would render the opposition’s action challenging the developer’s conditional use permit moot, and would cause the dismissal of the developer’s action against the board.

Finally, the opposition contended that the “by right” application was invalid because no “fairness” hearing had been conducted. Current law is that in reviewing a settlement proposal in land use litigation, a court should make a threshold finding as to whether any settlement terms are illegal or void against public policy. In this case, however, no hearing was necessary because the “by right” plan called for compliance with all governing standards on its face, and therefore could not be deemed illegal or void as against public policy. For all of those reasons, the Appellate Division reversed the holding of the lower court which had set aside the “by right” approval.

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