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K-Land No. 54, LLC v. Township of North Brunswick

A-1950-07T3 (N.J. Super. App. Div. 2009) (Unpublished)

ZONING; MOUNT LAUREL; APPEALS — While administrative remedies ordinarily should be exhausted before heading to the courts, exhaustion is neither a jurisdictional nor an absolute requirement and may be dispensed of when the interest of justice so require.

Several parties sued a municipality seeking to compel it to provide low and moderate income housing to comply with the requirements of the Mount Laurel line of cases. A Consent Order resulted, and pursuant to the Order a planned unit development ordinance was enacted effectuating a rezoning of a large tract of land within the municipality for the development of such housing. A developer applied for a zoning permit to improve commercial space on a parcel of land it owned within the zone. Over the course of several years it made numerous attempts to expedite its application. The municipality’s zoning officer finally sent a letter to the developer advising it that a zoning permit application was inapplicable to this type of request. The zoning officer based his conclusion on the fact that there had been no determination made by the zoning office that the uses requested by the developer were inconsistent with the ordinance and settlement agreement. The applicant sued the municipality claiming that the planning board’s refusal to schedule an informal review of its proposal violated certain provisions of the Municipal Land Use Law. It also asserted that its permit application should be “deemed” approved since the zoning officer failed to reach a determination on its request within ten business days.

The lower court ruled that when the zoning officer determined that the requested use was permitted, that was tantamount to the municipality issuing a permit. It held that the zoning officer had consented to the permit based on the zoning officer’s use of a double negative - when he said that the use was not “not permitted.” The municipality appealed, claiming that the lower court erred: (a) in failing to dismiss the developer’s complaint on ripeness grounds; and (b) in finding that the zoning officer determined that the use was permitted.

The Appellate Division affirmed. First, it rejected the municipality’s contention that the developer had failed to exhaust its administrative remedies by not appealing the zoning officer’s determination to the board before instituting this action. Because the developer’s application was not expressly denied, it held the action was ripe and no appeal was required. It noted that the developer’s position was that the zoning officer’s act amounted to an “automatic” approval as set forth in the statute under which it sought enforcement in the Law Division. It also ruled that an appeal to the board would have only caused useless delay in an already prolonged municipal process, and would have proven futile since the zoning officer was apparently acting at the behest of the municipality. Further, it found that while administrative remedies ordinarily should be exhausted before resort is had to the Law Division, exhaustion was neither a jurisdictional nor an absolute requirement. It recited that the exhaustion of remedies requirement may be dispensed with: (a) where the interest of justice requires; (b) if there is a need for prompt decision in the public interest; (c) where there is no question as to administrative discretion and only a question of law is involved; or (d) where further resort to administrative recourse would be futile. In the instant matter, the Court held that no one disputed that the developer’s use was permitted in the zone. The Court believed that this factor, coupled with the substantial amount of time that had elapsed without official action being taken, relieved the developer of any exhaustion requirement. Second, the Court also rejected the municipality’s contention that the developer had not filed an “official application form” requesting a permit. It noted that the municipality failed to identify any information not provided by the developer that a permit application required or that was needed to make an informed determination on whether the developer’s proposed use was permitted. Further, it stated that all that a permit did was give the applicant the opportunity to go to the planning board. Therefore, the municipality, rather than denying the developer a permit to which it was lawfully entitled, could have addressed its concerns over the developer’s plans during a site plan review process. Finally, the Court found that by the use of a double negative, the zoning officer acknowledged, albeit inartfully, that the proposed use was permitted. Consequently, it determined that the zoning officer, having found that the use was not prohibited, should have issued the permit, and his inaction was arbitrary, capricious, and unreasonable.

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