Kane Properties, L.L.C. v. City of Hoboken

423 N.J. Super. 49, 30 A.3d 348 (App. Div. 2011)
  • Opinion Date: November 16, 2011

ZONING — When a governing body, such a municipal council, reviews a zoning board’s decision, it may do so de novo and is not limited to determining if its own zoning board acted unreasonably.

A contract purchaser of property within an industrial zone (where residential development was prohibited) applied for variances to build a twelve story residential building, parking garage, and day care center. After a hearing, the zoning board approved the variances, but a neighboring condominium association objected. The municipality’s council rejected the zoning board’s grant of the variances and the contract purchaser sued. The lower court affirmed the council’s reversal of the zoning board approval. The purchaser then appealed, and the Appellate Division reversed and remanded.

The purchaser argued that the council’s decision was tainted by the participation of its new corporation counsel who had represented the neighboring condominium association during the zoning board hearings. In the alternative, the purchaser argued that even if the proceedings were not tainted by the corporation counsel’s participation, the council’s decision was still arbitrary, capricious, and not supported by the evidence. While the Court rejected the purchaser’s argument that the council’s decision was not supported by the evidence, it did find that the corporation counsel’s participation was a conflict of interest that required judicial review.

The Court generally noted that a zoning board’s determination should only set aside when it is arbitrary, capricious or unreasonable. However, when a governing body (such as the council in this case) reviews a zoning board’s decision, it may do so de novo. A governing body’s review is not limited to determining if its zoning board acted unreasonably. It may conduct its own review. The only requirement is that the governing body’s decision must be supported by the record. When a governing body overturns a zoning board’s decision, it is the governing body’s action that is presumed valid and not the zoning board’s. A governing body’s decision is not overturned unless it was arbitrary, capricious or unreasonable. Based on the record before it, the Court could not conclude that, as a matter of law, the only council’s decision was arbitrary or unreasonable. The council and zoning board each weighed the evidence differently and came to opposite conclusions, but the council’s analysis was not unreasonable.

The Court found that even though the corporation counsel had recused himself when his former client challenged the zoning board approval, he was still involved in the matter. It noted that he sent a generic memo to the council advising it how to handle zoning appeals. He was also present when the resolution was approved, but the council’s new attorney was not present. Lastly, he provided procedural advice concerning the vote and he signed the resolution in his capacity as corporation counsel. The Court noted that the test for conflict is whether a reasonably fully informed person would have doubts as to the corporation counsel’s impartiality. Under these circumstances, the corporation counsel, as prior counsel for the same condominium association that challenged the variance, should have stepped completed away. He should have not given any advice to the counsel, should not have been in the room when the council was voting on the resolution, and should not have signed it. For those reasons, the Court vacated the resolution and ordered that it be remanded to the council for reconsideration.