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Kelesh v. Caballero

A-6744-02T2 (N.J. Super. App. Div. 2004) (Unpublished)

MUNICIPALITIES; INSPECTIONS; IMMUNITY—To avail himself or herself of the “good faith immunity” defense, a construction official must either demonstrate “objective reasonableness” or that he or she acted with “subjective good faith.”

After inspecting a hotel, the Bureau of Rooming and Boarding House Standards (RBHS) concluded that the building was not actually being used as a hotel, but rather as a rooming and boarding house for which it was not licensed. The owner was therefore ordered to pay a penalty within thirty days. After two months, the RBHS and the owner entered into a settlement agreement which reduced the amount of the penalty, while also requiring the owner to either remove the property from the jurisdiction of the RBHS or to apply for a license to operate the property as a rooming and boarding house.

After three more months of non-compliance, the Department of Community Affairs (DCA) commenced an action in the Superior Court. Shortly thereafter, another settlement agreement was reached. It provided for a slightly higher penalty than the first agreement, but still lower than the original penalty, and again required that the owner either remove the property from the jurisdiction of the RBHS or apply for a rooming and boarding house license. Once again, the owner failed to comply, and the DCA issued a notice directing that the building be vacated within fifteen days.

The DCA then wrote to the local construction official to say the building was vacant and that it should remain vacant until a certificate of occupancy was duly issued. Subsequent inspections revealed numerous concerns, leading the construction official to issue a notice of unsafe structure, and directing the building to remain closed until all violations were corrected. The official also directed the owner to provide an inspection report by a licensed architect outlining how the various problems would be solved.

In response, the owner filed a complaint and sought an order compelling the municipality to issue a certificate of occupancy. The pleadings were inadequate, leading to a dismissal without prejudice. Then, the owner provided the construction official with a letter from an architect. The letter, however, did not cover all of the violations. So, the owner again appealed the notice of unsafe structure to the Construction Board of Appeals which denied that appeal without prejudice.

The original construction officer resigned from his position and a new officer reinspected the premises and issued a Certificate of Occupancy. Based on this change in the way the property had been treated, the owner claimed that it could be inferred that the original officer abused his power and had tried to force the owner to transform his hotel into a rooming and boarding facility.

In moving for summary judgment, the original officer claimed that he was immune from the suit as a matter of law under N.J.S.A. 59:3-3. That statute provides that a “public employee is not liable if he acts in good faith in the execution or enforcement of any law.” This immunity does not apply if the public employee’s conduct was outside the scope of his employment or the employee acted with willful misconduct. The Supreme Court has stated that this “good faith immunity” has two alternate components: a public employee either must demonstrate “objective reasonableness” or that he or she behaved with “subjective good faith.” Prior case law also holds that immunity can be defeated if an official “knew or reasonably should have known that the action he took within his sphere of official responsibility would violate the constitutional rights of the [plaintiff], or if he [acted] . . . with the malicious intention to [deprive the plaintiff] . . . of constitutional rights or other injury.”

The owner did not argue that his property was physically taken. Knowing that private property can be effectively taken by the government through regulatory measures, the owner instead claimed that the extensive time it took to reinstate the certificate of occupancy constituted an unlawful taking. Relying on prior case law, the Court identified three factors to consider: 1) the intensity of the regulation; 2) the extent of the impairment upon the landowner’s beneficial use of the property; and 3) the length of time the owner is deprived.

Affirming the opinion of the lower court, the Appellate Division concluded that if the owner’s factual contentions could be proven, a rational trier of fact night conclude that the original official’s refusal to reissue the certificate was pretextual. It found the facts offered by both parties to be unclear and not sufficiently developed. Therefore, summary judgment on the matter was held to be inappropriate.

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