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PEC Builders, Inc. v. Township of Hillsborough

A-3957-02T3 (N.J. Super. App. Div. 2004) (Unpublished)

MOUNT LAUREL; INTERVENTION—It is speculative for an objecting unrelated developer to suppose that its participation in a later affordable housing development cycle under a Mount Laurel settlement would be precluded by a judgment of repose; therefore, it does not have a sufficient interest to intervene in the settlement that results in the judgment of repose.

In Mount Laurel litigation, settlements were reached by and among developers, the local municipality, and its planning board which satisfied the municipality’s second-cycle fair-share obligation. After conducting a fairness hearing, the lower court entered an order approving the settlements. The order fixed a six-year period of repose. Another developer moved to intervene in the litigation, and sought modification of the order as to the period of repose. Alternatively, it argued that the order should be vacated because of the alleged failure of the parties to provide adequate notice of the court’s fairness hearing. Its motion to intervene was denied.

On appeal, the Appellate Division pointed out that intervention after a final judgment, and in this case after the time to appeal had expired, is unusual and not often granted. The developer’s motion to intervene had been made more than three months after the judgment of repose was entered. The developer had argued that the order was interlocutory in nature and therefore that the lower court could have reviewed and modified its terms “in the interests of justice.” The developer asserted the judgment was interlocutory because it had unfulfilled conditions, including one calling for the municipality’s adoption of an Affordable Housing Ordinance and the amendment of its zoning ordinances to implement the settlement terms. The Court held that for a judgment to be appealable, it must be final as to all the issues and parties, but it concluded that this particular order had clearly disposed of all of the substantive issues. Although case law has held that when a judgment in Mount Laurel litigation resolves only a component of a municipality’s compliance plan, the order is interlocutory in nature, that was not the case here.

After the lower court’s fairness hearing, it remanded some issues to the municipality for amendments to the master plan and for adoption of ordinances needed to implement the developer’s agreement. If the implementing ordinances were to be challenged in a separate action, that action would then have been consolidated with the pending exclusionary zoning case before any final judgment of compliance would be entered. Here, because the implementing ordinances had not been adopted, the Court agreed that the order was interlocutory in nature, but by the time the developer’s motion was heard, the ordinances had been adopted and no challenge to the ordinances had been filed. In fact, the matter had been pending for four and one-half years before the settlement, but the developer never sought intervention during that time. Moreover, before the settlements were approved by the municipality, public hearings had been conducted. The developer could have appeared at those hearings, but didn’t.

The Appellate Division agreed with the lower court that the principles underlying the Mount Laurel doctrine would be undermined if the developer was permitted to intervene. The Court found that the settlements provided a fair method for the construction of affordable housing which satisfied the municipality’s second-cycle obligation. Allowing the developer’s motion to intervene would have led to restarting the process and would result in a substantial delay in the construction of affordable housing units.

The developer also asked to intervene as of right solely for the purpose of appealing the original order. Although this motion was timely, the Court found no significant public-interest to support the developer’s application. For example, there was no wholesale zoning without prior public input. A fairness hearing had been conducted. The developer’s interest was undefined and it never took exception to the settlement terms, nor did it challenge the implementing ordinances. Instead, the developer’s purpose in seeking intervention was to protect its priority position based on the filing of its own inclusionary zoning action with respect to the municipality’s third-cycle obligation. Its concern was that the lower court’s judgment of repose would bar it from offering its own inclusionary development proposal during the third cycle. The Court disagreed with the developer’s concern, holding that it was speculative to assume that the developer’s participation in the third cycle would have been foreclosed by the judgment of repose, ruling that the developer had failed to demonstrate a sufficient interest to intervene.

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