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Powder Hill Developers, L.L.C. v. Borough of Woodcliff Lake Planning Board

BER-L-5739-07 (N.J. Super. Law Div. 2008) (Unpublished)

ZONING; SETTLEMENTS — Absent compelling circumstances such as fraud, final settlements of zoning disputes should not disturbed unless exceptional circumstances or changed circumstances exist to justify changing land use approvals granted pursuant to the settlement.

An applicant sought approval from a municipal planning board for a six lot subdivision. All six lots were designed to front on a proposed new street that would terminate in a cul-de-sac. Three of the proposed lots, while fronting on the newly created road, were to have their rear yards facing a main road. These three lots were the subject of discussion during a hearing. Ultimately, the application was denied and the developer filed suit. The suit was settled when the developer agreed to reorient the three homes so that they would front on the main road. A public hearing was held and, after comment, the board settled the litigation and granted preliminary subdivision approval. Subsequently, the developer sold the development to another developer. The municipality then adopted an ordinance requiring newly created subdivision lots to front on an existing roadway if they bordered both an existing roadway and a proposed roadway. The new developer applied to amend the preliminary and final subdivision approval to have the three lots front on the newly created road. It provided expert testimony to the effect that fronting on the newly created road would be safer and more practical than the original design. Following hearings, the board denied the application, finding the application was an attempt to renegotiate the settlement. The developer sued, arguing the board had failed to properly exercise its discretion in considering the developer’s request for a waiver.

The lower court was asked to determine under what circumstances a settlement, which had been subjected to a public hearing, can be set aside or modified. The Court noted that municipal actions enjoy a presumption of validity and there exists a strong public policy favoring settlement of litigation. It concluded that it had no basis to interfere with the settlement because there had been a public hearing where both the first and the second developer (who was a contract buyer at the time) had the opportunity to make their cases and to introduce their safety arguments as to why the lots should front the newly created road. The Court held that absent compelling circumstances such as fraud, final settlements should not be disturbed. It also examined whether, from a land use perspective, any exceptional circumstances or changed circumstances existed to jointly changing the land use approvals granted pursuant to settlement should be altered. It found none. Notably, it recognized that the settlement mandated the implementation of “K turn” driveways in order to address safety concerns.

The Court emphasized that the second developer was the contract buyer at the time of the settlement and was fully aware of the settlement’s terms, and had an opportunity to contest terms at public hearing or even to intervene during the course of the litigation. Accordingly, the Court affirmed the planning board’s decision, upheld the confirming ordinance, and dismissed the developer’s complaint with prejudice.

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