PAT CATANZARETI v. THE BOROUGH OF HIGH BRIDGE, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2093-04T2

PAT CATANZARETI,

Plaintiff-Respondent,

v.

THE BOROUGH OF HIGH BRIDGE,

a Municipal Corporation of

the State of New Jersey and

THE BOROUGH OF HIGH BRIDGE

PLANNING BOARD,

Defendants-Appellants.

___________________________

PAT CATANZARETI, A-2096-04T2

Plaintiff-Respondent,

v.

THE BOROUGH OF HIGH BRIDGE,

Defendant-Appellant.

_____________________________

 

Argued April 25, 2006 - Decided June 5, 2006

Before Judges Collester, Lisa and S.L. Reisner.

On appeal from the Superior Court of

New Jersey, Law Division, Hunterdon

County, L-636-98.

William J. Caldwell argued the cause

for appellant High Bridge Planning

Board (Carter, Van Rensselaer & Caldwell, attorneys; Mr. Caldwell, on the brief).

Appellant Borough of High Bridge, did not file a brief.

James H. Knox, argued the cause for respondent Pat Catanzareti (Gebhardt & Kiefer, attorneys; Mr. Knox and Deborah

B. Rosenthal, on the brief).

PER CURIAM

In this land use case, the Borough of High Bridge Planning Board appeals from a trial court order granting preliminary subdivision and site plan approval to a project submitted by developer Pat Catanzareti. This appeal was argued back-to-back with the Borough's related appeal in Matter of Borough of High Bridge Grant of Substantive Certification, which we also decide today.

Both cases arise from the settlement of Mount Laurel litigation in which the Borough obtained COAH approval of its fair share housing plan by agreeing to permit Catanzareti to develop his building site with a mix of affordable and market-rate housing. After enjoying years of the protection from builder's remedy lawsuits afforded by the COAH approval, the Borough sought to remove the Catanzareti site from its fair share plan, and the Planning Board denied Catanzareti's application for preliminary major subdivision and site plan approval to build the affordable housing. In the companion case, Matter of Borough of High Bridge Grant of Substantive Certification, Docket No. A-0913-04T2 (App. Div. 2006), we affirmed COAH's decision denying the Borough's application to remove the site from its fair share plan. In this case, we affirm Judge Mahon's decision, explained in his thorough and cogent sixty-one page oral opinion issued October 19, 2004, rejecting the Planning Board's denial of Catanzareti's application and granting preliminary major subdivision and site plan approval subject to conditions recommended by a court-appointed expert.

I

Catanzareti owns eighty-six acres of land in the Borough, situated on three contiguous lots: Block 31, Lot 14 ("Parcel One"), consisting of 34.5 acres; Block 33, Lot 36 ("Parcel Two"), consisting of 12.5 acres; and Block 30.02, Lot 2 ("Parcel Three"), consisting of 38 acres. In 1984, he instituted a builder's remedy lawsuit against the Borough and a lawsuit challenging the zoning of his property. The builder's remedy litigation was transferred to the Council on Affordable Housing ("COAH"), which mediated a settlement agreement between the parties.

The settlement agreement, executed on March 10, 1988, included a draft ordinance amendment that established an affordable housing zone on a portion of Catanzareti's property. The Borough agreed that it would not amend the draft ordinance as to Parcel One and Parcel Two, and would not amend existing zoning as to Parcel Three, without the consent of Catanzareti, unless amendment was necessary to achieve substantive certification. Catanzareti, in turn, agreed to cooperate fully with the Borough's effort to obtain substantive certification and, in the event that substantive certification was granted, to dismiss his lawsuits against all defendants.

The Borough stipulated that Catanzareti would be entitled to construct 170 new dwelling units, including thirty-four low/moderate income units, on Parcel One and Parcel Two. Development of Parcel Three with single family detached dwelling units would be limited in accordance with the Borough's existing R-1 zoning. As a condition of approval for development of Parcel One and Parcel Two, Catanzareti agreed to dedicate nine acres of Parcel Three to the Borough for recreational and conservation purposes.

With regard to development of the Catanzareti site, the agreement provided as follows:

5. In addition to other actions required by this Agreement, the Borough shall take all reasonable steps to foster development on the CATANZARETI property of the types and at the intensities described in this Agreement, including lower income housing, including, but not limited to the following:

(a) Expedited consideration and disposition of all development applications submitted by CATANZARETI and fast-tracking of such applications so that the time limits for decision required by the Municipal Land Use Law are observed. The public hearing shall be commenced on any application not more than 75 days from the date of certification of completion or the date the application is otherwise deemed complete as a matter of law.

[Emphasis added.]

Pursuant to the COAH settlement, the development was to be built in phases, with Phase I limited to construction of market rate units and Phase II involving construction of both market rate and low/moderate income units.

On August 1, 1994, the Planning Board approved Catanzareti's application to construct Phase I of the development. On August 3, 1998, after construction of Phase I was substantially complete, Catanzareti filed an application for preliminary major subdivision approval for Phase II. On September 14, 1998, the Planning Board unanimously deemed the subdivision application to be incomplete based on Catanzareti's failure to include site plans for the low/moderate income units. The Planning Board considered the status of the application on October 19, 1998, and determined that it should be administratively denied. Resolution 98-4, memorializing the denial, was adopted on November 16, 1998.

On October 7, 1998, Catanzareti filed a complaint in the Superior Court, Law Division, against the Borough and the Planning Board, alleging that the Borough had wrongfully interfered with his application and asking, among other things, for a declaration that the application was complete and an order compelling the Planning Board to immediately commence hearings on its merits.

On March 26, 1999, Catanzareti voluntarily provided the Planning Board with a preliminary site plan application for the low/moderate income housing units in order to supplement his preliminary major subdivision application. On April 19, 1999, the Planning Board acknowledged the submission of the preliminary site plan, but deemed the application incomplete for failure to include an environmental impact statement ("EIS") and for Catanzareti's failure to complete certain aspects of Phase I construction. On June 2, 1999, Catanzareti filed a second amended complaint, asking that his application again be reinstated. Catanzareti moved to consolidate the matter with the original exclusionary zoning action and for summary judgment compelling the Planning Board to hear his application.

On August 17, 1999, Judge Mahon rendered an oral decision concluding that he had no jurisdiction over the "Mount Laurel" issues and that it would be inappropriate to reopen the original exclusionary zoning lawsuit. He further stated that he could not determine whether the application contained all the information necessary for the Planning Board to make an informed decision and concluded that it was necessary to appoint an expert to address the need for an EIS. The judge's decision was memorialized in an order issued on November 17, 1999. The order denied Catanzareti's motion to declare the application complete, but appointed an expert, Susan S. Gruel, to review the application for completeness. The costs of Gruel's services were to be shared equally by the Borough and Catanzareti. In a report dated January 17, 2000, Gruel concluded that the submission of an EIS was appropriate and would provide information reasonably necessary for the Planning Board to make an informed decision on Catanzareti's application. She stated that "[t]he preparation of an EIS is essentially a matter of addressing the impacts of the existing environmental conditions in a format specified in the Borough ordinance."

Although Judge Mahon never formally adopted Gruel's report, Catanzareti submitted an EIS to the Planning Board on August 11, 2000. In response to the filing, the Planning Board notified Catanzareti that his application could not proceed because his escrowed fees were in arrears. The disagreement over fees resulted in renewed motions for summary judgment and another appearance before Judge Mahon in October 2000.

On October 23, 2000, Judge Mahon rendered an oral decision barring the Borough from contesting the enforceability of the 1988 Settlement Agreement. He denied Catanzareti's motion to declare the application complete, stating that it was the Planning Board's province to determine the completeness of the application and that he believed the parties could resolve the fee issue by themselves.

On November 20, 2000, the Borough's chief financial officer wrote to Catanzareti, confirming that the correct amount of fees were in his escrow account. On November 30, 2000, Catanzareti appeared before the Planning Board to request that Mayor Schweikert, who was a Board member, recuse himself from the proceedings due to his expressed opposition to the application, and that the application be deemed complete. Schweikert refused to recuse himself. Everyone agreed that there had always been sufficient funds in Catanzareti's escrow account to cover the application costs; nevertheless, Schweikert opposed considering the application's completeness because that issue was not listed as an agenda item on his meeting notes. Eventually the Board voted four to three to deem the application complete. Schweikert, however, nullified the vote by raising a point of order concerning the manner in which the vote was taken.

On December 18, 2000, the parties appeared before Judge Mahon to argue Catanzareti's renewed motion to declare the application complete. In opposition to the motion, the Planning Board presented a letter from its engineering expert asserting several new deficiencies in the application. Noting that at the October 2000 hearing the Planning Board advised that the only outstanding issue concerned the escrow account and that it had since been determined that Catanzareti was never delinquent with respect to fees, the judge found that the Board was estopped from asserting additional items that were required for the application to be deemed complete. He further observed that the Board never generated a comprehensive list of deficiencies as required by N.J.S.A. 40:55D-10.3, despite having had the application checklist for years. Concluding that "it's time to get this application moving forward," Judge Mahon deemed the application to be complete. He issued an order memorializing his decision in which he stated that the statutory time within which the Planning Board must act on the application would be measured from December 18, 2000, and that initial hearings on the merits must occur no later than January 15, 2001.

The first Planning Board hearing on the merits of the Catanzareti application was held on January 22, 2001. An issue immediately arose, however, concerning an alleged irregularity in the title block on the subdivision plans. The Board took the position that it lacked jurisdiction to hear the application because the engineer who signed the plans and who was present to testify concerning the application was not the same engineer who originally prepared the plans. Refusing even to hear testimony from the site plan engineer, who had nothing to do with the subdivision plan, the Board voted to administratively deny the application because the documents were not in the proper form. After the vote, the Board attorney stated that time had stopped running on the application: "Judge Mahon may have deemed it complete on the 18th, the Board has now acted and it is dismissed."

In February 2001, Catanzareti filed a motion to set aside the Planning Board's action. On March 14, 2001, Judge Mahon issued an order vacating the Planning Board's dismissal of the application and requiring Catanzareti to submit revised plans with an appropriate title block.

Catanzareti submitted revised plans to the Planning Board on May 11, 2001. On May 21, 2001, Catanzareti appeared before the Planning Board to offer testimony concerning his subdivision application. Following heated exchanges with Catanzareti's counsel, the Board voted to end the public hearing without hearing testimony because its professionals had not had sufficient time to review the revised application.

On June 11, 2001, Catanzareti was finally allowed to present substantive testimony from his engineering expert. Public hearings continued on June 25, 2001; July 9, 2001; July 28, 2001; and July 30, 2001. On September 17, 2001, the Planning Board voted to adjourn the meeting without hearing testimony because its professionals were not present. Catanzareti nevertheless consented to extend the statutory time period for the application to allow for more hearings. Further hearings were held on October 1, 2001; November 26, 2001; December 3, 2001; and December 17, 2001.

At the close of the December 17, 2001 hearing, a motion to approve the application without conditions was unanimously rejected. No motion was made to conditionally approve the application, even though the Board's attorney explained that it would be possible to incorporate the conditions expressed in the Board's expert reports into the resolution. Although Board members expressed concern that they did not have enough time to craft conditions at the meeting, they did not ask the applicant for an extension of time to do so. The Planning Board subsequently adopted a resolution memorializing its denial of the application.

On March 1, 2002, Catanzareti filed a third amended complaint challenging the denial of his preliminary major subdivision and site plan applications and asking the court to declare the applications approved. The Borough filed an answer and counterclaim on May 10, 2002, demanding revocation of the 1988 Settlement Agreement.

On January 6, 2003, Judge Mahon rendered an oral decision, finding the Board's resolution of denial to be "too much of, frankly, a narrative." He remanded the matter to the Planning Board for complete findings of fact as they related to the conclusions of law and the denial of the application. The Planning Board submitted a revised resolution of denial on or about April 13, 2003.

On April 25, 2003, Judge Mahon sua sponte remanded the revised resolution to the Planning Board for further revision and supplementation. He instructed that the second revised resolution should list each basis for denial of the application with specific reference to the record below and the controlling statutes and ordinances. The judge also determined that he would appoint a master to advise him in connection with the matter and that "[a]ll expenses associated with the Master shall be paid by the Borough of High Bridge."

On June 17, 2003, Judge Mahon appointed Creigh Rahenkamp to serve as special master in the litigation. Rahenkamp's reasonable fees and expenses were to be paid by the Borough and the Board, "subject to ultimate determination by the Court based upon discretion of the Court and consideration of the outcome of the litigation." The judge once again directed the Planning Board to complete the revisions to its resolution of denial. A resolution denying the Catanzareti application, along with supplemental findings of fact, were subsequently submitted to the court. Although the resolution is undated, there is no dispute that these materials were filed on or about June 20, 2003.

In September 2003, Catanzareti filed a motion seeking a formal judicial declaration that the regulations applicable to his application were limited by Ordinance 405, which the Borough adopted pursuant to the COAH settlement. On November 12, 2003, the judge issued an order that provided:

that the governmental regulations applicable to the Plaintiff's application before the Defendant Planning Board now under appeal shall be deemed to be limited to Section 405 and Article 5 of the High Bridge Borough Land Use Ordinance, the Residential Site Improvement Standards, applicable regulations of the State of New Jersey including but not limited to, the NJ DEP and the Council on Affordable Housing, and the 1988 Mt. Laurel Settlement Agreement between Plaintiff and the Defendant Borough.

Rahenkamp submitted a master's report, dated March 28, 2004, that recommended granting conditional approval to Catanzareti's application.

On July 9, 2004, the judge adjourned the scheduled trial date due to the withdrawal of the Borough's counsel from the litigation. A new trial date was set for August 16, 2004; in the meantime, responding to the Board's contention that it had inadequate time to review the application at its December 17, 2001 meeting, Judge Mahon remanded the matter to the Board for consideration of the recommendations made in the master's report.

On August 3, 2004, the Planning Board met to address Judge Mahon's remand. Mayor Schweikert, speaking for the Board, refused Rahenkamp's request to review the master's report, stating that it was not the Board's role to fill in gaps in the report and that "[w]e want the plan that we want."

On August 9, 2004, Rahenkamp submitted a revised master's report stating that the Planning Board was unable to reach any formal conclusions on his initial recommendations. The second report was substantially similar to the first, with Rahenkamp recommending approval subject to thirty enumerated conditions.

Trial was held before Judge Mahon on August 16, 2004. Rahenkamp was the only witness, testifying to explain the findings and conclusions set forth in his reports. On October 19, 2004, Judge Mahon rendered an oral decision in which he concluded that the Planning Board's denial of the application was arbitrary, capricious and contrary to law:

Putting aside the improper attempt of the resolution to incorporate expert reports by "incorporation by reference," this Court concludes after a review of the appendix and supporting documentation that except for technical issues which could and should have been made conditions of approval, plaintiff has complied with all appropriate and reasonable requests made by the Board's experts.

It is also noteworthy that the Board's experts raised questions and then issues subsequent reports raising numerous new questions that could have and should have been raised initially. This had the potential to frustrate the process and potentially make it endless.

This is a Mt. Laurel project. Its genesis is the Mt. Laurel settlement agreement entered into by plaintiff and the Borough of High Bridge in 1988. Many years have now passed. Inordinate delays have been encountered. The agreement affirmatively required the Borough and its Planning Board to, "foster" the project. The record reveals that the Planning Board has more often been recalcitrant.

While seeking to prevent the construction of the applicant's inclusionary project, the Borough has nevertheless made use of the protection offered to it by COAH's approval of its inclusionary housing program. For a period of approximately fourteen years from the date when COAH approved the Mt. Laurel settlement agreement between the applicant and the Borough, to the present date, the Borough of High Bridge has been essentially immune from builder's remedy suits because it has had COAH approval of its housing plan. The key element of that housing plan is the Catanzareti project which the Borough has meanwhile sought defeat. . . .

It is clear from the record that the Planning Board's handling of this application was often outright hostile. The Court-appointed master concluded: "It was clear from the transcripts of the hearings that the Board and its engineer in particular were not acting to affirmatively advance their municipality's response to its constitutionally deficient past. . . ."

The Board's decisions throughout the process, including the vote to deny the application, were arbitrary, capricious and contrary to law. The Planning Board has openly thwarted the inclusionary housing process and has acted in disregard of the Borough's obligation under the Mt. Laurel settlement agreement to, "foster" inclusionary development of the Catanzareti property.

While there was additional information submitted [ten] days prior to the final hearing on December 17, 2004, it was limited in scope. This was essentially a "cleanup" session. The [B]oard was not confronted with significant last minute changes. Any concerns can be addressed in conditions of approval.

The [B]oard's denial of plaintiff's application was not justified by any deviations from the ordinances deemed pertinent by the Court's limiting order. The four primary grounds for denial -- housing type mix, [non]-dispersal of COAH units, slope preservation and tree preservation -- are not supported by the ordinance itself or planning practice.

In conducting a thorough point-by-point review of the issues raised by the Planning Board, the master generally found that the application was complete or a particular issue could be addressed as a condition of approval. In some instances, he found the requested information was, "needlessly cost generative." The Court fully agrees with these conclusions which are amply supported by the record.

The process needs to come to an end. Housing opportunities need to be created for those that High Bridge has illegally excluded for many years throughout the exercise of its zoning powers.

The judge granted Catanzareti preliminary major subdivision and preliminary major site plan approval subject to conditions one through thirty of the master's report. He ordered a limited remand to the Planning Board, allowing sixty days within which it could conduct meetings to consider the conditions of approval and to recommend modifications. The judge's decision was memorialized in a final judgment filed on November 15, 2004. The Planning Board took no action in response to the court's order of remand and instead filed this appeal.

II

On this appeal, the Board raises the following issues:

POINT I: Notwithstanding the Substantial-Evidence Standard Argument Below The Decision by the Board to Deny The Application on December 17, 2001 In the face of the Plaintiff's Unwillingness to Extend Deliberations And The Plaintiff's Proposal That The Board Violate The Municipal Land Use Law by Delegating its Fact Finding Responsibility Was Not Arbitrary, Capricious and Unreasonable.

POINT II: The Court Below Erred by Deeming the Application for Development Complete on December 18, 2000 Thereby Precluding The Planning Board From Ever Acquiring Information Necessary to Make An Informed Decision at the End of the Hearing Process.

POINT III: The Plaintiff Should Have Been Estopped From Seeking a Limiting Order in Respect to the Applicable Ordinance Sections And the Law of the Case Doctrine Should Have Applied Making the Limiting Order of November 13, 2003 Reversible Error.

POINT IV: The Court Should Have Reviewed the Memorializing Resolution Under the Substantial Evidence Standard Based On the Record Before the Planning Board and Deferred to Findings of Fact Based Thereon Which Should Have Resulted In Sustaining the Denial of the Board.

POINT V: The Findings of Fact Made by the Court Below Are Not Supported By the Record Below or By the Testimony of the Court's Master and Proper Application of the Substantial Evidence Rule Should Have Resulted in An Affirmance of the Denial by the Board in December 2001.

POINT VI: The Granting of a Conditional Approval By The Board is Discretionary Under the Municipal Land Use Law N.J.S.A. 40:55D-22b And the Court Below Erred in Imposing a Conditional Approval Before There Had Been a Full Remand to the Board to Complete the Hearing Process.

POINT VII: High Bridge Does Not Have a Documented History of Preventing the Development of Low/[Moderate] Income Housing and the Proposed Inclusionary Development Is Not Needed in [Order] to Satisfy Its Constitutional Obligations.

POINT VIII: The Court Erred in Allocating the Cost of the Second Master Solely to the Board and the Borough.

Having reviewed the record, we conclude that these contentions are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). Judge Mahon's decisions to declare the application complete on December 18, 2000, to limit the applicable ordinances to those adopted in the COAH settlement, to require the Borough to pay for the Special Master, and to determine on October 19, 2004 that the application should be approved subject to conditions, were all amply supported by the record. R. 2:11-3(e)(1)(A). We affirm substantially for the reasons stated in his oral opinions. We add the following comments.

We find no error in Judge Mahon's December 18, 2000 decision to declare the application complete for purposes of review by the Planning Board. The Board had previously represented to Judge Mahon that the only outstanding issue affecting the application's completeness concerned allegedly unpaid fees; the Board subsequently conceded that the applicant had paid the fees. In fact, the applicant had never been delinquent in payment.

On November 30, 2000, the board's attorney confirmed that "[t]he last issue for determination of completeness was a resolution of the financial issues, which I understand have been resolved." And the Board itself determined, by a vote of four to three, to declare the application complete. The Mayor, a Board member who previously had publicly declared his implacable opposition to the application, derailed the approval by raising a procedural objection to the vote. And, thereafter, no one on the Board would second a motion to declare the application complete. The Board's conduct was starkly inconsistent with its promise, in the COAH settlement, to "fast track" Catanzareti's applications to develop the property.

We likewise find no merit in the Borough's objection to Judge Mahon's November 12, 2003 order enforcing the 1988 COAH settlement, which precluded the Board from applying later-enacted land use ordinances to Catanzareti's application. We also note that Catanzareti did file an environmental impact statement, although it was a later-enacted requirement. And while a later-enacted steep slope ordinance could not be applied to the application, the court-appointed expert concluded that Catanzareti could mitigate the impact of steep slopes by "mass grading" the property.

Finally, we note that the majority of the Board's reasons for rejecting the application either have no basis in its zoning ordinances, are contrary to the terms of the 1988 COAH settlement, or appear pretextual. That the applicant was insufficiently "creative" in designing the mix of housing, that he located all of the affordable housing in one area, and that he was proposing to cut down a lot of trees, were not valid grounds to reject the application. The COAH settlement gave Catanzareti discretion in choosing to build multi-family or single-family housing. Nor did the settlement require him to locate the affordable housing in any particular part of the site. Nor did the settlement preclude Catanzareti from cutting down trees to build the housing. Moreover, although the Board objected that the affordable housing was to be built in an area impacted by steep slopes, it appears from the record that Catanzareti built the Phase I market rate housing in an area impacted by steep slopes, without objection from the Board. The trial court also properly relied on Pizzo Mantin Group v. Township of Randolph, 137 N.J. 216 (1994), in rejecting the Board's efforts to rely on standards not set forth in its land use ordinances. Strict application of the Pizzo Mantin doctrine was particularly appropriate in a case where the Board rejected an application to construct affordable housing.

Further, the Board's concerns regarding storm water management and a possible landfill on the property were appropriately addressed by conditions requiring DEP review and approval of the project's storm water management plan and a "no further action letter" from DEP with respect to the landfill.

Finally, the trial court remanded this matter to the Board twice, once to give the Board an opportunity to further review the record it claimed it had had insufficient time to consider at the December 17, 2001 hearing, and again to give the Board a chance to propose revisions to the Master's proposed conditions on the approval. The Board declined those opportunities. These opportunities were in addition to the two remands the trial court ordered to give the Board a further chance to make more complete factual findings to support its decision denying the application.

In 1988, the Borough agreed to let Catanzareti build affordable housing on his land. Almost twenty years later, the affordable housing has not been built. We agree with Judge Mahon that the Board was arbitrary and capricious in its reasons for denying the application. The Board also acted arbitrarily and inconsistently with its obligations under the COAH settlement in denying the application rather than in approving it with conditions. In light of the tortured history of this case and the companion COAH case, we find no error in Judge Mahon's decision to approve Catanzareti's land use application with conditions.

Affirmed.

 

The Borough also filed a notice of appeal but did not file a brief.

Moreover, due to further procedural delays by the Board, the actual hearings on the application did not begin until June 11, 2001.

We find no indication in the record of the December 17, 2001 hearing, or in the immediately preceding hearing of December 3, 2001, that the applicant would not have agreed to give the Board a further extension beyond December 17, 2001. In fact on December 3, the applicant's attorney asked the Board to schedule an additional hearing after December 17.

(continued)

(continued)

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A-2093-04T2

June 5, 2006