BOROUGH OF MANTOLOKING by the BOROUGH COUNCIL of the BOROUGH OF MANTOLOKING v. DANIEL FITZGERALD



NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3829-02T33829-02T3

BOROUGH OF MANTOLOKING by the

BOROUGH COUNCIL of the BOROUGH

OF MANTOLOKING,

Plaintiff-Appellant,

v.

DANIEL FITZGERALD,

Defendant-Respondent,

and

IAN BLAIR FRIES and SUSAN FRIES,

Defendants-Intervenors.

_________________________________________


Argued September 21, 2005 - Decided January 25, 2006

Before Judges Stern and Levy.

On appeal from the Superior Court of New Jersey, Chancery Division, General Equity Part, Ocean County, Docket No. C-279-99.

John J. DeVincens argued the cause for appellant (DeVincens & Associates, attorneys; Eli L. Eytan, on the brief).

Charles E. Starkey argued the cause for respondent (Starkey, Kelly, Bauer & Kenneally, attorneys; Mr. Starkey and Terrance L. Turnbach, on the brief).

PER CURIAM

Plaintiff Borough of Mantoloking appeals from a February 10, 2003 order dismissing the complaints of the Borough and defendants-intervenors Susan and Ian Fries and ordering the Borough to issue a Certificate of Occupancy for defendant Daniel Fitzgerald's residence, if it conforms to all applicable standards. We find Judge James D. Clyne's decision to be supported by sufficient credible evidence, and affirm substantially for the reasons expressed in his opinion of January 14, 2003.

On November 19, 1998, defendant purchased an oceanfront residence at 1225 Ocean Avenue in the Borough of Mantoloking. The house, built in 1872, was in serious disrepair and defendant intended to begin an extensive restoration project to update the home for himself and his family.

In addition to being in need of extensive repair, the house violated a Mantoloking zoning ordinance (Ordinance) because it was situated too close to the ocean; however, because it was built before the setback requirements were established, it was exempt from the restrictions as a non-conforming use. The Borough required a setback of sixty feet, to a point known as the "scarp line," a line established from the extent of erosion to dunes caused by a northeast storm in 1992. About two-thirds of defendant's original structure was closer to the ocean than permitted. The Ordinance further provided, that "[a] non-conforming structure shall not be enlarged, extended or increased unless such enlargement, extension or increase is conforming." 4.9(A)(2).

On November 25, 1998, plaintiff's construction code official, William Cobb, issued defendant Fitzgerald (hereinafter defendant) a partial permit for demolition. Defendant's builder, Wayne Cantelmo, initially intended to preserve the exterior of the house, demolishing only interior walls. For that reason, defendant did not need to submit plans to the plaintiff.

However, following a meeting on December 5, 1998 at which defendant, Cantelmo and defendant's architect, Ronald Seiboth, considered the pre-existing building in preparation for renovations, plans were drafted by Seiboth that were submitted to the plaintiff's zoning officer, Richard Ramirez. Those plans, prepared on January 25, 1999, included elevations for the construction. Cantelmo then obtained a permit to replace the existing floors and joists, re-plywood the first floor and to fix the original foundation where deteriorated.

In spite of efforts to maintain the original structure, more and more of it was removed as construction progressed. The trial court found that "Borough officials acquiesced in this demolition and at times suggested [it]." By March 1999, almost the entire building had been demolished. Ultimately, the whole house was razed and a new structure was constructed in its footprint.

Defendant provided the plaintiff with additional plans during this process. On March 15, 1999, defendant submitted plans reflecting expansions of the second and third floors. The expansions showed those floors extending out into open space beyond the first floor and the foundation below it. The expansion also constituted a further intrusion across the "scarp line." Nonetheless, Cobb signed the plans. On March 24, 1999, the plaintiff issued a Construction Permit Notice, authorizing the construction of pilings.

Judge Clyne found the March 15, 1999 plans to be consistent with plans previously submitted. He further determined:

That which was ultimately built by defendant is in conformance with the plans on file with the Borough as of March 23, 1999. No plans submitted after March 23, 1999 show any change with regard to the second and third floor incursions. The Borough takes the position that without plans of the original home one could not tell whether the proposed new structure contemplated an incursion into what had been open space. Mr. John Wardell who later replaced Mr. Cobb as construction code official, clearly testified that a close look at the plans that designate "existing wall locations" and "new wall locations" does reveal incursions into open space. . . . Mr. Wardell indicated that his conclusions would be apparent to anyone experienced with regard to reading construction plans.

No one advised defendant that his non-conforming use exemption did not permit him to expand the upper floors of the structure beyond the foundation footprint. On the other hand, although the detailed plans filed with the plaintiff showed the expansions of those floors into previously open space, neither defendant nor anyone working for him specifically pointed this out to plaintiff.

In April 1999, Cobb resigned and Wardell succeeded him as construction code official. In June 1999, defendant-intervenor Ian Fries (hereinafter intervenor), defendant's neighbor, alerted Elbert Husted, a member of the plaintiff's governing body, that some pilings on defendant's property indicated a second story would be added to the building.

Intervenor's home invaded the "scarp line" to about the same extent as defendant's. Intervenor's call to Husted was prompted by a concern that he would lose his panoramic view of the ocean if defendant added a second story to his home. However, Husted determined the pilings were permitted and nothing could be done.

At about that time, plaintiff became concerned about the amount of demolition to the original structure and the further incursion over the "scarp line" by the new pilings. On June 7, 1999, plaintiff ordered defendant to stop construction and advised him he could not resume without Board approval. The order stated it was issued "for violation of FLOOD PLAIN which provides:

MORE THAN 50% OF THE BUILDING HAS BEEN DESTROYED MORE THAN 50% OF THE VALUE OF THE BUILDING TO REPAIR OR RENOVATE BUILDING."

Defendant stopped building and hired an attorney, who applied to the joint Borough Planning Board-Board of Adjustment for a determination that the stop-work order was erroneous. However, he also requested a variance in the event it was necessary.

Plaintiff retained Harvey York as special counsel for advice on the matter. On June 22, 1999, York rendered an opinion letter in which he advised Ramirez that an ordinance that establishes a percentage of replacement value as a basis for requiring a variance is invalid.

On June 30, 1999, the Mantoloking Planning Board and Board of Adjustment met to consider the issue. Prior to the public meeting, the mayor, the chairman of the planning board, Ramirez, and the attorney for the board met privately. All were informed of York's opinion letter. They also discussed the fact that a great deal of the demolition had taken place with the approval of the construction code official. Given York's opinion, a decision was made to lift the stop-work order, and defendant's attorney was invited to join the meeting, at which time he was informed of the decision to lift the stop-work order. The parties then discussed the location of pilings, and the officials were told they would not be located beyond the pre-existing foundation line. In order to confirm that new pilings would not be located closer to the ocean than original pilings, as-built plans of the original house were requested.

Following the private meeting, the joint board held its public session. At that session, Ramirez recited the history of the revocation and reinstatement of the permit for the construction, stating,

"I have decided that my revocation of the permit was, in fact, improper and that, in fact, tonight I am reinstating the zoning permit. What this does . . . is that it removes jurisdiction from the Board and allows the [defendants] to move forward with their plans on renovating and constructing the house."

In consideration of the withdrawal of the stop-work order, defendant executed a release of any claims for damages as a result of its issuance. Defendant also withdrew his application for a variance, since none was necessary, and proceeded with the construction under the assumption plaintiff was allowing him to build according to the plans on file.

On July 21, 1999, plaintiff issued a permit to rebuild and renovate the "existing home." Construction continued in conformance with the submitted plans, and on August 16, 1999, Ramirez confirmed in a memo to the mayor that defendant could carry on according to the designs.

Subsequently, however, plaintiff issued a second stop-work order. Plaintiff took the action after intervenor contacted Husted and then Ramirez and presented a photo showing that the original building on the ocean side was only one story. Although Ramirez testified at trial that Cantelmo "had a massive number of photographs of the original house" and "would hand [him] a bunch" when he visited the site, it was not until the contact by Fries that he concluded the second story violated the ordinance.

An appeal of the second stop-work order was taken to the Ocean County Construction Board of Appeals, but it was dismissed on the grounds that the board lacked jurisdiction over zoning matters. Nevertheless, defendant did not halt construction.

Therefore, on November 1, 1999, the Borough filed its complaint and sought temporary restraints to stop defendant from further construction. While denying injunctive relief, the court warned defendant that any further building would be at the risk of having to remove it, should plaintiff prevail. Thereafter, Ian and Susan Fries were permitted to intervene to seek to have defendant remove the second and third floors of his home.

In the litigation, plaintiff contended the as-built plans were never submitted and a proper comparison between the pre-existing structure and the finished product could not be made. The court concluded that engineering drawings delivered by Cantelmo two weeks after the meeting of June 30, 1999 did include as-built plans. The problem was, although those plans showed the footprint of the house and where the pilings would be located, they did not show a second and third floor would extend out beyond the footprint towards the ocean.

At the trial, the parties gave conflicting testimony about what defendant proposed to build. The board attorney, along with the mayor and Ramirez, believed defendant would build the same house with upgraded materials. Defendant's attorney believed they all agreed defendant could build within the footprint of the original structure and in accordance with the plans submitted in March of 1999.

Judge Clyne concluded:

Notwithstanding this confusion, it is absolutely clear that the plans were available at the meeting and had been on file since January and certainly by March reflected a structure that was not the same as the pre-existing structure. It is also absolutely clear that no official had advised the defendant that the Borough was taking the position that a variance was necessary if there were incursions into what had been open space.

Judge Clyne found the communication surrounding the second stop-work order constituted "the first date on which the Borough advised defendant that rights flowing from the pre-existing non-conforming status were defined by not just the footprint of the foundation but by the building envelope, including the lateral walls and the roof of the pre-existing structure."

The court considered that before receiving the second stop- work order, defendant spent $12,500 on expansion of the second floor into open space. In addition, the court found defendant incurred the costs for expensive framing members and demolition. Judge Clyne's opinion also stated:

The court would be remiss if it did not make reference to the fact that if this Court were to order removal and elimination of that portion of the proposed master bedroom that invades what had been open space there would have to be a redesigning of the entire second floor and the first floor to the extent that first floor stairwells and amenities were designed to accommodate the second floor placement of rooms into what had been open space. To what extent this redesigning would require removal of other walls on the first and second floor that did not constitute an incursion is unknown but certainly should be anticipated.

Following denial of injunctive relief, on October 13, 2000, defendant applied for a certificate of occupancy. Six days later the Borough issued a temporary certificate.

At trial, defendant argued that the doctrines of equitable estoppel and laches barred plaintiff and intervenor, respectively, from obtaining relief. Judge Clyne agreed. In entering judgment for defendant and dismissing both complaints, Judge Clyne concluded, even though the "Borough and the Fries acted in good faith in taking the positions they did before and after September 1999, those actions [were] barred by the doctrines of estoppel and laches." The court further ordered the plaintiff to inspect defendant's house and issue a permanent certificate of occupancy if the residence conformed to the requisite standards. Plaintiff alone filed this appeal on March 27, 2003.

We agree with Judge Clyne's conclusion that plaintiff is estopped from pursuing the relief it seeks. Equitable estoppel is:

the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed. . . as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse. . . .

[Carlsen v. Masters, Mates & Pilots Pension Plan Trust, 80 N.J 334, 339 (1979)(citations omitted).]

Equitable estoppel prevents one from:

speaking contrary to one's own act or deed; one may not take a position inconsistent with that previously assumed and intended to influence the conduct of another, if such repudiation "would not be responsive to the demands of justice and good conscience," in that it would work prejudice and injury to the other. New Jersey Suburban Water Co. v. Harrison,[ 122 N.J.L. 189, 194 (Ct. Err. & App. 1939).]

[West Jersey Title & Guar. Co., v. Indus. Trust Co., 27 N.J. 144, 153 (1958).]

While New Jersey courts have been reluctant to apply the doctrine of estoppel against municipalities, Vogt v. Belmar, 14 N.J. 195, 205 (1954), it will apply to a municipality where equity and common fairness require it. Gruber v. Mayor of Raritan, 39 N.J. 1, 13 (1962). Specifically, equitable estoppel may be applied to prevent a municipality from disavowing a building permit issued in good faith, but based upon an erroneous, though arguably correct, interpretation of a zoning ordinance. Howland v. Borough of Freehold, 143 N.J. Super. 484, 489, certif. denied, 72 N.J. 466 (App. Div. 1976).

The criteria that must be met for equitable estoppel to apply are set forth in Hill v. Bd. of Adjustment, 122 N.J. Super. 156, 162 (App. Div. 1972) as modified by Howland, supra, 143 N.J. Super. at 489:

1. The building permit must have issued in good faith;

2. The building official issuing the permit must have acted within the ambit of his duty;

3. There was good faith reliance upon the permit by the applicant; and

4. The "issue of construction of the zoning ordinance or statute which, although ultimately not too debatable, yet was, when the permit was issued, sufficiently substantial to render doubtful a charge that the administrative official acted without any reasonable basis or that the owner proceeded without good faith." Howland, supra, 143 N.J. Super. at 489.

Judge Clyne applied this four-prong test and determined the doctrine of equitable estoppel should apply. With respect to the fourth criterion, Judge Clyne concluded there was an arguable legal justification for the determination that the zoning ordinance did not prohibit the construction. In making that determination, he relied on the split in authority over whether a non-conforming structure could be expanded without the need for a variance if the non-conformity itself was not expanded.

Where a nonconforming structure is expanded in size and the addition itself does not add to the pre-existing nonconformity, the construction official can issue a building permit without the need to apply to the Board of Adjustment for a variance.

[Cox, New Jersey Zoning and Land Use Administration, 11-4.1 (1989), quoted in Sherman v. Harvey Cedars Zoning Bd. of Adjustment, 242 N.J. Super. 421, 424 n.1, certif. denied, 122 N.J. 404 (App. Div. 1990).]

Contra Engleside at West Condominium Association v. Land Use Board of Borough of Beach Haven, 301 N.J. Super. 628,636 (Law Div. 1997).

Although Judge Clyne found as a fact that defendant's construction did constitute an expansion in size of the second and third stories and did add to the pre-existing non-conformity, he determined that the conflicting legal authorities with regard to the need for a variance created an arguable justification for issuing the permits nonetheless. We agree with this conclusion. Cf. Sherman, supra, 242 N.J. Super. 421.

In addition, we find Judge Clyne's factual findings to be supported by substantial credible evidence in the record. It is clear from the record that the expansion of the second and third floor into open space beyond the footprint of the foundation did not require a change to the foundation itself. Furthermore, there is nothing in the record to support a conclusion that the code enforcement officers or the zoning officer acted in bad faith or that defendant acted in bad faith in applying for permits. Moreover, the issuance of permits was clearly within the duty of plaintiff's officials.

The record also supports the finding that defendant relied on the permits in good faith and was not aware, nor was he made aware by plaintiff, that he needed a variance for the second and third floor incursions. Although defendant, as a precaution, applied for a variance, he withdrew the application after he was advised at the June 30, 1999 meeting that no variance was necessary.

Furthermore, the evidence supports the finding that defendant expended thousands of dollars relying on the validity of the permits and plaintiff's acquiescence to the ongoing construction. If he were ordered to remove the offending incursion, defendant would lose the money spent as well as additional funds to correct the expanded non-conformity and rebuild the structure within the envelope of the previous structure. We have no basis upon which to challenge these findings.

We also reject plaintiff's argument that the public interest was ignored in the court's determination to apply the doctrine of estoppel. While the public interest is served in upholding municipal ordinances, it is also furthered when homeowners can rely on permits that are reasonably based on applicable ordinances at the time of issuance. For all of these reasons, we conclude that the trial court's decision should be affirmed.

Finally, we note that because intervenors have not participated in the appeal, we consider only the contentions raised by the Borough. As to it, we find the doctrine of equitable estoppel applies. We need not comment on whether the result would be the same if intervenors asserted independent rights.


Affirmed.

(continued)

(continued)

16

A-3829-02T3

January 25, 2006