DEG, LLC v. TOWNSHIP OF FAIRFIELD

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1657-11T4

DEG, LLC,

Plaintiff-Respondent,

v.

TOWNSHIP OF FAIRFIELD, and

ZONING OFFICER GLENN

PLUMSTEAD, in his official

capacity,

Defendants-Appellants.

_______________________________________

November 16, 2012

Argued October 16, 2012 Decided

Before Judges Yannotti and Harris.

On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket Nos. L-6984-05 and L-8596-11.

Dennis M. Galvin argued the cause for appellants (The Galvin Law Firm, attorneys; Mr. Galvin, on the brief).

Brian M. Chewcaskie argued the cause for respondent(Gittleman, Muhlstock& Chewcaskie, L.L.P., attorneys; Mr. Chewcaskie and Nylema Nabbie, on the brief).

PER CURIAM

The Township of Fairfield (Township) appeals from an order entered by the Law Division on November 18, 2011, which permitted plaintiff DEG, LLC (DEG) to relocate its sexually-oriented business from the front to the rear of a building in the Township. We affirm.

In June 2005, DEG entered into an agreement with Wespres, Inc. (Wespres) to lease premises in the rear of a building located at 276 Route 46 East. DEG intended to operate a sexually-oriented business at that location. At the time, the Township's zoning ordinance prohibited sexually-oriented uses in any zone in the municipality.

DEG filed an application with the Township seeking a permit to operate the business in the leased premises as a nonconforming use. The Township denied the application. DEG thereupon filed an action in the Law Division, challenging the constitutionality of the Township's zoning ordinance and the application of N.J.S.A. 2C:34-7, which precludes persons from operating sexually-oriented businesses at certain locations.

The trial court determined that the Township's ordinance was unconstitutional on its face because it precluded all sexually-oriented businesses within the municipality. The court entered a temporary restraining order, which required the Township to issue to DEG the necessary permits so that it could operate its business in the leased premises.

Because factual issues remained with regard to DEG's as-applied challenge to N.J.S.A. 2C:34-7, the trial court allowed the parties an opportunity for discovery and scheduled a plenary hearing. While the matter was pending, the parties reached a settlement and agreed to the entry of a consent judgment, which permitted DEG to continue to operate its sexually-oriented business at its location and acknowledged that DEG was entitled to a certificate of nonconforming use pursuant to N.J.S.A. 40:55D-68.

The Township thereafter enacted new zoning ordinances which allowed sexually-oriented businesses to operate as conditional uses in a zone other than the zone where DEG was operating. The Township also refused to issue the certificate of nonconforming use to DEG on the ground that the operation at its location was not permitted by N.J.S.A. 2C:34-7.

Consequently, DEG filed a motion in the trial court to enforce the parties' consent judgment, and the Township filed a cross-motion seeking relief from the judgment pursuant to Rule 4:50. The trial court entered an order enforcing the consent judgment.

We reversed the trial court's order, noting that the Township's new ordinances represented a "significant change in law" which may warrant relief from the judgment pursuant to Rule 4:50-1(e), and we remanded the matter for a hearing to determine whether continued enforcement of the judgment would be equitable. DEG, LLC. v. Twp. of Fairfield, 398 N.J. Super. 59 73-75 (App. Div. 2008). The Supreme Court reversed our decision and reinstated the trial court's judgment. DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 274 (2009). Among other things, the Court stated that the

consent judgment, by its very terms, was not intended to rezone the area in which DEG was located but only to settle DEG's statutory claim and acknowledge its prior nonconforming status under the zoning laws so that, if DEG ever abandoned or otherwise terminated the use, the premises would lose its protection.

[Id. at 273.]

On June 25, 2009, the Township issued a certificate of nonconforming use to DEG. About that time, DEG filed an application with the Township to relocate its business from the rear to the front of the building. The Township's zoning officer denied the application.

DEG thereafter filed a motion in aid of litigant's rights in the Law Division, claiming that the zoning officer's determination violated the consent judgment. The trial court determined that re-location of DEG's business from the rear to the front of the building "would be consistent with" the consent judgment.

Therefore, the trial court entered an order dated March 10, 2010, which required the Township to issue to DEG a certificate of re-occupancy and/or a certificate of nonconforming use permitting DEG to operate in the front portion of the building. The Township filed a motion for reconsideration, which the trial court denied by order entered on May 4, 2010. On May 10, 2010, the Township filed an appeal from the trial court's orders.

On that same date, the Township's attorney wrote to DEG's counsel and stated that, while the Township would comply with the trial court's order, it was not waiving its "rights to continue to contest your client's use of the front portion of the building" and that DEG was proceeding at its "own risk." On May 11, 2010, the Township issued the certificate of re-occupancy, allowing DEG to re-locate to the front of the premises.

On August 3, 2010, DEG and Wespres entered into an amendment to DEG's lease, which extended its term and permitted DEG to occupy space in the front of the building. The space in the front of the building had previously been occupied by Custom Dinettes. The amendment to the lease further provided that in the event the Township prevailed on its then-pending appeal, DEG had the right to re-locate its business to the rear of the premises upon sixty days written notice to Wespres.

In August 2010, the Township informed Wespres that a certificate of re-occupancy was required because Custom Dinettes was then occupying the rear rather than the front portion of the premises. Wespres told the Township that it was merely allowing Custom Dinettes to use the premises in the rear of the building for storage. The Township threatened to penalize Wespres if it did not obtain the certificate of re-occupancy. Wespres and Custom Dinettes thereafter obtained the certificate.

In April 2011, we reversed the trial court's March 10, 2010 order, concluding that the consent judgment required DEG to operate its business in the rear of the building. DEG, LLC v. Twp. of Fairfield, No. A-4051-09 (App. Div. Apr. 7, 2011). DEG filed a motion with us seeking a stay of our judgment pending a decision by the Supreme Court on a petition for certification. On April 12, 2011, the Township's attorney wrote to DEG's attorney and stated that he had "cautioned" DEG against moving to the front of the building, as the move might be viewed as an abandonment of DEG's right "to make use of the rear store."

We entered an order dated May 2, 2011, denying DEG's motion for a stay. DEG filed a petition for certification with the Supreme Court and a motion for a stay of our judgment pending consideration of the petition. On June 14, 2011, the Supreme Court granted DEG's motion for a stay. Thereafter, DEG and Wespres entered into another amendment to DEG's lease, which gave DEG an additional period of time in which to elect to relocate to the rear of the premises.

On September 28, 2011, the Supreme Court denied DEG's petition for certification. DEG, LLC v. Twp. of Fairfield, 208 N.J. 381 (2011). By letter dated October 3, 2011, DEG informed the Township that it intended to re-locate its business to the rear of the building within the ensuing sixty days.

By letter dated October 5, 2011, the Township advised DEG that it had abandoned the rear portion of the premises and would not be permitted to return to that part of the building without a court order. DEG continued to operate in the front of the building.

The Township then filed a motion in the trial court to enforce litigant's rights seeking, among other things, an order requiring DEG to immediately cease operating its business. The Township later filed another application seeking an order requiring DEG to vacate the premises on the ground that it had abandoned its right to operate in the building. DEG filed a cross-motion to enforce litigant's rights, seeking an order granting it permission to relocate to the rear of the premises.

The trial court considered the applications on November 9, 2011, and delivered a decision from the bench concluding that DEG had not abandoned its rights under the consent judgment and it was entitled to operate its business in the rear of the building. The court entered an order dated November 18, 2011, which gave DEG thirty days to re-locate to the rear of the premises. This appeal followed.

The Township argues that: (1) DEG has lost its right to operate in the rear of the leased premises as a nonconforming use; (2) DEG's nonconforming use was extinguished when it ceased operating in the rear of the building and that space was occupied by Custom Dinettes; and (3) the trial court failed to make appropriate findings of fact as required by Rule 1:7-4.

We have carefully considered the Township's contentions and conclude that they are without merit. We accordingly affirm the trial court's order of November 18, 2011, substantially for the reasons stated by trial court in its decision from the bench on November 9, 2011. We add the following.

A nonconforming use is a "property right, a part of land title, that [can] only be extinguished by acts or omissions indicating an intention to abandon it." Scavone v. Borough of Totowa, 49 N.J. Super. 423, 428 (App. Div. 1958). Abandonment of a nonconforming use requires proof of "(1) an intention to abandon, and (2) some overt act or failure to act which carries a significant implication that the owner neither claims nor retains any interest in the subject matter of the abandonment." S & S Auto Sales, Inc. v. Zoning Bd. of Adj. of Borough of Stratford, 373 N.J. Super. 603, 613-14 (App. Div. 2004).

The intent to abandon "must be continuing and definite and the owner bears the burden of proof by competent evidence." Berkeley Sq. Ass'n, Inc. v. Zoning Bd. of Adj. of City of Trenton, 410 N.J. Super. 255, 268 (App. Div. 2009) (quoting S & S, supra, 373 N.J. Super. at 624). The time of non-use must be considered along with the "subjective intent to resume the conforming use." Ibid. (quoting S & S, supra, 373 N.J. Super. at 624). See also Children's Institute v. Verona Twp. Bd. of Adj., 290 N.J. Super. 350, 357 (App. Div. 1997) (noting that a temporary non-use does not constitute abandonment of a nonconforming use).

We are convinced that the record supports the trial court's determination that DEG did not abandon its right to operate its business in the rear of the leased premises as a nonconforming use. As we have explained, DEG moved to the front portion of the building after the trial court ruled that the consent judgment allowed DEG to operate its business there, and DEG never indicated that it intended to abandon any right to operate the business in the rear of the building.

Indeed, in the first lease amendment which allowed DEG to relocate the business, DEG retained the right to return to the rear of the premises if the Township's appeal from the trial court's March 25, 2010 order was successful. Furthermore, after we reversed the trial court's order, and DEG filed its petition for certification with the Supreme Court, DEG and Wespres executed another lease amendment which recognized DEG's right to relocate to the rear of the premises.

We recognize that the Township warned DEG that it was proceeding at its own risk in relocating the business and stated that it was reserving the right to contend that DEG abandoned the nonconforming use by moving to the front of the building. The Township's statements do not, however, establish that DEG intended to abandon its right to operate its business in the rear of the building as a nonconforming use.

The Township further argues that DEG's nonconforming use was extinguished as a matter of law when DEG moved from the rear of the building and Custom Dinettes temporarily used that portion of the building for storage. In support of its argument, the Township relies upon Twp. of Belleville v. Parrillo's, Inc., 83 N.J. 309 (1980). In that case, a restaurant and catering business operated as a nonconforming use. Id. at 312. The owners thereafter renovated the premises and re-opened as a discotheque. Ibid.

The Court considered whether "the conversion from a restaurant to a discotheque represented a substantial change" that precluded the discotheque from continuing to operate as a nonconforming use. Id. at 316. The Court concluded that the change was substantial and therefore impermissible. Id. at 318. The Court stated

The entire character of the business has been altered. What was once a restaurant is now a dancehall. Measured by the zoning ordinance, the general welfare of the neighborhood had been demonstrably affected adversely by the conversion of defendant's business.

[Ibid.]

In our view, the Township's reliance upon Parrillo's is misplaced. In that case, the change in use was substantial, thereby extinguishing the right to continue the prior nonconforming use of the property. Here, there has been a change in use from operation of a sexually-oriented business to temporary storage. However, as we have explained, DEG never abandoned its right to use the rear of the property as a nonconforming use.

The Township further argues that DEG's right to use the rear of the premises as a nonconforming use expired pursuant to Section 45-66.4 of its zoning ordinance, which states that "no nonconforming use shall, if once changed into a conforming use, be changed back into a nonconforming use." However, as we have explained, DEG never abandoned the nonconforming use, and had the right under its lease to return to the rear of the building. Under these circumstances, the brief use by Custom Dinettes of space in the rear of the building did not constitute a change from a nonconforming to a conforming use of the sort envisioned by the ordinance.

We have considered the Township's other contentions and find that they are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.