501 WASHINGTON BLVD LLC v. SEA GIRT BOROUGH PLANNING BOARD

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

501 WASHINGTON BLVD LLC;

503 WASHINGTON BLVD LLC;

SITAR SEA GIRT LLC; 900

FIFTH AVENUE LLC; and

SITCO SEA GIRT LLC,

Plaintiffs-Appellants,

v.

SEA GIRT BOROUGH PLANNING

BOARD and the BOROUGH OF

SEA GIRT,

Defendants-Respondents,

and

THOMAS JENNINGS, MICHAEL FUCCI

and MICHAEL and JOSEPH CANTERINO,

Defendants-Intervenors.

_____________________________________

January 3, 2017

Argued December 12, 2016 Decided

Before Judges Sabatino, Nugent and Haas.

On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-196-13.

Thomas J. Hirsch argued the cause for appellants.

Kevin E. Kennedy argued the cause for respondents.

PER CURIAM

Plaintiffs 501 Washington Blvd. LLC, 503 Washington Blvd. LLC, Sitar Sea Girt LLC, 900 Fifth Avenue LLC, and Sitco Sea Girt LLC (collectively "the applicant") appeal from a January 28, 2015 Law Division order denying its motion for reconsideration of the trial court's October 4, 2013 order, which had affirmed the decision of defendant Sea Girt Planning Board ("Planning Board" or "Board") to deny its application for use variances and site plan approval to construct two apartment buildings. We reverse and remand for further proceedings.

The parties are fully familiar with the procedural history and facts of this case and, therefore, a brief summary will suffice. The applicant owns two lots on one side of an intersection in the Borough of Sea Girt ("Borough"), as well as two lots across the street at the same intersection. The lots are located in the District 2 East commercial zone and are immediately adjacent to a residential zone.

The Borough's zoning ordinance permits a variety of commercial uses in the District 2 East zone and also permits apartments on the second floor of commercial buildings. However, the ordinance only permits two apartment units per lot.

In its application, the applicant sought to combine the two lots on one side of the intersection and construct a two-story luxury apartment building with four apartments on each floor. The applicant also proposed to combine its two lots across the street and construct a similar two-story, eight-apartment building. The Planning Board determined that the applicant needed to secure a use variance to permit it to construct a new residential building in the commercial zone, and a density variance because the number of apartments it proposed exceeded the number of apartments permitted per lot in the zone.

The applicant and the Planning Board disputed whether the applicant also had to obtain a building coverage variance. In 2006, there was a re-codification of the Borough's zoning ordinance. Due to some ambiguity in the language of the new ordinance, it was unclear whether the Borough intended that uses in the commercial zone had to abide by a limitation that permitted no more than 20% building coverage on a lot. The building coverage of the applicant's proposed project was 32.9%.

The Board conducted an eight-day public hearing between March 21, 2012 and October 17, 2012. The applicant, the Board, and four objectors presented expert and lay testimony in support of their respective positions. A number of citizens also voiced their support or opposition for the project during the course of the hearing.

On October 17, 2012, seven members of the Board unanimously voted to deny the application. The Board concluded that the applicant did not meet the positive and negative criteria for a use variance under N.J.S.A. 40:55D-70(d)(1). The Board also found that the applicant's proofs failed to support its request for a density variance under N.J.S.A. 40:55D-70(d)(5).

However, the building coverage limitation drew the most Board comment during the voting. One Board member stated

[I]n my opinion while this is a very attractive application, it's just too large for our small town. I think if you could take it down and make it closer to 20 percent lot coverage you would indeed have my vote. I think the idea of apartments is excellent. And I think there is definitely a market for it. I would vote to deny this due to the extreme lot coverage issue. And I think the extreme lot coverage would be a detriment to our zoning plan. And it's . . . due to . . . the size of the application and not to the proposed use. I would vote for the use of it. But on the basis of this as we're voting in total I would vote to deny this application only because of its size.

A second Board member stated that "one particular concern of mine was the issue of lot coverage." Another Board member declared, "I am extremely concerned with the size of the units. 32 and 35 percent coverage is just way too much coverage for those lots." Finally, a fourth Board member noted that building coverage was "just a big issue in my mind."

On November 28, 2012, the Board adopted a resolution further detailing the reasons for the denial of the application. In the resolution, the Board made no less than seventeen separate references to the building coverage limitation, each noting that the "excessive building coverage" proposed in the application was not justified and prevented its approval. The Board also listed other reasons for its action, including its findings that the proposed residential use of the property proposed by the applicant was not permitted in a commercial zone, and that the number of apartments exceeded the number permitted by the density ordinance. However, in almost every reference to these stated rationales in its decision, the Board also mentioned that the applicant's proposal would exceed the building coverage limitation.

Somewhat inconsistently with some of the expressions of the Board members at the hearing and the other provisions of the resolution noted above, the Board included a paragraph in its resolution that stated

Notwithstanding the above, if a reviewing [c]ourt were to determine that a Building Coverage Variance is not necessary in the within situation, the Board Members would still deny the [a]pplication based upon the excessive density, coupled with the overall non-permitted use aspect of the proposal.

In the very next paragraph, however, the Board reiterated its position that "the deviations" the applicant proposed from the "maximum building coverage allowed on each of the sites" were "not de-minimus in nature." The Board also stated that the "excess coverage proposed [by the applicant] will have a detrimental impact on the quality of life for the residents of the Borough[.]"

Following the Planning Board's denial of the application, the applicant filed an action in lieu of prerogative writs in the Law Division. In addition to the Board, the applicant named the Borough as a co-defendant, and alleged that the 20% building coverage limitation did not apply in the District 2 East commercial zone, and was otherwise invalid, arbitrary, and capricious. The applicant pointed out that of the twenty-one properties in the commercial zone, only one complied with the 20% building coverage limitation. Instead, the average building coverage in the commercial zone was 35%, which was above that proposed by the applicant. According to the applicant, this further demonstrated that this limitation was not intended to apply to the commercial zone despite some ambiguity in the 2006 re-codification.1

Following oral argument, the trial judge upheld the Planning Board's decision to deny the application. In an oral opinion rendered on September 19, 2013, the judge concluded that the Board's findings and conclusions were supported by the evidence and were not arbitrary, capricious, or unreasonable. The judge found that the building coverage limitation applied "to any lot[,]" including lots in the commercial zone. Because the applicant's proposal "exceeds what is required" in terms of building coverage, the judge found that the Board appropriately applied this ordinance, together with the use and density ordinances, in denying the application.

The applicant and the Borough then settled the applicant's claim that the building coverage ordinance was never intended to apply in the commercial zone. The Borough agreed with the applicant on this point and adopted a new ordinance clarifying that the 20% maximum building coverage limitation only applies to residential zones in the Borough and not to the commercial zone.

Having obtained this important clarification from the Borough, the applicant filed a motion for reconsideration of the trial court's decision upholding the Board's denial of its proposal. Following argument on December 19, 2014, the judge rendered a brief oral opinion denying the applicant's motion. The judge acknowledged that the Board's resolution discussed the building coverage issue in detail, under a supposition that the 20% maximum limit was applicable in the commercial zone. However, the judge concluded that this was "just one factor" that the Board considered and that the building coverage issue "was not the only reason" cited by the Board in denying the application. The judge also noted that it might be logistically difficult to remand the matter to the Board because, among other things, the members would need to again familiarize themselves with the record. This appeal followed.

On appeal, the applicant argues that the trial judge failed to give sufficient consideration to the substantive points it presented to the Planning Board concerning its compliance with the positive and negative criteria. In addition, plaintiff contends that, at a minimum, the judge should have reconsidered her decision and remanded the matter to the Board once the Borough clarified that the building coverage limitation did not apply in the commercial zone. We agree with the applicant's contention on this latter point.

We review the denial of a motion for reconsideration to determine whether the trial court abused its discretionary authority. Cummings v. Bahr, 295 N.J. Super. 374, 389 (App. Div. 1996). Reconsideration should only be used "for those cases which fall into that narrow corridor in which either 1) the Court has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the Court either did not consider, or failed to appreciate the significance of probative, competent evidence." Id. at 384 (quoting D Atria v. D Atria, 242 N.J. Super. 392, 401-02 (Ch. Div. 1990)). Additionally, the decision to deny a motion for reconsideration falls "within the sound discretion of the [trial court], to be exercised in the interests of justice." Ibid. (quoting D Atria, supra, 242 N.J. Super. at 401).

Applying this standard, we are constrained to conclude that the trial court mistakenly exercised its discretion by denying the applicant's motion for reconsideration. As discussed above, the Board's discussion of the building coverage limitation permeated its analysis. A majority of the seven members who voted on the application specifically mentioned building coverage as a primary reason for denying the application. In addition, the Board's November 28, 2012 resolution repeatedly referred to the building coverage limitation as an important justification for the Board's decision. The trial court also based its decision to uphold the Board's decision, at least in part, on its conclusion that the applicant failed to meet the building coverage requirements for the project.

However, as the applicant established in its claim against the Borough, the building coverage limitation was never intended to apply to the commercial zone. This information was not available at the time of the Board's decision or even when the trial court upheld the Board's ruling. Thus, the legal premise underlying the Board's and the court's initial decisions, that there was a building coverage limitation for the commercial zone, was changed by subsequent events. Under these circumstances, we are satisfied that, in the interests of justice, the court should have remanded this matter to the Board to re-examine its denial of the application in light of this change in the legal underpinnings for its earlier decision.

In so ruling, we are of course mindful that the Board included a provision in its resolution stating that if a court later found that the building coverage limitation did not apply to the applicant's project, the Board would have still denied the application. As noted above, however, the Board's findings with regard to the building coverage limitation were inextricably intertwined with its analysis of the use and density zoning ordinances. Thus, on this record, it is impossible to reasonably conclude that the Board would have reached the same decision if the members knew that the building coverage proposed in the applicant's proposal was not prohibited by the Borough's ordinance. Therefore, a remand to enable the Board to consider this critical information was clearly in order.

Like the trial court, we appreciate the logistical difficulty of remanding this matter to the Board, particularly in a case where, as here, there is an extensive record for the Board to reconsider. However, our Supreme Court has provided guidance in this area. In Pizzo Mantin Group v. Township of Randolph, the Court stated that when a remand is required, we should remand the matter initially to the trial court. 137 N.J. 216, 232 (1994). Remanding the matter to the trial court, rather than directly to the Board will enable the trial court "to determine the nature and scope of any hearing to be undertaken by the [Board] to reassess or to recast its factual findings in light of the" Borough's confirmation that the building coverage limitation does not apply in the commercial zone. Ibid. At a minimum, the Board must make new findings of fact and conclusions of law concerning the application now that it knows that the building coverage limitation is inapplicable.

Prior to remanding the matter to the Planning Board, the trial court should conduct a case management conference with the parties' attorneys and map out a procedural course of conduct for the Board to follow on remand. As the Court stated in Pizzo, the Board's reconsideration of an applicant's proposal on remand need not be confined to the record and, therefore, the possibility that additional evidence may be required by the Board or sought or tendered by the applicant should not be automatically foreclosed. Id. at 233. Instead, these "are matters that the trial court may settle on remand." Id. at 234. Likewise, the potential contours of any potential role of objectors on remand before the Board is referred to the trial court and counsel for consideration.

Finally, the trial court and the parties should resolve the issue of which Board members may participate in the reconsideration of the application if there have been changes in membership since the time of the Board's November 28, 2012 resolution. As the Court noted in Pizzo, when, as here, a planning board is directed to make a "fresh determination" of a matter, all members of the board may participate, including "those who participated in the earlier hearings as well as those who have since joined the board." Ibid.

In sum, we reverse the trial court's decision denying the applicant's motion for reconsideration, and remand this matter in the first instance to the trial court to determine the process and procedures the Planning Board should follow when it reviews the application anew. In remanding this matter, we do not suggest a preferred result, but only that the Board reconsider the matter on the basis of the new information concerning the inapplicability of the building coverage limitation in the commercial zone, and issue a new decision which fully articulates its findings of fact and conclusions of law. Any review of that new decision shall be pursued initially in the trial court in a new action in lieu of prerogative writs.

Reversed and remanded. We do not retain jurisdiction.

1 The trial judge decided to bifurcate this matter by reviewing the Planning Board's decision first, and thereafter permitting the applicant and the Borough to litigate separately the question of the applicability of the building coverage limitation to the commercial zone.