Opinion
DOCKET NO. A-0103-14T3
05-10-2016
LARRY PRICE, Plaintiff-Appellant, v. CITY OF UNION CITY, Defendant-Respondent.
Larry Price, appellant, argued the cause pro se. Gregory F. Kotchick argued the cause for respondent (Durkin & Durkin, LLP, attorneys; Mr. Kotchick, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Yannotti and St. John. On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-385-14. Larry Price, appellant, argued the cause pro se. Gregory F. Kotchick argued the cause for respondent (Durkin & Durkin, LLP, attorneys; Mr. Kotchick, of counsel and on the brief). PER CURIAM
Plaintiff Larry Price appeals a Law Division order, declaring a December 17, 2013 ordinance (Ordinance) of the City of Union City (the City) void, but applying the decision prospectively. Price contends the order should have applied retroactively, asserting the Ordinance was void ab initio. Having reviewed the arguments in light of the record and applicable principles of law, we agree and remand for entry of an order consistent with our decision.
On August 20, 2013, the Ordinance amending Chapter 223 "Land Development Ordinance" of the City was introduced before the Board of Commissioners of the City (the Commissioners). The stated purpose of the amendment was to protect the health and safety of tenants of illegal units in multi-family homes by encouraging the owners to bring the units into compliance with code through a streamlined process that did not involve the time and expense of a site plan approval application.
In accordance with N.J.S.A. 40:55D-64, the proposed Ordinance was referred to the Planning Board of the City (the Board) for comment and consideration.
On October 22, 2013, the Board conducted a hearing on the Ordinance. As a result of a recommendation by the Board, on November 6, 2013, a hearing was held before the Commissioners, who determined it appropriate to republish the Ordinance and to set a new hearing date because of certain changes. The proposed Ordinance was published in the Jersey Journal on November 25, 2013.
On December 3, 2013, a public hearing was held before the Commissioners. After public questions and comments, the hearing was adjourned until December 17, 2013. On that date, the Commissioners adopted the Ordinance to exempt from site plan approval and from the requirement of a variance application "the conversion, creation or legalization of units within pre-existing dwellings." Further, two conditions applied: that the "total number of units resulting . . . do not exceed three . . . and are permitted by the provisions . . . of the City Code." The adoption of the Ordinance was published in the Jersey Journal on December 26, 2013.
As required by N.J.S.A. 40:55D-10(i).
Less than one month later, on January 24, 2014, Price filed a complaint in lieu of prerogative writs in the Law Division, challenging the Ordinance as arbitrary, capricious and unreasonable. Rule 4:69-6 sets forth the time limitations on the institution of such action. Subsection (a) acknowledges a general limitations period of forty-five days "after the accrual of the right to the review, hearing or relief claim." R. 4:69-6(a). Subsection (b) qualifies that broad limitation, detailing eleven specific exceptions to the general rule, the applicability of which are determined based on the nature or context of the challenge. R. 4:69-6(b)(1) to (11). Relevant to this case, the rule prescribes:
(b) Particular Actions. No action in lieu of prerogative writs shall be commenced
. . . .
(3) to review a determination of a planning board or board of adjustment, or a resolution by the governing body or board of public works of a municipality approving or disapproving a recommendation made by the planning board or board of adjustment, after 45 days from the publication of a notice once in the official newspaper of the municipality or a newspaper of general circulation in the municipality . . . .
[R. 4:69-6(b)(3).]
A trial was held on June 20, 2014. On June 24, 2014, the court determined that the Ordinance violated the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -163, concluding it does not treat similarly situated property the same, and was thus void. The court's order of July 21, 2014, stated that the Ordinance was invalid as of June 24, 2014. Further, "[a]ll applications approved prior to that date shall remain in effect. All applications pending on that date or submitted after that date are declared void."
Initially, both the City and Price appealed; however, the City withdrew its appeal. On appeal, Price argues that the court erred by making the invalidity prospective rather than concluding the Ordinance was void ab initio. The City disagrees, contending that making the Ordinance void ab initio would have a detrimental effect on the property owners who relied on the Ordinance in seeking to legalize existing unlawful units, as well as tenants who reside in those units.
It is well established that an amendment to an ordinance, whether by court order or otherwise, is not automatically entitled to retroactive effect. See Tremarco Corp. v. Garzio, 32 N.J. 448 (1960); Urban Farms, Inc. v. Borough of Franklin Lakes, 179 N.J. Super. 203 (App. Div.), certif. denied, 87 N.J. 428 (1981).
In Urban Farms, plaintiff developer had previously been granted approval to build a nursing home in a residential zone as a conditional use. After seven years, the governing body of Franklin Lakes changed the zoning to no longer conditionally permit nursing homes. We invalidated this ordinance amendment because it was contrary to the MLUL. Id. at 216-17. We went on to explain that even if the ordinance were valid, the developer could still build the project because the municipality does not have an absolute right to retroactivity in their ordinances. Id. at 221. We held, "substantial economic reliance by a developer on a building permit issued to him prior to a zoning ordinance amendment will defeat its retroactivity." Ibid. "The ultimate objective is fairness to both the public and the individual property owner." Ibid. (quoting Tremarco, supra, 32 N.J. at 457). As such, in Urban Farms, we balanced:
the nature, extent and degree of the public interest to be served by the ordinance amendment on the one hand and, on the other hand, the nature, extent and degree of the developer's reliance on the state of the ordinance under which he has proceeded, the extent to which his undertaking has been at any point approved or encouraged by official municipal action, and the extent to which, under the circumstances and as objectively determined, he should have been aware that the municipality would be likely to change the ordinance prior to actual commencement of construction.
[Ibid. (emphasis added)].
Unlike here, Urban Farms involved substantial economic reliance by the developer. We pointed to the "seven years of dedication to the project which followed the municipality's original approval." Urban Farms, supra, 179 N.J. Super. at 222. Here, Price properly filed his complaint within the prescribed forty-five day period under Rule 4:69-6(b)(3).
According to a July 15, 2014 certification by the City's Construction Code Official, since the adoption of the Ordinance, approximately 135 applications seeking to legalize existing unlawful dwelling units were received with only fourteen having already been approved to that date. In oral argument, Price, without support in the record before us, further contended that only two of these approvals occurred between the date the Ordinance was published and the filing of his complaint.
Price tried to get the copies of all applications and approvals through an Open Public Records Act (OPRA), N.J.S.A. 47:1A-1 to -13, request and court orders. He contends that despite court orders, he has only received six of the applications and no approvals. We do not express any opinion on the legality of that issue. --------
The City contends that the applicants' reliance on this Ordinance was reasonable, however, we disagree. Rule 4:69-6(b)(3) authorizes challenges within forty-five days after a municipality publishes any determination or resolution. Beyond those forty-five days, any action will be dismissed. See, e.g., Milford Mill 128, LLC v. Borough of Milford, 400 N.J. Super. 96 (App. Div. 2008). "[T]his statute of limitations is designed to encourage parties not to rest on their rights." Rocky Hill Citizens for Responsible Growth v. Planning Bd. of Rocky Hill, 406 N.J. Super. 384, 398 (App. Div. 2009) (internal citation omitted). As such, after this period, interested parties can proceed with reasonable reliance on the determination or resolution. Likewise, it would be unreasonable to rely on a contested ordinance until a judicial determination was made.
This follows the concept that reliance will not be deemed reasonable before the time to appeal has run. Lizak v. Faria, 96 N.J. 482, 499-500 (1984); Donadio v. Cunningham, 58 N.J. 309, 323 (1971). In Lizak, builders argued that their reliance on the issuance of a valid building permit in proceeding with the construction should have equitably estopped the municipality from the removal of the structure. Id. at 499. However, the Court found that their actions were not reasonable, knowing that neighbors objected to the proposal and the Board of Adjustment had orally, but not yet in writing, disapproved their application; consequently, "they reasonably could have expected further opposition to the construction . . . . In relying on their attorney's opinion while the underlying variance was still appealable, they took their chances." Id. at 499-500. Here, the applicants who sought approval of their illegal units during the forty-five day period for a challenge similarly took their chances. Price did not "rest on his rights," but brought his challenge well within the period to do so. Rocky Hill, supra, 406 N.J. Super. at 398. The applicants' reliance was unreasonable and any approved applications must be voided.
Further, the record contains no evidentiary support demonstrating reliance by the fourteen applicants who received approvals prior to July 15, 2014, except the bare assertion by the City of "substantial expense." It should be noted that any costs incurred were to bring illegal units up to code. Moreover, of the fourteen approvals, the record does not disclose how many were granted prior to June 24, 2014.
As such, since Price challenged the Ordinance shortly after its enactment, and because the Ordinance violated the MLUL, it should have been found to be void ab initio and have no legal effect. See Hilton Acres v. Klein, 35 N.J. 570, 581 (1961) (stating that a municipal land use action that directly violates law or lacks legal authority is "void ab initio and has no legal efficacy"); Grasso v. Borough of Spring Lake Heights, 375 N.J. Super. 41, 48 (App. Div. 2004).
We remand for the entry of an order by the trial court consistent with this opinion. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION