The municipal bar benefitted substantially from the Supreme Court decisions this term. Although two of them probably stand out among the 14 reviewed here, virtually every one either clarified previous ambiguous holdings or established a relatively definitive standard for practitioners to apply in sometimes common situations. Furthermore, unlike some decisions in the past, the court’s opinions were direct and concise. One decision had substantial political consequences, while another discarded an age-old analysis in favor of one that is more easily applied and readily understood. The rest laid down a series of relatively unambiguous principles that will assist practitioners in dealing with these recurring issues.
The two stand-out decisions dealt with eminent domain valuation practices and the ability of the New Jersey Department of Environmental Protection (NJDEP) to conduct warrantless searches. Five cases dealt with land-use related matters and affordable housing, two with conflicts of interests and others addressed sewer connection fees, Tort Claims Act, police discipline, arbitration and tax appeals.
The first stand-out decision involved valuation methods under the eminent domain law. In Borough of Harvey Cedars v. Karan, No.070512 (N.J. July 8, 2013), the Supreme Court discarded the distinction between special and general benefits in partial-takings cases and held that juries determining just compensation should use a straightforward, fair-market value approach, considering any nonspeculative, quantifiable benefits capable of reasonable calculation at the time of the taking.
The issue arose in a partial-takings case when the Borough of Harvey Cedars brought an eminent domain action to secure an easement for the purposes of constructing a 22-foot-high dune, which had the effect of partially obscuring the property owner’s previously unobstructed view of the ocean. After rejecting the borough’s compensation offer and the commissioner’s award, the property owners demanded a jury trial. The trial court prohibited the jury from considering any project-related general benefits that would be enjoyed by this property owner as well as other residents of the borough. The borough was dissatisfied with the award and appealed to the Appellate Division. The Appellate Division concurred that the overall benefits afforded by the dune project to all residents could not be considered by a jury to serve to decrease the property owner’s compensation award because that protection was a general benefit and enjoyed by all persons on the island.
The Supreme Court framed the question simply: how is “just compensation” computed in a partial-takings case?
Justice Albin, writing for a unanimous court, reached back to an 1892 New Jersey Supreme Court case, Mangles v. Hudson County Board of Chosen Freeholders, 55 N.J.L. 88 (Sup. Ct. 1892), for the proposition that:
[A]ny benefit” arising from the taking and public use of property “which admits of reasonable computation may enter into the award.” In Mangles, the increased value of the land abutting the road was not a general benefit and therefore could be deducted from the compensation award if it sprung from “the benefit immediately arising from the mere existence of the road.
To his credit, Justice Albin acknowledged the difficulty of distinguishing between general and special benefits, admitting that “in partial-takings cases, our courts have often used the shorthand terms general and special benefits in different ways — and sometimes in ways that have obscured or confused these principles.” He concluded that “[t]he task of distinguishing between special and general benefits — as defined by case law in New Jersey and other jurisdictions — is difficult ‘even for trained legal minds.’” Summarizing, he stated:
Today, the terms special and general benefits do more to obscure than illuminate the basic principles governing the computation of just compensation in eminent domain cases. The problem with the term “general benefits” is that it may mean different things to different courts. To some courts, the term “general benefits”‘ is a surrogate for speculative or conjectural benefits. To other courts, general benefits are any benefits shared in common with a landowner’s neighbors or community. (Internal citations omitted.)
With that, and noting that “[w]e need not pay slavish homage to labels that have outlived their usefulness,” the Supreme Court opted for rejecting use of the general benefits doctrine in favor of a fair-market value approach as the benchmark. It found that speculative benefits should not be considered in a partial-taking because those speculative benefits would not be a factor in calculating fair market value. On the other hand, reasonably calculable benefits that may increase the value of the property at the time of the taking should serve to reduce the condemnation award, whether or not a portion of those benefits are also enjoyed by the local community:
We cannot devise a perfect means for compensating a property owner whose land is partially taken as part of a public project. We can only ensure that every person will receive just compensation, as promised by our State and Federal Constitutions. Using fair market value as the benchmark is the best method to achieve that result.
In so concluding, the court found that the borough should not have been prevented from presenting all nonspeculative, reasonably calculable benefits from the project for which the eminent domain proceeding derived. “In short, the quantifiable decrease in the value of their property — loss of view — should have been set off by any quantifiable increase in its value — storm-protection benefits.”
Accordingly, the court remanded the matter to the trial court for proceedings consistent with its opinion.
The New Jersey Supreme Court disagreed, finding that the exception to the warrant requirement for administrative inspections of commercial property in a closely regulated business, as recognized in Burger, does not apply to the inspection of residential properties under the FWPA. Instead, the court found that in exercising the statutory and regulatory right of entry and inspection, the NJDEP must comply with its own processes which require presentation of credentials before seeking consent to enter at reasonable times. If consent is denied, then NJDEP’s commissioner may assess a penalty and order that entry be provided, seeking judicial process to compel access to the property that is subject to the regulatory permit, if necessary. What cannot be done is to conduct an inspection without the consent of the property owner and without the commissioner and the NJDEP implementing the statutory and regulatory enforcement process set forth in N.J.S.A. 13:9B-21(b) and (c) and N.J.A.C. 7:7A-13.1(a)(9).
Recognizing that the plain language of the statute “appears exceedingly broad,” the Supreme Court found that the legislature’s intent was an expectation that an FWPA permit holder would consent to an inspector accessing the premises to enforce compliance with the provisions of the act. However, if that consent is withheld after proper presentation of credentials by the NJDEP inspector, forcible entry is not authorized. Instead, the Supreme Court explained,
[T]hrough the combined powers granted under N.J.S.A. 13:9b-21(b) and (c), the Commissioner can issue orders to permittees who refuse entry to inspectors who have presented their credentials and have been denied access, charging such persons with a violation of a provision of the Act and of a regulation to which the permittee is subject by virtue of being a permittee. The Commissioner can bring a civil action to secure enforcement of such an order, including the securing of judicial injunctive relief in the form of a court order directing the entry that was sought and denied. Further, the Commissioner may separately assess a violation for the denial of entry by a permittee, which is chargeable as a separate administrative violation. N.J.S.A. 7:7A-16.11. (Emphasis added.)
Looking at the administrative scheme as a whole, the Supreme Court opined:
Although the Act expects permittee consent, and will penalize the permittee who denies a DEP representative reasonable entry onto property to inspect for compliance with the Act, the inspection scheme taken as a whole does not purport to authorize forcible, nonconsensual entry into the backyard of a residential property owner. Rather, the Act provides a means for the DEP to obtain judicial access to secure a court-issued injunctive order authorizing the administrative search to which the DEP is entitled.
The standard to obtain such court ordered entry is not “probable cause” in the criminal context. Instead, “probable cause in the administrative-search context may be based not only on specific evidence of an existing violation but also on a showing that reasonable legislative or administrative standards for conducting an … inspection are satisfied.” (Internal citations and quotations omitted.)
Municipal Land Use Law and Affordable Housing.
Four cases dealt with issues that have arisen over the years under the Municipal Land Use Law (MLUL), and definitively established answers to questions that have been of concern to land use practitioners for many years.
In the first, the Supreme Court weighed in on the issue of whether the misidentification of the lot to be developed vitiated the jurisdiction of the planning board to hear the application. In Northgate Condo. Ass’n v. Borough of Hillsdale Planning Bd., 214 N.J. 120 (2013), the Supreme Court held that the minor misstatement in the lot numbers used in reliance on the direction of the municipal tax assessor did not deprive the planning board of jurisdiction to act on the application, deciding that a minor clerical deviation that had no potential to mislead any interested member of the public does not fail to meet the statutory requirement for describing the property to be developed. In addition, the court found that there was lack of support for the proposition that environmentally constrained wetlands should be excluded from the density calculation for determining a roadway’s intensity for the purposes of installing sidewalks on both sides of the road.
The deficiency in the notice involved the identification of the property as Lots 1.01 and 1.02, Block 506 in Hillsdale, commonly known as Golden Orchards (south of Ell Road). The tax lot numbers were incorrect, and the parcels should have been identified simply as Lot 1 in accordance with its designation on the Official Tax Map. The error was not recognized until the fourth day of hearings, and in advance of that fourth hearing the applicant again published and mailed its notice with the same erroneous tax lot designation, while the board published its own notice correctly identifying the parcel as Lot 1. The adequacy of the notice implicated N.J.S.A. 40:55D-11, which provides:
Notices pursuant to [N.J.S.A. 40:55D-12 and -13] shall state the date, time and place of the hearing, the nature of the matters to be considered and, in the case of notices pursuant to [N.J.S.A. 40:55D-12], an identification of the property proposed for development by street address, if any, or by reference to lot and block numbers as shown on the current tax duplicate in the municipal tax assessor’s office, and the location and times at which any maps and documents for which approval is sought are available pursuant to [N.J.S.A. 40:55D-10].
The Supreme Court acknowledged that it had not interpreted this language previously, although the Appellate Division had done so on at least two occasions, in Perlmart of Lacey v. Lacey Twp. Planning Bd., 295 N.J. Super. 234 (1996); and Pond Run Water Shed Ass’n v. Tp. of Hamilton Zoning Bd. of Adjustment, 397 N.J. Super. 335 (App. Div. 2008).
The Supreme Court found that in this case the block notices were correct, and any interested party who would have looked at the tax map would have seen that Lot 1 was a single unified parcel and not a parcel that had been subdivided formally into two lots, Lot 1.01 and Lot 1.02. Moreover, the court found that because other information in the notice made it clear what parcel was the focus of the development application [by stating that the property was commonly known as Golden Orchards (south of Ell Road)], the identity of the property was sufficiently clear.
Finally, the court noted that there was no confusion about the location of the proposed development since many interested property owners appeared at the hearings both before and after the error became apparent. Moreover, after the board published its notice using the accurate lot designation, no new objector came forward. The court cautioned, however, “that there is [not] a great deal of flexibility in the statute as it relates [to] the manner in which a property is identified.” Instead, the court noted that the more flexible approach to notice is appropriate only when applied to those aspects of the statute that include generally described requirements such as notice of the matters to be considered.
With regard to whether the roadways in the proposed development complied with the Residential Site Improvement Standards (RSIS) and the proper classification of the roadway for compliance purposes in terms of its intensity, the court found that there was a failure by the objector to identify any evidence that quantifies the extent of the wetlands that it contends should have been excluded from the density calculation, thereby sidestepping the issue of the manner in which density is calculated under the RSIS.
Because Northgate is required to point to evidence in the record to demonstrate that the Board’s decision was arbitrary or capricious, its inability to identify any evidence in the record that identifies and quantifies the extent of the wetlands that it contends should have been excluded from the density calculation is fatal to its appellate challenge of the Board’s finding about the roadway’s intensity. Because that is the only challenge now made to the Board’s analysis of RSIS compliance, we reject Northgate’s attack on the Board’s RSIS findings and conclusions.
In an extremely well-written opinion by Justice Hoens, in TSI East Brunswick v. Zoning Bd. of Adjustment of Twp. of East Brunswick, No. 070383 (N.J. July 23, 2013), the court reviewed the various standards of proof needed to obtain use variances, and found that the relaxed standard of proof established in Coventry Square v. Westwood Zoning Bd. of Adjustment, 138 N.J. 285 (1984), applies to the evaluation of the negative criteria in an application for a variance from a condition imposed in a conditional use ordinance. The enhanced quality of proofs related to the negative criteria established in Medici v. BPR Co., 107 N.J. 1 (1987), which governs use variances, is inapplicable to an application for a conditional-use variance under N.J.S.A. 40:55D-70(d)(3).
The application before the zoning board of adjustment was to renovate an existing building in a large shopping center to utilize as an LA Fitness health club. The use is a conditional use in the HC-2 zone in which the property was located. The property fronted on Route 18 South, a six-lane divided highway. The conditional-use ordinance prohibits this type of facility from being located within 500 feet of any residences or residential zone. A small part of the property was within 500 feet of a residential zone. That residential zone, however, was across the six-lane highway and behind other commercial facilities, one of which was a New York Sports Club, a similar type of for-profit health club.
At the hearing, the applicant’s professional planner believed that as a result of the Coventry relaxed standards of proof for the positive criteria, the enhanced quality of proofs required under Medici would not be applicable to the negative criteria. However, since Coventry was decided in 1984 and Medici in 1987, the court in Coventry only addressed the proofs required for the positive criteria.
Not surprisingly, the objector’s expert contended that while a relaxed standard of proof applies to the positive criteria, an enhanced quality of proofs applies to the negative criteria. The Supreme Court granted the objector’s petition for certification for the limited purpose of determining the quality of proofs required to satisfy the negative criteria in an application for a conditional use variance under N.J.S.A. 40:55D-70(d)(3).
The support for the plaintiff objector’s position that the enhanced quality of proof was applicable to the negative criteria even in conditional-use cases was a comment in the well regarded treatise New Jersey Zoning & Land Use Administration, William M. Cox and Stuart R. Koenig, Section 17-4.2 at 476 (2013). There, it was maintained that “nothing in [Coventry Square] suggests that the enhanced quality of proof for the negative criteria, established in Medici, would not apply in the conditional use context.”
Because over the years the Supreme Court has engrafted on the MLUL a series of proof requirements that are not articulated in the statute itself, and has done so in the context of specific factual situations, it is sometimes difficult to apply those proof standards under different factual scenarios. Land use practitioners debate extension of precepts that the courts have established, particularly with regard to specific standards of proof not articulated in the MLUL, such as in Medici with regard to finding an enhanced quality of proof for the negative criteria in use variance cases (under Section (d)(1)), and in Sica v. Bd. of Adjustment, 127 N.J. 152, 154-55 (1992), with regard to not requiring that same enhanced quality of proof for the negative criteria in an inherently beneficial use case, but establishing yet a different test.
Section III of Justice Hoens’ opinion succinctly and with abundant clarity reviews not only the judicial history of these various cases, but provides a clear understanding and articulation of the underlying basis for them, fitting the proofs once and for all into a clear and concise mosaic for the land use practitioner. Indeed, both veteran and novice land use attorneys, when dealing with the standard of proofs for variance, would do well to read Section III of Justice Hoens’ opinion and keep the same handy for future reference.
Drawing on the distinction that the failure of a property owner to be able to meet one or more of the conditions imposed by the conditional use ordinance does not convert the use into a prohibited use which would activate the Medici standards, the court concluded that “the enhanced quality of proof standards has no application in the evaluation of an application for a conditional use standard” with regard to both the positive and negative criteria. Justice Hoens gave three reasons for that conclusion. The first was as mentioned above, that a conditional use is a permitted use and the failure to meet certain conditions does not transform the same into a prohibited use, activating the criteria for a use variance. Second, the court found that, contrary to the plaintiff’s assertions, other published opinions are not in conflict with the Supreme Court’s conclusions here, noting that those opinions do not consider the quantum of proofs, but instead reached the conclusions on alternate grounds. Third, the court was not persuaded by the comments in the Cox and Koenig treatise, finding that if the enhanced quality of proofs was required:
[W]e would effectively erase the distinction that a conditional use creates. Rather than recognizing that the use is essentially permitted, albeit with conditions, we would be presuming that the use is prohibited unless the conditions are met or are proven in accordance with the standards ordinarily required to secure a use variance. By demanding that an applicant for a conditional use variance prove the negative criteria by the enhanced quality of proofs, we would erase the distinction that the governing body drew when it designated the use as conditional … transforming the (d)(3) analysis into a (d)(1) analysis ….
Applying those standards to the proofs before the zoning board, the court found that the decision was not arbitrary, capricious or unreasonable and had to be sustained.
In the third case, Price v. Himeji and Union City Zoning Bd. of Adjustment, No. 068971 (N.J. June 25, 2013), a unanimous Supreme Court clarified the meaning and intent of “particularly suitable” under N.J.S.A. 40:55D-70(d)(1), and further evaluated the Appellate Division’s exercise of original jurisdiction in deciding several related challenges that were not addressed by the lower court. The Supreme Court found that although the availability of alternate locations is relevant to the analysis of whether a proposed use is particularly fitted to the proposed location, it does not bar the finding that the site proposed is also particularly suitable. Furthermore, the Supreme Court agreed that the Appellate Division’s decision to exercise its original jurisdiction to decide a number of related variances was proper and that it was appropriate for the Appellate Division to reinstate the board’s resolution granting the use variance application.
The applicant had sought a use variance for the construction of a multi-unit residential building in a mixed residential zone, which consisted primarily of one- to four-family dwellings and row houses, bounded by a zone permitting multifamily high-rises. After a hearing at which the plaintiff was the only objector, the board granted all of the requested variances, paying particular attention to the property’s particular suitability for the project. On an appeal by objector Price, the Law Division found that the board’s decision that the proposed use was particularly suitable was arbitrary, capricious and unreasonable, asserting that the standard required the board to determine that the proposed site was the only available location for the use, and that no other viable locations existed which would require less extensive variances. The Appellate Division reversed, finding that the Law Division’s interpretation of the particularly suitable standard was too narrow, and that the site was in fact particularly suitable for the proposed use in light of the zoning ordinance and the purposes of the MLUL. The plaintiff objector petitioned for certification, which was granted.
After reviewing the general framework of the MLUL concerning the granting of use variances, the court focused on the common-law development of the components of “special reasons” for which a use variance can be granted. Acknowledging that “special reasons” exist whenever a variance proposes to advance any of the statutory zoning goals, the court quoted from Kramer v. Bd. of Adjustment, 45 N.J. 268, 287 (1965): “[T]he question is whether the ‘special reasons,’ taken as a whole, are founded affirmatively in one or more of the zoning objectives set forth in [the MLUL.]“
Recognizing that most lawful uses of property can be said to promote the general welfare to some degree, the court observed that the “particularly suitable” standard always required an analysis that is inherently site specific, and that the development of the site in the community that is particularly appropriate for that enterprise reflects the appropriate benefit to the general welfare. The court reminded us that detailed factual findings, distinguishing this property from surrounding sites and demonstrating a need for the proposed use, assist in establishing that the property is particularly suitable for the use.
The Supreme Court found that the trial court had effectively misread and misapplied three separate earlier opinions to arrive at its conclusion that demonstration of particular suitability required proof that the property in question be the only possible location for the proposed project. Mocco v. Job, 56 N.J. Super. 468 (App. Div. 1959); Kohl v. Mayor of Fair Lawn, 50 N.J. 268 (1967); Fobe Assocs. v. Mayor of Demarest, 74 N.J. 519 (1977). The Supreme Court explained that while some of the language that it and the Appellate Division utilized in the above three cases could be interpreted to mean that there must be no other site available, a different approach was appropriate:
Our use of the words peculiar and particular makes clear that the inquiry concerning whether a proposed use variance should be granted on this basis is an inherently fact-specific and site-sensitive one. Although the availability of alternative locations is relevant to the analysis, demonstrating that a property is particularly suitable for a use does not require proof that there is no other potential location for the use nor does it demand evidence that the project ‘must’ be built in a particular location. Rather, it is an inquiry into whether the property is particularly suited for the proposed purpose, in the sense that it is especially well suited for the use, in spite of the fact that the use is not permitted in the zone. Most often, whether a proposal meets that test will depend on the adequacy of the record compiled before the zoning board and the sufficiency of the board’s explanation of the reasons on which its decision to grant or deny the application for a use variance is based.
The Supreme Court found that the Appellate Division had appropriately understood and applied the site specific standard that it had utilized to determine particular suitability, and found that the board’s detailed explanation of the reasons why this property is particularly suited for the proposed use supported the use variance it granted.
The definitive determination of the Supreme Court that when a board is considering a Section (d)(1) variance on the basis of a particular suitability, the proposed site need not be the only site on which the proposed use could be undertaken, is a welcome direction to zoning boards of adjustment. The reality is that the earlier decisions of the Supreme Court (and the Appellate Division), did contain language that supported the proposition applied by the trial court. The Supreme Court has now taken a different direction based particularly on the facts in this case. The definitive holding makes clear the burden that an applicant must meet, and the analysis that a board must apply in evaluating a particular suitability (d)(1) variance request, making it perfectly clear that the site in question need not be the only site on which this particular proposed use can take place.
Further, this case demonstrates that the evolution of the MLUL and its interpretation continues to be driven by specific facts that lend themselves to a conclusion that may be contrary to the direction in which the court had previously moved. While the attempt to maintain some common thread is laudable, the reality is that at times the facts create the need for a different conclusion, and while the court goes through legal gymnastics to somehow reconcile its new direction with the old one, its attempt to explain its position many times creates more problems than it solves. At times, it may well be preferable for the Supreme Court to acknowledge that it is changing its direction and provide cogent reasons for doing so, since the practice of land development evolves through the years and what was once thought to constitute the singular justification is no longer the only basis because of a factual pattern that would not have been contemplated when the original decision was made.
In Ten Stary Dom P’ship v. Mauro, No. 069079 (N.J. Aug. 5, 2013), the court reviewed the denial of a frontage variance by the Bayhead Zoning Board of Adjustment (ZBA), and found that the applicant had satisfied the positive and negative criteria and therefore was entitled to the bulk variance. The Supreme Court also weighed in on an ancillary issue related to the trial court’s affirmance of the ZBA’s denial of the variance, without prejudice, to allow the applicant to return to the ZBA with essentially the same application to supplement the record.
The applicant sought a variance to allow the construction of a single family home in a single family residential zone on property that had 10.02 feet of frontage, as opposed to the required 50 feet of frontage. All other aspects of the lot complied with the zoning ordinance. After the initial grant of the variance was challenged by a neighboring property owner, it was discovered that one of the members of the ZBA had missed a meeting and therefore had been ineligible to vote. On the remand and the new vote, the ZBA reversed itself and denied the variance. The Law Division affirmed the ZBA’s denial without prejudice, permitting the applicant to return to the ZBA with the same application and to supplement the record. Both parties appealed and the Appellate Division reversed, finding that adequate evidence was presented to support the grant of the variance. The plaintiff’s petition for certification was granted. In finding that the applicant had satisfied the positive criteria, the Supreme Court reminded us of the obvious fact that the infringements on the zoning restrictions are of varying degrees, and the less of an impact, the more likely that the restriction is not vital to the public interest:
In other words, care must be taken to direct the evaluation of a request for a bulk variance to those purposes of zoning that are actually implicated or triggered by the requested relief. However, not every deviation from prescribed bulk standards implicates the same concerns.
Thus, if an applicant seeks a variance from set-back requirements, traditional zoning concerns such as preservation of light, air, and open space may be valid inquiries in an assessment of the impact of the requested variance. If an applicant seeks a variance from lot coverage requirements, drainage may be a valid inquiry in an assessment of the impact of the requested variance on surrounding properties. Similarly, a subdivision application that will create additional lots and permit intensified development of the property prompts examination of traditional zoning purposes including light, air, open space, access, and drainage.
* * *
On the other hand, some variances from prescribed bulk requirements may not implicate some of the otherwise valid zoning purposes advanced by other bulk variances. For example, a minor deviation from a height restriction has no impact on lot coverage and the valid goal of maintaining sufficient undeveloped area on a lot to foster light, air, and open space. A deviation from prescribed lot frontage may have no impact on any valid zoning purpose other than the stated public interest in location of all lots on a public street.
Applying those principles, the court found that the applicant had satisfied bulk positive and negative criteria.
Turning to the dismissal of the complaint without prejudice by the Law Division, the Supreme Court found that the trial court “sidestepped the salutary rule that bars resubmission of the same proposal finding a dispositive ruling by the Board.” Instead, the Supreme Court found that it is up to the board to make that determination in the first instance, and that the trial judge usurped the role of the board to determine if it should hear the application. Judge Cuff (temporarily assigned) declared: “In this case, it was incumbent on the judge to affirm, reverse, or modify the decision of the Board, not to prolong an already protracted proceeding.”
The case causing the most political reaction pitted the executive branch of government against the judicial branch. In a five-to-two decision, written by Chief Justice Rabner, the Supreme Court in In re Plan for the Abolition of the Council on Affordable Housing (COAH), No. 070426 (N.J. July 10, 2013), invalidated the governor’s reorganization plan that had abolished COAH as an agency and had transferred its power to the New Jersey Department of Community Affairs (DCA). The majority focused on the fact that COAH was “in, but not of” the executive branch of government. The dissenting opinion, authored by Justice Patterson and joined by Justice Hoens, maintained that at least six governors and a succession of Legislatures have applied the 44-year old Reorganization Act to agencies within the category of “in, but not of” in the past. Further, the dissent observed that the reorganization process is a two-step process. After the governor acts, the Legislature can veto the reorganization plan. Justice Patterson opined in the dissent that if the legislature now or in the past was of the view that any of the governors had overstepped their bounds in reorganizing an “in, but not of” agency, they merely had to say so by voting to veto the plan. Predictably, the governor slammed the majority, characterizing it as an “activist opinion” by the “liberal Supreme Court” and vowed “to continue to fight to bring common sense to New Jersey’s judiciary.”
The majority reviewed the genesis of COAH, asserting that when the Legislature creates an executive agency, the Constitution requires the Legislature to place the agency within an executive branch department.In creating COAH, the Legislature put the agency within the broad confines of the DCA but, in order to insulate the agency from complete executive control, utilized the term of art placing COAH “in, but not of” the DCA. The majority explained, “That phrase has long been understood to signify an agency’s independence and the Legislature had used the designation to create dozens of independent offices.” After tracing the creation of the COAH task force by the governor under Executive Order #12, and the conclusion of its report that COAH was “irrevocably broken,” the court turned to the legislation being contemplated to modify the Fair Housing Act. It noted that while the Legislature passed a reform bill, the governor conditionally vetoed it and the Legislature failed to accommodate the Governor’s concerns, letting the legislation die by its own hand. Thereafter, the governor issued the aforesaid reorganization plan, which abolished COAH and the terms of its 12 members and transferred its powers to the DCA, replacing the 12-member council with the single DCA commissioner, relying upon the Reorganization Act.
The majority first looked to the definition of agency: “(1) Any division, bureau, board, commission, agency, office, authority or institution of the executive branch created by law, whether or not it receives legislative appropriations, or parts thereof ….” (Emphasis added.)
It is from that singular use of the term “of” that the majority concluded that agencies that are “in, but not of” the executive branch escape the reach of the reorganization plan and promote an independence that precludes such reorganization. Further, the majority emphasized that the Reorganization Act does not empower the governor to abolish an agency. Instead, “the Governor is limited to rearranging what already exists. He is not empowered to decide what new or different authority should be vested in his branch of government.” The court found that while in order to create an agency, the Legislature had to place it “in” a department, the additional three words “but not of” were intended to inject a level of independence of those agencies from the executive branch of government. Utilizing well-settled principles of statutory construction, the court found that the plain language of the statute creating COAH makes it clear that an agency that is “not of” an executive branch is incapable of being subject to the Reorganization Act.
With regard to the state’s contention that the act has been used in the past to reorganize independent agencies within the executive branch, the majority found that in those cases, the governor has “transferred agencies intact to other parts of the government.” Finally, the court dismissed the fact that the legislature remained silent in the face of the reorganization plan in question that was filed with it. The Chief Justice opined:
If anything, this example demonstrates that historic practices that went unchallenged do not create precedent. They do not answer the question presented for the first time in this case: whether the specific, plain language of the Reorganization Act covers independent agencies and allows them to be abolished. We find that it does not.
The Supreme Court concludes with a cautionary note: “To reiterate, we do not reach the constitutional issues the parties debate about the State Reorganization Act because we are able to resolve this appeal on statutory grounds. We therefore have no reason to reassess Brown today.”
The majority adopted the position espoused by Judge Carchman at the Appellate Division:
The issue in this case is not whether COAH should or should not be an active participant in developing and implementing policies for affordable housing in New Jersey. Recent events have demonstrated that both the Legislature and the Governor are committed to charting another course for the future of affordable housing in this state.
The Supreme Court made it clear that it was not attempting to chart that course, but instead was examining the process that the law requires and that if the governor and legislature intend to abolish COAH, they have to do it through a different path.
In a vigorous dissent, Justice Patterson, joined by Justice Hoens, found that not only was the Reorganization Act applied to a variety of agencies created in the “in, but not of” category, but further, that the legislative intent was clearly established by the Legislature’s failure to veto the reorganization of COAH. Justice Patterson found that the use of the unremarkable term “of” could not be elevated to eliminate the reach of the Reorganization Act to agencies “in, but not of” the particular executive department. Further, the dissent observed that the reorganization statute itself contains a section prohibiting certain reorganization plan provisions, including a prohibition of utilizing the Reorganization Act “to create, abolish, transfer or consolidate principal departments, to continue an agency beyond its statutorily prescribed period, to authorize an agency to exercise a function that is not expressly authorized by law, or to increase the term of an office beyond that provided by law.” (Internal citations omitted.)
Conspicuous by its absence is any prohibition of utilizing the Reorganization Act to reorganize agencies that are “in, but not of” the agency itself argued the dissent. Justice Patterson noted that the abolition of COAH and the representative nature of its members was precisely what the legislature had done in its own bill that was vetoed by the governor for unrelated reasons. Thus, Justice Patterson asserted that the reorganization plan mirrored the legislature’s express intent to abolish COAH and transfer its powers to DCA.
It remains to be seen the direction in which the Legislature and governor will now go. Perhaps this decision will spark a “peace treaty” between the governor and the Legislature to address the affordable housing situation jointly, an effort that came close, but could not be brought to the finish line in the past. Moreover, with the validity of the third-round COAH regulations still before the Supreme Court and ripe for a decision at anytime, a comprehensive legislative and executive branch compromise could result in effectively mooting the validity of the COAH regulations case presently before the Supreme Court, and allow both the executive and legislative branches to jump out ahead of the curve for once instead of reacting to actions they deem inappropriate by the co-equal third branch of government.
Conflicts of Interests
In two important conflicts of interests cases, the Supreme Court drew a bright-line test and standard, and reconfirmed that although the appearance of a conflict or impropriety was dropped from the rules of professional conduct, that standard remains not only for the judiciary (where the section was never dropped in the Code of Judicial Conduct), but also with regard to municipal bodies acting in a quasi-judicial capacity, including the municipal attorney advising them, even though the municipal attorney does not participate in the decision-making process.
In the case captioned, In the Matter of Advisory Letter No. 7-11 of the Supreme Court Advisory Committee on Extrajudicial Activities, 213 N.J. 63 (2013), the Supreme Court found that the canons of the Code of Judicial Conduct mandate that a municipal court judge whose child becomes a police officer in the same municipality may not hear any cases involving that police department nor supervise other judges who hear those cases. Although the municipal court judge had already disqualified himself from any case involving his son, he requested an opinion from the Advisory Committee on Extrajudicial Activities after the presiding municipal court judge found that such recusal was insufficient, that a conflict existed and that the judge should resign from the bench. Judge George M. Boyd, whose son was a police officer in the same municipality in which he was a judge, petitioned the Supreme Court to review the same.
Citing to the court’s adopted Guidelines for Extrajudicial Activities (1987) to implement the Code of Judicial Conduct, Justice Albin, writing for a unanimous court, noted that the guidelines “instruct judges to ‘always guard against the appearance of bias or partiality or the perception of prejudgment of issues likely to come before them.’” The court noted that the “clear theme” of many of those opinions is that “judges must avoid any appearance of having a special relationship or an entangling alliance with law enforcement.” Justice Albin succinctly framed the question and answered it:
Would a reasonable, fully informed person, knowing that Judge Boyd’s son is a Perth Amboy police officer, have doubts about Judge Boyd’s impartiality in deciding a case that pits the credibility of a Perth Amboy police officer against that of a litigant? We believe that the answer to that question is yes. If a Superior Court judge, whose son is an Assistant Prosecutor, must disqualify himself from a criminal case presented by an Assistant Prosecutor who works in the same office as his son, the same result should apply with equal if not greater force in this case.
Public perception was clearly the guiding principle:
The issue is not whether Judge Boyd can faithfully maintain impartiality in cases involving Perth Amboy police officers who serve with his son. The workings of his mind cannot be put on display. That is why public perception matters. Judges must appear to be impartial, for in a democracy the standing of our system of justice depends on the people’s confidence in the judicial process. In any particular case, Judge Boyd will have to decide whether to accept the credibility of a citizen-litigant over that of a Perth Amboy police officer. Will the litigant reasonably believe that, given Judge Boyd’s filial ties to the Perth Amboy Police Department, he will receive a fair shake or that the scales of justice are titled against him? Ultimately, a litigant should not be left to wonder about the judge’s objectivity or impartiality.
In the second case, Kane Properties v. City of Hoboken, No. 069676 (N.J. June 26, 2013), the Supreme Court, in a unanimous opinion, determined that while the appearance of impropriety standard does not govern attorneys under the Rules of Professional Conduct, that standard does govern the evaluation of a municipal attorney’s conflict of interest and a governing body acting in a quasi-judicial capacity. (Note: The firm of the author of this article, The Buzak Law Group, was special counsel for the City of Hoboken in this case.)
In addition, the court found that the appropriate remedy under the circumstances where a city council reversed the granting of a use variance by its zoning board of adjustment, was to remand the matter to the Law Division for a de novo review of the zoning board’s resolution, but with direction to the court to entertain the city council’s arguments or supplements to the record that reflect its own expertise and knowledge in the zoning scheme, giving due consideration as well to the city council’s evaluation of the proposed use variance.
In this case, a contract purchaser successfully obtained a use variance from the city’s zoning board of adjustment (ZBA) to construct a 12-story residential structure, containing 72 dwelling units, 1,700 square feet of space for a nursery school and daycare center and 78 parking spaces in an industrial zone. The objectors before the ZBA were represented by counsel, who cross-examined the applicant’s witnesses and presented his own witnesses. Shortly after the ZBA granted the use variance, among other variances, counsel for the objectors became the corporation counsel for the city. The objectors retained new counsel who brought an appeal of the grant of the use variance to the city council as permitted under the city’s ordinance. Recognizing an obvious conflict of interests, the new corporation counsel assigned the matter to special counsel.
Special counsel advised the city as to procedures to be followed in this particular matter but included, along with his own memorandum of law, another copy of a generic memorandum of law previously received by the city council from the conflicted corporation counsel setting forth the obligations of the city council in considering these appeals (other appeals in which new corporation counsel had no conflict were pending before the city council). The city council conducted a de novo review at a hearing on March 24, 2010, with special counsel present and advising them. Because the statutory time constraint within which to make a decision was quickly approaching, immediately following their review, the city council, by a five-to-three vote on that same evening, reversed the zoning board’s decision to grant the variance for residential use and also other use variances, including floor area ratio, height and number of stories. Special counsel was directed to prepare a memorializing resolution for the council to consider within 45 days after the decision was made, in accordance with the memorializing provisions under the Municipal Land Use Law (MLUL).
Special counsel prepared the resolution, and on May 5, 2010, the city council met again to vote on the resolution memorializing its March 24, 2010, decision. Special counsel did not attend that meeting and instead conflicted corporation counsel was at the meeting, which was a regular meeting of the city council at which other city business was being conducted. At that time, corporation counsel answered questions about voting procedures that were posed by council members and, after adoption, signed the resolution on the line indicating that he had approved it after it was adopted. Thereafter, special counsel distributed copies of the signed resolution to all of the parties.
The disgruntled applicant initiated an action in lieu of prerogative writ challenging the city council’s decision denying the variances. In addition to arguing that the decision was arbitrary, capricious and unreasonable, the applicant asserted that conflicted corporation counsel’s involvement had irreparably tainted and thoroughly undermined the city council’s decision. After a review on the record and hearing the arguments of counsel, the trial court, in a written decision, affirmed the council’s decision. The trial court rejected the argument of the plaintiff that the decision was tainted by corporation counsel’s conflict of interests, finding that the original memorandum that was written by corporation counsel and sent to the city council both by corporation counsel and later by special counsel was procedural and was distributed in his administrative capacity. The trial court found that corporation counsel’s involvement in the consideration of the resolution was “too minimal to have tainted the proceedings or to have influenced the decision of the City Council,” determining that the standard to be applied was one of actual prejudice, since the appearance of impropriety standard was no longer applicable to measure the propriety of attorney conduct.
The Appellate Division reversed, concluding that the participation of corporation counsel tainted the action of the governing body and remanded it to the city council for a new proceeding de novo. The plaintiff filed a petition for certification, contending that the remand to the “tainted” city council was incorrect. The city filed a cross-petition for certification, contending that the minimal involvement of corporation counsel in the matter did not taint the proceedings. The city further maintained that the actual decision of the city council was made at the March 24, 2010, hearing at which corporation counsel was not present, and not at the May 5, 2010, memorialization vote. Thus, the decision of the city council reversing the granting of the variance should have been sustained. The Supreme Court granted both the petition and cross-petition for certification and articulated two issues:
The first issue relates to conflicts of interests of municipal attorneys. More particularly, we are called upon to determine the standards that govern the evaluation of such conflicts of interests, the obligations that recusal imposes on an attorney in order to adequately address a conflict of interests, and whether involvement in a matter by an attorney who is required to be recused can be excused as harmless to the outcome. The second issue before this court is, assuming that the municipal attorney’s involvement tainted the proceedings before the governing body and that its decision on the merits must be vacated, what is the appropriate remedy and the proper forum for further proceedings on the underlying application.
In examining the first issue, the Supreme Court, while agreeing that the appearance of impropriety standard is no longer utilized to evaluate an attorney’s potential conflict of interests, opined that that standard applies to municipal officials acting in a quasi-judicial capacity. The Supreme Court observed:
For this reason, as the Appellate Division correctly recognized, because [Corporation Counsel] Kates was barred by RPC 1.11(d)(2)(i) from being involved, and because the governing body’s consideration of the appeal was a quasi-judicial act, the appearance of impropriety remains the appropriate standard against which to test his participation in the proceedings.
The Supreme Court found that the appearance of impropriety standard has never been altered as it relates to judges, and does not require evidence that the judge conducted the proceedings in a biased or unfair way, i.e., there was no necessity to prove actual prejudice. Instead, citing from its decision in DeNike v. Cupo, 96 N.J. 502, 514-19 (2008), the court framed the question as follows: “Would a reasonable, fully informed person have doubts about the judge’s impartiality? As we explained, if the judge’s conduct gave the public ‘reason to lack confidence in the integrity of the process and its outcome[,]‘ the decision rendered would have to be reversed and the matter retried.” (Citations omitted.)
The court found that the same standard should apply to an attorney advising a governing body in its performance of a quasi-judicial act and the governing body performing its quasi-judicial function. Applying that standard to the facts in Kane, “leaves no doubt that an objectively reasonable, fully informed member of the public would perceive that the participation by [Corporation Counsel] Kates in the proceedings calls into question the impartiality of the governing body and the integrity of the proceedings.” The court established a mandatory bright-line test that once a conflict of interests is extant, there must be absolute isolation of the recused attorney from any proceedings directly or indirectly related to the matter: “recusal of an attorney advising a municipal decision-making body must involve a complete separation from any aspect of the matter whatsoever so that public confidence in the decision-making body will be safeguarded and public confidence in the eventual decision will be maintained.” (Emphasis added.)
Turning to the second issue involving the remedy, after reviewing the statutory provisions under the MLUL allowing a party to appeal the granting of a use variance to the governing body if so permitted by ordinance, the court acknowledged that there is a significant difference between appeals to the governing body and appeals to the Law Division of grants of use variances. Citing from Comm. for a Rickel Alt. v. City of Linden, 111 N.J. 192, 202 (1988), the court found that the governing body, in conducting its review,
is not limited to weighing the decision of the board against the relatively indulgent arbitrary, unreasonable or capricious standard as would apply to proceedings in court. Instead, its decision to adopt an ordinance in which it has retained the power to hear an appeal from the zoning board is one which entitles it to de novo review. Moreover, it is entitled to bring to bear, in its consideration of the record that has been compiled, its understanding of the existing zoning ordinance and the Master Plan. (Internal citations omitted.)
The court’s dilemma was to not divest the governing body of its proper role in the proceedings, despite the taint created by the actions of corporation counsel, but yet still cure the taint that had occurred, recognizing that a remand to the Law Division under circumstances where the city council’s determinations have been stricken and having the Law Division apply the more indulgent arbitrary and capricious standard,
would elevate the Zoning Board’s decision by cloaking it with a deference that is inappropriate in light of the role that should be played by the City Council. That approach would unfairly deprive the City Council of its opportunity to ‘apply its own expertise and knowledge’ to the application for a use variance. (Internal citations omitted.)
In an attempt to balance the rights of the parties and recognize the proper roles that would ordinarily be played by ZBA as well as the governing body, the court remanded the matter to the Law Division to conduct a de novo review of the zoning board’s resolution (not an arbitrary, capricious and unreasonable standard), directing that as part of the proceeding, the Law Division entertain such arguments or supplements to the record that may be presented on behalf of the city council and that relate to its expertise and knowledge of the zoning scheme. Furthermore, the trial court was directed to give “due consideration to the expressions that illuminate the City Council’s evaluation of whether the proposed use variances satisfy the positive and negative criteria imposed by the MLUL.”
The last five cases reviewed here addressed procedural issues in the Tax Court, imposition of connection fees by utility authorities, notice under the Tort Claims Act, police disciplinary proceedings and review and arbitration decisions.
The Tax Court jurisdiction case addressed a common practice in the tax appeal bar that the designated plaintiff must be the entity that appears on the tax assessment list, irrespective of its accuracy. In Prime Accounting Department v. Township of Carney’s Point, 212 N.J. 493 (2013), the Supreme Court held that the misdesignation of the plaintiff in a tax appeal did not deprive the Tax Court of subject matter jurisdiction because the tax appeal complaint was timely filed, accurately described the property and put the township and the public on notice that the 2008 assessment for the property was disputed by the taxpayer.
The Supreme Court determined that the complaint defect could be corrected by amendment and that the taxpayer should have been given leave to file an amended complaint that related back to the filing of the original complaint.
In a further rare action, the court acknowledged that amicus New Jersey State Bar Association and the taxpayer advised that the historic practice in tax appeal proceedings was for the taxpayer’s counsel to designate as plaintiff the entity that appears on the tax assessment list, irrespective of its accuracy, and indeed that the Tax Court will reject the complaint unless the person or entity designated on the municipal tax assessment list is named as the plaintiff. In a move to get to the root of the problem, Justice Patterson, writing for a unanimous court, encouraged that the practice be modified:
We suggest that the Tax Court and the tax appeal bar modify that practice. Rule 8:3-5 requires that the property owner be identified in a tax appeal complaint. However, attorneys who file tax appeal complaints should not indicate that they represent a party who is not their client. Counsel for lessees, sublessees and other taxpayers who are not the record owners of property subject to a tax appeal should undertake a reasonable investigation to determine the identity of the current property owner before filing a tax appeal. In addition to the person or entity listed on the municipality’s tax assessment list, the person or entity qualifying as an aggrieved taxpayer under N.J.S.A. 54:3-21, and the current property owner, if known to the taxpayer following a reasonable investigation, should be identified in a tax appeal complaint and in the case information statement.
* * *
We invite the Supreme Court Committee on Civil Practice to consider whether Rule 4:9-3 should be revised to provide that an amendment correcting an error in the designation of a party asserting a claim may relate back to the filing of the original complaint. We further invite the Supreme Court Committee on the Tax Court to consider whether a specific rule applying the relation-back doctrine in the setting of tax appeals would address considerations unique to this specialized litigation.
In the connection fee case, the Supreme Court in 612 Associates v. N. Bergen Mun. Util. Auth.,No. 067931 (N.J. March 7, 2013), resolved a dispute involving the imposition of connection fees by multiple authorities which serve a particular property. The court, in a unanimous decision, determined that municipal utilities authorities and sewerage authorities can each impose connection fees for both direct and indirect connections to its system, but that the amount of the fee must be related to that portion of the system utilized by a particular user.
The facts in the case were straightforward. A condominium complex located in Union City was required to connect to the sanitary sewer system. The topography of the site would direct the sewage flow to the North Bergen Treatment Plant operated by the North Bergen Municipal Utilities Authority (NBMUA), instead of the North Hudson Regional Sewer Authority (NHRSA) which served connections in Union City. However, the property was required to connect for a distance of approximately 300 feet to the NHRSA line until reaching the NBMUA sewer lines, which would then transport the sewage to the North Bergen Treatment Plant. Approximately 95 percent of the lines through which the sewage would travel would be physically located in North Bergen, with the treatment being supplied by the NBMUA. The dispute centered around which entity had the right to impose a connection fee.
After reviewing the statutory provisions, Justice Hoens, writing for a unanimous court, observed that the county and municipal utilities authorities statutes (governing the NBMUA) and the sewerage authorities statutes (governing the NHRSA) were similar in relation to the imposition of connection fees, and while neither specifically referred to direct and indirect connections when discussing connection fees, the immediately preceding section of the statute dealing with the imposition of service charges in both statutes establish a right to impose fees on both direct and indirect connections. The Supreme Court found that the descriptive language involving direct and indirect connections was equally applicable to the connection fee portion of the statute. The amount of the fee charged, however, must represent a fair payment toward the cost of the system utilized by the user and cannot be duplicative. It summarized its determination as follows:
In order to be faithful to these overarching principles, where a property is served by two authorities, fairness and equity demand that the capital costs be divided between costs of a collection system and costs of the treatment facility and its associated trunk lines in order that the connection fee rest on an appropriate basis. In this manner, although the governing statutes will permit each of the authorities to assess a connection fee, each must be a fee that is tied to the capital costs of the relevant portion of each authority’s system.
That is, each connection fee must be tied to the cost of that part of the system that the particular connector uses, so that a property that merely has sewage transported for a distance through the piping system of one authority will be assessed based on the costs of that entity’s collection system, but will not be charged for the costs of that entity’s treatment system that it does not use. By the same token, the same property may be charged a connection fee by the authority that actually treats the sewage which reflects a portion of that entity’s capital costs for its piping system and its treatment facility, consistent with the property’s use. Finally, an authority that operates only a collection system and the authority that operates the treatment facility will each be permitted to assess their connection fee to defray capital costs as the statutes intended.
With those principles in mind, the court turned to the actual allocation that the trial court had previously established and found that there had been no abuse of discretion in the apportionment judgment reached. Unfortunately, the trial court’s determination did not represent a precise implementation of the Supreme Court’s conclusions, because the trial court proportionalized the connection fee imposed by the NHRSA, together with that entity’s application and review fees, rather than evaluating the connection fees of each of the authorities and proportionalizing them independently. The trial court was constrained to address the issue in that fashion because of the unique procedural situation in which it found itself. The primary litigation was actually instituted by the developer who sought the court’s assistance in resolving the dispute regarding which authority was entitled to a connection fee. As a result, the two authorities were left to litigate which of them was to receive the fee.
The Supreme Court recognized that because of the procedural status,
a connection fee that might or might not represent the full fee that our reading of the statutes would generate became the entire fee. That is, if the two authorities had independently calculated their connection fee, in compliance with the principles we have explained relating to the statutory command that it be a fair payment toward each system and that it be non-duplicative, the total connection fee might be different from the one that the North Hudson SA calculated, which was based on its assumption that it was entitled to recover a portion of the capital costs and debt service for its entire system.
Nevertheless, the court, finding no abuse of discretion in the apportionment given the interpleader nature of this action, declined to engage in any further detailed analysis and sustained the trial court’s proportionalization to conclude the case.
Based upon the Supreme Court’s reading of the statute, it could be argued that municipalities and authorities that are not fully self-contained with regard to their transmission and treatment facilities may be required, in some cases, to create a dual connection fee, i.e., one representing those capital costs associated with treatment facilities and a second connection fee related to those capital costs associated with the transmission infrastructure. If a property within its jurisdiction utilizes both components, the full connection fee would be charged, but if only one component were utilized, only that connection fee would be imposed.
The municipal entities or regional authorities must take care to ensure that the connection fees are nonduplicative. In some cases, for example, a regional treatment facility that operates both an interceptor system, collecting the sewage from various other municipalities and authorities, and a treatment plant treating all the sewage, may not impose any connection fee, but instead include all of the capital infrastructure costs in the calculation of its service fees to its individual municipal members. In that case, the individual municipal members should be permitted to include that portion of the service fee imposed by the regional entity on it as part of the local entity’s connection fee. On the other hand, when the regional entity imposes a connection fee, care must be taken that any portion of the service fee it charges to its local system users that represents debt service or capital costs is not included by the local entity in the calculation of its connection fee. It is unfortunate that the procedural status of the case decided by the Supreme Court removed the opportunity for the Supreme Court to actually apply its ruling to facilitate the manner in which local entities need to deal with this issue.
Furthermore, connectors to the system may argue for even more precision based upon the magnitude of the particular system that it utilizes. For example, in the instant case, since only 300 feet of the NHRSA’s transmission lines are utilized, should the connection fee established by the NHRSA, representing its transmission system (and excluding its treatment plant costs), be further reduced because only a small portion of its lines are being utilized by this particular user? Although courts in the past have not adopted that philosophy in the name of maintaining an overall uniform connection fee, it remains to be seen whether this case has inadvertently opened that door to allow a user to make the argument despite previous Supreme Court cases emphasizing that mathematical precision is not required for the development and validity of a fee system.
In the only tort claims case this term, the Supreme Court reversed a Law Division and Appellate Division decision allowing the late filing of a notice of tort claim under the New Jersey Tort Claims Act (TCA), N.J.S.A. 59:8-1 to 12-3. D.D. v. University of Medicine and Dentistry of New Jersey, 213 N.J. 130 (2013). The court further found that timely oral notice of a tort claim does not represent substantial compliance.
Writing for the majority, Justice Hoens found that the plaintiff had failed to meet the extraordinary circumstances standard that was engrafted in the TCA in 1994, related to filing of late notice. The prior standard was a showing of “sufficient reasons” to file a late notice. The majority found that the 1994 amendment was intended to “create a more exacting standard than the one that courts had used prior to the amendment ….” After reviewing decisions tied to the late filing of claims based upon the medical condition of the plaintiff, the majority noted:
The consistent theme of these decisions is the severity of the medical condition and the consequential impact on the claimant’s very ability to pursue redress and attend to the filing of a claim. Lesser complaints of a medical nature have been held to fall short of the Act’s high standard.
* * *
Applying these precedents to the record before the Court in this matter, we are constrained to conclude that the medical proofs do not surpass the threshold that the Legislature has created. We reach this conclusion for several reasons. Viewed objectively, plaintiff’s asserted medical and emotional conditions are not severe, debilitating, or uncommon; for the most part, they are vaguely described complaints of stress and emotional strain that would quite ordinarily follow from learning that one’s personal information had found its way to the internet.
Apart from plaintiff’s assertions that she was in “absolute shock,” depressed, stressed and anxious, there is no evidence that these complaints were of sufficient immediate concern to her or were so significant in nature that she sought medical care to address them. On the contrary, the only medical evidence that plaintiff tendered was the note from her doctor. That note, although listing a variety of medical complaints and conditions, did not attest to their severity, but instead offered the doctor’s opinion that all of them were transitory conditions that were expected to resolve completely.
Further, the court declared that it could not agree “that an attorney’s inattention to a file, or even ignorance of the law, equates with extraordinary circumstances for tort claim purposes.” Accordingly, the Supreme Court reversed the Appellate Division’s decision.
In a cogent singular dissent, Justice LaVecchia claimed that the majority took “a crabbed view of what constitutes ‘extraordinary circumstances’ to permit a late filing of a written notice of tort claim.” In addition, the dissent further contended that since the abuse of discretion standard applies to a review of the trial court’s decision on a motion to file a late notice of tort claim, and because the standard of “extraordinary circumstances” is imprecise and depends on the circumstances, the Appellate Division’s affirmance of the trial court’s grant of the motion to file a late claim based upon a combination of circumstances should have been sustained.
Because the majority applies too harsh a standard for extraordinary circumstances, and because its after-the-fact analysis parsing the individual difficulties that led to plaintiff’s late written notice is inconsistent, in my view, with a proper application of an abuse of discretion review of a late notice motion that has been granted by the trial court, I must respectfully dissent.
Justice LaVecchia was troubled by the majority’s analysis as it related to the abuse of discretion standard. She called the majority out on it:
With those reasons in mind, I find puzzling the majority’s analysis and can only view it as an example of a failure to give proper application to the abuse of discretion standard. Judicial discretion is:
the option which a judge may exercise between the doing and the not doing of a thing which cannot be demanded as an absolute legal right, guided by the spirit, principles and analogies of the law, and founded upon the reason and conscience of the judge, to a just result in the light of the particular circumstances of the case. [State v. Madan, 366 N.J. Super. 98, 109 (App. Div. 2004)]
And, importantly, we have previously held that courts should review “more carefully cases in which permission to file a late claim has been denied than those in which it has been granted, to the end that wherever possible cases may be heard on their merits, and any doubts which may exist should be resolved in favor of the application.” Thus, even were one to concede that this case is close and could arguably have been decided at the trial court in either party’s favor, with the facts of this case and the standard of review in mind, I certainly cannot say that the trial court failed to exercise sound discretion. It is the trial court’s exercise of discretion that should “be sustained on appeal in the absence of a showing of an abuse thereof.” Although the majority tries mightily to portray this case as one involving legal error, claiming that the trial court misunderstood the legal standard, I am not persuaded by the effort to mask a simple re-exercise of discretion by this Court. (Internal citations omitted.)
In Ruroede v. Borough of Hasbrouck Heights, No. 069484 (N.J. July 1, 2013), while finding that a police officer’s termination was proper, the Supreme Court clarified that the statutory de novo review under N.J.S.A. 40A:14-147 to -151, limited the trial court’s remedies to affirming, reversing or modifying the decision. A trial court does not have the power to remand the matter to the borough for a new disciplinary hearing. The decision is a succinct and clear delineation of police disciplinary procedures in a noncivil service municipality.
The Supreme Court summarized the relevant statutory scheme set forth in N.J.S.A. 40A:14-147 to 151, finding that the plain language of the statute was clear:
The disciplinary system contemplated by the Legislature provides a police officer with well-defined procedures for an efficient and fair hearing process on alleged charges against the officer. The hearing must commence promptly, and the burden of proving the charges is on the police officer’s employer. N.J.S.A. 40A:14-147. The officer is provided with multiple opportunities to have the relevant evidence reviewed and to present his or her own evidence to ensure a fair and meaningful result: an officer can elect to submit to a disciplinary hearing before a neutral party instead of having a departmental hearing. see ibid.; an officer can seek a de novo review and supplement the evidentiary record in Superior Court, see N.J.S.A. 40A:14-150; and an officer can seek reinstatement or back pay depending on the eventual outcome, see N.J.S.A. 40A:14-149, -149.1, -151. Finally, an officer has the opportunity for appellate review in accordance with the Court Rules governing practice before the Appellate Division, see R. 2:2-9(a), or this Court, as in the present appeal, see R. 2:12-3.
Reiterating that the standard of proof to sustain the charges is a preponderance of the evidence, the court explained that in a de novo review on the record the court needs to make its own findings of fact, and the lack of live testimony does not alter the standard. The statute makes clear that a reviewing court can reverse, affirm or modify a disciplinary conviction under its broad authority, and while it must give due deference to the conclusions drawn by the original fact-finder, those conclusions are not controlling. Instead, the court reviewing the matter de novo can make reasonable conclusions based upon a thorough review of the record, which could include rejecting findings that were made by the original tribunal.
In reviewing the record of the action taken by the Law Division, the court found that the lower court did not review the evidence to determine whether there was sufficient competent evidence which supported the charges, explaining that, in its view:
The Law Division’s attention was diverted by the fact that this record did not include oral testimony from [the other participant] concerning the altercation, even though Ruroede admitted that a physical altercation did indeed occur when the police initially investigated the matter, which was memorialized in an internal affairs report to the Chief of Police, and admitted it again at the hearing on direct and cross-examination. The Law Division declared that the failure to produce a live witness to the altercation at the hearing violated Ruroede’s due process rights.
Moreover, the court explained the evaluation of hearsay evidence:
We have explained that “a fact finding or a legal determination cannot be based on hearsay alone. Hearsay may be employed to corroborate competent proof, or competent proof may be supported or given added probative force by hearsay testimony.” But, in reviewing a hearing officer’s decision, we must ensure there is “a residuum of legal and competent evidence in the record to support it.” The residuum rule does not require that each fact be based on a residuum of legally competent evidence but rather focuses on the ultimate finding or findings of material fact. The competent evidence standard applied to ultimate facts requires affirmance if the finding could reasonably be made. (Internal citations omitted.)
The Supreme Court then rejected the remand by the Law Division to the borough:
Finally, faced with the arguments about the state of the record before it, remanding for a new disciplinary hearing was not an appropriate remedy for the Law Division under N.J.S.A. 40A:14-150. The court could have allowed for the supplementation of the record by either party, but the statutory scheme envisioned that disciplinary proceedings be brought to a prompt conclusion, for the sake of the public, the employer, and the charged individual. The record, as it existed, or as it was allowed to be supplemented in the de novo proceeding, should have been evaluated, and the disciplinary action should have been brought to a conclusion at the trial level.
The Supreme Court decided to exercise its original jurisdiction in order to resolve the controversy, reviewing the record de novo to determine whether there was sufficient competent evidence to prove the charges by the preponderance of the evidence. After reviewing all of the evidence, the court found that the borough’s proofs were sufficient to prove the charges by a preponderance of the evidence, and that those charges support the termination of Ruroede as a police officer. The court remanded the matter to the Law Division for the entry of any and all dispositional orders consistent with the opinion.
In the final case reviewed, another politically sensitive issue was addressed and again the governor rebuffed. In Borough of East Rutherford v. East Rutherford PBA Local 275, 213 N.J. 190 (2013), the court sustained the Appellate Division’s reversal and reinstatement of an arbitrator’s award directing the Borough of East Rutherford to reimburse police employees for an additional $5.00 co-payment they were required to make, which was mandated by the State Health Benefits Commission, effective Jan. 1, 2007. The borough passed on the increase to members covered by the existing Collective Bargaining Agreement (CBA), which was effective for the period from Jan. 1, 2005, through Dec. 31, 2009. The PBA filed a grievance challenging the increased co-pay and ultimately demanded arbitration. The arbitrator found that the borough “remained contractually obligated to provide its employees the medical insurance benefits, including the required co-payments that it was providing in 2005.” The arbitrator concluded that the CBA was violated when the PBA members were required to make the increased payment and, while it was beyond the scope of her authority to restore the $5.00 co-payment, she found that there was nothing that precluded her from directing the borough to reimburse the employees for the amount of the increased co-payments during the contractual period.
On the borough’s appeal, the Law Division vacated the award. The Appellate Division reversed and reinstated the arbitration award, with the appellate panel being more deferential to the arbitration process. It found that the award was not contrary to law or public policy, and therefore that the award was reasonably debatable.
In a four-to-one decision, the Supreme Court sustained the Appellate Division’s determination, relying upon the strong preference for the judicial confirmation of arbitration awards. The court pointed out that the “reasonably debatable” standard applies, and that the court cannot substitute its judgment for that of the arbitrator, irrespective of the court’s view of the correctness of the arbitrator’s position. In applying that standard, the court found that the arbitrator’s determination was reasonably debatable and therefore had to be sustained. In a strong dissent, Justice Patterson would have reversed the Appellate Division decision and reinstated the trial court’s vacation of the arbitrator’s award:
Because the CBA subordinates the parties’ agreement to governing law, because the 2007 amendments to the SHBP [State Health Benefits Plan] clearly reflect the Legislature’s determination that local employees participating in the SHBP assume a greater share of their healthcare costs in the form of an increased copayment, and because the 2007 amendments furthered an important legislative policy, I cannot accept the arbitrator’s decision as “reasonably debatable” interpretation of the CBA. I consider the award to directly contravene the terms of the CBA and the letter and policy goals of N.J.S.A. 52:14-17.29(C).
The Supreme Court, this term, clearly broke new ground in clarifying that valuation of interests in eminent domain cases cannot ignore the benefits from the project attributable to the property affected by the taking. Regarding warrantless searches, although a criminal-type warrant need not be obtained for administrative searches by the NJDEP, the consent contained in the permit issued by the NJDEP did not justify a forcible entry. A process still had to be followed, albeit not as stringent as for a criminal search warrant. The decisions in the MLUL field should put to rest the number of questions that come up relatively often before land use boards, and while the appearance of impropriety is dead for most practitioners, municipal practitioners, judges and municipal governing bodies acting in a quasi-judicial capacity (and arguably municipal boards and agencies acting in that capacity), must still abide by that standard.
Finally, while it is now definitive that COAH remains in existence, the manner in which it functions and the regulations that it is to implement await their fate before the Supreme Court. Although it is clear that COAH will in fact implement the regulations, the important question that will be decided shortly by this court is the contents of those regulations and the standards by which municipalities must abide in order to satisfy their constitutional affordable housing obligation. That case was argued before the Supreme Court on Nov. 14, 2012, and a decision is imminent. Of course, the Legislature could largely pre-empt any decision, but they appear helplessly deadlocked such that the Supreme Court, itself understaffed, may well feel constrained to take back at least the regulatory portion of the affordable housing domain and ensure that regulations are adopted that meet whatever standard they establish. Hopefully, municipalities will soon know exactly how they must deal with their affordable-housing constitutional obligations. •