SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION DOCKET NO. A-0989- 22 TG ACQUISITIONS, LLC, Plaintiff-Appellant,

v. BOROUGH OF FREEHOLD and MAYOR AND COUNCIL OF THE BOROUGH OF FREEHOLD, Defendants-Respondents.

Argued February 26, 2024

– Decided Ju ly 2, 202 4 Before Judges Marczyk and Chase. On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L

- 0684

- 22. Donna M. Jennings argued the cause for appellant (Wilentz, Goldmanfaif and Spitzer PA, attorneys; Donna M. Jennings, of counsel and on the briefs). Matthew R. Goode argued the cause for respondents (Arbus, Maybruch & Goode, attorneys; Matthew R. Goode, on the brief).
PER CURIAM NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court. " Although it is posted on the internet, this opinion is binding only on the parti es in the case and its use in other cases is limite d. R. 1:36- 3.2 A- 0989

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Plaintiff TG Acquisitions, LLC, appeals from the trial c ourt's October 20, 2022 order granting defendant Borough of Freehold s ummary judgment. Based on our review of the record and the applicable lega l principles, we affirm.
I. Plaintiff is a real estate developer with experien ce in developing mixeduse properties with affordable housing. It purchas ed property in Freehold identified as Block 110, Lots 8 and 8.01 ("500 Park Avenue property"). Plaintiff filed a builder's remedy lawsuit on March 9, 2022, seeking both a declaration that Freehold wa s in violation of its constitutional obligation to provide realistic opportunities for the construction of affordable ho using for low- and moderateincome families and a builder's remedy seeking to r ezone the 500 Park Avenue property to allow for the construction of two multi -family inclusionary residential buildings consisting of a total of 147 units, with twenty-two of those set aside for low- and moderate-income housing. A week later

— on March 16,
2022

— Freehold filed a declaratory judgment action seekin g a determination that it had complied with its fair share housing obligat ions under the Mount Laurel doctrine 1 and the New Jersey Fair Housing Act, N.J.S.A. 52:27D- 301 to - 329

.

1 See S. Burlington Cnty. N.A.A.C.P. v. T wp. of Mount Laurel (Mount Laurel I), 67 N.J. 151, 174 (1975) ( holding developing municipalities are under a3 A- 0989

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By way of background, plaintiff notes its affiliat e companies, CT95-CT07 200 Park LLC and DT 95 -DT07 200 Park LLC ("CT95/DT95"), had previously filed a builder's remedy on October 10, 2019, against Freehold in a separate action. The builder's remedy action was filed following wha t plaintiff characterizes as failed negotiations between the pa rties to develop low- and moderate-income residential housing at the 200 Park Avenue property in Freehold. Ultimately, a settlement was reached between t he parties in February
2022 , but plaintiff alleges Freehold "dragged its feet" in coming to that agreement. Plaintiff also references a "related" matter involving the Borough of Matawan in which another affiliate of plaintiff ("1 60 Main"), which was also represented by plaintiff's law firm, sought to nego tiate construction of a mixeduse development with an affordable housing componen t. Matawan was represented by Freehold's former law firm

— the Rainone firm. Plaintiff alleges the Rainone firm "blindside[d]" plaintiff in the Ma tawan case by filing a declaratory judgment action to cut off plaintiff's relief through a builder's

constitutional obligation to provide a realistic op portunity for the creation of affordable housing) and S. Burlington Cnty. N.A.A.C .P. v. Mount Laurel Twp. (Mount Laurel II), 92 N.J. 158 (1983) (clarif ying and reaffirm ing that constitutional requirement).4 A- 0989

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remedy suit after engaging in months of negotiation s. Plaintiff contends the history of "bad faith in prior dealings with the Ra inone Firm" justified plaintiff in seeking a builder's remedy in the present matter

. In the present action, in September 2022, Freehold moved for summary judgment. It argued plaintiff failed to obtain rel ief through negotiations with Freehold before filing its builder's remedy action. Moreover, Freehold contended plaintiff was not entitled to a builder's remedy because the declaratory judgment action would ensure review of Freehold's compliance with its Mount Laurel obligations. Freehold further argued plaintiff could intervene in the declaratory judgment action to obtain relief

. The trial court, as discussed more fully below, gra nted summary judgment noting a determination on whether Freehold failed t o create a realistic opportunity for the development of affordable housi ng w ou ld be addressed in the declaratory judgment action, and that plaintiff was required to negotiate with Freehold regarding its interest in developing the 5 00 Park Avenue property prior to filing its builder's remedy lawsuit. Moreover, plaintiff's interest in developing the property c ould be adequately addressed by the interested party, F air Share Housing Center , in Freehold's declaratory judgment action.5 A- 0989

- 22 II. Plaintiff argues the trial court erred in granting summary judgment because Freehold's motion was premature. Plaintiff further alleges the court erred in failing to find any efforts by plaintiff t o negotiate with Freehold because negotiations would have been futile based on Freeho ld's past record. Plaintiff further contends the court erred in finding plainti ff should be limited to intervening in Freehold's declaratory judgment acti on. A trial court must grant a summary judgment motion if "the pleadings, depositions, answers to interrogatories and admissions o n file, together with the affidavits, if any, show that there is no genuine i ssue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46 -2(c). "An issue of fact is genuine only if, consi dering the burden of persuasion at trial, the evidence sub mitted by the parties on the motion, together with all legitimate inferences the refrom favoring the nonmoving party, would require submission of the issue to the trier of fact." Ibid. ; see also Brill v. Guardian Life Ins. Co. of Am., 14 2 N.J. 520, 540 (1995). On appeal, we employ the same summary judgment standar d. Townsend v. Pierre , 221 N.J. 36, 59 (2015). If there is no factual dis pute, and only a legal issue to resolve, the standard of review is de novo, and the trial court rulings "are not6 A- 0989

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entitled to any special deference." Manalapan Real ty v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995).
A. Plaintiff relies on Oceanport Holding, LLC v. Boro ugh of Oceanport for the proposition that the trial court prematurely ad dressed Freehold's argument that plaintiff failed to negotiate in good faith pr ior to filing its builder's remedy action. 396 N.J. Super. 622, 633 (App. Div. 2007). Plaintiff asserts that a premature adjudication of plaintiff's entitlement t o a builder's remedy would undermine the policy of encouraging Mount Laurel ac tions by developers to promote compliance by municipalities with the oblig ation to provide an opportunity for affordable housing. It asserts the summary judgment motion should have been denied so the trial court could first adjudicate whether Freehold satisfied its constitutional obligations t o provide its fair share of affordable housing. In Mount Laurel II, our Supreme Court noted:

Builder's remedies will be afforded to plaintiffs i n Mount Laurel litigation where appropriate, on a cas eby -case basis. Where the plaintiff has acted in good faith, attempted to obtain relief without litigatio n, and thereafter vindicates the constitutional obligation in Mount Laurel-type litigation, ordinarily a builder' s remedy will be granted, provided that the proposed project includes an appropriate portion of low and7 A- 0989

- 22 moderate income housing, and provided further that it is located and designed in accordance with sound zoning and planning concepts, including its environmental impact. [92 N.J. at 218 (emphasis added) .] The trial court noted that our courts have upheld the obligation of developers to attempt to obtain relief in good fait h. See Toll Bros. v. Twp. of W. Windsor, 173 N.J. 508, 559-60 (2002); Cranford De v. Assocs., LLC v. Twp. of Cranford, 445 N.J. Super. 220, 226-27 (App. Div. 2016). We held in Oceanport, however, that a developer's obligation to seek relief from the zoning applicable to its property without litigation is "r elevant only to the developer's entitlement to a builder's remedy. A developer doe s not have to make this showing in order to have standing to maintain a Mount Laurel action." 396 N.J. Super. at 624. Specifically, we noted:

[I]f a trial court determined that a plaintiff-deve loper was not entitled to a builder's remedy before adjudicating the constitutionality of the municipal ity's zoning, the developer would be likely to dismiss th e action because it no longer would have a sufficient financial incentive to pursue its claim. Therefore, a premature adjudication of a plaintiff-developer's entitlement to a builder's remedy would undermine t he Court's policy of encouraging Mount Laurel actions by developers to promote compliance by municipalities with the obligation to provide their fair share of affordable housing.8 A- 0989

- 22 [Id. at 633.] The trial court here distinguished Oceanport, noting the plaintiff there had submitted a concept for the development of the prop erty that included affordable housing and engaged in discussions with Oceanport regarding the plan. The developer filed a builder's remedy lawsuit, and Oce anport sought to dismiss the complaint, alleging the plaintiff failed to negotiate in good faith. The trial court in Oceanport dismissed the plaintiff's action. Id. at 626-27. We reversed , noting: In dismissing plaintiff's complaint on the ground

it had failed to negotiate in good faith to obtain relief from the zoning applicable to its property without litigation, the trial court effectively converted t his precondition for entitlement to a builder's remedy into a precondition for maintenance of a Mount Laurel action. However, the right to maintain an action i s a standing not a remedies issue, see Anderson v. Sill s, 56 N.J. 210, 220-21 (1970), and the New Jersey courts have traditionally taken a liberal approach to issu es of standing, see Crescent Park Tenants Assoc. v. Realt y Equities Corp., 58 N.J. 98, 107-12 (1971). Moreove r, the Court indicated in Mount Laurel II that "the ne ed for a 'liberal approach' to standing is especially important in Mount Laurel litigation." 92 N.J. at 337. Under this liberal approach, a plaintiff-developer has standing "to pursue an action simply to vindica te the Mount Laurel right without seeking a builder's remedy." Id. at 327, 456. Similarly, a developer who seeks a builder's remedy but is unable to satisfy o ne of the preconditions for such relief has standing to9 A- 0989

- 22 continue a Mount Laurel action. See id. at 316, 32 1. Therefore, there is no basis for requiring a plaint iffdeveloper to show that it has satisfied a precondit ion for obtaining a builder's remedy in order to pursue a Mount Laurel action. [Id. at 631-32.] The trial court here noted our decision in Oceanpo rt was distinguishable from the present matter. First, the court noted th at plaintiff did not provide "any notice to . . . Freehold of its proposed affordable housing-inclusive development, or any information concerning its project. Unlike in the Oceanport . . . matter, [plaintiff] did not make any presentation or engage in any negotiations with . . . Freehold concerning its proposed project." In Oceanport, we noted:

A court ordinarily will not consider the remedies to which a party may be entitled until that party h as established its cause of action. In a Mount Laurel c ase, the cause of action is the alleged unconstitutional ity of the defendant-municipality's zoning because of its failure to provide for the municipality's fair shar e of affordable housing. See Mount Laurel II, 92 N.J. a t 214 -16. If a plaintiff establishes this cause of acti on, the trial court then proceeds to the remedies stage of the case. Id. at 2 78. [396 N.J. Super. at 630.] The trial court here noted , "[a]bsent evidence of an attempt to negotiate, the developer may be able to successfully show that the municipality's zoning10 A- 0989

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plan is unconstitutional . . . but the developer wo uld be unable to obtain the sitespecific remedy sought

— court-ordered approval for the . . . builder's prop erty." The trial court further observed:

In the present builder's remedy action, while plaintiff . . . would be able to proceed on the cla im that [Freehold's] zoning plan is unconstitutional, argui ng that it does not sufficiently provide for the devel opment of affordable housing, absent efforts to negotiate with [Freehold] prior to the filing of a builder's remed y complaint or showing that negotiations would be futi le, plaintiff is not entitled to a site-specific builde r's remedy . . . . Notably, the court further observed, "[ t]he issue to be decided by the court in the present builder's remedy suit is thus simply wh ether the municipality's zoning plan passes constitutional muster. A determinati on on this issue can and in fact will be made in [Freehold's declaratory judgment] action." Accordingly, the trial court noted the issue before it did not c oncern, unlike the Oceanport case, whether plaintiff had standing to proceed in the builder's remedy action. Rather, the court noted the issue before it was whe ther plaintiff should be permitted to proceed when there is a declaratory ju dgment action filed by Freehold addressing "the issue of whether [Freehold ] has failed to create a realistic opportunity for the development of afford able housing," which is the11 A- 0989

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precise issue that would initially be addressed in plaintiff's builder's remedy lawsuit. We affirm substantially for the reasons set forth b y the trial court. Plaintiff will have the opportunity to assert the s ame arguments in the declaratory judgment action challenging Freehold's assertion that it satisfied its constitutional obligation by creat ing a realistic opportunity for the development of affordable housing. The Oceanport case did not involve a parallel declaratory judgment action. In short, we discern no error by the trial court on this issue.
B. Plaintiff next argues the trial court erred by fai ling to find plaintiff's duty to negotiate with Freehold was discharged because a ny efforts to negotiate would have be en futile. Plaintiff contends the trial court improp erly characterized its action in filing the builder's re medy lawsuit as a "race to the courthouse." Plaintiff further asserts it was comp elled to file the builder's remedy lawsuit because of the bad faith efforts of defendant's prior attorney. Plaintiff also asserts the trial court did not prop erly consider the record of negotiations involving Freehold and the Rainone fir m. Plaintiff recounts its years of discussions with Fr eehold to develop a similar site for affordable housing and the Rainone law firm's actions, in another12 A- 0989

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case involving Matawan, to cut off plaintiff's affiliates' access to a builder's remedy. Plaintiff alleges its affiliate 160 Main p ut Matawan on notice regarding its non-compliance with its fair share housing obli gations. Plaintiff contends the Rainone firm assured 160 Main it was waiting fo r the planner's review of a concept plan, but the negotiations were actually "a guise to forestall a lawful builder's remedy action by 160 Main." Plaintiff as serts that given the Rainone firm's actions in the Matawan matter , it was concerned that defendants would rush to file a declaratory judgment action here and that any efforts to negotiate would be futile. Plaintiff maintains the Rainone f irm's failure to engage in good faith negotiations in a virtually identical case in Matawan demonstrates that plaintiff approaching Freehold regarding the 500 Pa rk Avenue property in this matter "would have resulted in [d]efendants rushing to file a declaratory judgment action" even though they were on notice fo r a number of years their ordinance did not provide a realistic opportunity t o develop affordable housing. Plaintiff further alleges that it was discharged o f its duty to negotiate with Freehold before initiating its builder's remedy sui t because of the futility of further negotiations. Plaintiff contends that desp ite a settlement ultimately reached with Freehold regarding the 200 Park Avenue property, the court failed to consider the record as a whole and the Rainone f irm's tactics in the Matawan13 A- 0989

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case. Plaintiff contends there is no need to exhau st administrative remedies when the pursuit of those remedies would be futile or illusory. We are unpersuaded by plaintiff's arguments regard ing the futility issue. The trial court considered the history between the parties, along with plaintiff's argument regarding the Matawan case. The court pro perly rejected plaintiff's arguments regarding the relevance of the Matawan ca se and the prior history of negotiations with Freehold in the 200 Park Avenue m atter. Specifically, the court noted: This court can take judicial notice that the govern ing

body of . . . Matawan is a different body than the governing body of . . . Freehold. What . . . Mataw an has or has not done with reference to its Mount Lau rel obligations is not relevant to the present matter. While Matawan and Freehold . . . may both be represented by the same law firm, the court cannot conclude based upon the information presented that any steps taken . . . by . . . Matawan are attributable [to Freehold's prior law firm]. What has or has not happened in . . . Matawan . . . is not relevant to the present matter and cannot be considered by this court on the present motion. The court further noted, "[ p]erhaps the best evidence of whether efforts to negotiate with . . . Freehold on the interest of [p laintiff] to develop the subject property is found in the manner in which the [CT95 /D T 95 ] . . . matter was resolved." The court noted that Freehold settled t he builder's remedy lawsuit14 A- 0989

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with plaintiff's affiliate in that separate action. The court commented, "[i]t is difficult to imagine the presentation of clearer ev idence that efforts to negotiate the development of property to include affordable h ousing [within Freehold] can succeed . . . ." As the court observed, Freehold h ad entered into a settlement with plaintiff's affiliate a month prior to the fili ng of the builder's remedy action in this case. Accordingly, the court concluded, "[ t]he assertion by [plaintiff] that any effort to reach a negotiated resolution of its claim with . . . Freehold would have been futile is not factually supported a nd is thus rejected by this

court ." We find no basis to disturb the court's conclusions

. C. Plaintiff next contends the trial court erred in f inding plaintiff should be limited to intervening in the declaratory judgment action because Freehold had not yet received immunity from the builder's remedy lawsuits. Plaintiff asserts Freehold did not file a declaratory judgment action back i n July 2015 because it had not received substantive certification from the Council on Affordable Housing

. Although Freehold indicated in response to the builder's rem edy action concerning the 200 Park Avenue property that it planned to file a declaratory judgment action, it failed to do so unt il after the underlying builder's remedy action was filed. Plaintiff asserts Freehol d delayed until it finally15 A- 0989

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indicated at a case management conference in Februa ry 2022, it would file a declaratory judgment action by March 18, 2022. Pla intiff asserts because of these delays, it had no reason to expect defendants would follow through with such filing and therefore proceeded with its builde r's remedy action. Because Freehold failed to comply with its obligations to p rovide realistic opportunities for the construction of low- and moderate-income housing and failed to file in a timely manner for immunity, plaintiff argues it was appropriate for it to file a builder's remedy suit. Plaintiff further contends Freehold has an "urgent" need for affordable housing that has not been met, and i t is entitled to a builder's remedy as a matter of law. Plaintiff argues its "right to a builder's remedy is not obviated by the mere possibility of an interested party advocating on its behalf in the declaratory judgment action." Freehold counters that in order to succeed in a bu ilder's remedy action, the developer must demonstrate noncompliance of the ordinance and propose a project with a substantial amount of affordable hou sing that is suitable for the site. Mount Laurel II, 92 N.J. at 279-80. At that point, builder's remedies will be afforded to plaintiffs "[w]here the plaintiff ha s acted in good faith [and] attempted to obtain relief without litigation." Id . at 218. Freehold contends that a municipality's failure to timely file for immunit y is immaterial to whether a16 A- 0989

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builder's site-specific remedy will lie. It further notes that plaintiff's builder's remedy was not obviated by the declaratory judgment action but rather its failure to approach Freehold with a plan prior to filing th is suit. We affirm substantially for the reasons set forth by the trial court in addressing this issue. The court noted:

There are two matters pending before this court, the builder's remedy suit filed by [plaintiff] and the [declaratory judgment] action filed by . . . Freeho ld

. [Plaintiff] cannot obtain an actual builder's remed y, that is, approval for development of its property in its builder's remedy suit because it did not attempt to negotiate a resolution with [Freehold] before filin g the builder's remedy lawsuit and . . . has not shown th at it would have been futile to do so. The trial court properly noted that plaintiff's bui lder's remedy lawsuit requires that a determination be made as to whether Freehold 's zoning plan provides a constitutionally acceptable opportunity for the dev elopment of affordable housing. However, "th e same determination can, and will be made in [Freehold's declaratory judgment] action." The cou rt determined that as a matter of judicial economy, it did not make sense for para llel matters to proceed. Specifically, the court noted:

I t would constitute [an] inappropriate waste of resources on the part of . . . Freehold, Fair Share Housing Center, the Special [Adjudicator] appointed in Mount Laurel proceedings . . . to allow both matters,17 A- 0989

- 22 the [declaratory judgment] action and the builder's remedy action, to proceed at the same time. The court noted the evidence presented indicates th at while Freehold did not file a declaratory judgment action immediately following the Supreme Court's decision in Mount Laurel IV 2 in 2015, it was "not sitting idly by waiting for a builder's remedy action to be filed before taking action." The court noted that it is "more appropriate" to address Freehold's constitut ional obligation to provide an opportunity for the development of affordable ho using in the declaratory judgment action. The court further stated that pla intiff alleged Freehold had an unmet need of eighty-five housing units. However, "[t]he Fair Share Housing [Center] is an interested party in the [declaratory judgme nt] action, as it is in all Mount Laurel matters, and the court finds it diffic ult to imagine that the [Center ] will not take notice of [plaintiff's] interest in d eveloping residential housing" in Freehold. Accordingly, the court granted Freehold summary judgment. We discern no basis to disturb that decision. Affirmed.

2 In re Adoption of N.J.A.C. 5:96 & 5:97, 221 N.J. 1, 7 (2015).