Court Opinion

ID: 4707393
Source: CourtListenerOpinion
Date Created: 2021-07-29 14:08:27.85424+00
Date Added: 2024-06-11T08:06:43.985615
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                            APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
  internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                     SUPERIOR COURT OF NEW JERSEY
                                                     APPELLATE DIVISION
                                                     DOCKET NO. A-5696-18

IN RE GEORGE TRUESDALE
C/O POINT PLEASANT
PROPERTIES, INC., CAFRA
INDIVIDUAL PERMIT NO.
1524-05-0005.1 CAF 150001
CHALLENGED BY PETER
GAPP AND LISA PERRETTO.
____________________________

                Argued March 22, 2021 – Decided July 29, 2021

                Before Judges Messano and Suter.

                On appeal from the New Jersey Department of
                Environmental Protection.

                Ira E. Weiner argued the cause for appellants (Beattie
                Padovano, LLC, attorneys; Ira. E. Weiner, of counsel
                and on the briefs; Martin R. Kafafian, on the briefs).

                Michael J. Gross argued the cause for respondent
                George Truesdale c/o Point Pleasant Properties, Inc.
                (Giordano, Halleran & Ciesla, attorneys; Michael J.
                Gross and Afiyfa H. Ellington, on the brief).

                Patrick S. Woolford, Deputy Attorney General, argued
                the cause for respondent New Jersey Department of
                Environmental Protection (Gurbir S. Grewal, Attorney
                General, attorney; Melissa H. Raksa, Assistant
            Attorney General, of counsel; Patrick S. Woolford, on
            the brief).

PER CURIAM

      In November 2015, Point Pleasant 847 Properties, Inc. (the Developer),

applied to the New Jersey Department of Environmental Protection (DEP) for

an individual permit under the Coastal Area Facility Review Act (CAFRA),

N.J.S.A. 13:19-1 to -51. The application sought a permit for "the reconstruction

of an existing one-story structure with a new two-story banquet hall facility" at

Clark's Landing Marina in Point Pleasant (the Project).

      Appellants Peter Gapp and Lisa Perretto own residential property in the

nearby Clark's Landing Condominium complex.               They retained Thonet

Associates, Inc. (Thonet), an engineering firm that filed a lengthy report

objecting to the issuance of the permit. The report noted that while the new

facility would be built essentially on the footprint of an existing structure, it

would result in a three-story, not two-story, building. Among numerous other

objections, Thonet explained that the Project's ground floor would be below the

regulatory "100-year flood" levels set by regulations issued under the Flood

Hazard Area Control Act (the FHA), N.J.S.A. 58:16A-50 to -103.

      In May 2016, DEP issued the CAFRA permit (the Permit) and on June 1,

2016, published public notice of its issuance. Appellants did not file an appeal

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to this court, but rather filed a request for an adjudicatory hearing. See N.J.A.C.

7:7-28.1(a) and (b) (permitting a person to request an adjudicatory hearing "to

contest a Department decision to approve or deny a coastal permit" within

"[thirty] calendar days after public notice of the decision published in the DEP

Bulletin"). Appellants' request included additional comments made by Thonet

that included the substance of emails between DEP reviewers and the

Developer's experts, which appellants obtained through OPRA. Thonet again

noted that the Project anticipated a three-story structure with its ground floor

below regulatory flood-area levels.

      There were additional submissions to DEP by the Developer which were

not provided to appellants. In February 2019, nearly three years after the

issuance of the Permit, DEP's Division of Land Use issued a written

"Amplification and Supplementation of the Record" (the Amplification). DEP

noted that in "[t]he . . . application, [the Developer] represented . . . a proposed

renovation of the ground floor of the building was not a 'substantial

improvement.'" 1 DEP noted that appellants had challenged that characterization

1
  "'Substantial improvement' means any reconstruction, rehabilitation, addition,
or other improvement of a structure, the cost of which equals or exceeds [fifty]
percent of the market value of the structure as determined before the start of
construction of the improvement."          N.J.A.C. 7:13-1.2 (2013).        The

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of the Project in their request for an adjudicatory hearing and, as a result, DEP

"requested additional information from the [Developer] . . . to supplement the

public record." The Amplification further stated that the Developer "still did

not present enough information for [DEP] to determine if the project is a

'substantial improvement,'" and therefore the agency was applying "the more

stringent regulations assuming the [P]roject is a 'substantial improvement.'"

      The Amplification then considered FHA regulations in existence at the

time of the application, specifically N.J.A.C. 7:13-11.5(g)(4) (2013). Those

provided that the applicant demonstrates "it is not feasible to construct the

lowest floor of any or all portions of the building at least one foot above the

flood hazard area design flood elevation[,]" and "the lowest floor . . . is

constructed as close as feasible to one foot above the flood hazard area design

flood elevation." N.J.A.C. 7:13-11.5(g)(4)(i) and (ii) (2013).

      Based solely upon the Developer's submissions, DEP concluded the

estimated costs to raise the building several feet was approximately $1.4 million,

making regulatory compliance "infeasible."      DEP concluded that the Project

Amplification "applied the FHA Regulations in effect at the time of the
application submittal." Since then, many of these regulations have been updated
and renumbered multiple times.

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complied with FHA regulations, whether viewed as "a substantial improvement

of a lawfully existing building, . . . or a modification of a lawfully existing

building that does not result in a substantial improvement."

      More than five months later, on July 25, 2019, DEP's Commissioner

issued an order denying appellant's request for an adjudicatory hearing. Citing

N.J.A.C. 7:7-28.1(e) and decisions from the Supreme Court and our court, the

Commissioner concluded appellants "failed to make the requisite showing to

establish their right to a hearing or to demonstrate what particularized property

interest entitles them to an adjudicatory hearing in this matter." She noted that

appellants "due process rights have been well protected by the repeated

opportunities afforded to present written objections and reports from their

consultants."

      Appellants filed this appeal, challenging both the denial of their request

for an adjudicatory hearing and DEP's 2016 issuance of the Permit. They

contend they were entitled to an adjudicatory hearing under CAFRA, the Public

Trust Doctrine, and because the unusual procedural circumstances denied them

the right to participate in the review process. Appellants also advance several

arguments that DEP's grant of the Permit was arbitrary, capricious, and

unreasonable.

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      The Developer and DEP counter by arguing appellants were not entitled

to an adjudicatory hearing because they lacked a "particularized property

interest sufficient to require a hearing on constitutional or statutory grounds."

N.J.S.A. 52:14B-3.2(c). DEP argues appellants' challenge to the Permit should

be rejected as untimely. The Developer contends DEP properly evaluated its

application and granted the Permit.

      We have considered these arguments in light of the record and applicable

legal standards. We affirm DEP's denial of an adjudicatory hearing. However,

"[i]t should go without saying that turning . . . square corners is minimally what

citizens should be able to expect from their government." Klumpp v. Borough

of Avalon, 202 N.J. 390, 413 (2010). We conclude that DEP did not do so in

this matter. We therefore remand the matter to DEP for further proceedings

consistent with this opinion.

                                        I.

      Pursuant to the Administrative Procedure Act (the APA), N.J.S.A.

52:14B-1 to -31, no State agency may promulgate a regulation "that specifically

allows a third party to appeal a permit decision," unless "otherwise required by

federal law or by . . . statute." N.J.S.A. 52:14B-3.3(a). A third party is defined

as any person other than:

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            a. An applicant . . . .

            b. A State agency; or

            c. A person who has a particularized property interest
            sufficient to require a hearing on constitutional or
            statutory grounds.

            [N.J.S.A. 52:14B-3.2.]

As a result, the Court has clearly held that non-applicants are entitled to an

adjudicatory hearing only where they can demonstrate: (1) a right to a hearing

under an applicable statute; or (2) a "particularized property interest of

constitutional significance that is directly affected by an agency's permitting

decision." In re NJPDES Permit No. NJ0025241, 185 N.J. 474, 481–82 (2006).

"[T]hird parties generally are not able to meet the stringent requirements for

constitutional standing in respect of an adjudicatory hearing." Id. at 482.

      These limitations are "intended to prevent the processing of permit

applications by State agencies from being bogged down by time-consuming and

costly formal hearings" that "consume substantial public and private resources."

In re Riverview Dev., LLC, 411 N.J. Super. 409, 424 (App. Div. 2010). The

Legislature found that giving third parties the right to hearings would "give rise

to a chaotic unpredictability and instability that would be most disconcerting to

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New Jersey's business climate and would cripple economic development."

N.J.S.A. 52:14B-3.1(c).

      "[L]andowners objecting to the development of neighboring property" do

not, by proximity alone, "have a particularized property interest warranting an

adversarial hearing before an administrative law judge."         In re Freshwater

Wetlands Gen. Permits, 185 N.J. 452, 470 (2006) (citing Spalt v. DEP, 237 N.J.

Super. 206, 208–11 (App. Div. 1989)). Collateral economic impacts, traffic,

views, quality of life, recreational interest, and property values, are insufficient

to establish a third-party right to an adjudicatory hearing. Ibid.

      Given these compelling precedents, nothing in appellants' arguments

supporting their right to an adjudicatory hearing warrants discussion in a written

opinion. R. 2:11-3(e)(1)(E). We affirm DEP's final decision denying appellants

an adjudicatory hearing.

                                             II.

      Under the particular facts presented, we do not agree with DEP or the

Developer that our consideration of the merits of appellants' challenge to the

Permit is procedurally barred. We acknowledge that our Court Rules require

any appeal from a final agency decision must be filed within forty-five days

"from the date of service of the decision or notice of the action taken." See R.

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2:4-1(b). DEP contends that despite the more than three-year delay in the

agency's determination of their request for an adjudicatory hearing, appellants

were required to challenge the Permit within forty-five days of DEP's public

notice. We disagree.

      First, DEP's own regulations require that anyone seeking an adjudicatory

hearing file the request within thirty days, not forty-five days, of the public

notice. N.J.A.C. 7:7-28.1(b). To avoid the "consum[ption of] substantial public

and private resources," In re Riverview Dev., 411 N.J. Super. at 424, DEP

should have determined whether appellants had standing rather quickly and not

have inordinately delayed that decision for more than three years before denying

the request. Critically in this case, it was during this more than three-year delay

that DEP was considering additional information submitted by the Developer.

      DEP's regulations require that if it grants an adjudicatory hearing, it refers

the matter to the Office of Administrative Law (OAL) "for a contested case

hearing" under the APA. N.J.A.C. 7:7-28.1(f). Only the final decision issued

by the Commissioner after the hearing "shall be subject to judicial review."

N.J.A.C. 7:7-28.1(g). The regulations are silent regarding the time within which

one must appeal the denial of the request for an adjudicatory hearing. DEP

suggests, and we agree, that Rule 2:4-1(b) governs; however, it logically follows

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that until the request for an adjudicatory hearing is denied, requestors do not

know if they will have the ability to contest the grant of a permit in the OAL or

not.

       The logical endpoint of DEP's argument regarding the timeliness of

appellants' challenge to the Permit on its merits is simple: to avoid the time

constraints of Rule 2:4-1(b), appellants should have contemporaneously filed

both an appeal of the issuance of the Permit and a request for an adjudicatory

hearing. Based on the particular facts of this case, we disagree.

       It goes without saying that had appellants done what DEP suggests, an

appeal would have been pending in our court, and quite possibly have been

decided prior to the denial of their request for an adjudicatory hearing nearly

three years later. Alternatively, we might have delayed resolution of the appeal

pending DEP's decision, but certainly no agency should have the ability to delay

this court's disposition of an appeal simply because of an untoward delay in its

administrative review processes. Lastly, what should happen if DEP decides a

requestor should receive an adjudicatory hearing while the appeal is pending?

How could we conduct a fulsome review of the issuance of the permit in those

circumstances not knowing the result of the administrative hearing? In short,

DEP's argument is unpersuasive.

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      We recognize that requestors who lack standing under the APA could

delay the finality of the issuance of a permit by filing meritless requests for an

adjudicatory hearing, but that is not for us to address, particularly under the facts

of this case. More importantly, there is a difference between standing under the

APA and, in a more general sense, standing by members of the public to

challenge DEP's actions. See, e.g., N.J. Dept. of Env't Prot. v. Exxon Mobil

Corp., 453 N.J. Super. 272, 298–99 (App. Div. 2018) (discussing standing to

challenge agency action in a variety of contexts). That a person lacks standing

to request an adjudicatory hearing does not compel the same result for a

challenge to the merits of the issuance of a permit.

      Turning to the arguments made regarding the issuance of the Permit, we

reject appellants' claim that the Developer's notice was insufficient because its

description of the Project was inadequate; we also reject their contention that

DEP's public notice of its approval of the Permit was inadequate. Neither

argument requires discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Appellants claim that the Project further impeded the public's physical and

visual access to the riverfront and violated both the Public Trust Doctrine and

N.J.A.C. 7:7-16.9. "Development that does not comply with N.J.A.C. 7:7-16.9,

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Public access, is discouraged in lands and waters subject to public trust rights."

N.J.A.C. 7:7-9.48(b). However,

             For existing marina development where the proposed
             activity consists of . . . renovation, redevelopment, or
             expansion that remains entirely within the parcel
             containing the existing development, no public access
             is required if there is no existing public access onsite
             . . . . Any existing public access shall be maintained.

             [N.J.A.C. 7:7-16.9(p)(1) (2015).2]

In the Developer's revised compliance statement, it addressed the public access
issue:

             In accordance with [N.J.A.C. 7:7-16.9(p)(1)], any
             existing public access at an existing marina shall be
             maintained. Due to the nature of the daily operations
             of the marina use, including operating machinery, boat
             storage and the presence of fueling stations, there is
             limited existing public access on site. The site
             functions as a private marina and therefore does not
             permit any types of public recreational activities such
             as swimming, sunbathing or diving due to safety
             concerns. The proposed development consists of the
             removal and reconstruction of an existing structure in
             the same location entirely within the parcel containing
             the existing development. The reconstruction of the
             structure will have no impact on the existing access.
             Boat owners will still be able to park and walk safely
             from their vehicles to their boat slips.

             The prior public access requirements from the 2006
             Waterfront Development permit and subsequent 2007

2
    Now N.J.A.C. 7:7-16.9(m)(1).
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             permit modification are not applicable as the approved
             improvements were never completed.

       DEP placed special conditions on the Permit requiring "[a]ny existing

public access on the project site must be maintained in accordance with Public

Access rule at [N.J.A.C. 7:7-16.9(n)(1)(i).]" 3 DEP clearly considered the public

access issue prior to issuing the Permit.

       However, given what occurred after the Permit was issued, it is unclear

on this record if DEP comprehended the actual scope of the Project. Indeed, the

amplification fails to state definitively whether the Project is or is not a

"substantial improvement." Because we are remanding for other reasons we

3
    That regulation provided:

             For existing commercial development . . . where the
             proposed      activity   consists     of   maintenance,
             rehabilitation, renovation, redevelopment, or expansion
             that remains entirely within the parcel containing the
             existing development, no public access is required if
             there is no existing public access onsite. Any existing
             public access shall be maintained or equivalent public
             access shall be provided onsite. Equivalent public
             access shall include access that provides for
             opportunities to participate in the same activities, such
             as fishing, swimming and passive recreation, in the
             same manner and by the same number of people as in
             the existing public access area.

             [N.J.A.C. 7:7-16.9(n)(1)(i) (2015).]

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explain below, we leave resolution of the merits of appellants' argument in this

regard to DEP as part of the remand.

      Appellants also argue that we should consider the merits of their appeal

without regard to the reasoning DEP employed and described in the

Amplification. In other words, appellants argue DEP issued the Permit by

erroneously concluding that the Project did not involve a "substantial

improvement," and only after appellants objected and submitted a request for an

adjudicatory hearing did DEP change course and decide that requiring the

Project to comply with FHA rules was infeasible.

      We disagree with appellants that the proper recourse is for us to

completely ignore the Amplification. It is axiomatic that our review of agency

determinations is limited, and "[i]t is settled that '[a]n administrative agency's

interpretation of statutes and regulations within its implementing and enforcing

responsibility is ordinarily entitled to our deference.'" Seigel v. N.J. Dept. of

Env't Prot., 395 N.J. Super. 604, 613 (App. Div. 2007) (quoting Wnuck v. N.J

Div. of Motor Vehicles, 337 N.J. Super. 52, 56 (App. Div. 2001)). In particular,

"[e]ach agency decision involving an application for development under

CAFRA invokes . . . competing policy considerations." Id. at 615 (quoting In

Re Cape May Cnty. Mun. Util. Auth., 242 N.J. Super. 509, 516 (App. Div.

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1990)). We would stray from our responsibilities, and it would be unfair to all

parties, especially the Developer and DEP, if we simply ignored the

Amplification by accepting appellants' argument that it is outside the agency

record.

      However, appellants' objection to the Amplification on procedural

grounds has merit. Initially, the "entire application" for an individual CAFRA

permit shall be provided to DEP and the municipal clerk where the development

is located. N.J.A.C. 7:7-24.3(a). There are specific, comprehensive public

notice requirements when individual CAFRA permits are sought. N.J.A.C. 7:7-

24.3(b); N.J.A.C. 7:7-24.4.      Notably, if an applicant submits a "revised

application at any time during the . . . review process," it must file the revisions

with the municipal clerk and provide the "revisions to any person listed in

N.J.A.C. 7:7-24.3(b), whom [DEP] determines would likely be affected by the

revised application." N.J.A.C. 7:7-26.1(d).

      In this case, the Permit application contained significant information

which, by regulation, was accessible for public review. The Developer's notice

specifically advised that the "package" could be reviewed at DEP's offices in

Trenton or at the municipal clerk's office.       The Permit itself provided no

explanation for its grant, except that it complied with CAFRA and Coastal Zone

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Management Rules. The Permit "authorize[d] the reconstruction of the existing

one-story building with a two-story banquet hall facility," along with other

improvements to the "existing two-story banquet hall."

      Although it is unclear when and where Thonet reviewed the application

file, the comments it made on behalf of appellants caused DEP to re-examine

the situation. This is borne out by the emails in the record, as well as the fact

that DEP felt compelled to issue the Amplification.        Critically, DEP then

accepted additional documentation from the Developer's expert regarding the

costs of compliance with FHA regulations.           Although the Developer's

submissions may not technically be "revisions" to the application, the

undisputed record demonstrates that it supplied significant, critical information

to justify exceptions to the FHA regulations, and neither appellants nor members

of the public were privy to this information either at the time of the original

application or afterwards.

      Certainly, had the Developer intended to rely on the infeasibility of

compliance, rather than solely on whether the Project was a substantial

improvement or not, the information supporting DEP's decision, i.e., the

estimated costs of compliance, would have been subject to challenge by

appellants and others. It never was. Moreover, the specific details of the costs

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of compliance are nowhere in the appellate record or in the Amplification. In

other words, DEP's conclusion that compliance with FHA regulations was

infeasible is not supported by credible evidence in this record. See Tlumac v.

High Bridge Stone, 187 N.J. 567, 573 (2007) (noting we defer to an agency's

findings of facts if "supported by substantial credible evidence in the record and

[if they] are not so wide off the mark as to be manifestly mistaken"); Matter of

Thomas Orban/Square Props., LLC, 461 N.J. Super. 57, 77 (App. Div. 2019) ("It

. . . is a fundamental of fair play that an administrative judgment express a

reasoned conclusion. A conclusion requires evidence to support it and findings

of appropriate definiteness to express it." (quoting N.J. Bell Tel. Co. v.

Commc'ns Workers of Am., 5 N.J. 354, 375 (1950))).

      "[W]henever an administrative agency acts, be that act mandatory or

strictly voluntary, it must do so reasonably and in a manner calculated to achieve

the policies expressed in the agency's organic statute." In re State & Sch. Emps.'

Health Benefits Comm'ns' Implementation of Yucht, 233 N.J. 267, 281 (2018)

(citing 37 Steven L. Lefelt et al., N.J. Practice: Administrative Law & Practice

§ 7.17 (2d ed. 2000)). "[L]ike the means an agency chooses for purposes of

meeting a public need contemplated by a statute the agency is charged with

implementing, the means of notice in fulfillment of that statutory policy

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similarly must be designed to reasonably achieve its intended purpose. " Id. at

282.

       Ironically, if we were to adopt DEP's argument that appellants' challenge

to the Permit is untimely, and they were required to have filed an appeal to this

court within forty-five days of publication of the Permit's issuance, the following

scenario was likely. DEP would have sought a remand to supplement the record

so it could provide its rationale for now deciding compliance was infeasible, i.e.,

the Amplification. R. 2:5-5(b). We would have likely granted that motion, and

appellants would have had the right to appear for purposes of the remand, sought

access to the information the Developer submitted to DEP, and submit their own

information to supplement the agency record so it was complete for our review.

See In re State & Sch. Emps.', 233 N.J. at 285 (requiring remand hearing to

develop "a proper record to permit meaningful judicial review," and permitting

examination of both "the form and substance" of contested notice to

beneficiaries). We conclude that is the appropriate remedy here.

       We affirm the final agency decision denying appellants an adjudicatory

hearing. We vacate the issuance of the Permit and remand the matter to DEP

for a hearing to allow for the development of a full record as to: 1) whether the

Project is a "substantial improvement"; and, 2) if DEP concludes it was a

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"substantial improvement," whether the Project complied with Public Access

regulations and its compliance with FHA regulations was infeasible. DEP shall

provide appellants with the information supplied by the Developer supporting

the conclusion the agency reached in the Amplification; appellants shall be

permitted to submit information to DEP on the issue. We leave it to DEP's

discretion whether additional information, submissions, or testimony is

appropriate.

      Affirmed in part; reversed and remanded in part.     We do not retain

jurisdiction.

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