Recent NJ Opinion Favors Run-Down Health Care Facility

December 2013Articles In the Zone

A New Jersey Superior Court judge recently authored an opinion favoring the continued operation of a run-down health care facility, which serves as a great primer on the law surrounding zoning challenges and State preemption of local zoning ordinances. In Mazel, LLC, et al., v. Township of Toms River, Dover Woods Healthcare Center, et al¹., the plaintiffs, owners of a Ramada Inn in Toms River, New Jersey, filed a complaint in lieu of prerogative writs asserting that the conditional use giving rise to the original zoning approval of a neighboring facility known as Dover Woods no longer existed, that the facility operated as a non-permitted use within the zone and that the owners must be restrained from continuing its current use until they obtained the necessary approval as a permitted use. The plaintiffs also sought to compel the defendant Township to require Dover Woods to comply with all, applicable Township land use ordinances and the terms and conditions of the original Planning Board approving resolution, issued in 1983.

The facts are essentially as follows: Dover Woods is located in the Rural Highway Business (RHB) zone. Dover Woods, initially known as the Dover Retirement Hotel, was built approximately 30 years ago and was designed with hotel specifications. Hotels were permitted in the RHB zone as a conditional use in 1983 when the Planning Board approved the development as a hotel and a state-licensed, residential health care facility (RHCF). Dover Woods continues to be licensed by New Jersey and is subject to the regulations of the Department of Community Affairs.

The 1983 Planning Board resolution recited the facts that: the developer proposed to construct a 136 unit hotel containing 240 beds on approximately six acres; the hotel was to provide dining and kitchen facilities not open to the general public, with additional indoor and outdoor recreational facilities and transportation amenities; and, the typical hotel guests were anticipated to be elderly, non-working, living on a fixed income, spouseless and, in many instances, with no family or with few visitors. The facility was not constructed under hospital or nursing home specifications, but rather was built to hotel specifications, although licensed by New Jersey at all times since its construction as an RHCF.

In 1991, the Township amended its zoning ordinance to expand the permitted uses in the RHB zone to include both “medical services facilities” and “hotels.” As noted, hotels were previously permitted as conditional uses, only; medical services facilities were neither permitted uses nor conditional uses prior to the 1991 amendment.

In short, the facility has become exceedingly run-down, and its guests have often been found wandering about aimlessly in public, causing significant disturbances and burdening emergency services. Based upon these conditions, the plaintiffs argued that the Ramada Inn hotel business has suffered and sought injunctive relief. The current owner of the facility filed motions for summary judgment on all counts of the complaint. The Court granted summary judgment in favor of Dover Woods on virtually all counts for the following reasons.

The Court interpreted the Township’s zoning ordinance to find that Dover Woods operated both as a hotel and a medical services facility, thus constituting two permitted uses within the RHB zone. In so doing, the Court analyzed the judicial function. While courts must construe zoning ordinances reasonably and liberally in favor of a municipality, mindful of any apparent legislative purpose or intent, they must construe restrictive zoning regulations in favor of a property owner because they limit property rights. Accordingly, courts may not infer restrictions beyond the clear and unequivocal language of a restrictive zoning ordinance. With those principles in mind, the Court found that Dover Woods constituted a hotel within the meaning of the applicable zoning ordinance. Simply, the facility as constructed met the definitional requirements. The Court also found that Dover Woods’ status as an RHCF did not affect its status as a hotel, the two not being mutually exclusive. The Court then found that Dover Woods operated as a medical services facility within the definition of the ordinance, a broad category that included long-term, RHCFs, acknowledging that it must construe the definition of a medical services facility in favor of Dover Woods’ use. In the absence of clear restrictive language, the Court could not infer that the drafters of the zoning ordinance intended to prohibit residential health care facilities in the RHB zone. Accordingly, the Court felt that its proper inquiry was not whether the zoning ordinance’s definition for medical services facilities permitted residential health care facilities, but rather whether it clearly prohibited them. Finding nothing prohibitive, the Court construed the zoning ordinance to permit Dover Woods’ use of the property as a state-licensed, RHCF and, in turn, as a medical services facility, a permitted use².

The 1983 Planning Board resolution contained standards for the developer’s operation of the facility higher than those required by State regulations. As a result, the plaintiffs sought to have the Township require the facility to comply with those higher standards. The Court denied that application, stating that a municipality, as an agent of the State, cannot act contrary to the State and cannot forbid what a State statute permits. Municipalities can exercise zoning power only through delegation of the State’s authority, and they must consider the welfare of all of the State’s citizens, not just the interests of the inhabitants in the particular locality. State preemption occurs when the legislature regulates a field so extensively and comprehensively that it evinces an intent to preclude concurrent municipal regulation of the same field. The Court considered the five factor test articulated by the state Supreme Court (not recited here), applied it to the facts, and found State preemption based upon the field of regulations governing the operation of RHCFs. Accordingly, the Court found that, to require literal compliance with the 1983 Planning Board resolution, would effectively impose more stringent municipal regulations on Dover Woods than those imposed by existing State regulations. It declined to compel the Township, despite the plaintiffs’ arguments to the contrary, to interfere with Dover Woods’ operations through literal enforcement of the 1983
Planning Board resolution, finding that to be an intrusion upon the State’s regulatory authority.

In conclusion, the Court acknowledged the problems experienced by both the Township and local businesses as the result of the behavior of some of the “guests” at Dover Woods. However, since the plaintiffs’ action was brought as a zoning challenge, it involved questions of law. The Court left open the option for the State, in a separate administrative action, to impose penalties on Dover Woods to force compliance with licensure requirements, if those requirements have been violated.

View the entire issue of In the Zone (pdf)