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IT AIN'T OVER YET: SUDLER HEADS TO APPELLATE DIVISION SEEKING REVERSAL OF JUDGE HODGSON'S RULING ON LEGAL FEES IN LAKE TERRACE CASE



The New Jersey Appellate Division is set next Wednesday, May 29, 2024 to hear oral arguments from Sudler Lakewood LLC which is appealing Ocean County Superior Court Judge Francis Hodgson's denial of their motion to collect their legal fees for fighting Lake Terrace's lawsuit which challenged their minor subdivision application.


Since November 2020, Lake Terrace has been embattled by multiple lawsuits filed by their industrial park neighbor Clayton Associates and their landlord Sudler, which assert that they never received Township Zoning Board approval for the use of their banquet hall and concert hall.


When given the opportunity to be the one to shoot back with legal opposition, Lake Terrace did so - with a lawsuit opposing Sudler's routine Minor Subdivision.


In November 2021, Sudler Lakewood LLC which owns properties adjacent to Lake Terrace, presented an application to the Lakewood Planning Board for a Minor Subdivision of their single property into 4 separate lots for financial reasons (to renegotiate their mortgage). This would typically be a very routine matter for the Board, as the applicant is not seeking to construct anything or to make any changes to the site, but rather to draw an imaginary line through the lot so they can renegotiate their mortgage.


However, this application was anything but routine.


Attorney Ron Gasiorowski, who told the Board that he was representing "Lake Terrace and Bnos Brocho who are neighbors of the Sudler property" objected to the application on several grounds.


The existing single lot currently has access directly onto Towbin Avenue. By subdividing this lot into 4 lots, some of the new lots (which, by the way, are mainly unusable due to wetlands) will no longer have access directly onto a street, therefore, the applicant sought to provide easements across the lots for cross-access so they could continue to cut the trees and maintain the wetland property.


Mr. Gasiorowski claimed that "easements" are not "permitted uses" under Lakewood Township's zoning ordinances and therefore this application required a Use Variance which only the Zoning Board - and not the Planning Board - could grant.


Furthermore, Mr. Gasiorowski argued that the legal notice published by Sudler was insufficient as it did not disclose that the application required a Use Variance.


Mr. Gasiorowski further argued that, under state law, only the Zoning Board has jurisdiction to approve a Subdivision where the new lots would not front a "street", and in this case, by approving this Minor Subdivision, the Planning Board would be approving a Subdivision where the new lots would not front a "street."


Additionally, Mr. Gasiorowski argued that the New Jersey Municipal Land Use Law prohibits Municipalities from issuing construction permits for structures on lots which do not abut public streets, and by approving this Minor Subdivision, the Board would be creating lots upon which, the Township would not be permitted to issue construction permits.


The Board noted that the only issue they had with the application was that the Township zoning ordinances requires a sidewalk in every Subdivision application, whether for a major development or for a Minor financial matter, and the application was seeking a design waiver from providing sidewalks.


In response, the applicant agreed to install a sidewalk as a condition of the Minor Subdivision approval, and the Board then approved the Minor Subdivision application.


Subsequently, in September 2022, as first reported here on FAA News, Mr. Gasiorowski, on behalf of Lake Terrace, filed a lawsuit against the Planning Board and Sudler.


In the Complaint in Lieu of Prerogative Writs, Mr. Gasiorowski reiterated the arguments he presented at the Planning Board public hearing, and claimed that the Board's approval of the Minor Subdivision was "arbitrary, capricious, and unreasonable" as it "failed to consider and apply important planning and zoning principles and requirements."


On February 28, 2022, Attorney Jonathan Epstein of Faegre Drinker Biddle and Reath LLP on behalf of Sudler filed an Answer simply denying all allegations.


On March 8, 2022 Attorney Jilian Mcleer on behalf of the Lakewood Planning Board filed an Answer denying all allegations and also claiming in affirmation that Plaintiffs’ complaint fails to state a cause of action upon which relief can be granted; the claim set forth by plaintiffs is not a proper subject of equitable relief; and furthermore, relief should be denied due to the "unclean hands doctrine."


As previously reported here on FAA News, back in August 2022, Lake Terrace charged on when Sudler returned to the Planning Board to seek an extension to their Minor Subdivision. Typically an extremely routine matter, however, in this case, Lake Terrace retained Attorney Jan Meyer who tried telling the Board that they should deny this extension because "Sudler is suing the Township" (as parties to the Lake Terrace and Bnos Brocho lawsuits).


Planning Board Attorney John Jackson responded that it appeared to him that the owners of Lake Terrace were "meddling" in this very minor extension simply as "retaliation" against Sudler.


The Board then approved the extension.


Judge Ford held a trial on November 28, 2022. As previously reported here on FAA News, Judge Ford released a decision dismissing all of lake Terrace's complaints, and upholding the Planning Board's approval of the minor subdivision.


As previously reported here on FAA News, back in Februar 2023, Sudler filed a Motion seeking to recover their legal fees on the basis that the lawsuit was frivolous retaliation.


"Sudler's land use application did not propose any new improvements, changes to the use of the Property or further development in any respect. Rather, the purpose of the minor subdivision was merely to create new lot lines to separate the Property into individual lots for financing purposes.


"Based on the course of conduct by KBS and its affiliates, and the fact that the claims in the instant litigation were without merit, it is apparent that this litigation was filed for an improper purpose – i.e., to harass Sudler in retaliation for the ancillary lawsuits between the parties, unnecessarily delay Sudler’s subdivision and its ability to secure financing at certain interest rates and upon certain terms that would have been otherwise available, and/or increase the costs associated with the minor subdivision approval by resorting to prolonged litigation that lacked legal and evidentiary support.


"This caused Sudler to propound a Notice of Frivolous Litigation & Demand for Voluntary Dismissal upon KBS, through respective counsel, on or about April 19, 2022, which advised KBS and its attorney that the lawsuit constituted frivolous litigation as outlined in state law.


"Plaintiff refused to voluntarily dismiss the frivolous litigation, which caused Sudler to incur substantial attorneys’ fees and litigation costs to eventually obtain the final judgment from the Court adjudicating all issues. As much as the Plaintiff’s claims were frivolous and apparently were filed for an improper purpose, Sudler has filed this motion for an award of attorneys’ fees and litigation costs."


Ultimately, Judge Hodgson denied this motion, saying:


"It is this court's view that while Defendant Sudler disagrees with Plaintiff Lake Terrace's assertions challenging their land use approval, it can not be said that those assertions were made in bad faith or that 'the arguments are so bereft of any legal basis that they should not have been to make those arguments' - the court does not think that's the case here.


"The court can not assign bad motive and can not pin any connection between this case and the parties other pending litigation.


"It appears to the court that each side has contributed to the conflagration of issues, and therefore the motion for the granting of legal fees is denied," Judge Hodgson concluded.


In response, Sudler filed an appeal to the New Jersey Appellate Division. Oral arguments have been scheduled to take place next Wednesday, May 29, 2024.


This is not the only retaliation lawsuit filed by Lake Terrace against Sudler.


In August 2021, Lake Terrace filed suit against Clayton after they discovered that there were 3 structures in Clayton's parking lot which appeared to contain cats. Apparently, "cat breeding" is not a permitted use under the Township ordinances, they alleged.


Lake Terrace claimed that these cats were a nuisance to them and their patrons, and may have even been a fire hazard, as well as a health and safety risk given the potential for diseases. They further claimed that they were concerned about animal cruelty as the crates did not contain heating or cooling capabilities.


Prior to filing the lawsuit, Lake Terrace notified Township Officials as to the "Health Code violations" taking place, and miraculously, in under 24 hours, the police department and inspection department responded to investigate. A manager for Clayton advised that they were aware of the issue and they were attempting to get a third party to remove the cats. As the Township did not do any further enforcement, Lake Terrace filed suit seeking injunctive relief to restrain Clayton from having any cats on their property until the proper health department inspection could take place.


Not surprisingly, Judge Hodgson tossed that case right out.


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