The Intersection of Contract Law and Land Use Approvals

Andrew J. Bellwoar

Practice Area:Contracts / Agreements

Outcome:Verdict in favor of Bellwoar's client.

Description:In this case, a developer and a municipality resolved a land use appeal by entering into a written agreement, whereby the municipality approved a concept plan attached to the agreement. Once the developer went through the land development process, he received approval to develop a large commercial property, including the construction of a hotel. Thereafter, the developer wanted to change the approved use from a hotel to apartments. After numerous discussions and presentations to the municipality, the developer claimed that at a public meeting the elected officials approved the use, density and layout for apartments, with a written document to follow, and all open issues to be addressed in land development. According to the municipality, it accepted the use, density and layout subject to the developer resolving remaining issues -- such as grading and preservation of historic trees -- before the municipality would approve the requested change to the concept plan. The developer claimed that the municipality thereafter failed to follow through on its approval and sued for breach of contract, declaratory judgment and specific performance. The developer presented an expert report that concluded that the developer had suffered $5 million in damages because the township refused to allow the developer to move ahead with the "approved" plan for apartments. The issues in this case joined at the intersection of contract law and land use law. Andrew Bellwoar and Susan DiGiacomo, as counsel for the municipality, presented a dual defense: No contract was formed at the open meeting as there was no meeting of the minds, and a municipality cannot enter into a contract and/or approve a land development plan unless there is a formal motion and vote by the elected officials. The hotly contested trial took 3 days, with the Court issuing a verdict after studying the testimony.