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Borough’s Alleged Premature Enforcement of a CO Ordinance Does Not Constitute a Substantive Due Process Violation

By: Voris M. Tejada, Jr., Esq.

In Reed v. Scheffler, 2018 U.S. Dist. LEXIS 71032 (D.N.J. April 27, 2018), Plaintiff sued the Borough of Palmyra (the “Borough”) and its Housing Official alleging, inter alia, violations of substantive due process as a result of the enforcement of certain ordinances in connection with the sale of Plaintiff’s mother’s home.  Prior to the sale, Plaintiff contacted the Borough to inquire as to whether any inspections were required before the home could be sold.  Plaintiff noted he had a buyer who was interested in purchasing the property “as is,” and who was interested in a “quick sale.”  The Borough’s Housing Official advised Plaintiff, consistent with an ordinance previously enacted by the Borough, that an inspection and issuance of a certificate of occupancy (“CO”) were required prior to the sale of any residence in the Borough.

Following Plaintiff’s contact with the Borough, an inspection of Plaintiff’s mother’s home was scheduled.  The inspection revealed 33 code violations at the property, which violations were required to be abated prior to the issuance of a CO.  While Plaintiff abated the violations, he alleged he spent tens of thousands of dollars in doing so, and also lost his buyer due to the resulting delay.  Plaintiff ultimately sold his mother’s home at an increased price to a different buyer.

Following the sale of the home, Plaintiff began searching the Borough’s website for additional information concerning the relevant ordinance.  During his search, Plaintiff came across a post indicating enforcement of the relevant ordinance had been delayed to a date two months after his initial communication with the Borough.  Plaintiff then initiated suit, alleging, inter alia, violations of substantive due process as a result of (1) the Borough’s enforcement of an ordinance which Plaintiff claimed was not then in effect; (2) the Housing Official’s failure to inform Plaintiff that under the terms of the ordinance, a CO was only required prior to the reoccupation of the home, rather than the mere sale of the home; and (3) the Housing Official’s failure to inform Plaintiff about the option of obtaining a temporary CO, which, under certain circumstances, would have allowed the originally planned sale to go forward while the code violations were being abated.  The Borough and its Housing Official were represented by Capehart Scatchard in the ensuing litigation.

The Court noted that to prove a substantive due process claim, a plaintiff must prove (1) that he was deprived of a protected property interest; and (2) that a state actor acted with a degree of culpability which shocks the conscience.  Addressing Plaintiff’s first argument, the Court found that the relevant ordinance was in effect at all relevant times, as a post on the Borough’s website was not sufficient to override the formal process by which the ordinance had been adopted, and by which its effective date had been set.  Moreover, the Borough had enforced the relevant ordinance against other homeowners during the relevant time period.  The Court further noted that even if the enforcement of the ordinance was on hold when Plaintiff initially sought to sell the property, his claim would still fail, as the Borough’s action was not sufficiently egregious to be “conscious-shocking.”  It was undisputed that the Housing Official was never informed of any delay in the enforcement of the ordinance, and thus acted in good faith in enforcing same.  In addition, the ordinance served an important public purpose in promoting decent housing to all Borough residents.  Under these circumstances, Plaintiff’s first due process argument was without merit.

Addressing Plaintiff’s second argument, the Court noted Plaintiff provided no proof that the original buyer would have proceed with the sale without a CO, thereby agreeing to undertake the repairs of the 33 code violations himself after the sale and prior to moving in.  Indeed, the only detail Plaintiff provided about the falling-through of the initial sale was the buyer’s statement that he just was not interested in the property anymore.  Because there was no evidence the original buyer would have proceed with the sale without a CO, the Court rejected Plaintiff’s second argument.

Addressing Plaintiff’s third and final argument, the Court found there was no evidence the Housing Official had an independent duty to inform Plaintiff about the possibility of obtaining a temporary CO where Plaintiff did not inquire about same.  Moreover, there was no evidence that a temporary CO would have saved the initial sale of the home.  The ordinance made clear that the issuance of a temporary CO was a matter of discretion which could only be exercised under certain circumstances.  In addition, Plaintiff again failed to provide any evidence that the initial buyer would have consummated the sale with a temporary CO, assumed responsibility for abating the 33 code violations, and submitted to a re-inspection.  Plaintiff’s claim that the Housing Official failed to inform him about the option of obtaining a temporary CO thus did not rise to the level of a substantive due process violation.  Having rejected each of Plaintiff’s three arguments, the Court granted summary judgment in favor of Defendants.

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