Township of Radnor v. Goshen Holding

Summary of Facts and Issues: In 1997, the CFH Company applied to the Township of Radnor and Delaware County for approval of a nine-lot subdivision on a 22-acre parcel. In all of the application materials spanning several months, eight of the lots were identified as residential and one lot (Lot 9, consisting of 9.5 acres) was identified as 'open space.' Various communications from CFH stated its intent to ultimately protect Lot 9 in some formal way, either through a conservation easement, fee donation to the Township, or restrictions in the subdivision declaration. The final approved subdivision plan in May 1998 designated Lot 9 as 'open space.' A Township memorandum that accompanied the final subdivision plan listed 14 conditions of approval. However, item 13, stating that Lot 9 be 'deed restricted with a conservation easement,' was crossed out by hand. Contemporaneous communications from CFH's attorney to the Township's attorney suggested that CFH still intended to protect Lot 9, but wanted that item eliminated in order to avoid the appearance of a quid pro quo so as to preserve a potential charitable deduction. Citing this same rationale, CFH's attorney requested and received a letter from the Township's attorney stating that even though the final subdivision plan labeled Lot 9 as 'open space,' the Township had not restricted it against further development and it remained a buildable lot. At some point in 1998, CFH transferred the subdivision property to Goshen Holding Company (GHC), owned by the same individual as CFH. In 1999, GHC's attorney wrote another letter to the Township's attorney, in which he floated the idea of donating the fee or a conservation easement on Lot 9 to the Township. But the Township never responded and the donation never came to fruition. Marketing materials prepared for buyers of the eight residential lots referred to 'nine acres of preservation space.' But the subdivision declaration did not include any restrictions or protections on Lot 9. The eight other lots sold between 2000 and 2002. In 2004, just as GHC's interest in the subdivision was about to expire, it convened a meeting of the homeowners association. GHC sought and received approval from the other lot owners to remove Lot 9 from the subdivision and develop most of it (all except a two-acre buffer area) as a separate lot. In 2005, the Township and the County approved an amendment to the declaration that removed Lot 9, after GHC's principal stated that the designation of Lot 9 as 'open space' on the subdivision plan was an inadvertent mistake by its engineering firm. GHC's attorney also contended erroneously that the term 'open space' was not defined in the Township's subdivision ordinance and did not connote any special protection from development. In fact, the ordinance did define 'open space' as 'generally undeveloped' land that did not include streets, parking areas, yards or dwelling units. The ordinance also required that designated open space must be so noted on any subdivision plan, including a statement that the land could not be separately sold or further developed, which language was not included on the final subdivision plan. In any event, as a result of these 2005 proceedings, an amended declaration plat removing any references to open space for Lot was recorded. In 2016, GHC sought approval to subdivide Lot 9 into three buildable lots. In response, the Township and the County reviewed the 1997-1998 subdivision approval record and concluded that Lot 9 was intended to be protected from development. The Township denied the subdivision application and then filed suit for an injunction and a declaratory judgment to prevent GHC from developing Lot 9. During a bench trial, more facts and testimony emerged suggesting that the Township, the County, abutting landowners, and purchasers of the eight lots had relied on statements made by GHC signaling its intention to permanently protect Lot 9 as open space.
Holding: The trial court ruled that Lot 9 was not subject to any restrictive covenant. The trial court reasoned that because the protection of Lot 9 had been unequivocally stricken from the list of conditions of approval, the 'open space' notation on the subdivision plan was not enough to constitute a restrictive covenant, but instead was merely a contemporaneous statement by GHC that it did not intend to build anything on Lot 9 at that time. Furthermore, the trial court ruled that the Township's 2005 approval of the amended declaration plan formally removing Lot 9 from open space designation was binding and any review in 2016 was outside the statute of limitations. Any failure to follow the proper procedure in that process was borne by the Township, not GHC. The appellate court vacated and remanded, finding as follows: (1) The trial court's conclusion that the 1998 final plan did not preserve Lot 9 as undevelopable open space via a deed restriction or restrictive covenant was an abuse of discretion and an error of law. The ordinance requirement that 'open space' designation be accompanied by specific language in subdivision plans was directory and not mandatory, and its absence did not render the relevant land buildable. The appellate court found that the striking of the Lot 9 item on the list of conditions of approval was not dispositive, especially in light of the repeated, consistent, and unambiguous statements by CFH during the course of the subdivision application of its intention to preserve Lot 9. Furthermore, the striking of that item, which specifically contemplated a conservation easement, did not preclude other forms of protection such as a deed restriction or restrictive covenant. And the Township attorney's letter stating that Lot 9 was a buildable lot went beyond the attorney's authority to bind the Township. (2) Because GHC argued all along that the 2005 approval by the Township to remove the words 'open space' from the declaration plat was not a substantive decision, but rather simply a cosmetic clarification of the already buildable status of Lot 9, then it followed logically that said approval could not grant GHC any rights it didn't have prior to 2005. (3) GHC could not be equitably estopped from building on Lot 9 because the Township did not meet its duty to inquire into the issue when GHC told the Township in 2015 that it believed the lot to be buildable. (4) It is possible that GHC could assert equitable estoppel against the Township, but the trial court did not address this issue in its initial ruling and the appellate court remanded on that point.
Analysis and Notes: There's a lot going on in this fact-intensive case, but pay particular attention to the dynamic in which the developer's attorney maneuvered with the Township's attorney, and how this episode later blew up in the Township's face. The appellate court's opinion is generally favorable to conservation, especially the recognition that a long train of statements indicating an intention to protect a parcel can overcome conflicting evidence in the final documents.