In the Matter of the Application of the Township of Colts Neck, Etc.

New Jersey Superior Court Appellate Division·Decided July 24, 2026·No. A-2677-24·Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2677-24

IN THE MATTER OF THE APPLICATION OF THE TOWNSHIP OF COLTS NECK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY. ____________________________

Argued May 20, 2026 – Decided July 24, 2026

Before Judges Currier, Berdote Byrne and Jablonski.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-2234-15.

Thomas J. Trautner, Jr. argued the cause for appellant Township of Colts Neck (Chiesa Shahinian & Giantomasi PC, attorneys; Thomas J. Trautner, Jr., Ronald L. Israel, and Alyssa E. Spector, on the briefs).

Ariela Rutbeck-Goldman argued the cause for respondent Fair Share Housing Center (Ariela Rutbeck-Goldman and Joshua D. Bauers, on the brief).

Craig M. Gianetti argued the cause for respondent Seta Realty Corp. (Day Pitney LLP, attorneys; Craig M. Gianetti, of counsel and on the brief; Chelsea Turiano, on the brief). PER CURIAM

After the Township of Colts Neck ("Colts Neck") filed a declaratory

judgment action seeking confirmation it had satisfied its Mount Laurel 1

affordable housing commitments, it entered into a Settlement Agreement

("Agreement") with the Fair Share Housing Center ("FSHC") that, among

other obligations, required Colts Neck to provide sewer service for its planned

development. When Colts Neck informed the court it could not fulfill this

promise, FSHC moved to enforce the Agreement. The trial court held the

Agreement was valid and ordered Colts Neck's compliance with certain

modifications to it. After considering the record, the arguments presented by

the parties on appeal, and the relevant legal principles, we affirm.

I.

Despite its extensive factual and procedural history, the issue before us

is nuanced – the enforceability of the Agreement negotiated between Colts

Neck and FSHC. Accordingly, we recount only the facts relevant to that issue

for context.

The Agreement included plans for development at several sites in Colts

Neck and, specifically, as to a portion of the municipality known as "Area 1."

1 In re N.J.A.C. 5:96 and 5:97, 221 N.J. 1, 30 (2015) ("Mount Laurel IV"). A-2677-24 2 The Agreement included a durational adjustment 2 with a related waiver where

Colts Neck would be excused from any project that would provide sewer

service to its property under its Housing Element and Fair Share plan

("HEFSP"). Colts Neck also agreed to contribute up to $2 million toward

extending sewer to Area 1, primarily through Manasquan River Regional

Sewerage Authority ("MRRSA"), and to support applications for infrastructure

expansion. Colts Neck was required to pay these funds to Toll Brothers, Inc.

("Toll Brothers") to develop the Area 1 sewer system. Toll Brothers was

designated as the initial developer for the portion of Area 1 owned by Seta

Realty Corp., an intervenor in this litigation. If Toll Brothers ever chose not to

proceed with its development plans, Colts Neck instead would be required to

pay those funds "to a developer of comparable reputation" to develop the

sewer system.

Although the Agreement identified MRRSA as the primary proposed

sewer solution for the inclusionary sites, it also recognized alternatives to

MRRSA might be necessary – especially as to Area 1. Specifically, the parties

2 A "durational adjustment" allows a municipality "to postpone satisfaction of its affordable housing obligation until water and sewer service actually become available." In re Petition for Substantive Certification, Twp. of Southampton, 338 N.J. Super. 103, 106 (App. Div. 2001).

A-2677-24 3 agreed "a closer available tie-in along Route 34 or another location acceptable

to both the developer and [Colts Neck]" may be required instead of connecting

to MRRSA.

The Agreement contained a severability clause providing that if any

provision were found to be invalid, illegal, or unenforceable, such a

determination would not affect the validity nor enforceability of the remaining

provisions.

In June 2020, the trial court conducted a fairness and preliminary

compliance hearing. MRRSA and its member municipalities appeared as

objectors, arguing Colts Neck was not entitled to a durational adjustment

waiver under N.J.A.C. 5:93-4.3(c)(4) and that new developments in Colts Neck

should not be allowed to connect to MRRSA's system or to obtain water

service through neighboring Freehold Township. On August 13, 2020, the

court determined the Agreement was fair and concluded Colts Neck had

partially complied with its obligations.

Over the intervening years, problems and concerns arose over Colts

Neck's ability to secure and to implement the required sewer services. After

Colts Neck determined MRRSA was not an option for the Area 1 development,

A-2677-24 4 it explored alternative service providers, including the Naval Weapons Station

Earle ("NWSE") and the Two Rivers Water Reclamation Authority.

In May 2022, Colts Neck acknowledged it had overestimated the

available treatment capacity at NWSE. It informed the court that, due to

recent discussions about rising costs for providing sewer capacity, it no longer

believed it was appropriate to pursue settlement negotiations or a full hearing

regarding the proposal to supply sewer capacity to Area 1 from NWSE. It

argued since it could not meet its obligations under the Agreement, the

Agreement was void. On June 15, 2022, Colts Neck proposed an alternate

HEFSP, other than the one previously approved by the court, that did not

include the $2 million contribution.

In October 2022, FSHC moved to enforce litigant's rights, seeking

enforcement of the court's August 13, 2020, judgment and the March 2020

Agreement under Rule 1:10-3. In November 2024, after hearing testimony

from planners, engineers, and special adjudicators, the trial court issued a

cogent and reasoned sixty-eight-page written decision granting (1) FSHC's

motion to enforce its litigant's rights, and (2) Colts Neck's request for a

conditional judgment of compliance subject to it satisfying certain conditions

and amending its proposed HEFSP.

A-2677-24 5 The court found the Agreement valid and enforceable. The court also

concluded although the proposed HEFSP submitted by Colts Neck complied

with its Mount Laurel Third Round obligations, it would be subject to certain

amendments. Specifically, Colts Neck was required to revise its HEFSP to

ensure the adoption and maintenance of certain zoning in Area 1 as required by

the Agreement, and to reaffirm its obligation to provide the $2 million

financial contribution to a sewer system in that parcel.

Although the court granted Colts Neck's request for a durational

adjustment, it vacated the waiver that it previously approved in the Agreement.

Consequently, Colts Neck was required to endorse all applications to the New

Jersey Department of Environmental Protection ("NJDEP") to provide sewer

service. The trial court ordered Colts Neck to adopt its HEFSP ordinance to

permit development where the NJDEP approved infrastructure in Colts Neck

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In the Matter of the Application of the Township of Colts Neck, Etc., (N.J. Ct. App. 2026).

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