Donald Whiteman v. Township Council of Berkeley Township

SYLLABUS

This syllabus is not part of the Court’s opinion. It has been prepared by the Office

of the Clerk for the convenience of the reader. It has been neither reviewed nor

approved by the Court and may not summarize all portions of the opinion.

Donald Whiteman v. Township Council of Berkeley Township (A-40-24) (089641)

Argued April 29, 2025 -- Decided July 10, 2025

PATTERSON, J., writing for a unanimous Court.

In this appeal, the Court considers a petition filed by residents of South

Seaside Park to deannex their barrier island community from the Township of

Berkeley and to annex it to the Borough of Seaside Park, an adjoining municipality.

To reach the mainland section of the Township, a resident of South Seaside

Park must drive between 13 and 16 miles across 7 other municipalities. South

Seaside Park’s municipal facilities consist of a basketball court and White Sands

Beach, a public beach with restrooms and a water fountain. The Township provides

emergency and police patrol services to South Seaside Park. South Seaside Park

shares a border and a zip code with the municipality it seeks to join, Seaside Park.

Plaintiffs presented evidence that South Seaside Park residents rely more on Seaside

Park than the Township for emergency services and engage more with the residents

and businesses of Seaside Park than with the Township’s mainland community.

In September 2014, plaintiffs submitted to the Township Council a petition

“seeking annexation by Seaside Park Borough and deannexation from Berkeley

Township.” Beginning in January 2015, and ending in February 2019, the Planning

Board conducted thirty-eight hearings.

The Planning Board retained a professional planner who did not impartially

analyze the evidence as N.J.S.A. 40A:7-12 envisions, but instead worked with the

Township on its strategy for opposing deannexation and participated in the

preparation of the Township’s witnesses for their testimony before the Board. In

addition, one Planning Board member is alleged to have publicly opposed plaintiffs’

petition while the matter was pending, telling a group of senior citizens that they

should “start going to the meetings, because if South Seaside Park becomes Seaside

Park, your taxes are going to go up,” while another Board member allegedly

disparaged plaintiffs’ deannexation effort as “an elitist section moving.”

During the hearings, plaintiffs presented the expert opinion of a professional

planner, who testified that the Township had provided deficient services to South

1

Seaside Park residents and had otherwise disregarded their needs. The planner

opined that approval of the proposed deannexation would benefit the majority of

South Seaside Park residents; that refusal to allow deannexation would be

detrimental to the economic and social well-being of a majority of South Seaside

Park residents; that deannexation would not cause a significant injury to the

economic and social well-being of the Township; and that deannexation would not

have a detrimental negative impact on the Township’s master plan, zone plan,

affordable housing plan, or 2020 Vision Statement. Plaintiffs’ financial expert

witness explained that the Township’s loss of taxes through deannexation would be

offset, in part or in whole, by the Township’s savings on police services.

The Township’s expert witness on planning disputed the contention that the

Township would suffer no harm if South Seaside Park were deannexed, and its Chief

Financial Officer and Treasurer opined that deannexation would give rise to a tax

increase of $147.63 for the average single-family home in the Township. In

rebuttal, plaintiffs presented the testimony of a second professional planner, who

testified that deannexation of South Seaside Park would not harm the Township, but

that South Seaside Park’s residents would be harmed if deannexation were denied.

In August 2020, the Planning Board adopted a resolution recommending that

the Township should deny the petition. By resolution dated September 21, 2020, the

Township Council denied the petition, “relying on the well-supported findings”

stated by the Planning Board in its resolution.

Plaintiffs filed this action, seeking judicial review of the Council’s denial of

their petition. The trial court found that plaintiffs had met their burden of proof with

respect to all three of N.J.S.A. 40A:7-12.1’s deannexation factors. The Appellate

Division affirmed. The Court granted certification. 260 N.J. 125 (2025).

HELD: The Court views N.J.S.A. 40A:7-12 to require a planning board to

independently evaluate the merits of a deannexation petition and make an objective

recommendation to the municipality’s governing body. That did not occur in this

case. Plaintiffs met their burden of proof with respect to all three prongs of N.J.S.A.

40A:7-12.1, and the trial court properly ordered deannexation.

1. The Court reviews the history of the statutes governing deannexation. N.J.S.A.

40A:7-12 prescribes requirements and procedures for petitions for deannexation, and

N.J.S.A. 40A:7-12.1 provides that, to challenge the denial of a petition, “the

petitioners have the burden of establishing [1] that the refusal to consent to the

petition was arbitrary or unreasonable, [2] that refusal to consent to the annexation is

detrimental to the economic and social well-being of a majority of the residents of

the affected land, and [3] that the annexation will not cause a significant injury to

the well-being of the municipality in which the land is located.” (pp. 17-21)

2

2. Case law explains each of N.J.S.A. 40A:7-12.1’s three prongs, as the Court

reviews in detail. If a court determines that the petitioners have met their burden of

proof as to all three prongs of that statutory test, it orders the municipality to grant

deannexation in accordance with N.J.S.A. 40A:7-12. (pp. 21-28)

3. In any proceeding before it, the Planning Board must conduct itself fairly and

impartially. Here, the Planning Board did not act in accordance with that standard.

The trial court’s factual findings regarding the first prong of N.J.S.A. 40A:7-12.1

were supported by competent, relevant and reasonably credible evidence in the

record, and plaintiffs met their burden with respect to that factor in the statutory test.

(pp. 29-31)

4. As to the second factor, the Township does not appear to contest the findings of

the trial court and the Appellate Division that the denial of plaintiffs’ petition would

be “detrimental to the economic and social well-being” of a majority of South

Seaside Park’s residents. Both courts’ findings are substantially premised on the

most compelling factors in plaintiffs’ favor: the geographic distance between South

Seaside Park and the Township’s mainland section and the time and effort required

for residents to traverse seven municipalities and reach the mainland, where virtually

all municipal facilities are located. The Court concurs that plaintiffs met their

burden with respect to N.J.S.A. 40A:7-12.1’s second prong. (pp. 31-32)

5. Finally, with regard to N.J.S.A. 40A:7-12.1’s third prong, the evidence presented

to the Board supports the conclusion that any economic loss to the Township

through lost tax revenue would be offset to some degree by cost savings, and that

deannexation would not cause substantial economic harm to the Township. The

record also supports the findings that the deannexation of South Seaside Park would

not cause significant social harm to the Township’s remaining residents, given the

limited contact between South Seaside Park residents and their counterparts in the

Township’s mainland section, and that the loss of White Sands Beach -- only 5.4%

of the Township’s 28 miles of shoreline -- would have a minimal impact on the

Township. Plaintiffs have thus proved that the proposed deannexation would not

cause a significant injury to the Township’s well-being. (pp. 33-35)

6. Plaintiffs have satisfied their burden of proof as to all three prongs of N.J.S.A.

40A:7-12.1, and the trial court properly ordered deannexation. (p. 35)

AFFIRMED.

CHIEF JUSTICE RABNER and JUSTICES PIERRE-LOUIS, WAINER

APTER, FASCIALE, NORIEGA, and HOFFMAN join in JUSTICE

PATTERSON’s opinion.

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SUPREME COURT OF NEW JERSEY

A-40 September Term 2024

089641

Donald Whiteman,

Patricia A. Dolobacs,

Judith A. Erdman, and

282 Other Petition Signers

of South Seaside Park

Homeowners & Voters

Association,

Plaintiffs-Respondents,

v.

Township Council of

Berkeley Township and

Township of Berkeley,

Defendants-Appellants.

On certification to the Superior Court,

Appellate Division.

Argued Decided

April 29, 2025 July 10, 2025

Gregory P. McGuckin argued the cause for appellants

(Dasti, McGuckin, McNichols, Connors, Anthony &

Buckley, attorneys; Gregory P. McGuckin, of counsel

and on the briefs, and Kelsey A. McGuckin-Anthony, on

the briefs).

Joseph Michelini argued the cause for respondents

(O’Malley, Surman, & Michelini, attorneys; Joseph

Michelini, on the brief).

1

JUSTICE PATTERSON delivered the opinion of the Court.

In this appeal, we consider a petition filed by residents of South Seaside

Park to deannex their barrier island community from the Township of Berkeley

-- two miles away across Barnegat Bay -- and to annex it to the Borough of

Seaside Park, an adjoining municipality.

Under New Jersey’s municipal annexation statute, “[l]and in one

municipality may be annexed to another municipality to which said land is

contiguous.” N.J.S.A. 40A:7-12. Residents seeking to deannex their land

from a municipality may present to the municipality’s governing body a

petition seeking deannexation, signed by at least sixty percent of the legal

voters residing there. Ibid. The municipality’s planning board is charged to

consider the evidence and “report to the governing body on the impact” that

deannexation would have on the municipality. Ibid. By a two-thirds vote of

the full membership of the governing body, the municipality may consent to

deannexation. Ibid.

If the governing body declines to consent to the petition for annexation,

the petitioners may seek judicial review. Id. at -12.1. In that proceeding, the

petitioners have the burden of proof as to the statute’s three requirements: that

the municipality’s “refusal to consent . . . was arbitrary or unreasonable”; that

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the refusal “is detrimental to the economic and social well-being of a majority

of the residents of the affected land”; and that annexation to the new

municipality “will not cause a significant injury to the well-being of the

municipality in which the land is located.” ----

Ibid.

Here, after South Seaside Park’s petition was referred to the Township’s

Planning Board, the Board retained a professional planner who did not

impartially analyze the evidence as the statute envisions, but instead worked

with the Township on its strategy for opposing deannexation and participated

in the preparation of the Township’s witnesses for their testimony before the

Board. In addition, plaintiffs presented evidence that two Board members

made comments opposing the petition while the matter was pending before the

Board. After thirty-eight hearings conducted over four years, the Board issued

a report recommending that the Township Council deny the petition for

deannexation, and the Council passed a resolution denying the petition.

Plaintiffs filed this action, seeking judicial review of the Council’s

denial of their petition. The trial court found that plaintiffs had met their

burden of proof with respect to all three of N.J.S.A. 40A:7-12.1’s

deannexation factors. The Appellate Division affirmed the trial court’s

judgment, concluding that the trial court’s factual findings were supported by

3

credible evidence in the record and concurring with the trial court’s application

of N.J.S.A. 40A:7-12.1 to the evidence in the record.

We granted certification and now affirm the Appellate Division’s

judgment. We view N.J.S.A. 40A:7-12 to require a planning board to

independently evaluate the merits of a deannexation petition and make an

objective recommendation to the municipality’s governing body. That did not

occur in this case. We agree with the trial court and Appellate Division that

plaintiffs met their burden of proof with respect to all three prongs of N.J.S.A.

40A:7-12.1, and that the trial court properly ordered deannexation.

I.

A.

The Township is an Ocean County municipality spanning approximately

55.8 square miles -- 42.9 square miles of land and 12.9 square miles of water. 1

According to the 2010 United States Census, it had approximately 41,255

year-round residents. The Township consists of the “mainland” section west

of Barnegat Bay and two barrier island sections east of Barnegat Bay -- South

Seaside Park and Pelican Island.

1

The Township was incorporated by the Legislature in 1875 after deannexing

from Dover Township, now the Township of Toms River. Over the next six

decades, seven sections of the Township were deannexed to form new

municipalities. One of those municipalities is Seaside Park.

4

South Seaside Park has approximately 490 year-round residents, who

represent less than two percent of the Township’s population. It includes

about 1,400 residential and commercial properties.

To reach the mainland section of the Township, a resident of South

Seaside Park must drive between thirteen and sixteen miles across seven other

municipalities. In the off-season, that trip can take a half hour, and during the

summer, it can take forty-five minutes or more.

The Township’s municipal buildings and the vast majority of its

recreational facilities, parks, and historic sites are located on the mainland.

Because the mainland and South Seaside Park are served by different cable

providers, broadcasts of the Township’s municipal meetings are not available

to the residents of South Seaside Park.

South Seaside Park’s municipal facilities consist of a basketball court

and White Sands Beach, a public beach with restrooms and a water fountain.

The Township provides emergency services to South Seaside Park; Township

officers, using two police vehicles assigned to South Seaside Park, patrol the

community. The Township also hires auxiliary officers to assist the police

department during the summer.

South Seaside Park shares a border and a zip code with the municipality

it seeks to join, Seaside Park. Plaintiffs presented evidence that because of the

5

distance between their homes and the mainland portion of the Township, South

Seaside Park residents rely more on Seaside Park than the Township for

emergency services and engage more with the residents and businesses of

Seaside Park than with the Township’s mainland community.

B.

On September 22, 2014, plaintiffs Donald Whiteman, Patricia A.

Dolobacs, Judith A. Erdman, and 282 other residents of South Seaside Park,

representing approximately sixty-six percent of the 435 registered voters in

South Seaside Park, submitted to the Township Council a petition “seeking

annexation by Seaside Park Borough and deannexation from Berkeley

Township.” The Council referred the petition to the Planning Board.

Beginning on January 15, 2015, and ending on February 7, 2019, the

Planning Board conducted thirty-eight hearings. Before the Board, plaintiffs

and the Township presented the testimony of expert witnesses, the testimony

of fact witnesses, and exhibits.

The Planning Board retained a professional planner to assist it in the

hearings and write the report required by N.J.S.A. 40A:7-12. As the Board’s

planner explained in his report, “a Board’s role in the deannexation context is

to function as an independent information-gatherer, fact-finder and advisor” to

the municipality’s governing body. Indeed, the planner acknowledged that his

6

role as the Board’s professional planner was not to “prejudge the matter,” but

to “avoid the appearance of impropriety and bias.”

Nonetheless, the Planning Board’s planner actively assisted the

Township in the presentation of its case before the Board. For example, the

planner annotated hearing transcripts, commenting on the testimony of

plaintiffs’ witnesses with what he characterized as “suggestions that would

clarify the record,” and sent the annotations to the Township’s witnesses. The

planner conceded during his testimony that he “coordinated with the Township

witnesses” and assisted them with respect to “what they needed to testify for.”

The record suggests that when the planner assisted the Township’s

witnesses, he acted at the Township’s behest. During the hearings, the

Township’s administrator e-mailed the Board’s planner, Board members, and

other officials, asking them to “create a strategy for the [Township] portion of

the hearing, including but not limited to, material items to refute from

applicant testimony, documentation required, priority of testimony/witnesses

for the [Township].” The Board’s planner conceded that the e-mail “probably”

showed bias in the Township’s favor.

According to testimony elicited at the hearings, one Council member

who was also a Planning Board member publicly opposed plaintiffs’ petition

while the matter was pending, telling a group of senior citizens that they

7

should “start going to the meetings, because if South Seaside Park becomes

Seaside Park, your taxes are going to go up.” In response to plaintiffs’

objection to that official’s continued participation in the Board’s review of

their petition, the official explained that he had simply urged members of the

public to attend a meeting on a matter of public interest but had not made up

his mind about the merits of plaintiffs’ petition. Another Board member

allegedly disparaged plaintiffs’ deannexation effort as “an elitist section

moving.”

During the hearings, plaintiffs presented the expert opinion of a

professional planner, who testified that the Township had provided deficient

services to South Seaside Park residents and had otherwise disregarded their

needs. The planner opined that the Township’s approval of the proposed

deannexation would benefit the majority of South Seaside Park residents; that

the Township’s refusal to allow deannexation would be detrimental to the

economic and social well-being of a majority of South Seaside Park residents;

that deannexation would not cause a significant injury to the economic and

social well-being of the Township; and that deannexation would not have a

detrimental negative impact on the Township’s master plan, zone plan,

affordable housing plan, or 2020 Vision Statement.

8

Plaintiffs’ accounting and financial expert witness opined that South

Seaside Park’s properties were responsible for 10.68 percent of the Township’s

net valuation of taxable properties and that the Township would lose

$3,318,173 of its tax levy if South Seaside Park’s petition for deannexation

were to be approved. The expert explained, however, that in the event that

South Seaside Park were to be deannexed from the Township, the loss of that

portion of the tax levy would be offset, in part or in whole, by the Township’s

savings on police services to South Seaside Park.

The Township’s expert witness on planning disputed plaintiffs’

contention that the Township would suffer no harm if South Seaside Park were

deannexed given the potential loss of property tax revenues paid by the owners

of many housing units and oceanfront property. The Township’s Chief

Financial Officer and Treasurer stated that any savings by the Township on

police services would be insignificant because the police officers who patrol

South Seaside Park would not be terminated, but instead would be reassigned

to other sections of the Township if South Seaside Park were to deannex from

the Township. He opined that deannexation would reduce the Township’s

assessed valuation by $575,639,441 for tax year 2017 and would give rise to a

tax increase of $147.63 for the average single-family home in the Township.

9

In rebuttal, plaintiffs presented the testimony of a second professional

planner, who testified that deannexation of South Seaside Park would not harm

the Township, but that South Seaside Park’s residents would be harmed if

deannexation were denied.

On August 6, 2020, the Planning Board issued its report, prepared by its

professional planner and professional engineer. The Board found that “while

[plaintiffs] may experience inconvenience and frustration in being part of

Berkeley Township, they do not suffer the kind of long term, structural and

inherently irremediable detriment that the Legislature had in mind” when it

adopted the deannexation statute. The report stated that “[c]onversely,

deannexation will work a long term, structural and inherently irremediable

detriment to the remaining residents of Berkeley Township.”

The same day, the Board adopted a resolution recommending that for the

reasons stated in the report, the Township should deny the petition. By

resolution dated September 21, 2020, the Township Council denied the

petition, “relying on the well-supported findings” stated by the Planning Board

in its resolution.

C.

Plaintiffs filed a complaint in lieu of prerogative writs in the Law

Division, contending that they had presented evidence sufficient to meet their

10

burden as to each of N.J.S.A. 40A:7-12.1’s three factors. They also asserted

due process claims pursuant to Article I, Paragraph 18 of the New Jersey

Constitution.

After conducting a two-day hearing in which counsel for the parties

presented arguments based on the record presented to the Planning Board, the

trial court held that plaintiffs had met their burden of proof with respect to the

statutory factors. The court recognized the presumption that a governing

body’s actions are correct given its members’ knowledge of local conditions

and New Jersey’s public policy to recognize existing municipal boundaries. It

found, however, that plaintiffs had presented sufficient evidence to meet their

burden under N.J.S.A. 40A:7-12.1.

First, the trial court held that plaintiffs had proven that the Planning

Board’s review of the deannexation petition was not impartial but biased and

that the Township’s decision was therefore “arbitrary or unreasonable” under

N.J.S.A. 40A:7-12.1. The court cited, among other considerations, the efforts

of the Board’s planner to assist the Township in the Board hearing and public

statements by Board members against the deannexation petition. The trial

court viewed the record to demonstrate that the Township’s rejection of the

petition was “predetermined.” It held that by “lobbying and advocating

against deannexation before and during hearings before the Board as well as

11

within the community, the Board failed to function in its role as a

disinterested, fair and impartial decisionmaker” with respect to the petition.

Second, the trial court concluded that plaintiffs met their burden to

establish that the Township’s rejection of their petition would be detrimental to

the economic and social well-being of a majority of South Seaside Park’s

residents. Ibid. Citing South Seaside Park’s “geographic isolation” from the

Township’s mainland and its lack of a “social or community identification

with the balance of the Township,” the court concluded that South Seaside

Park’s residents would be better integrated into the adjoining municipality of

Seaside Park.

Third, the trial court found that plaintiffs met their burden to prove that

“annexation will not cause a significant injury to the well-being” of the

Township. Addressing potential economic injury to the Township due to

deannexation, the court found that although the average taxpayer would

experience a municipal tax increase of approximately $200 per year, there

would be no significant increase in the school tax because the municipalities at

issue share a school district. The court further found that any loss of tax

revenue would be offset by savings to the Township, relieved of the obligation

to provide municipally funded services to South Seaside Park.

12

Turning to the question of whether the deannexation of South Seaside

Park would inflict social injury on the Township, the trial court concluded that

deannexation would have “little if any impact upon demographics, ethnic

diversity or neighborhood prestige” in the remainder of the Township, and that

the loss of White Sands Beach would reduce the Township’s twenty-eight

miles of shoreline by only 5.4 percent. The court found that deannexation

would have an “insubstantial” impact on the social, cultural, civic, and

community life of the Township.

The trial court entered final judgment in plaintiffs’ favor. It ordered that

its “approval for deannexation should be considered self-executing” and its

relief “should be immediate,” but stayed its judgment pending appeal.

D.

Defendants appealed the trial court’s judgment. In an unpublished

opinion, the Appellate Division found the trial court’s findings of fact on all

three prongs of N.J.S.A. 40A:7-12.1 to be supported by credible evidence in

the record and agreed with the trial court’s legal conclusions.

Addressing the first prong of N.J.S.A. 40A:7-12.1, the appellate court

found that the Board’s proceedings “were fraught with unfair and biased

conduct” due to collusion between the Board and the Council, biased conduct

13

on the part of Board and Council members, and the Board’s “pre-determined

result of denying deannexation.”

With respect to the second prong, the Appellate Division agreed with the

trial court that because of South Seaside Park’s geographic separation and

social isolation from the Township’s mainland, the denial of plaintiffs’ petition

would be detrimental to the economic and social well-being of a majority of

South Seaside Park’s residents.

As to the third prong, the Appellate Division concurred with the trial

court that the loss of tax revenue that the Township would sustain by virtue of

South Seaside Park’s deannexation would be reduced or eliminated by cost

savings, and that mainland residents of the Township would suffer no social

detriment, given their limited interaction with South Seaside Park’s residents

and minimal use of White Sands Beach.

The Appellate Division accordingly affirmed the trial court’s judgment.

E.

We granted defendants’ petition for certification and ordered that this

appeal proceed on an expedited schedule. 260 N.J. 125 (2025).

II.

Defendants urge the Court to reverse the Appellate Division’s judgment.

They argue that the trial court and Appellate Division misapplied N.J.S.A.

14

40A:7-12.1’s “arbitrary or unreasonable” first prong, imposing on the Planning

Board strict neutrality requirements that the Legislature did not prescribe.

Defendants also contest both courts’ findings on the statute’s third prong,

contending that deannexation of South Seaside Park would not only increase

remaining residents’ municipal taxes, but would trigger an increase of those

residents’ school taxes that would not be offset by cost savings. Defendants

assert that if the Court rules in plaintiffs’ favor, it should exclude White Sands

Beach from the area subject to deannexation.

Plaintiffs argue that the trial court and Appellate Division properly

found that they met their burden of proof under N.J.S.A. 40A:7-12.1. With

respect to the statute’s first prong, plaintiffs contend that although the

objective Planning Board determination that both courts envisioned is not

addressed in detail in the statute, it is consistent with the approach taken in

prior deannexation proceedings and would not bar a municipality in the

Township’s position from presenting expert testimony or other evidence.

Plaintiffs assert that their proofs as to N.J.S.A. 40A:7-12.1’s second prong are

uniquely compelling given the distance between South Seaside Park and the

mainland, and that the trial court and Appellate Division properly applied the

statute’s third prong to find that the Township would not sustain significant

damage due to the loss of South Seaside Park. They state that because White

15

Sands Beach was designated in their petition as part of the land in dispute, it is

subject to deannexation.

III.

A.

When we review a trial court’s determination, we will “not disturb the

factual findings and legal conclusions of the trial judge unless convinced that

those findings and conclusions were so manifestly unsupported by or

inconsistent with the competent, relevant and reasonably credible evidence as

to offend the interests of justice.” Allstate Ins. Co. v. Northfield Med. Ctr.,

P.C., 228 N.J. 596, 619 (2017) (internal quotation marks omitted) (quoting

Griepenburg v. Township of Ocean, 220 N.J. 239, 254 (2015)).

We review questions of statutory interpretation de novo without

deference to the trial court’s findings. In re Est. of Jones, 259 N.J. 584, 594-

95 (2025). In that review, we apply familiar principles of statutory

interpretation. “When interpreting a statute, the Legislature’s intent is

paramount to a court’s analysis, and the plain language of the statute is crucial

to determining legislative intent.” Id. at 595. We “resort[] to extrinsic

evidence only when ‘there is ambiguity in the statutory language that leads to

more than one plausible interpretation.’” Ibid. (quoting DiProspero v. Penn,

183 N.J. 477, 492 (2005)).

16

B.

1.

Enacted in 1917, the original version of New Jersey’s deannexation

statute required that a petition for annexation be accompanied by “a resolution

of the governing body of the municipality in which such land is located,

consenting to said annexation, which resolution said governing body is hereby

authorized and empowered to adopt.” N.J.S.A. 40:43-26 (repealed 1979). The

1917 Act did not address the procedure to be followed in the event that a

municipality opposed an attempt to deannex. Ibid.

This Court construed the 1917 Act to impose the burden of proof on the

municipality opposing a petition for deannexation. W. Point Island Civic

Ass’n v. Twp. Comm. of Dover, 54 N.J. 339, 348 (1969). It held that if the

municipality “is to object to the deannexation,” it “must come forward with

reasons why such deannexation would be injurious to the social and economic

well-being of the municipality.” Ibid.; see also Carton v. Tinton Falls, 177

N.J. Super. 404, 410 (App. Div. 1981) (holding that the 1917 Act did not

require petitioners to “give reasons to the municipal officials in requesting

consent to deannexation” and that, “[o]nce the request is made, it is up to the

municipality, if it objects, to come forward with reasons why it refuses to grant

consent”).

17

In Ryan v. Mayor & Council of Demarest, the Court observed that

deannexation petitioners have limited information about the potential impact

of deannexation on their municipality. 64 N.J. 593, 605 (1974). It held that if

petitioners prove they submitted a petition and the municipality withheld its

consent, it is the municipality’s burden to present evidence to which it has “a

superior means of access.” Ibid. The Court identified the categories of proof

that would satisfy the municipality’s burden:

Proof of either economic or social injury, substantial in

nature, is sufficient to satisfy the municipality’s burden

of coming forward with the evidence and there need not

be a showing of both. It is likewise conceivable that

there be both economic and social detriment, neither of

which standing alone would be considered

“substantial” but the total of which taken together

would work a substantial injury on the community were

deannexation allowed.

[Id. at 601-02.]

Addressing an issue left unresolved in West Point Island, the Court in

Ryan interpreted the 1917 Act to place on the petitioners “the ultimate burden

of proving that the municipality acted in an arbitrary or unreasonable manner.”

Id. at 602.

In 1979, the Legislature repealed the 1917 Act and recodified it from

Title 40 to 40A. L. 1979, c. 181, § 2 (eff. Aug. 29, 1979). Three years later,

the Legislature adopted the statute that governs this appeal. L. 1982, c. 182,

18

§§ 1, 2. It acted to “establish certain procedures to be followed by the

governing body of a municipality before adopting a resolution on a petition

requesting annexation of land to another municipality.” Sponsor’s Statement

to A. 398 (L. 1982, c. 182, § 2).

As amended in 1982, N.J.S.A. 40A:7-12 prescribes the requirements for

a deannexation petition and addresses the procedure to be followed when the

municipality consents. It provides that

a petition in writing shall be presented to the governing

body of the municipality to which such annexation is

sought to be made, specifically setting forth the

boundaries of such land, signed by at least 60% of the

legal voters residing thereon. If the land is vacant, the

petition may be signed by the person or persons owning

at least 60% of said land as shown by the assessor’s

duplicate for the preceding year. The petition shall be

duly verified by one of the signers, and shall have

attached thereto the oath of an assessor of the

municipality in which said land is located, or of some

other person having access to the assessor’s books,

setting forth the assessed value of the real estate

contained within the boundaries for the preceding year,

and the amount of real estate assessed to any of the

persons whose names are signed to such petition. The

petition shall also have attached thereto a certified copy

of a resolution adopted by two-thirds of the full

membership of the governing body of the municipality

in which said land is located, consenting to said

annexation.

Prior to action on a resolution to consent to or to deny

the petition for annexation, the governing body of the

municipality in which the land is located shall, within

14 days of the receipt of the petition, refer the petition

19

to its planning board which shall, within 45 days of its

receipt, report to the governing body on the impact of

the annexation upon the municipality. Action on a

resolution to consent to or deny the annexation shall be

taken within 30 days of receipt of the planning board’s

report.

[N.J.S.A. 40A:7-12.]

In its 1982 amendments, the Legislature enacted a new provision,

N.J.S.A. 40A:7-12.1, “to stipulate that in any judicial review of a refusal by

the governing body to consent to a petition of annexation, the petitioner shall

have the burden of proof to establish that the denial was arbitrary or

unreasonable.” Sponsor’s Statement to A. 398 (L. 1982, c. 182, § 2). The

Legislature stated that the provision “is intended to avoid the burdensome legal

costs a municipality might incur if the burden of proof were upon the

municipality.” Ibid.

N.J.S.A. 40A:7-12.1 provides that

[i]n any judicial review of the refusal of the governing

body of the municipality in which the land is located or

the governing body of the municipality to which

annexation is sought to consent to the annexation, the

petitioners have the burden of establishing that the

refusal to consent to the petition was arbitrary or

unreasonable, that refusal to consent to the annexation

is detrimental to the economic and social well-being of

a majority of the residents of the affected land, and that

the annexation will not cause a significant injury to the

well-being of the municipality in which the land is

located.

20

The 1982 amendments “signified a legislative intent to ‘impose[] a

heavier burden on the petitioners, thereby making deannexation more difficult

or, perhaps, discouraging attempts to undertake the effort at all.’” Seaview

Harbor Realignment Comm., LLC v. Twp. Comm. of Egg Harbor Twp., 470

N.J. Super. 71, 95 (App. Div. 2021) (alteration in original) (quoting Avalon

Manor Improvement Ass’n v. Township of Middle, 370 N.J. Super. 73, 91

(App. Div. 2004)). As the Appellate Division has explained, in cases decided

“[b]oth before and after the 1982 amendment, courts have” construed the 1982

deannexation statute to convey “an intention ‘to give precedence to a more

significant policy, that of preservation of municipal boundaries and

maintenance of their integrity against challenge prompted by short-term or

even frivolous considerations such as “tax shopping” or avoidance of

assessments.’” Id. at 95 (quoting D’Anastasio Corp. v. Township of

Pilesgrove, 387 N.J. Super. 247, 260 (Law Div. 2005)); accord Ryan, 64 N.J.

at 606.

2.

Case law explains each of N.J.S.A. 40A:7-12.1’s three prongs. The first

prong, requiring the petitioners to prove “that the refusal to consent to the

petition was arbitrary or unreasonable,” mirrors the standard governing

appellate review of municipal actions; as the court noted in Russell v. Stafford

21

Township, N.J.S.A. 40A:7-12.1 embodies “traditional concepts of

reasonableness” that have long applied to judicial review of municipal actions

in deannexation matters. 261 N.J. Super. 43, 60 (Law Div. 1992); see also

Ryan, 64 N.J. at 600-01 (noting, before the enactment of N.J.S.A. 40A:7-12.1,

that a municipality’s exercise of discretionary authority in a deannexation

matter is “subject to close judicial scrutiny to prevent arbitrary and

unreasonable action”). In addition, courts reviewing the actions of municipal

zoning and planning boards must ensure that the boards acted “within their

jurisdiction and ‘according to law.’” Paruszewski v. Twp. of Elsinboro, 154

N.J. 45, 58 (1998) (quoting Wyzykowski v. Rizas, 132 N.J. 509, 522 (1993)).

This includes ensuring that the common law guarantee of a “fair and impartial

tribunal” is upheld. Ibid.

In this appeal, the trial court and Appellate Division premised their

findings of arbitrary and unreasonable action by the Township on allegations

of bias. In its prior deannexation decisions, West Point Island and Ryan, the

Court did not consider an allegation of bias in the proceedings. The Appellate

Division, however, has twice rejected claims premised on allegations of bias

under the first prong of N.J.S.A. 40A:7-12.1.

In Avalon Manor, the plaintiff, an association of residents of a barrier

island, sought deannexation from Middle Township. 370 N.J. Super. at 76-77.

22

The petitioners cited “a comment by the mayor at a Township meeting” that

“he would ‘never cut [land] off and give it to Avalon’” as evidence that the

mayor was biased against Avalon Manor’s attempt to deannex. Id. at 99.

Affirming the trial court’s dismissal of the petitioners’ complaint, the

Appellate Division found the mayor’s comment “isolated and inconsequential

in the context of this comprehensive process.” Ibid.

In Seaview Harbor, residents of a section of Egg Harbor Township

sought deannexation from the Township and annexation to a neighboring

municipality. 470 N.J. Super. at 76-77. The trial court found that they did not

meet their burden on the first and third factors set forth in N.J.S.A. 40A:7-12.1

and dismissed their complaint. Id. at 77-78.

On appeal, the petitioners claimed that three officials who were members

of both the Township Committee and the Planning Board “had predetermined

that they would oppose the petition and influenced other members to do the

same, rendering the final decision arbitrary, capricious, and unreasonable.” Id.

at 78. The Appellate Division rejected that allegation on the grounds that all

three officials had recused themselves from the deannexation proceeding and

there was “no evidence that they attempted to influence others in opposing the

petition, that [they] had a personal stake in the matter, or that the proceedings

were tainted by bias.” Id. at 105. It accordingly affirmed the trial court’s

23

holding that the petitioners “received a full and fair opportunity to present

their case,” and did not meet their burden on the statute’s first prong. Id. at

104-06.

N.J.S.A. 40A:7-12.1’s second prong requires proof that the

municipality’s refusal to consent to the deannexation petition “is detrimental to

the economic and social well-being of a majority of the residents of the

affected land.” The statute does not require deannexation petitioners “to show

a benefit to the majority” if deannexation is allowed, “but rather that the

refusal to consent is detrimental to the economic and social well-being of the

majority.” D’Anastasio Corp., 387 N.J. Super. at 254; see also Seaview

Harbor, 470 N.J. Super. at 96 (“Notably, economic benefit to a petitioner does

not necessarily equate to economic detriment if the petition is denied.”). As

the Appellate Division explained,

relevant considerations include, but are not limited to:

the geographic location of the area seeking

deannexation and its physical connection, or lack

thereof, to the municipality; the petitioner’s connection

with both municipalities based on social interactions,

emergency services and location; demographics;

services provided by the municipalities; the petitioner’s

identity and sense of belonging; and the economic

effect of deannexation in terms of taxes or any other

financial consequence such as insurance premiums and

construction costs or profits.

[Seaview Harbor, 470 N.J. Super. at 95-96.]

24

The court added that those “considerations should not be limited to the date of

the petition but should extend into the future and consider the ‘prospect for and

likelihood of change.’” Id. at 96 (quoting Avalon Manor, 370 N.J. Super. at

102).

The distance between the land subject to deannexation and the

municipality the petitioners seek to leave, as compared with that land’s

distance from the municipality the petitioners seek to join, may be a pivotal

consideration. In West Point Island, the residents, living far from the

remainder of the municipality they sought to leave, “naturally look[ed]” to the

nearby municipality they sought to join “as the focus of community interest

and activity.” 54 N.J. at 350.

In Seaview Harbor, the petitioners’ section of the municipality was “4.3

miles east of the mainland portion,” separated from the mainland “by

marshland and multiple municipalities.” 470 N.J. Super. at 79. Although the

Appellate Division rejected the deannexation petition for other reasons, it

noted the trial court’s finding of “social harm” to the residents under N.J.S.A.

40A:7-12.1’s second prong “based on residents’ identity, choice of schools,

and community activities.” Id. at 103-04.

In the contrasting setting of Ryan, however, the Court observed that

“[t]he geography and logistics of the situation do not compel the conclusion

25

that the land in question more naturally belongs to the municipality to which

deannexation is sought.” 64 N.J. at 603.

N.J.S.A. 40A:7-12.1’s third prong requires proof that the annexation

“will not cause a significant injury to the well-being of the municipality in

which the land is located.” Departing from the language of the 1917 Act, “the

Legislature appears to have reversed the burden of proof as to the third

element,” so that deannexation petitioners must show that deannexation “will

not cause a significant injury to the well-being of the deannexing municipality

rather than the initial burden being upon the deannexing municipality to prove

that it will be injured.” Russell, 261 N.J. Super. at 49.

As the Appellate Division observed in Seaview Harbor, the “injury”

contemplated by the Legislature “can include the loss of significant services to

the community at large, removal of a diverse citizenship, and likely erosion of

valuable civic participation caused by the absence of those homeowners who

seek to deannex from the community.” 470 N.J. Super. at 78.

The impact of deannexation on a municipality’s tax base is a relevant

consideration under N.J.S.A. 40A:7-12.1’s third prong. In Ryan, this Court

noted that the municipal officials in that case “quite properly considered the

amount of both the long term and the short term loss of revenue in determining

that the proposed deannexation would mean economic injury to the Borough.”

26

64 N.J. at 603; accord D’Anastasio Corp., 387 N.J. Super. at 258; Avalon

Manor, 370 N.J. Super. at 102.

The impact of such a loss of revenue should be weighed against cost

savings that would be achieved by deannexation. Seaview Harbor, 470 N.J.

Super. at 87, 93; Avalon Manor, 370 N.J. Super. at 98. Such savings can be

premised on municipal services that would no longer be necessary if

deannexation occurs. Ryan, 64 N.J. at 602; Avalon Manor, 370 N.J. Super. at

98. As the Appellate Division explained in Avalon Manor, however, cost

savings should not be based on measures that a municipality could take that

are available “whether deannexation occurs or not,” such as “the sale of

municipally owned property, the issuance of a liquor license and other such

devices.” 370 N.J. Super. at 98.

The Appellate Division’s decision in Seaview Harbor illustrates the

application of N.J.S.A. 40A:7-12.1’s third prong. 470 N.J. Super. at 92-93.

There, the trial court found that deannexation would cost the municipality

$2,325,000 in tax revenue, thus increasing the average homeowner’s annual

tax bill by $122.78. Id. at 92. The Appellate Division concurred with the trial

court that the municipality was “in a state of economic stress as a result of

state mandates, the state’s failure to adequately fund programs, the economic

recession, reductions in property values and the casino crisis in Atlantic City.”

27

Id. at 92-93 (internal quotation marks omitted). The appellate court further

noted that because of the municipality’s cost-sharing agreement with the town

the petitioners sought to join, deannexation would yield “no quantifiable

savings” for emergency services. Id. at 93. The court also recognized the

social harm that deannexation would cause, because the residents seeking

deannexation “had been more actively involved in [the municipality’s]

planning and government than any other group.” Id. at 83.

The Appellate Division therefore affirmed the trial court’s finding that

the petitioners “failed to meet their burden of showing that deannexation

would not cause significant injury to the well-being” of the municipality they

sought to leave. Id. at 92-93.

3.

If a court reviewing a municipality’s denial of deannexation determines

that the petitioners have met their burden of proof as to all three prongs of

N.J.S.A. 40A:7-12.1’s statutory test, it orders the municipality to grant

deannexation in accordance with N.J.S.A. 40A:7-12. At that stage, the

petitioners may request that the municipality they seek to join “annex the land

specifically described in the petition” in accordance with N.J.S.A. 40A:7-13

and -14.

28

C.

Against that backdrop, we review the determinations of the trial court

and Appellate Division as to each prong of N.J.S.A. 40A:7-12.1’s

deannexation standard.

1.

The trial court and Appellate Division found evidence of bias in the

Planning Board’s proceedings and held that plaintiffs accordingly met their

burden to prove that the Council’s denial of their deannexation petition was

“arbitrary or unreasonable” under N.J.S.A. 40A:7-12.1. We agree.

As the deannexation statute’s plain language reveals, the Legislature

determined that two separate municipal bodies -- the governing body of the

municipality and the planning board -- participate in the deannexation process.

N.J.S.A. 40A:7-12. Their respective roles are distinct from one another. The

municipality is a party before the planning board and may present fact and

expert evidence relevant to the question of deannexation; the planning board

develops a factual record, considers the evidence presented by the parties, and

submits a report to the governing body assessing “the impact of the annexation

upon the municipality.” Ibid.

In any proceeding before it, the Planning Board must conduct itself

fairly and impartially. See Wyzykowski, 132 N.J. at 522 (the common law

29

entitles the parties before a municipal zoning or planning board to “a fair and

impartial tribunal”). Even the professional planner retained by the Planning

Board in this case acknowledged that a board reviewing a deannexation

petition must act in an open-minded and unbiased manner, conducting the

proceedings fairly and objectively assessing the evidence in its report to the

governing body.

Here, the Planning Board did not act in accordance with that standard.

As the trial court and Appellate Division found, the Board’s planner

coordinated the litigation on the Township’s behalf, annotating transcripts,

suggesting themes for the Township’s rebuttal of plaintiffs’ evidence, and

helping Township witnesses prepare for their testimony. We concur with the

Appellate Division that the planner’s conduct “was tantamount to a court-

appointed expert participating in strategy sessions and witness preparation

meetings for a party appearing before a court, thereby shaping the record that

was developed and attempting to skew it in favor of one of the parties.” By

virtue of that conduct, plaintiffs were denied a fair and impartial hearing on

their petition. In contrast to the alleged bias in Seaview Harbor, 470 N.J.

Super. at 105, and Avalon Manor, 370 N.J. Super. at 98-99, the alleged bias in

this matter was not isolated or inconsequential but substantially impacted the

fairness of the proceedings.

30

That conclusion is underscored by the evidence that Planning Board

members made public comments opposing the deannexation petition while that

petition was under the Board’s review. In contrast to the public officials

alleged to have made negative comments about the petition in Seaview Harbor,

470 N.J. Super. at 105, the officials in this matter did not recuse themselves

from the proceedings.

We hold that the trial court’s factual findings regarding the first prong of

N.J.S.A. 40A:7-12.1 were supported by “competent, relevant and reasonably

credible evidence” in the record, see Allstate Ins. Co., 228 N.J. at 619, and that

the trial court and Appellate Division properly concluded that plaintiffs met

their burden with respect to that factor in the statutory test.

2.

In its petition for certification, the Township does not appear to contest

the findings of the trial court and the Appellate Division that the denial of

plaintiffs’ petition would be “detrimental to the economic and social well-

being” of a majority of South Seaside Park’s residents. See N.J.S.A. 40A:7-

12.1. 2 Both courts’ findings on the statute’s second prong are substantially

premised on the most compelling factors in plaintiffs’ favor: the geographic

2

The Township clarified at oral argument that it does not concede the second

prong of N.J.S.A. 40A:7-12.1, but that its focus is the statute’s third prong.

31

distance between South Seaside Park and the Township’s mainland section and

the time and effort required for residents to traverse seven municipalities and

reach the mainland, where virtually all municipal facilities are located.

The trial court found that the distance between South Seaside Park and

the remainder of the land in the Township has given rise to geographic

isolation and limited South Seaside Park residents’ connection to the

Township’s social and community life. See W. Point Island, 54 N.J. at 349-50

(relying on the petitioners’ geographic and social isolation from the distant

municipality to rule in favor of deannexation). The court found that the

deannexation petition was primarily motivated by the residents’ view that the

Township has declined to invest in their distant community, and their belief

that they would be part of the community in the adjacent municipality of

Seaside Park.

We agree with the Appellate Division that the trial court’s findings on

this issue are based on substantial evidence in the record, including fact and

expert testimony on the social and economic detriment to South Seaside Park

residents if they were denied the opportunity to annex their land to Seaside

Park. We concur with the trial court and Appellate Division that plaintiffs met

their burden with respect to N.J.S.A. 40A:7-12.1’s second prong.

32

3.

Finally, we address N.J.S.A. 40A:7-12.1’s third prong, which requires

plaintiffs to prove that deannexation “will not cause a significant injury to the

well-being of the municipality.”

There is no question that the Township would suffer an economic loss

were it to lose the tax revenue generated by South Seaside Park’s residents; as

the trial court found, the owner of an average Township home “would incur an

annual increase of around $200” in municipal taxes. 3 The evidence presented

to the Board supports the conclusion that any economic loss to the Township

would be offset to some degree by cost savings. The evidence indicates that

the Township would no longer need the two police vehicles used to serve

South Seaside Park, that it could eliminate certain summer auxiliary officer

positions, and that there would be reduced demand for other municipal

services.

3

The Township alleges that deannexation would increase the school tax

burden for remaining taxpayers by approximately $121 per year, and asserts

that the Appellate Division erroneously failed to address the potential increase

in the school tax rate. However, a school tax increase was not mentioned in

the Township’s resolution as a reason for denying the deannexation petition,

and the trial court found that “[t]here would be no impact upon school taxes”

owed by the Township’s remaining residents as a result of deannexation. The

Township did not dispute that finding in its appeal to the Appellate Division,

and the Appellate Division therefore did not rule on the issue. Accordingly,

we do not address the impact of deannexation on the school tax.

33

The trial court’s finding that deannexation would not cause substantial

economic harm to the Township is supported by competent, relevant, and

reasonably credible evidence in the record.

The record also supports the trial court’s finding that the deannexation of

South Seaside Park would not cause significant social harm to the Township’s

remaining residents, given the limited contact between South Seaside Park

residents and their counterparts in the Township’s mainland section. In that

regard, this case stands in stark contrast to Seaview Harbor, in which the

residents seeking deannexation were found to have a higher level of civic

involvement in the municipality than other residents. See 470 N.J. Super. at

83. The trial court also found that the loss of White Sands Beach, which

represents only 5.4 percent of the Township’s twenty-eight miles of shoreline,

would have a minimal impact on the Township. 4

4

Nothing in the deannexation statute or the record supports defendants’

argument, asserted for the first time before this Court, that any order of

deannexation should exclude White Sands Beach. In their petition, plaintiffs

identified White Sands Beach as part of the area they seek to deannex from the

Township and annex to Seaside Park. See N.J.S.A. 40A:7-13 (authorizing

petitioners to request that the municipality they seek to join “annex the land

specifically described in the petition”). White Sands Beach was considered

part of the land in dispute in the proceedings before the Planning Board, the

Council, the trial court, and the Appellate Division, and is therefore part of the

land subject to deannexation in this appeal.

34

We agree with the trial court and the Appellate Division that plaintiffs

proved that the proposed deannexation would not cause a significant injury to

the Township’s well-being.

We hold that plaintiffs have satisfied their burden of proof as to all three

prongs of N.J.S.A. 40A:7-12.1 and that the trial court properly granted

plaintiffs’ petition for deannexation. Pursuant to N.J.S.A. 40A:7-13, plaintiffs

may request that Seaside Park annex the land identified in plaintiffs’ petition

for deannexation.

IV.

The judgment of the Appellate Division is affirmed.

CHIEF JUSTICE RABNER and JUSTICES PIERRE-LOUIS, WAINER

APTER, FASCIALE, NORIEGA, and HOFFMAN join in JUSTICE

PATTERSON’s opinion.

35