Colonial Oaks West, Inc. v. East Brunswick Tp.

• Decision Date: 20 November 1972
• Citation: 61 N.J. 560,296 A.2d 653
• Parties: COLONIAL OAKS WEST, INC., a New Jersey corporation, et al., Plaintiffs-Appellants, v. TOWNSHIP OF EAST BRUNSWICK, a municipal corporation of the State of New Jersey in the County of Middlesex, et al., Defendants-Respondents.
• Court: New Jersey Supreme Court

Page 560

61 N.J. 560

296 A.2d 653

COLONIAL OAKS WEST, INC., a New Jersey corporation, et al Plaintiffs-Appellants, v. TOWNSHIP OF EAST BRUNSWICK, a municipal corporation of the State of New Jersey in the County of Middlesex, et al., Defendants-Respondents.

Supreme Court of New Jersey.

Argued Sept. 26, 1972.

Decided Nov. 20, 1972.

Seymour Gelzer, East Brunswick, for plaintiffs-appellants (Iaria & Gelzer, East Brunswick, attorneys).

Peter J. Selesky, New Brunswick, for defendants-respondents (Selesky, Kolsky, Kravarik & Epstein, New Brunswick attorneys).

Richard W. Kracht, Woodbridge, filed a brief, amicus curiae, on behalf of New Jersey Builders Ass'n (Hutt & Berkow, Woodbridge, attorneys).

The opinion of the Court was delivered by

JACOBS, J.

The Law Division granted some but not all of the relief which the plaintiff-developers sought from the Township of East Brunswick along with its Board of Education and Planning Board. The plaintiffs appealed to the Appellate Division which affirmed in an unreported Per curiam; there was no cross appeal by the Township. We granted the plaintiffs' petition for certification. 60 N.J. 287, 288 A.2d 29 (1972).

The plaintiffs Colonial Oaks West, Inc., Deerfield Estates, Inc., Joaldan, Inc., Colonial Oaks, Inc., Picaro Building & Contracting Co., Inc., Picaro Brothers, Inc., and Picaro Home Builders, Inc. were developers and builders engaged in subdividing land and constructing dwellings and other structures in the Township of East Brunswick. They were largely controlled by Mr. Daniel Picaro who represented himself and two brothers. Picaro and his associates, acting through one or more of the corporations, acquired land in the Township from time to time and proceeded with development and construction. In 1968 an action in lieu of prerogative writ was initiated by Picaro naming the corporations as plaintiffs and the Township along with its Planning Board and Board of Education as defendants. The complaint contained five counts to the following effect:

In the first count the plaintiffs Colonial Oaks West, Inc. and Deerfield Estates, Inc. alleged that before applying to the Planning Board they were informally advised that they would not receive preliminary approval unless they donated the sum of $100,000 for school expansion purposes; that in the light of the foregoing and under duress they agreed to pay the $100,000 and have actually paid part thereof, namely $25,000; and they sought judgment for the return of the $25,000 and cancellation of their agreement to pay the remaining $75,000. On the basis of full testimony the Law Division found that the agreement to pay the $100,000 was obtained under duress and was 'void and of no effect.' See West Park Ave., Inc. v. Ocean Tp., 48 N.J. 122, 224 A.2d 1 (1966); Midtown Properties, Inc. v. Madison Tp., 68 N.J.Super. 197, 210, 172 A.2d 40 (Law Div.1961), aff'd, 78 N.J.Super. 471, 189 A.2d 226 (App.Div.1963). It directed that the $25,000 already paid be returned by the Board of Education to the plaintiff Deerfield Estates, Inc. and that the requirement for payment of the remaining $75,000 agreed upon 'be set aside.' Since the defendants have not appealed from this direction it stands as entered and is not now before us for review.

In the second count the plaintiff Joaldan, Inc., alleged that although the Township operates its own water supply utility, it compelled the plaintiff to extend off-site water mains along Cranbury Road and as a result the Township was unjustly enriched in the sum of $29,497.50. In the third count the plaintiffs Colonial Oaks, Inc., Deerfield Estates, Inc., Picaro Building & Contracting Co., Inc., Picaro Brothers, Inc., and Picaro Home Builders, Inc. alleged that the Township required that they install on-site water mains and as a result the Township was unjustly enriched in the sum of $250,000 (later reduced to $219,677.36). The Law Division found that the requirement in the Land Subdivision Ordinance of the Township that plaintiffs install on-site water mains constituted ' a lawful exercise of municipal power' and that the plaintiffs were not entitled to any reimbursement for their expenditures in connection with the on-site water mains. It also found that the alleged off-site water mains which the Planning Board required plaintiff Joaldan, Inc. to install were, under the particular circumstances as they appeared from the record, 'in a real sense an on-site improvement.' This explicit factual determination was not the subject of any direct attack by the plaintiffs either in their brief before the Appellate Division or in their petition for certification before us and we shall therefore not consider disturbing it.

After the Law Division made its determinations with regard to the water mains, and while the plaintiffs' petition for certification was pending, this Court handed down its opinion in Deerfield Estates, Inc. v. Tp. of East Brunswick, 60 N.J. 115, 286 A.2d 498 (1972). That case was concerned with a later Deerfield development and involved a proceeding in liue of prerogative writ in which the developer had not installed the water mains but sought instead judicial relief either (1) directing the Township to install the water mains or (2) compelling the Township to enter into an agreement under which the developer could proceed with installation of the mains and thereafter obtain reimbursement from the Township under a just and equitable formula. The Law Division had held that the Township had the power to require the developer to install the on-site water mains at its own cost and entered judgment for the Township which the Appellate Division sustained. In this Court the judgment was vacated and the cause was remanded for further proceedings in conformity with pertinent principles which were set forth in a comprehensive opinion by Justice Mountain and are controlling here. 60 N.J. 115--133, 286 A.2d 498.

Deerfield first pointed out that there was no longer any doubt that a municipality which, as here, 'has created a planning board and adopted an adequate subdivision ordinance may impose, as a condition of subdivision approval, a requirement that necessary water mains be installed.' 60 N.J. at 122, 286 A.2d at 502. It then dealt with the question as to who was to bear the cost of the installation and listed alternative courses available to the municipality; included among these was the municipality's power to require 'that the work be done at the expense of the developer,' either with or without a formula for partial or total reimbursement, provided the local ordinance permits the imposition and 'it is fair and equitable that this be done.' 60 N.J. at 131, 286 A.2d at 507.

In determining the fairness and equitableness of the imposition, the primary concern is with the purchaser (Cf. 60 N.J. at 132, 286 A.2d 498) for it is generally to be assumed that the developer includes the water main expense as an item in fixing his selling price. If all developers have been treated alike by the Township and have paid the water main expenses without reimbursement, purchasers will as a practical matter have been dealt with equally and fairly; on the other hand if the Township has permitted the extension of water mains in other developments at general municipal expense, the imposition of water main costs on these developments would operate unequally and unfairly insofar as the purchasers in these developments are concerned. 60 N.J. at 132, 286 A.2d 498. In Deerfield, the record was inadequate to permit a final determination and accordingly there was a remand for further testimony and due application of the principles set forth in this Court's opinion; similarly, here the record is inadequate and there must be a comparable remand.

On the remand, the Law Division will take testimony not only with respect to the practices of the Township in connection with the installation of water mains at developments but also with respect to the issue of whether the costs incident to the water mains were passed on by the developers here to the purchasers; in the likely event that they were then, as contemplated by Deerfield, supra, 60 N.J. 115, 286 A.2d 498 any recoveries by the developers of such costs would justly be placed in trust under suitable court directions awaiting formal claims by the purchasers; and if the purchasers fail to assert their claims the laws of escheat will in time be applied.

The Law Division may be called on the remand to deal with a further matter which was not presented in Deerfield. Unlike the situation there the developers here did not make any demand of the Township that it install water mains nor did they initiate any judicial proceeding seeking such relief. On the contrary, they installed the water mains themselves and now seek damages as reimbursement. The record contains no explanation as to why they chose that course but they may now present such explanation together with other pertinent evidence and the Township may present evidence in support of any claim it may seek to assert that the developers should equitably be barred because of the course they pursued. See Lake Intervale Homes, Inc. v. Parsippany-Troy Hills, 28 N.J. 423, 430--431, 147 A.2d 28 (1968); Yardville Estates, Inc. v. Trenton, 66 N.J.Super. 51, 63, 168 A.2d 429 (App.Div.1961).

In the fourth count the plaintiffs alleged that the Township had imposed water tap charges under Section 13--15.4 of its Revised General Ordinances which they asserted were improperly imposed and had resulted in unjustly enriching the Township in the sum of $50,000. The cited section provides, Inter alia, that a fee shall be charged for providing water service and that the fee 'shall include the cost of issuing a permit, making the physical connection to a water main and a portion of the cost of increasing the capacity of the township's water supply and system in order to provide the water service.' The fees are graduated according...