McNally v. Teaneck Tp.

• Decision Date: 17 January 1975
• Citation: 132 N.J.Super. 442,334 A.2d 67
• Parties: Kathleen McNALLY et al., Plaintiffs, v. TOWNSHIP OF TEANECK et al., Defendants.
• Court: New Jersey Superior Court

Page 442

132 N.J.Super. 442

334 A.2d 67

Kathleen McNALLY et al., Plaintiffs, v. TOWNSHIP OF TEANECK et al., Defendants.

Superior Court of New Jersey Law Division.

Jan. 17, 1975.

Howard M. Kaplan, Teaneck, for plaintiffs (Alan Marlowe, Teaneck, on the brief).

Jacob Schneider, Teaneck, for defendants (Schneider, Schneider & Behr, Teaneck, attorneys; Michael Lubin, Paterson, on the brief).

PRESSLER, J.C.C., Temporarily Assigned.

Plaintiffs, owners of 49 single-family residential properties in the Township of Teaneck appeal, pursuant to N.J.S.A. 40:56--54, from the township's confirmation of assessments imposed against their properties to pay for a portion of the cost of improving the streets upon which their homes abut. The appeal raises important legal questions regarding defendant township's sue of a front-foot formula for calculating the amount of the assessments.

The significant facts relating to the making of the challenged assessments, as proved at trial, are essentially undisputed. The township, pursuant to a bond ordinance duly adopted in March 1971, undertook, in part as a local improvement, a substantial street reconstruction project on a group of 11 streets in the residential neighborhood in the so-called West Englewood section of the municipality. The project consisted of five categories of street improvements: (1) storm sewer repair and replacement; (2) sanitary sewer repair and replacement; (3) curb replacements; (4) new curbing where required and (5) new street paving. Pursuant to the terms of the ordinance, the storm and sanitary sewer work and the curb replacement work were undertaken as general improvements. The new curbing and pavement work were undertaken as local improvements for which the benefitted property owners were to be specially assessed pursuant to N.J.S.A. 40:56--1 et seq.

The project was duly undertaken and completed, and on April 17, 1973, and in compliance with the requirements of N.J.S.A. 40:56--24, the township adopted a resolution prepared by its engineering department reciting the satisfactory completion of the work, fixing for each of the 11 streets the actual construction cost for each of the five categories of work, and determining a separate overhead cost for all categories of work on each of the 11 streets. The total cost of the entire street improvement program, including overhead, was so certified to be $734,816.05. Of this amount the local improvement costs were $331.280.72 plus overhead for street paving, and $12,104.95 plus overhead for new curbing cost. These costs were to be the subject of the special assessments. The township then, pursuant to the statute, transmitted this resolution of certification to the three assessment commissioners, appointed in accordance with N.J.S.A. 40:56--22, who then undertook the fixing of the assessments.

Two of the commissioners, Norman F. Sirianni and J. Jerome Case, testified at the trial. The pretrial deposition of the third commissioner, James R. Wynn, whose presence was not procurable at trial by reason of his nonresidency at that time, was admitted into evidence. The testimony of the three commissioners was in substantial agreement as to the manner in which the assessments were made. Their method was simply to calculate, based on municipal maps, the total front feet abutting each of the 11 improved streets and to divide the actual cost of the two local improvement categories for each street by that number of front feet in order to arrive at a front-foot unit cost. That unit cost was then multiplied by the number of front feet of each separate property and the product thus obtained, after application of a uniform overhead factor of 7%, was the figure reported as the assessment, except in the case of corner lots which abutted two improved streets. As to these, the assessment consisted of the unit cost multiplied by the number of front feet on that street, which was the postoffice address of the property, plus half of the unit cost multiplied by the front feet on what was then considered as the side street frontage.

It should be noted that the unit cost so arrived at both for paving and new curbing was not the same for each of the streets involved, and this for the reason, apparently, that the actual lineal foot charge of the contractor varied from street to street, although no reason for the variation, except in the case of Sussex Street, as indicated Infra, was ever offered. As a result of the lineal foot cost variations, the repaving cost on a street-by-street basis ranged from a low of $9.87 to a high of $16.35 a lineal foot. Consequently, properties of equal frontage on different streets were disparately assessed despite the fact that the paving work on all streets except Sussex Street apparently produced reconstructed streets of the same specifications. It should be further noted that the properties so assessed vary substantially with respect to depth, size and shape.

Over 300 separate properties abutted the 11 improved streets in question, and the assessment made by the commissioners for each, in accordance with the front-foot method described above, was duly reported to the council after public hearing, as required by statute. By resolution adopted October 16, 1973 the township confirmed the assessments as reported, with two minor adjustments. One was the reduction of the lineal foot cost for the Sussex Road properties by $1.115, the council having found that all of the other streets had been paved for a depth of five inches whereas Sussex Road had been paved for a depth of six inches. This reduction was intended to reflect the extra inch of paving, thereby purporting to place the Sussex Road property owners on an equal basis with the owners abutting the other streets. The second adjustment was a reduction of one of the individual assessments, apparently on the basis that extra lineal feet had been calculated into that assessment. The owners of that property are not plaintiffs here.

The owners of the 49 properties, who are plaintiffs here, filed their action within 30 days of the confirmation date as required by statute, ¹ claiming that the assessments were illegal, first, because the street improvement program did not confer any special benefit upon their properties at all, and second, that in the event there was some special benefit conferred which would justify a special assessment, the assessments were made so arbitrarily as not to represent a fair reflection of the dollar amount of any such benefit.

The determination of these contentions requires statement of the essential legal principles governing the making of assessments for local improvements. First, it is clear that the basis of the municipal power to make and collect a special assessment is the actual fact that the improvement which is the subject of the assessment confers upon the property owners assessed a special benefit by way of enhancement of the value of their properties beyond and in addition to that general benefit which may be enjoyed by all of the property owners and residents of the municipality. Hence, it is a matter of constitutional imperative that the amount of the assessment be calculated in relation to the value of the special benefit and that it not exceed that value. See In re Public Service Elec. and Gas Co., 18 N.J.Super. 357, 363, 87 A.2d 344 (App.Div.1952); Ridgewood Country Club v. Paramus, 55 N.J. 62, 68, 259 A.2d 218 (1969); Jardine v. Rumson, 30 N.J.Super. 509, 519, 105 A.2d 420 (App.Div.1954); McQueen v. West New York, 56 N.J. 18, 23--24, 264 A.2d 210 (1970); Howorth v. Wenonah, 67 N.J.Super. 161, 165, 170 A.2d 259 (Law Div.1961). And see, N.Y. and G.L. Ry. Co. v. Kearney, 55 N.J.L. 463, 470, 26 A. 800 (Sup.Ct.1893), which held unconstitutional an assessment statute which did not require that the amount of the assessment reflect the special benefit but rather simply dictated assessment of properties abutting the improvement in proportion to its expense.

To ensure compliance with this judicially articulated constitutional prerequisite to the municipal power to specially assess, the statute, N.J.S.A. 40:56--26, places upon the commissioners the obligation to 'make a just and equitable assessment of the benefits conferred upon any real estate by reason of such improvement having due regard to the rights and interests of all persons concerned, as well as the value of the real estate benefited.' They are further enjoined to levy the assessment 'as nearly as may be in proposition to and not in excess of the peculiar benefit, advantage or increase in value which the respective lots and parcels of real estate shall be deemed to have received by reasons of such improvement.' N.J.S.A. 40:56--27.

It is also clear that special benefit in this context has a well-settled meaning. Special benefit is the actual increase in the value of the property which results from the local improvement or, more particularly stated, the difference in the fair market value immediately before and immediately after the making of the improvement. This definition of special benefit is not only currently accepted, see, E.g., McQueen v. West New York, Supra, but has also been recognized in our jurisprudence on this subject for at least the last 50 years; see, E.g., In re South Orange, 2 N.J.Misc. 867, 869 (Circ.Ct.1927), and In re Mulberry Street, Newark, 11 N.J.Misc. 295, 303, 166 A. 447 (Circ.Ct.1933). Thus, the task of the commissioners is to devise and implement a method of determining the assessment which is reasonably calculated both to reflect the before and after value of the benefited property and to fairly apportion the burden of payment for the improvement among all the affected property owners. In performing this task the cost of the improvement has relevance--it is not, however, both as a matter of constitutional requirement and statutory mandate, dispositive as the commissioners here seemed to think. That is to say, the cost of...