Pinkowski v. Township of Montclair

• Citation: 691 A.2d 837,299 N.J.Super. 557
• Parties: John PINKOWSKI and Diann Riches Pinkowski, Plaintiffs-Appellants, v. TOWNSHIP OF MONTCLAIR, a Municipal Corporation, Defendant-Respondent, v. ALFRED J. CLARK, INC. and Alfred J. Clark, Third-Party Defendants.
• Decision Date: 07 April 1997
• Court: New Jersey Superior Court – Appellate Division

Page 557

299 N.J.Super. 557

691 A.2d 837

John PINKOWSKI and Diann Riches Pinkowski, Plaintiffs-Appellants, v. TOWNSHIP OF MONTCLAIR, a Municipal Corporation, Defendant-Respondent, v. ALFRED J. CLARK, INC. and Alfred J. Clark, Third-Party Defendants.

Superior Court of New Jersey,

Appellate Division.

Submitted March 10, 1997.

Decided April 7, 1997.

Ferguson & Gille, Montclair, for plaintiffs-appellants (Grant M. Gille and Adam L. Levine, on the brief).

Robert A. Hoonhout, Township Attorney, for defendant-respondent (Richard Seltzer, Assistant Township Attorney, on the brief).

No other parties participated in this appeal.

Before Judges PETRELLA, WALLACE and KIMMELMAN.

The opinion of the court was delivered by

PETRELLA, P.J.A.D.

This case arises out of the construction, approximately seventy years ago, of an underground cement culvert or pipe through which flows a portion of Nishuane Brook, a natural water course. Plaintiffs, John and Diann Pinkowski, appeal from the Law Division's grant of summary judgment in favor of Montclair Township. Montclair's motion for summary judgment was granted in a March 25, 1996 order and opinion. For purposes of the motion, the court assumed that Montclair constructed the culvert. The judgment dismissed their suit against Montclair for trespass, inverse condemnation, and negligence.

The Pinkowskis argue on appeal that the judge erred by (1) applying the Tort Claims Act bar against subrogation claims to plaintiffs individually, rather than restricting its application to the title insurance company as subrogee; (2) failing to reach issues of the Township's negligence, palpably unreasonable conduct, gross negligence, and recklessness, conduct that would render inapplicable the limited immunity under the Tort Claims Act; (3) failing to recognize the Township's trespass as a valid claim based on misapplication of the Tort Claims Act ban on claims by subrogees; and (4) failing to recognize plaintiffs' right to be secure in the ownership and possession of their property by concluding that the actions of Montclair could not constitute a taking.

The first count of the complaint alleged that the existence of the culvert on the property constituted a trespass. Count two sought relief through inverse condemnation on the ground that the location of the culvert prevented the Pinkowskis from building on the property and deprived them of beneficial use of their land. Count three alleged negligence by the Township in failing to properly record an easement for the culvert and in approving a subdivision of the parcel from which 20 Melrose Place was created without acknowledging the existence of the culvert.

Alfred J. Clark, Inc. and Alfred J. Clark (Clark) were joined by Montclair as third-party defendants. Montclair alleged that Clark breached his duty to the Township by failing to discover the culvert when he surveyed the property for the 1987 application for minor subdivision approval submitted by the Pinkowskis' predecessor in title. The Pinkowskis then filed a cross-claim against Clark, alleging negligence. ¹

On December 14, 1995, the Pinkowskis and Montclair filed a stipulation of facts identifying the Pinkowskis' title insurance company as the true party-in-interest insofar as any alleged misfeasance caused a diminution in the property's value. The stipulation notes that the title insurance company paid the Pinkowskis approximately $80,000, and took an assignment of the Pinkowskis' interest in the property.

During the 1920's an underground culvert was built three feet below the surface that was approximately six feet wide and four feet high. The culvert relocated part of the Nishuane Brook from a surface level brook to an underground waterway. The culvert runs south and east through the center of the plaintiffs' property connecting two storm drains which run parallel to each other along Melrose Place and the rear boundary of plaintiffs' lot. Before construction of the culvert, Nishuane Brook ran above ground on the property in question. The brook runs above ground in certain locations as close as 100 feet from the Pinkowskis' lot.

Apparently, an easement for the construction of the culvert beneath the property was never recorded and there is no record of the culvert within the property's chain of title. At the time the culvert was constructed, the property, a vacant lot (now known as 20 Melrose Place), was owned by Lila J. Tufts as part of a larger lot which included the subject property and the immediately adjacent lot to the east. Over the past seven decades the combined parcel was owned by approximately six different owners. On April 13, 1987, the immediate predecessors in title to the Pinkowskis, Dennis and Mary Fry, were granted minor subdivision approval so that they could sell the undeveloped lot, presumably unaware of the underground culvert.

The Pinkowskis purchased the lot from the Frys in 1992, and obtained a permit to construct a one-family home. However, the culvert precluded their proposed development. The title insurance company, Osage Corporation, a subsidiary of Commonwealth Land Title Insurance Company, reimbursed the Pinkowskis for the purchase price of the property, took title to it, and became subrogated to the Pinkowskis ownership rights. The Pinkowskis apparently contend that they are entitled to seek additional damages on their own behalf.

Although the record does not include the deed to the property or the contract of sale, it does include a recorded easement to Montclair on September 22, 1919, by several property owners including Ms. Tufts, providing Montclair with a ten foot right of way to construct a storm drain and sewer along the southern boundary of the property. Although the easement describes the right of way as running parallel to Melrose Place from Harrison Avenue east to the western boundary of Nishuane Brook, it does not indicate the location of Nishuane Brook. Clark's 1987 survey also did not depict the location of Nishuane Brook or the culvert.

The culvert was discovered by the Pinkowskis' contractor upon excavation for the foundation. The Pinkowskis claim that the property is not buildable because of the location of the culvert and that the cost of relocating the culvert would be approximately $243,000.

I.

In considering whether a trial court properly granted summary judgment, we review the trial court's decision under the same standard that applies in the trial courts. Antheunisse v. Tiffany & Co., 229 N.J.Super. 399, 402, 551 A.2d 1006 (App.Div.1988), certif. denied, 115 N.J. 59, 556 A.2d 1206 (1989). See also Brill v. Guardian Life Ins. Co. of America, 142 N.J. 520, 666 A.2d 146 (1995).

The Pinkowskis argue that the motion judge improperly applied the Tort Claims Act's ( N.J.S.A. 59:1-1, et seq.) (Act) prohibition against subrogation. Arguing that they also claimed damages on their own behalf for injuries not covered under their title insurance policy, the Pinkowskis contend that the judge improperly applied N.J.S.A. 59:9-2e. They argue that the Act contemplates that they may receive compensation from different sources and that the Act permits recovery from both an insurer as well as a public entity or employee so long as the proceeds from the insurance policy are offset against any damages awarded for the misfeasance of the public entity or employee. Thus, the Pinkowskis argue that the judge should have permitted their claims insofar as they related to damages they suffered which were not compensated for by their insurance policy.

The Pinkowskis allege that Montclair was palpably unreasonable in constructing the culvert beneath their property without recording an easement, and that, several decades later, records in Montclair's Engineering Department should have put Montclair on notice of the culvert's location when the Frys requested subdivision approval and they applied for a building permit.

The Pinkowskis also contend that Montclair should be estopped from asserting immunity under the Act. They argue that Montclair was the only party that knew the location of the culvert through its engineering maps, and knew that the Pinkowskis were intending to build a home on the lot when they applied for a building permit. In addition, they claim that Montclair prevented them from discovering the existence of the culvert by failing to place the culvert's existence, in the form of a recorded easement, within the property's chain of title. Thus, the Pinkowskis argue, the judge erred in according Montclair immunity.

The judge dismissed count one (trespass) and count three (negligence in the issuance of subdivision approval and failure to record an easement) on the ground that N.J.S.A. 59:9-2e provided immunity to Montclair. ²

N.J.S.A. 59:9-2e states in pertinent part:

No insurer or other person shall be entitled to bring an action under a subrogation provision in an insurance contract against a public entity or public employee.

The immunity provided governmental entities under the Act is limited to tort based liability. Feinberg v. State, D.E.P., 137 N.J. 126, 133, 644 A.2d 593 (1994). The policy underlying N.J.S.A. 59:9-2e "reflects a recognition that profit-making insurance companies are in a better position to withstand losses which they contract for than are the already economically burdened public entities." See comment to 59:9-2; see also Travelers Ins. Co. v. Collella, 169 N.J.Super. 412, 415, 404 A.2d 1250 (App.Div.1979). In addition, N.J.S.A. 59:9-2e was designed to prevent plaintiffs from obtaining a double recovery by requiring that any insurance proceeds or other collateral compensation paid to the plaintiff for the alleged injuries sustained as a result of the governmental entity's negligence be subtracted from any judgment against the governmental entity. N.J.S.A. 59:9-2e; Sikes v. Township of Rockaway, 269 N.J.Super. 463, 466, 635 A.2d 1004 (App.Div.), aff'd, 138 N.J. 41, 648 A.2d 482 (1994).

Accordingly, ...