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Lake Intervale Homes Inc. v. Township of Parsippany-Troy Hills

Decided: December 15, 1958.


On appeal from Superior Court, Law Division, whose opinions are reported in 43 N.J. Super. 220 and 47 N.J. Super. 334.

For affirmance -- Chief Justice Weintraub, and Justices Heher, Wachenfeld, Burling, Jacobs, Francis and Proctor. For reversal -- None. The opinion of the court was delivered by Burling, J.


The defendant municipality appealed from a judgment of the Superior Court, Law Division, in the amount of $6,000 in favor of the plaintiff, representing a portion of the costs incurred by the plaintiff in installing water mains in certain areas of the Lake Intervale development in the municipality. We certified the cause on our own motion prior to hearing in the Superior Court, Appellate Division.

On June 6, 1941 the Township Committee of Parsippany-Troy Hills approved a map of a proposed development of a tract of land owned by the Lake Intervale Corporation. The approved map divided the tract into over 300 lots, each with a frontage of approximately 50 feet and with varying depths from 100 to over 200 feet. The map was duly filed in the Morris County Clerk's Office, July 11, 1941. Approval and recording were pursuant to the Old Map Act, R.S. 46:23-1 et seq. (since repealed L. 1953, c. 358, p. 1941,

ยง 7, and supplanted by N.J.S.A. 46:23-9.1 et seq.). Thereafter the tract was assessed for purposes of taxation on an individual lot basis.

In 1941 the defendant had not enacted a zoning ordinance. Its first zoning ordinance was adopted in 1945, and as subsequently amended, places the Lake Intervale tract in a single-family residence zone, with a minimum lot area of 15,000 square feet and a minimum frontage requirement of 100 feet. Compliance with the zoning ordinance requires a combination of two lots to meet the area and frontage requirements.

In 1950, by virtue of a mortgage foreclosure sale, the Reid Development Corporation acquired title to 332 lots in the Lake Intervale tract. Up to 1950 the development had been unsuccessful. As part of its development plans the Reid Development Corporation made demands upon the municipality, which supplies its own water service, for extension of mains into portions of the Lake Intervale tract. In one such attempt the corporation succeeded in obtaining a 600-foot extension of the mains at the municipality's expense. Reid Development Corp. v. Parsippany-Troy Hills Tp., 10 N.J. 229 (1952). In a later request for an additional extension of 3,060 feet the municipality's refusal to extend the mains was upheld. Reid Development Corp. v. Parsippany-Troy Hills Tp., 31 N.J. Super. 459 (App. Div. 1954). The municipality's position that, in order to obtain building permits, the lot must conform to the zoning ordinance irrespective of any approval of lots as delineated on the filed map in 1941, was upheld in two cases: Rodee v. Lee, 14 N.J. Super. 188 (Law Div. 1951); Herman v. Board of Adjustment, Parsippany-Troy Hills Tp., 29 N.J. Super. 164 (App. Div. 1953).

On June 1, 1954 the defendant adopted a subdivision regulation ordinance pursuant to the provisions of the Planning Act of 1953, N.J.S.A. 40:55-1.14 et seq. Article VI entitled "Improvements" reads:

"The subdivider shall install or guarantee the installation of such of the following improvements or portions thereof as may be required

by the governing body: (a) street grading and pavement [or] other surfacing; (b) gutters, curbs and sidewalks; (c) shade trees; (d) street lighting; (e) street signs; (f) water mains, culverts, storm sewers, sanitary sewers, or other means of sewage disposal, drainage structures, and all appurtenances to such facilities properly connected with approved systems of water supply, sewerage, and storm water drainage, as the case may be."

Plaintiff was incorporated in 1954. It acquired (the exact time and the grantor are not in the record) 30 lots in the Lake Intervale development, upon which it proposed to construct 15 dwelling houses. Eighteen of the lots were situated contiguous to each other on Fairway Place, an unimproved street. The other 12 lots were situated, in pairs, on various other unimproved streets throughout the development. Plaintiff's plan was to combine two lots, as delineated on the filed map -- this to comply with the previously outlined zoning requirements.

Sometime in 1954 the plaintiff obtained building permits for the construction of four homes and commenced work. The municipality offers no explanation why these permits were issued.

By letter dated February 15, 1955, plaintiff wrote to the municipality offering to install certain street improvements at its own expense and inquiring as to the performance bond it should post. Apparently there was no reply.

Subsequently, in May of 1955, plaintiff had virtually completed the work on two houses and wrote to the municipality requesting an extension of water mains to service the houses. The defendant refused to extend the mains at its expense and countered the demand by declaring that certificates of occupancy would not be issued on the houses under construction and that no further building permits would be issued unless plaintiff submitted its plat for approval pursuant to the subdivision regulation ordinance. Defendant's primary purpose in demanding plat approval by the planning board and governing body was to impose upon the plaintiff the obligation to install, at plaintiff's expense, the main extensions, required by Article VI of the ordinance referred to previously. Defendant's basic position then and

now is that the Planning Act of 1953 and the ordinance are applicable to plaintiff's development and that they supply the authority to impose the ultimate cost of water main extensions upon the plaintiff.

A course of negotiations ensued. Apparently neither party was desirous of securing an immediate judicial determination on the controversy.

On October 4, 1955 the parties executed a non-waiver agreement by which plaintiff agreed to install the water mains and street improvements at its own expense initially. And, while not reduced to writing, defendant agreed to issue four certificates of occupancy and additional building permits. The pertinent portions of the agreement provide:

"The Developer agrees to bear the entire expense of introducing such roadways and water mains. If it shall hereafter and within a period of three years from the date hereof be determined by agreement, litigation or otherwise that the whole or any portion of the cost and expense of introducing such water mains should properly be borne by the Township, then the Township agrees at that time to reimburse the Developer to such extent and in such amount as shall be so determined, but without interest. In no event, however, shall this obligation of the Township exceed the total amount of $6,000."

"It being recognized by the parties hereto that a dispute exists between them as to who should be required to install mains and who should bear the cost thereof, it is the intention of the parties that none of the terms of this agreement or of any document to be presented herewith, nor the performance of any of the terms hereof, nor the execution and delivery of this agreement shall be for any purpose taken or considered as in any way affecting, changing, altering or having any effect upon the existing rights and obligations of the parties hereto with respect to such water mains and the cost of their installation."

Thereafter, plaintiff installed the water mains and street improvements.

No settlement of the narrowed liability issue was arrived at and plaintiff commenced the instant action for money damages in March 1956. Plaintiff's complaint alleged that the agreement of October 4, 1955 was procured under economic duress and sought in two counts, framed on a quasi-contract theory, damages for extension of water mains and

street improvements. The actual cost to plaintiff of the improvements was $12,021.60 for the mains and $40,427.51 for streets.

The court below, in a tripartite determination of the cause held: (1) that the Planning Act of 1953 supplies the statutory authority for a municipality supplying its own water service to impose, by ordinance duly adopted, the cost of extensions of water mains on the developer, 43 N.J. Super. 220 (Law Div. 1956); (2) but that in the instant case the subdivision control provisions of the Planning Act were inapplicable to plaintiff's development for the reason that the plat of the Lake Intervale tract had been approved pursuant to the Old Map Act and, in the absence of a resubdivision of lots as delineated on the filed map, the subdivision control provisions of the Planning Act are prospective in operation only, 47 N.J. Super. 334 (Law Div. 1957); (3) that the agreement limiting liability for water main extensions to $6,000 was not executed under economic duress and was binding; that the parties agreed, previous to suit, that plaintiff was to pay for street improvements and that, since the only defense prior to suit relied upon by the defendant to support its position that it might compel the developer to pay for extensions of water mains was the Planning Act of 1953, judgment in the amount of $6,000 should be entered in plaintiff's favor. (Unreported decision of April 25, 1958)

The plaintiff has not cross-appealed from those portions of the determination below holding that plaintiff had agreed to install street improvements and limiting liability of main extensions, pursuant to the October 4, 1955 agreement, to $6,000.

The municipality raises an initial procedural question as to whether the instant action is not foreclosed by virtue of the fact that in lieu relief sounding in mandamus is the sole remedy to test the basic proposition of whether or not the municipality was under a duty to pay for the installation of the water mains. It is asserted that ...

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