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Economy Enterprises Inc. v. Township Committee of Township of Manalapan

Decided: February 7, 1969.

ECONOMY ENTERPRISES, INC., A CORPORATION OF THE STATE OF NEW JERSEY, SIDNEY GELLMAN AND BENJAMIN HOCHBERG, PLAINTIFFS - RESPONDENTS,
v.
TOWNSHIP COMMITTEE OF THE TOWNSHIP OF MANALAPAN, IN THE COUNTY OF MONMOUTH, STATE OF NEW JERSEY, AND THOMAS E. HIGGINS, TOWNSHIP CLERK OF THE TOWNSHIP OF MANALAPAN, IN THE COUNTY OF MONMOUTH, STATE OF NEW JERSEY, DEFENDANTS-APPELLANTS



Conford, Kilkenny and Leonard. The opinion of the court was delivered by Kilkenny, J.A.D.

Kilkenny

Defendant governing body of the Township of Manalapan (hereinafter, township committee) appeals from that portion only of a final judgment of the Law Division, which states:

"Article VII 'Improvements,' Section 16 'Performance Guarantees,' Subparagraph (a), Subsection 2 of the Manalapan Township Subdivision Ordinance be and is hereby declared void and illegal and for nothing holden."

I

The township committee correctly points out that this portion of the judgment goes beyond the scope of the relief demanded. The entire subsection of the ordinance was declared void and illegal, although many of its requirements are sanctioned by law, admittedly valid and were not challenged by plaintiffs. Only the provisions requiring the owner or developer of a subdivision to make a deposit to secure payment of inspection fees and the obligation to pay such fees were challenged by plaintiff developers.

Among its many parts, article VII, section 16(a)(2) requires that, prior to the submission of the final plat to the planning board. the developer or owner, after obtaining from the township engineer an estimate of the cost of all improvements required for final approval, together with an estimate of any damage to any existing accepted street abutting the proposed subdivision, shall tender to the "governing body" a performance guarantee conditioned upon the completion of the required improvements and for the repair of any damage caused by the owner or developer to existing streets. The performance guarantee must be a cash deposit or cash plus a performance bond, issued by an authorized bonding or surety company. The bond must be approved as to form by the township attorney.

These provisions are sanctioned by the Municipal Planning Act (1953), N.J.S.A. 40:55-1.1 et seq., and particularly by N.J.S.A. 40:55-1.20, 1.21 and 1.22. Plaintiffs do not question their validity, nor do they dispute the required fee of $50 to cover the inspection and approval of the performance guarantee by the township attorney.

The only part of article VII, section 16(a)(2) of the township subdivision ordinance whose validity was questioned by plaintiffs is that which obligates the owner or developer to tender to the governing body, in addition to the performance guarantee, "a fee in cash or a certified check amounting to five per cent (5%) of said estimated cost (of completion of the required improvements and damage) to cover cost of supervision and inspection." There are further provisions that, if the 5% deposit exceeds the amount of money expended by the municipality for the services of the municipal engineer in connection with the project, the excess will be refunded to the developer or owner. On the other hand, if the expenditures exceed the 5% deposit, the developer or owner shall pay the municipality the difference required to cover said expenditures.

These provisions as to the municipal engineer's supervision and inspection fees in overseeing, before final approval of a

subdivision plat, the completion of required improvements and the repair of damage caused by the owner or developer, were, as noted above, the only elements in the subject ordinance provision which were litigated, heard and determined by the Law Division.

The trial court's oral decision at the close of the hearing, as to this count of the complaint, based its finding of invalidity solely on the ground that the municipality had no right to charge a 5% fee and then put it "in trust for the engineer," thereby "acting as a collection agency for the engineer." It deemed this "not proper." It found the lack of an appropriation in the budget for this purpose a further bar. Finally, the trial court ruled that "the five percent fee far exceeds ...


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