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Crescent Park Tenants Association v. Realty Equities Corp.

Decided: March 22, 1971.

CRESCENT PARK TENANTS ASSOCIATION, A NONPROFIT CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
REALTY EQUITIES CORP. OF NEW YORK AND R.E. MATAWAN CORP., A WHOLLY OWNED SUBSIDIARY OF REALTY EQUITIES CORP. OF NEW YORK, DEFENDANTS-RESPONDENTS



For reversal -- Justices Jacobs, Francis, Proctor, Hall and Schettino. For affirmance -- None. The opinion of the Court was delivered by Jacobs, J.

Jacobs

The Chancery Division dismissed the plaintiff's complaint for lack of standing. An appeal was taken to the Appellate Division and we certified before argument there.

The plaintiff Association is a nonprofit organization which was incorporated in 1969 pursuant to the terms of N.J.S.A. 15:1-1 et seq. It was created for the protection and mutual benefit of the tenants residing in the Crescent Apartment House located at 320 South Harrison Street, East Orange. Its membership consists of a substantial majority of the tenants and it has undertaken to represent them with respect to their common grievances against their landlord the defendant R.E. Matawan Corp. and its parent company the defendant Realty Equities Corp. of New York.

The Crescent Apartment House is a high-rise luxury apartment with 252 residential units including several professional and business suites. The monthly rentals range between $285 and $700 per month for 1, 2 and 3 bedroom

apartments and the approximate annual rental roll predicated on 98% occupancy is $1,300,000. For the most part the tenants are middle aged or older businessmen, widows or widowers who were former homeowners in the Essex County area. They assert, through their Association, various mismanagement charges all of which have a common relationship to the tenant body as a whole. Thus it is alleged, inter alia, that the air conditioning system is in a constant state of disrepair and that its condition is particularly dangerous because many of the tenants are elderly; that the elevators are in poor working condition and constitute a safety hazard; that the security and protection afforded is wholly inadequate; that the incinerator rooms constitute a health and fire hazard; that the air conditioning and heating units generate incessant noises and disturbances; that the halls, incinerator rooms, elevators and laundry rooms, along with the basement and swimming pool areas, have been woefully neglected and are desperately in need of attention; and that repair services required on the breakdown of appliances and on the appearance of structural deficiencies have been repeatedly withheld.

The complaint prays for injunctive relief, for the appointment of a rent receiver, for an accounting, and for such other equitable relief as may be just and proper. Affidavits accompanying the complaint verified its allegations in detail. Answering affidavits, referring to corrective action which has been taken and denying the allegations of mismanagement, were filed on behalf of the defendants who moved for an order dismissing the complaint on the ground that the plaintiff Association had no interest in the matter and no standing to sue. After considering briefs and hearing argument, the Chancery Division judge dismissed the complaint on the stated ground. He did not pass on the merits and the single issue presented by the parties on appeal is whether he erred in his holding that the Association had no legal or equitable standing to maintain an action based on the alleged wrongful conduct set forth in the complaint. Compare

Hudson Bergen County Retail Liquor Stores Association v. Hoboken, 135 N.J.L. 502, 510 (E. & A. 1947) and Greenspan v. Division of Alcoholic Beverage Control, 12 N.J. 456, 459 (1953) with New Jersey Bankers Association v. Van Riper, 1 N.J. 193, 196-197 (1948); see New Jersey State Bar Association v. Northern New Jersey Mortgage Associates, 22 N.J. 184, 196 (1956); New Jersey Pharmaceutical Association v. Furman, 33 N.J. 121, 123-124 (1969); Jaffe, Judicial Control of Administrative Action 542-43 (1965).

The New Jersey cases have historically taken a much more liberal approach on the issue of standing than have the federal cases. See Walker, Inc. v. Stanhope, 23 N.J. 657 (1957); Jaffe, supra at 535-36. However, in the isolated case of New Jersey Bankers Association v. Van Riper, supra, upon which the defendants and the Chancery Division judge placed reliance, this Court denied standing to an association of bankers, citing only Farmers Co-op. Oil Co. v. Socony-Vacuum Oil Co., 133 F.2d 101 (8 Cir. 1942), a case which has been criticized or departed from in several later cases (Smith v. Board of Education of Morrilton Sch. Dist. No. 32, 365 F.2d 770 (8 Cir. 1966); Noerr Motor Frgt., Inc. v. Eastern Railroad Presidents Conf., 273 F.2d 218 (3 Cir. 1959), rev'd on other grounds, 365 U.S. 127, 81 S. Ct. 523, 5 L. Ed. 2d 464 (1961); Cooperative De Seguros Multiples De Puerto Rico v. San Juan, 294 F. Supp. 638 (D.P.R. 1968)) and which has probably been swept away by the recent Supreme Court decisions broadening the federal approach to standing. See Hardin v. Kentucky Utilities Co., 390 U.S. 1, 88 S. Ct. 651, 19 L. Ed. 2d 787 (1968); Flast v. Cohen, 392 U.S. 83, 88 S. Ct. 1942, 20 L. Ed. 2d 947 (1968); Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S. Ct. 827, 25 L. Ed. 2d 184 (1970); Barlow v. Collins, 397 U.S. 159, 90 S. Ct. 832, 25 L. Ed. 2d 192 (1970); Davis, Administrative Law, Ch. 22, p. 702 (1970 Supp); Jaffe, "Standing Again," 84 Harv. L. Rev. 633 (1971); Hennigan, "The Essence of Standing: The Basis of a Constitutional Right to be Heard," 10

Ariz. L. Rev. 438 (1968); Note, "Judicial Review of Agency Action: The Unsettled Law of Standing," 69 Mich. L. Rev. 540 (1971).

In Flast the Supreme Court upheld a federal taxpayer's standing to maintain an action to enjoin expenditures of federal funds under a statute which allegedly conflicted with the establishment and free exercise clauses of the first amendment. 392 U.S. at 85, 88 S. Ct. at 1945, 20 L. Ed. 2d at 953. So far as our own State doctrine is concerned, the standing of a taxpayer to attack illegal disbursements of public funds or other illegal official action has been long and firmly established. See Ferry v. Williams, 41 N.J.L. 332, 337 (Sup. Ct. 1879); Haines v. Burlington County Bridge Commission, 1 N.J. Super. 163, 170-173 (App. Div. 1949); Piscitelli v. Tp. Committee of Tp. of Scotch Plains, 103 N.J. Super. 589, 593 (Law Div. 1968). However in Frothingham v. Mellon, 262 U.S. 447, 43 S. Ct. 597, 67 L. Ed. 1078 (1923), the Supreme Court dismissed, for lack of standing, a federal taxpayer's suit challenging the constitutionality of the statute commonly called the Maternity Act. In Flast the Supreme Court departed from Frothingham's restrictive approach to standing, at least in cases where the ...


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