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Jersey City Education Association v. City of Jersey City

November 04, 1998


Before Judges Pressler, Brochin, and Kleiner.

The opinion of the court was delivered by: The opinion of the court was delivered by Kleiner, J.A.D.

[9]    Argued September 29, 1998

On appeal from the Superior Court of New Jersey, Law Division, Hudson County.

Plaintiffs, Jersey City Education Association, Salvatore Riggi, Mary Revell, Mia Scanga, and Catherine Revel *fn1 (collectively "JCEA"), appeal from an order denying their petition seeking injunctive relief designed to bar defendants City of Jersey City ("City"), Bret Schundler in his official capacity as Mayor, the Council of the City of Jersey City, and the Jersey City Redevelopment Agency ("JCRA"), from using a portion of the $32,250,000 proceeds of a sale of municipal bonds for the construction of a community/educational facility which JCEA contends is solely designed to accommodate a charter school. Plaintiffs also appeal from the order dismissing plaintiffs' verified amended complaint. *fn2 The crux of plaintiffs' first amended complaint is the assertion that the proposed partial use of municipal bond proceeds for defendants' intended purpose violates N.J.S.A. 18A:36A-10. *fn3 In response to plaintiffs' amended complaint, defendants filed a motion to dismiss, R. 4:6-2(e), contending that plaintiffs' complaint was untimely filed. Additionally, addressing the merits of plaintiffs' complaint and in support of its motion to dismiss, defendants attached an appendix containing four certifications and one affidavit. Plaintiffs responded by filing additional material which they deemed pertinent. Judge Arthur D'Italia concluded that plaintiffs' amended complaint was not untimely, but that plaintiffs' application for restraints would be denied and its amended complaint dismissed. Pursuant to plaintiffs' motion, we accelerated plaintiffs' appeal.

Although we disagree with the motion Judge's Conclusion that plaintiffs' complaint was untimely, we nevertheless conclude that Judge D'Italia correctly construed N.J.S.A. 18A:36A-10, thus properly denying plaintiffs' request for injunctive relief and dismissing plaintiffs' amended complaint. Although the Judge did not specifically state that he was considering the motion to dismiss as a motion for summary judgment, we conclude that his decision, as articulated in his well-reasoned findings of fact and Conclusions of law, was predicated on the standard enunciated in Brill v. Guardian Life Ins. Co., 142 N.J. 520 (1995). We affirm. *fn4


In December 1995, the New Jersey Legislature enacted P.L. 1995, c. 426 (N.J.S.A. 18A:36A-1 to -18), the Charter School Program Act of 1995. The Act authorizes the establishment of charter schools as part of the state's program of public education. The Legislature found and declared that establishing charter schools as part of public education can "assist in promoting comprehensive educational reform . . . [and] is in the best interests of the students of this State and it is therefore the public policy of the State to encourage and facilitate the development of charter schools." N.J.S.A. 18A:36A-2.

Pursuant to the New Jersey Local Bond Law, N.J.S.A. 40A:2-1 et seq., the City submitted to the Local Finance Board of Local Government Services in the Department of Community Affairs of the State of New Jersey a proposed bond ordinance in the total amount of $32,500,000 (net $30,165,000), to be used for a variety of municipal purposes, among which was the construction of a community/educational facility by JCRA at an anticipated cost of $9,500,000. The proposed building was to be constructed by JCRA, pursuant to a cooperation agreement between the City and the JCRA, in furtherance of the redevelopment purposes delineated in the New Jersey Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq. After a public hearing, review, and approval by the Deputy Attorney General assigned to the Local Finance Board, the purposes and issuance of the proposed bonds were approved on February 11, 1998.

Immediately thereafter, the City, by Ordinance 98-003, adopted a bond ordinance authorizing the bonds for the purposes identified in the submission to the Local Finance Board. On February 13, 1998, the bond ordinance was duly published as required by N.J.S.A. 40A:2-17 and -19.

N.J.S.A. 40A:2-18 specifically provides: "A bond ordinance shall take effect 20 days after the first publication thereof after final adoption. A bond ordinance which authorizes obligations to fund, refund, renew, extend or retire obligations issued or authorized pursuant to this chapter, or notes or bonds issued or authorized pursuant to any act of which this chapter is a revision shall not be subject to referendum."

After the expiration of this twenty-day period of limitation, the following conclusive presumptions shall be made concerning the adopted ordinance: 1) the accuracy, correctness and sufficiency of any annual or supplemental debt statement filed; 2) any statements of fact contained in the ordinance; 3) determinations in the ordinance as to the purposes for which the obligations are authorized; 4) the due and regular introduction, publication, final passage and adoption of the ordinance; and 5) "the compliance with the provisions of this chapter and every other law of such ordinance and all matters in connection therewith, and the issuance of obligations authorized thereby or pursuant thereto by the local unit." N.J.S.A. 40A:2-49.

Failing to object before the expiration of the twenty-day period of limitation has the following effect: "The local unit and all other persons interested shall forever be estopped from denying that such ordinance or its final adoption or issuance of obligations thereunder do not comply with the provisions of this and every other law, or from questioning in any manner the validity of such ordinance or any obligations issued thereunder in any action or proceeding commenced after 20 days shall have elapsed from publication of such ordinance after final passage." [N.J.S.A. 40A:2-49.]

As part of its motion to dismiss, relying upon N.J.S.A. 40A:2-49, defendants asserted that plaintiffs' complaint was untimely filed. Although defendants orally argued this same point in the Law Division, the motion Judge, relying on Watters v. Mayor of Bayonne, 89 N.J. Eq. 384 (Ch. 1918), rejected defendants' contention. The Judge concluded that plaintiffs' amended complaint challenged the "use" of the funds derived from the issuance of the bonds, rather than the enactment of the bond ordinance, and as such the statutory time constraints were inapplicable.

As noted correctly by defendants, Watters is not binding precedent, yet the motion Judge found Watters persuasive. In Watters, the plaintiffs sought to enjoin the City of Bayonne from purchasing a water works system at an allegedly excessive price. Id. at 385. Bayonne defended on the ground that more than twenty days had elapsed since the publication of the ordinance ...

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