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East Brunswick Sewerage Authority v. East Mill Associates

January 02, 2004

EAST BRUNSWICK SEWERAGE AUTHORITY, A PUBLIC BODY POLITIC AND CORPORATION OF THE TOWNSHIP OF EAST BRUNSWICK, PLAINTIFFS-APPELLANTS,
v.
EAST MILL ASSOCIATES, INC., A NEW JERSEY LIMITED PARTNERSHIP, JACK WHITMAN, INDIVIDUALLY AND AS GENERAL PARTNER, DEFENDANTS-RESPONDENTS.



Before Judges King, Lintner and Lisa. On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County, C-241-0.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: December 3, 2003

This case involves the allocation of costs associated with the upgrade of a sewer pumping station. The defendant, East Mills Associates (EMA), was developing residential units within the East Brunswick Sewerage Authority's (EBSA) service area. The sewer pumping system required an upgrade to accommodate the new units being built by the defendants.

In the developer's agreement, EMA agreed to pay 55% of the costs of the upgrade. Due to events unforeseen by both parties at the time of the agreement, the costs of the project increased substantially. EBSA sought reimbursement in accordance with the agreement. The trial judge held that EMA should not have to pay for the increased costs associated with the unforeseen events.

We conclude that the judge erred. In effect, he rewrote the contract of the parties. We reverse and direct entry of judgment for the full claim of EBSA, $340,022 plus interest.

I.

EBSA and EMA entered into a developer's agreement on December 28, 1993 to upgrade the Ryder's Lane Pumping Station. EMA was building thirty-seven residential units located within EBSA's service area. Under the terms of the agreement, EMA was permitted to connect a maximum of eighteen units to the existing sewerage system. EMA could connect more units to the system with an EBSA engineer's approval. EBSA needed to expand and upgrade the existing pumping station to accommodate the additional units.

Pursuant to the agreement, EMA"agreed to pay for fifty-five percent (55%) of the total cost." The agreement stated in paragraph one:

Developer [EMA] shall pay to the EBSA... fifty-five percent (55%) of the costs and expenses incurred by the EBSA to upgrade the EBSA Ryders Lane Pumping Station which costs and expenses shall be inclusive of engineering, approval, design and construction costs and inclusive of approval costs as set forth in paragraph three of this Agreement. The EBSA shall be responsible for the difference of the Developer's contribution and total costs and expenses relating to the upgrade of the Ryder's Lane Pumping Station.

Paragraph three addressed the costs related to approvals or permits necessary for the pumping station improvements.

To the extent any costs are incurred in seeking approvals, permits and the like from any governmental entity having jurisdiction which are required for upgrading the EBSA Ryders Lane Pumping Station, such costs shall be borne by the EBSA and the Developer in the same percentage contribution as provided for in Paragraph 1 of this Agreement.

The schedule of payments mandated that EMA pay 55% of the engineering and design costs at the time of the bid award. Also, within ten days of the contractor's request, EMA had to pay 55% of the engineering and design costs incurred since the prior payment in addition to 55% of the amount set forth in the contractor's request.

In 1993 the estimated cost to the defendant was $150,000 to $200,000. Although the construction was anticipated to begin in 1998, it did not actually begin until 2001. The reasons for the delay were threefold: (1) alterations because of MiddleseX County's road-widening project on Ryders Lane; (2) a ...


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