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Kip's Ridge Condominium Association, Inc. v. Township of Montclair


July 15, 2009


On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-10184-05.

Per curiam.


Argued March 18, 2009

Before Judges Rodríguez and Ashrafi.

Kip's Ridge Condominium Association, Inc. (Association), a sixteen-unit residential condominium development, with eleven units in Montclair and five units in Verona, appeals from the May 10, 2008 judgment of the Law Division, following a bench trial, which denied in part the relief it sought against the Township of Montclair. We affirm.

The facts are largely uncontested. The dispute is centered on curb boxes located in each unit in the Association. A "curb box" is the housing for an underground shut-off valve linking the main water line to the service lines, which, in turn, are linked to each dwelling. Generally, curb boxes are located on a public right-of-way or as close to it as possible. Under the traditional arrangement, the municipality is responsible for the lines from the water main to the box and the property owner is responsible from the curb box to the dwelling. However, for some undetermined reason, the Association's developer placed some curb boxes at a distance from the right-of-way and well within the property of each unit owner.

Seven years after the curb boxes were installed, upon discovering an apparent break in the main water line, the Association and Montclair disputed the responsibility for repairing and maintaining the water lines from the public right-of-way to the curb box. Eventually, Montclair agreed to undertake responsibility for the water mains, the sewer main, and the fire hydrants located on the Association's property. In the course of negotiating this agreement, neither party discussed the water service lines. The agreement was formalized in a Bill of Sale and Grant of Easement.

In the Bill of Sale, dated September 19, 1996, Montclair undertook responsibility for:

The twelve (12") inch water main line and hose connections along with the sanitary sewer main all located within the Kip's Ridge Condominium property . . . . . . . [Montclair] warrants it shall maintain the above-described sanitary sewer main the water main, and hose connections.

On the same date, the Association granted Montclair an easement:

[T]o install and/or operate, expand, rebuild, relocate, locate, remove, inspect, test, replace, reconstruct, repair and maintain sanitary sewerage facilities, . . . but not including laterals or stubs running from [Montclair]'s 8 inch PVC sewer main to any buildings located on Owner's lands and also including the main water line and hose connections and other necessary appurtenances . . . .

The Easement did not address the laterals or spurs from the water main, only from the sewer main.

The Association sued Montclair, seeking declaratory relief ordering Montclair to maintain the water lines, seeking damages for incomplete repairs and seeking compensation for repairs undertaken by the Association. Montclair answered and a bench trial followed.

At trial, in addition to the Bill of Sale and Grant of Easement, the judge considered Montclair Municipal Ordinance § 341-5(F) (ordinance), which provides: "The consumer is responsible for the service from the shutoff valve at the street to the structure, except for the meter." Montclair adopted a similar resolution incorporating "such sanitary and waterlines and service . . . into its overall municipal delivery system of such utilities."

At trial, Michael Rohal, Montclair's Director of Public Works and former town engineer, testified that this resolution would have used the plural "services" instead of the singular "service" had Montclair intended to assume responsibility for the residential service lines. The judge agreed with this interpretation in his holding.

Rohal additionally testified that, generally, Montclair accepted responsibility for maintenance of the main line up to the midpoint of the curb box. Gary Obszarny, the Water Superintendent for Montclair, estimated that less than five percent of the curb boxes in Montclair were set back from the curb. Ordinarily, if a water line is not properly installed, Montclair would refuse to turn it on. Obszarny had been unable to locate inspection records for the Association development.

The judge dismissed the requests for declaratory judgment and damages but granted other relief which has not been challenged on appeal. The judge memorialized this decision in a written order dated May 12, 2008.

The judge found "the Bill of Sale is the only document governing Montclair's maintenance obligations" but also noted that "all four of the documents that we've made reference to have to be looked at very carefully and looked at together." These "four documents" are the Bill of Sale, the Easement, the Ordinance and the resolution. The judge noted that, at the time of drafting and as reflected in letters relating to the Bill of Sale, the parties never discussed or apparently relied on the Ordinance, making it inappropriate to rely on it after the fact to establish Montclair's rights and duties.

The judge found all the parties had apparently assumed the curb boxes would be in the normal location, as they are in ninety-five percent of Montclair, and that the agreement plainly indicated Montclair would only be assuming responsibility for the main line, not the service lines. The judge also noted that both parties were the innocent victims of an irresponsible developer who made several mistakes regarding the water lines.

On appeal, the Association contends that "Montclair Provides by Ordinance that All Residents' Responsibility for Water Service Lines Terminates at the Curb Box."

This argument focuses on the Ordinance. The Association urges this Ordinance be read to require Montclair to undertake maintenance of pipelines running between the main line and the curb box, regardless of where the curb box is located.

Montclair argues this reading of the Ordinance would negate the specific intent of the parties as expressed in the Bill of Sale. Moreover, this would set a precedent allowing homeowners to relocate their curb boxes so as to force Montclair to provide maintenance for service lines as well as the main water line.

Generally, courts will defer to an agency's interpretation of the laws it enforces, so long as that interpretation is not unreasonable. Metromedia, Inc. v. Dir., Div. of Taxation, 97 N.J. 313, 327 (1984).

The record suggests Montclair has consistently interpreted the Ordinance, and its general policy, as requiring it to maintain water lines only to the extent they are located on public lands. Montclair has refrained from performing work on water lines located on private property out of the concern it might incur additional expenses or liability for restoring the property to its prior condition. In the past, Montclair has relocated improperly-situated curb boxes, although this may have been done in the course of other repairs to the water lines.

Thus, Montclair has set its service limits at the division between public and private land, not at the location of the curb box. This interpretation is not unreasonable.

The desire to avoid additional expense and liability is a valid concern when delineating the scope of Montclair's maintenance obligations. This is particularly true where Montclair has no control over the installations on that private property such as flower beds, fences, trees, and electric and other utility lines. The Ordinance does not require that Montclair maintain its service lines up to the curb box without regard for the curb box's location.

The Association next contends that the "Bill of Sale and Grant of Easement, Properly Construed, Do Not Support the Alteration of the Otherwise Extant Relationship Between the Homeowner and Montclair with Respect to Water Service Lines."

The Association's argument is that, although the service lines were not contemplated at the time of drafting, and the Bill of Sale only mentions the water main, when read in connection with the Easement and Ordinance, the Bill of Sale requires Montclair to maintain all lines of service between the water main and the curb box.

Another way of articulating the the Association's argument is to say the "water main" extends to the point of the shutoff valve, wherever that may be located. It is only on the other side of this valve the homeowner could conceivably begin to assume responsibility for maintenance and repairs to its water lines.

Montclair argues the Bill of Sale only modified the 1988 developer's agreement, under which the Association bore the exclusive burden of maintaining both the main line and service lines. The argument runs that, because the Bill of Sale only transferred responsibility for maintaining the main water line, the service lines remained in the hands of the Association. Montclair further emphasizes the judge's holding that the Easement only granted Montclair rights of access; it did not impose additional obligations on Montclair not already found in the Bill of Sale. Montclair contends that, because the terms of the Bill of Sale are clear and unambiguous, there is no authority to rewrite the agreement.

The role of a court in interpreting a contract is to give effect to the intent of the parties. Krosnowski v. Krosnowski, 22 N.J. 376, 387 (1956). The court must read the terms of the contract in the context of the circumstances at the time of drafting and afford the terms a rational meaning in keeping with the intent of the entire instrument. Id. at 387-88. A contract should not be construed in a way which renders one of its terms meaningless. Ibid.

The Bill of Sale is silent on the issue of service lines and the Easement is, at best, ambiguous. The failure to exclude "laterals and stubs" from the main line when they were expressly mentioned with regard to the sewer line may be read to indicate Montclair accepted responsibility for these lines. However, the parties never appeared to contemplate this issue at the time of drafting, suggesting the absence of such term was unintentional.

The Ordinance also fails to support the Association's position. The fact that Montclair has consistently refused to service pipes located on private property is supported by testimony to the effect that, although the issue of service lines was not discussed at the time of drafting, Montclair never would have accepted a contract obligating it to maintain service lines located on private property.

Although the Association further urges that the term "necessary appurtenances" in the Bill of Sale and Easement must refer to the service lines or nothing at all, the record is bereft of evidence as to any mutually-agreed-upon definition. "Necessary appurtenances" may easily include the "corporation" valve, the shutoff valve, fire hydrants, or any number of other related items discussed at trial. Reading the Bill of Sale to limit Montclair's obligation to the public/private property line does not necessarily render the term "necessary appurtenances" completely meaningless.

In light of the absence of express terms in the Bill of Sale, the common practice in Montclair and in New Jersey of servicing only those pipes located on public land, and the failure of the parties to discuss service lines at the time of drafting, the terms of the Bill of Sale and Grant of Easement do not support the contention that the parties intended for Montclair to assume responsibility for service lines located on private property.

Finally, the Association contends that "Even if Montclair had Intended to Delimit Its Responsibility Per Municipal Ordinance When it Assumed Responsibility for [the Association's] Water Main, Its Doing so Would be in Contravention of Public Policy and Should Not be Permitted."

The essence of the Association's argument is that public policy does not permit a municipality to contract away its obligation to provide statutorily-required services, particularly where the majority of the community receives those services. The Association argues Montclair provides water service and maintains water lines throughout the municipality, and that it cannot now use the developer's agreement to deny its obligation to provide these services to the Association. The Association contends these "services" include maintenance of water lines up to the curb box.

The flaw in the Association's argument is that there is no evidence of an inconsistency in Montclair's treatment of the Association when compared to the other communities within Montclair. Montclair has presented evidence of a consistent service policy which it seeks to apply to the Association: maintaining water lines up to the public/private property line, whereupon homeowners are responsible for any maintenance on their own land. This normally coincides with the curb box but where it does not, Montclair's obligation terminates at the private property line.



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