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Jersey City Municipal Utilities Authority v. Joseph


November 2, 2009


On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-1852-08.

Per curiam.


Argued September 24, 2009

Before Judges Fuentes and Simonelli.

Defendants Sandra Joseph and David Stott appeal from a judgment entered by the Law Division in favor of plaintiff, the Jersey City Municipal Utilities Authority (JCMUA or Authority), a public body organized under the Municipal and County Utilities Authorities Law (MCUAL), N.J.S.A. 40:14B-1 to -78, to provide the residents of Jersey City with various services, including water and sewage. The court found defendants liable for fees incurred for water service provided to defendants' commercial property. The court also awarded plaintiff counsel fees in connection with the prosecution of this case pursuant to N.J.S.A. 40:14B-46.

Defendants now appeal, arguing that the court erred: (1) in construing the MCUAL to apply to their property; (2) in not finding that plaintiff's actions violated the Consumer Fraud Act; (3) in awarding plaintiff $21,928.12 in counsel fees; and (4) in calculating the simple interest accrued on the outstanding balance. We reject these arguments and affirm.

We summarize the following facts from the record developed before the trial court.


Commencing in 1998, the JCMUA began providing fire suppression services in the form of standby lines that supply water to properties in case of a fire. The Authority also established a uniform rate structure for service charges, including service for fire protection systems.

At all times relevant to this case, defendants owned a multifamily mixed-use building, consisting of eight apartments and one commercial unit located on Grove Street in Jersey City. In January 1999, defendants sought municipal approval to renovate the Grove Street property. The formal renovations plans included "a fire sprinkler system and a four[-]inch water main, with a branch for a two[-]inch domestic water supply with a meter." The technical drawings were prepared by an architect and ultimately approved by the City of Jersey City. The plans specifically provided for the installation of a separate meter for the fire-line service.

On August 31, 1999, defendants paid the JCMUA a tap fee for a four-inch water main connection and a two-inch water main branch. Also on that date defendants' plumber, Balacco Plumbing, obtained municipal authorization to connect into the JCMUA water system to provide water service to the property. Construction of the fire sprinkler system and water supply line commenced in September 1999. Although there were two connections, a two-inch line to service the building's regular water needs and a four-inch line to service the fire suppression system, Balacco testified that he did not install separate meters for each line.

By October 1999, defendant's property was fully integrated into the JCMUA system, and defendants began to receive bills on a regular basis. The City issued a final Certificate of Occupancy in January 2000, acknowledging the property as a mixuse building consisting of eight residential apartments and one commercial unit.

In February 2004, the JCMUA retained Gustella Associates, Inc., to determine the cost of providing standby fire-line services. Pursuant to recommendations made by Gustella in its formal report, JCMUA increased the monthly rate for a four-inch fire-line from $105 to $114.14. The increase took effect in mid-2004. It is important to emphasize that the increase was based on the diameter of the service line pipe, not on whether the property was residential or commercial.

JCMUA contracted with United Water to oversee billing, collection, and metering. Under this system, fire-line services are billed on a monthly basis; customers are responsible for obtaining separate meters to gauge the consumption of regular water services and distinguish it from the service provided to fire-lines. After the meters are installed, customers must arrange for a final inspection that is performed by United Water. Billing commences thereafter.

JCMUA first discovered that defendants had a separate unmetered fire-line in October 2004. Thus, although defendants installed the fire-line in October 1999, JCMUA had not billed defendants for this service for the past five years. Defendants received their first bill in February 2005, in the amount of $8,174.23. On March 17, 2005, JCMUA sent a revised bill in the amount of $7,014.54. This suit ensued when defendants did not pay.

The Authority first filed a collection action in the Special Civil Part. The matter was subsequently transferred to the Law Division when defendants filed a third-party complaint against the City of Jersey City and sought declaratory relief in the form of a judicial determination that the MCUAL was unconstitutional. The claims against the City were dismissed by way of summary judgment. Defendants have not appealed this part of the trial court's ruling.

The question of liability was resolved by the trial court in favor of the JCMUA in the context of the Authority's summary judgment motion. After considering the questions raised and the arguments of counsel, Judge Mary Costello framed the issue thusly: "whether a municipal authority can collect a fee for a fire protection system based on the authority granted to [it] in [N.J.S.A.] 40:14B-21?" After reviewing the relevant statute, Judge Costello answered the question in the affirmative. We agree.


Because the trial court addressed the question of liability in the context of deciding the Authority's motion for summary judgment, we will first articulate the relevant standard of review. A motion for summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). A reviewing court must determine whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party. . . . If there exists a single, unavoidable resolution of the alleged disputed issue of fact, that issue should be considered insufficient to constitute a "genuine" issue of material fact for purposes of Rule 4:46-2. [Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).]

On appeal from a summary judgment decision, we use the same standards employed by the trial court to conduct our own de novo review. Mango v. Pierce-Coombs, 370 N.J. Super. 239, 249 (App. Div. 2004). On matters dealing exclusively with a legal question, our review is de novo. Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995).

Here, there are no disputed facts bearing on the question of liability. Both parties agree that this is purely a legal issue. We thus turn to the relevant legal authority.

In adopting the MCUAL, the Legislature declared that it is the public policy of this State to foster and promote by all reasonable means the provision and distribution of an adequate supply of water for the public and private uses of counties and municipalities and their inhabitants, the collection, disposal and recycling of solid waste, including sewage sludge, in an environmentally sound manner, the relief of lands and waters in or bordering the State from pollution, from domestic, industrial and other sources, including pollution derived from chemical and hazardous wastes, and thus the reduction and ultimate abatement of the menace to the public health resulting from such pollution, and the generation of hydroelectric power. It is the purpose and object of this act to further and implement such policy by . . . .

Authorizing service charges to occupants or owners of property for direct or indirect connection with and the use, products or services of such works, and providing for the establishment, collection and enforcement of such charges. [N.J.S.A. 40:14B-2(2).]

Toward that end, N.J.S.A. 40:14B-21 authorizes the JCMUA to "collect rents, rates fees, or other charges" for "direct or indirect connection" to that entity's water system. Effective January 14, 2004, the Legislature amended the statute to provide that: "No municipal authority may impose standby fees or charges for any fire protection system to a residential customer served by a water service line of two inches or less in diameter." Ibid. A similar amendment was made to N.J.S.A. 40A:31-10(b).

Defendants argue that JCMUA is not permitted to charge fees for a fire-protection system that is serviced by a two-inch line. This argument lacks evidential support. Although defendants' property has a two-inch connection to service regular water usage, as Judge Costello noted, defendants' fire protection system is serviced by a four-inch line. Thus, JCMUA's authority to charge fees is not predicated on how the property is characterized (residential, commercial, or mixed use); the determining factor here is that the water service provided to the fire-line is not through a two-inch line.*fn1

We also reject defendants' argument that because the property only has one connection, JCMUA would be double billing if it is permitted to collect for fire suppression service. As the trial court found, defendants have "two separate systems," one for regular water service and one dedicated to the fire suppression. N.J.S.A. 40:14B-21 permits the JCMUA to charge "any real property which directly or indirectly is or has been connected with the water system or to which directly or indirectly has been supplied or furnished such use, products or services of the water system or water or water supply services. . ." (emphasis added).


On the question of damages, we incorporate by reference Judge Costello's findings as expressed in her oral decision delivered from the bench on August 14, 2008. We defer to those findings because they are well-supported by the competent evidence presented to the trial court in the course of a two-day bench trial. Brunson v. Affinity Fed. Credit Union, 199 N.J. 381, 397 (2009).

On the question of counsel fees, as the prevailing party, JCMUA is entitled to recover counsel fees and costs incurred in the prosecution of this action. N.J.S.A. 40:14B-46. In her September 4, 2006 memorandum of opinion, Judge Costello correctly applied the relevant standard to determine the amount of fees JCMUA is entitled to receive. In this context, she also correctly rejected defendants' untimely and procedurally baseless assertion of the Consumer Fraud Act.

Defendants' remaining arguments on appeal lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).


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