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Paulsboro Refining Company, LLC F/K/A Valero Refining Company - New Jersey v. Township of Greenwich

December 11, 2012


On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-479-10.

Per curiam.


Submitted October 29, 2012

Before Judges Fasciale and Maven.

Plaintiff Paulsboro Refining Company appeals from an August 25, 2011 Law Division order declaring that "foundations for manufacturing, production[,] and process equipment" are not exempt from the Uniform Construction Code (UCC), N.J.S.A. 52:27D-119 to -141, and are therefore subject to municipal permitting and inspections. We hold that the DCA did not exempt foundations from the UCC in general - only the specific type of foundation noted in subsection N.J.S.A. 5:23.9.7(b)13. We remand and direct the judge to make additional findings of fact.

Plaintiff attempted to install a foundation for its process equipment at one of its refineries without obtaining a construction permit.*fn1 As a result, a municipal code official from defendant Township of Greenwich issued a stop-work order for failing to obtain the permit, in violation of N.J.A.C. 5:23-2.14(a), which provides that [i]t shall be unlawful to construct, enlarge, repair, renovate, alter, reconstruct[,] or demolish a structure, or change the use of a building or structure, or portion thereof, or to install or alter any equipment for which provision is made or the installation of which is regulated by this chapter without first filing an application with the construction official, or the appropriate subcode official where the construction involves only one subcode, in writing and obtaining the required permit therefor[e].

In April 2003, plaintiff filed a verified complaint seeking to enjoin defendant from enforcing the stop-work order. On April 15, 2003, the parties entered into a consent order lifting the stop-work order, and plaintiff agreed to "submit an application for a building permit for foundations at the [refinery] facility for other than pipe rack foundations, exempt [from the UCC] under N.J.A.C. 5:23-9.7(b)13." Thereafter, the parties submitted to the New Jersey Department of Community Affairs (DCA) the question of "whether . . . processing equipment foundations, other than pipe rack foundations, as set forth in N.J.A.C. 5:23-9.7(b)13, shall be [exempt from the UCC]."

The parties expected that the DCA would conduct an arbitration proceeding to resolve the dispute. Before the proceeding began, however, defendant's construction official contacted the DCA and obtained two DCA letters addressing the merits of the dispute. Plaintiff objected to the DCA contending that the construction official improperly contacted the DCA unilaterally. Defendant then consented to the matter returning to the court for disposition.

In September 2010, defendant moved for summary judgment. The parties agreed that the judge would resolve the question of whether or not the processing equipment foundation at issue was exempt from the UCC. In May 2011, the judge conducted a two-day plenary liability hearing. Before the hearing began, the judge indicated, with the consent of the parties, that she bifurcated the issue of damages "pending the outcome of [her liability] factual determination." The judge then heard testimony from four witnesses and considered written post-hearing submissions by the parties' counsel. Plaintiff argued primarily that the foundation at issue is exempt from the UCC because it is an integral part of the processing structure and is therefore considered process equipment.

In August 2011, the judge issued an oral decision and concluded that plaintiff was required to obtain permits because the foundation was not exempt from compliance with the UCC. Interpreting N.J.A.C. 5:23.9.7(b)13, the judge acknowledged that foundations for equipment such as pipe racks and hangers that support process piping and storage racks for raw materials and finished products are exempt from the UCC; however, she determined that the Legislature intentionally omitted the term "foundation" from the exemptions other than from subsection (b)13. As a result, the judge concluded that the foundation at issue is subject to municipal permitting and inspections in accordance with the UCC. The judge did not substantively address plaintiff's main factual contention that the foundation is an integral part of the processing structure.*fn2 This appeal followed.

On appeal, plaintiff argues that the judge erred by (1) determining that a foundation for process equipment is subject to the UCC; and (2) considering the UCC's public protection purposes in her interpretation of N.J.A.C. 5:23-9.7(a) and (b). Plaintiff contends further that municipal code enforcement and construction code officials lack the qualifications to inspect plaintiff's foundation for processing equipment.

The parties agree that, pursuant to subsection (a), "[m]anufacturing, production[,] and process equipment is not under the jurisdiction of the [UCC]." They dispute whether the foundation, other than pipe rack foundation, is exempt from the application of the UCC under subsection (b) of the regulation. If the UCC applies, then the foundation at issue is subject to municipal permitting and inspections. We accord no deference to the judge's conclusions on issues of law, Manalapan Realty, L.P., v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995), which we review de novo, Spring Creek Holding Co. v. Shinnihon U.S.A. Co., 399 N.J. Super. 158, 180 (App. Div.), certif. denied, 196 N.J. 85 (2008).

We begin by summarizing the law governing interpretation of the administrative code. "We interpret a[n administrative] regulation in the same manner that we would interpret a statute." US Bank, N.A. v. Hough, 210 N.J. 187, 199 (2012). In determining "legislative intent, we 'look first to the plain language of the statute, seeking further guidance only to the extent that the Legislature's intent cannot be derived from the words that it has chosen.'" Headen v. Jersey City Bd. of Educ., ___ N.J. ___, ___ (2012) (slip op. at 19) (quoting Pizzullo v. N.J. Mfrs. Ins. Co., 196 N.J. 251 (2008)). In so doing, "we take into consideration the entire scheme of which a provision is a part." Id. at 19-20 (internal quotation marks omitted).

"We cannot rearrange the wording of the regulation, if it is otherwise unambiguous, or engage in conjecture that will subvert its plain meaning." Hough, supra, 210 N.J. at 199. Moreover, we look to extrinsic evidence "[o]nly when a fair 'reading of the enactment leads to more than one plausible interpretation.'" Ibid. (quoting Bedford v. Riello, 195 N.J. 210, 222 (2008)). Last, "[a]s a general rule, when the Legislature has carefully employed a term in one place and excluded it in another, it should not be implied where excluded." Twp. of W. Orange v. 769 Assocs., LLC, 198 N.J. 529, 540 (2009) (internal quotation marks omitted); see State v. Scott, ___ N.J. Super. ___, ___ (2012) (slip op. at 8) (stating that "[c]courts read every word in a statute as if it was deliberately chosen and presume that omitted words were excluded purposefully").


With these principles in mind, we turn to N.J.A.C. 5:23-9.7, which provides in pertinent part:

(a) Manufacturing, production[,] and process equipment is not under the jurisdiction of the [UCC]. Manufacturing, production, and process equipment is defined as all equipment employed in a system of operations for the explicit purpose of the production of a product.

(b) Manufacturing, production, and process equipment shall include, but is not limited to, the following:

13. Pipe racks, hangers, and the like that support the process piping and the storage racks for the raw materials and finished products. Building structural systems supporting the racks, hangers, storage loads, and the like are excluded from the definition of process equipment, except that pipe support units that include a foundation and support steel shall be included as process equipment ...

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