Cona v. Twp. of Wash.
Cona v. Twp. of Wash.
Opinion of the Court
*201*1054In these matters, which we considered back-to-back and have consolidated for purposes of writing one opinion, plaintiff landlords rely upon our opinion in Timber Glen Phase III, LLC v. Township of Hamilton,
We rejected the municipality's position in Timber Glen, noting, "the powers to regulate and to license, although related, are discrete" and that the power to regulate did not include the power to require a license and payment of a fee. Id. at 526,
The issue raised in the present appeals is whether fees imposed by defendant municipalities are for revenue generation as prohibited under Timber Glen, or if they are reasonably related to the municipalities' exercise of their regulatory powers as authorized by statute. The plaintiffs' complaints alleged the municipalities violated the New Jersey Civil Rights Act (CRA), N.J.S.A. 10:6-1 to -2, and that the ordinances requiring the payment of license *203fees were ultra vires under Timber Glen, entitling them to damages and a declaratory judgment awarding them injunctive relief. The municipalities responded by filing motions to dismiss under Rule 4:6-2(e). The trial court judges who considered the matters found that the challenged ordinances were distinguishable from the ordinance invalidated in Timber Glen, as the fees were permissible under a municipality's *1055regulatory powers in order to defray costs for inspections or registration of rental units. For the reasons that follow, we affirm.
The challenges raised by each plaintiff are summarized as follows. O'Hara brought her challenges against defendants City of Woodbury and the Borough of Glassboro where she maintained properties for rent. The Woodbury ordinance
The Glassboro ordinance
*204Brody, a landlord who maintains rental properties in defendants Borough of Westville, Borough of National Park and the Township of Deptford, challenged each of those municipality's ordinances. The Deptford ordinance
Westville's and National Park's ordinances also require annual registration and the payment of a fee before licenses will be issued to landlords. Westville's ordinance
Similarly, National Park's ordinance
O'Hara and Brody filed an initial complaint in August 2015, which they amended in April 2016. Judge David W. Morgan granted the municipalities' motions to dismiss on June 28, 2016.
Turning to the challenged ordinances, he observed that the municipalities' "ordinances have very similar framework." He found that the ordinances were different from the one addressed in Timber Glen *1057because in order to get a license under the framework of the challenged ordinances, a landlord had to comply with various regulations that were authorized by statute, not just pay a fee as was the case in Timber Glen. The distinction, he concluded, gave the challenged ordinances "the appearance of ... regulation, as opposed to simply a licensing act." After reviewing in detail the specific contents of the ordinance challenged in Timber Glen, and commenting on what parts related to regulation versus licensing, the judge turned to the subject ordinances, which he also discussed in detail.
During his review, Judge Morgan observed that unlike Timber Glen, Woodbury's ordinance required landlords to pay a fee and *207comply with various regulations before being able to obtain a license. He stated:
[W]hen you read ... [the] ordinances they're ... a very integrated set of ordinances that basically regulate the conduct, the operations of the apartment.
And charge a fee for the license that you get, once you've demonstrated after an inspection that you're in compliance with those regulations.
So it becomes much more of a regulatory-type of adoption, as opposed to what you see in [ Timber Glen.] ...
I'm satisfied that the ordinances that we have, ... are much more in the form and framework of a regulation that [has] as their component the issuance of a document, which indicates that [you have] complied with the regulation.
The judge followed the Court's decision in Nelson Cooney & Son, Inc. v. South Harrison,
Brody and O'Hara filed a motion for reconsideration. In their motion, they argued that contrary to Judge Morgan's findings, Woodbury's ordinance did not require inspections before issuing a license. They also contended that the fees associated with inspections required by other municipalities' ordinances were already charged in connection with the applications for a CO. As Judge Morgan described their position, "plaintiff[s'] argument [was that] landlords are required to pay a higher fee for the combination rental license/[CO] than a non-landlord would have to pay for just the [CO], but with the municipality expending the same amount of work." Finally, relying on the United States Supreme court's opinion in Brown v. Legal Foundation of Washington,
Judge Morgan considered the parties' oral arguments on September 2, 2016, and on September 6, 2016, he entered an order denying plaintiffs' motion, supported by a written statement of reasons. The judge conducted a detailed analysis of Woodbury's ordinance, conceded that on "first blush [it] appear[ed] to be an 'apply and pay' type of ordinance" similar to the one in Timber Glen, but upon closer examination *1058it was clear that a satisfactory inspection was a condition to the issuing of the license. Addressing the municipalities' charging of a premium inspection fee in addition to charging one for issuing a CO, the judge found the argument unpersuasive because plaintiffs did not plead in their complaint that the fee being charged was excessive. Moreover, he concluded that "the licensing ordinances require the municipality to engage ... in work over and above that encompassed by a [CO] review, most notably the review of tenant screening submissions and compliance with standards for occupants of the rented unit." Finally, the judge rejected plaintiffs' argument "that requiring a fee for a license required under an ultra vires ordinance creates a constitutional taking supporting a civil rights claim" under Brown because unlike "when the government appropriates money from a specifically identified fund of money[,] ... a law imposing the obligation to pay a generalized monetary liability such as a tax or fee ... is not a taking."
We turn next to plaintiff Christopher C. Cona's challenge to defendant Township of Washington's ordinance
On November 25, 2015, Cona filed a complaint challenging Washington Township's ordinance. Judge Morgan granted Washington's motion to dismiss on July 8, 2016 after considering oral argument. The judge found the "ordinance ... doesn't have a combination of what would appear licensing and regulatory-type requirements" because "it integrates regulation with the issuance of the registration and licensing, which[is] different[from] the[ ] ordinance[challenged in Timber Glen ], which simply was, pay your money, get your license ... and that was not permitted, authorized, enabled by the licensing act." The judge explained that the ordinance in Timber Glen required "a whole separate fee as it relates to the inspections and ... there is no tie-in between the two; there's no, you don't get your license if your inspection isn't so good." He concluded the ordinances had "regulatory qualities to them" that addressed "tenant screening" and registration, inspections, unit occupation limits, payment of taxes and other municipal obligations.
Judge Morgan also addressed Cona's CRA claim. He concluded that "the money *1059that's taken can't be considered a takings under *210the Constitution." Addressing Cona's contention that a fee being charged for a CO and a landlord's license was improper, Judge Morgan stated: "[T]he fact that there[are] two requirements ... does not necessarily negate the ability" to require both fees to address inspections and registrations in satisfaction of "regulation as opposed to pure licensing."
Finally, we review plaintiff Sharon Downs challenge to defendant the Borough of Paulsboro's March 1, 2016 ordinance
On April 15, 2016, Downs filed her complaint challenging the 2016 ordinance validity.
The judge supplemented her reasons in the order she entered on July 28, 2016, in which she stated:
Under Bernardsville Quarry v. Bernardsville,129 N.J. 221 ,608 A.2d 1377 (1992) a municipality has [a right] to charge fees which are incidental to its police power to regulate pursuant to [N.J.S.A.] 40:48-2. [ Timber Glen ] does not affect the municipality's ability to regulate for the health [and] safety of its residents ( [f]ootnote [four] is duly noted). [The] municipality remains empowered to conduct inspections [and] register units for [the general] welfare. Timber Glen is distinguishable from ordinances at issue in these matters.
*212On appeal, each of the plaintiffs essentially argues the same points. Brody and O'Hara argue it was error for Judge Morgan to deny their cross-motions for summary judgment and dismiss their complaint because contrary to the judge's finding, the ordinances they challenged were similar to the one in Timber Glen and therefore ultra vires. According to plaintiffs, "[u]sing the guise of licensing tenancies, defendants try to illegally levy a tax for revenue purposes without legislative authority ...." They contend that the judges' reliance on case law the judges found controlling or persuasive was inapposite and that they made out viable claims under the CRA and were entitled to a declaratory judgment in their favor. According to plaintiffs, the municipalities did not establish they were entitled to dismissal of plaintiffs' complaint under Rule 4:6-2(e). They assert their "complaints were amply pled[and t]he trial court permitted no discovery to test the view that the ordinance fees were reasonable in comparison to the expenses defendants incurred and services defendants provided ...." Brody and O'Hara also contend it was error for Judge Morgan to deny their motions for reconsideration because "Woodbury also charges a separate fee for a [CO] inspection ...."
Cona also argues that it was error to dismiss his complaint because "comparing the [Washington] ordinance and the [ Timber Glen ] ordinance[,] which the Appellate Division ruled was ultra vires[,] leads to the conclusion that the [Washington] ordinance is likewise ultra vires[.]" He contends that the fees imposed by the Washington ordinance are unreasonable in light of Washington's CO requirement, which also requires a fee for inspection. He also argues "the order dismissing the complaint is deficient" because it "fails to provide a place for the [c]ourt to note that the motion was opposed ...." Last, in his reply brief, Cona asserts for the first time that Washington's ordinance's registration fee is unreasonable because the information collected through the registration is duplicative of what landlords already provide through the New Jersey Landlord Registration Statute, N.J.S.A. 46:8-28.
*213Downs argues that it was error for the court to dismiss her complaints because Paulsboro's 1997 and 2016 ordinances, "like the [ Timber Glen ] ordinance ... [are] ultra vires[.]" Downs also contends "the trial court erred by holding that the licensing fees are merely lawful registration and inspection fees[.]" She asserts that "[t]his is a 'takings' and/or confiscation [CRA] case" and that "the complaint pleads viable CRA takings and/or confiscation violations[.]" Downs also argues that the ordinances found valid in *1061State v. Mill Village Apartments, No. A-0522-14,
We review de novo a trial court's order dismissing a complaint under Rule 4:6-2(e), applying the same standard as the trial court. See Stop & Shop Supermarket Co. v. Cty. of Bergen,
"A pleading should be dismissed if it states no basis for relief and discovery would not provide one." Rezem Family Assocs., LP v. Borough of Millstone,
*215see also *1062Prime Accounting Dep't v. Twp. of Carney's Point,
The result of these appeals turn on whether the challenged ordinances are valid. "A municipal ordinance under review by a court enjoys a presumption of validity and reasonableness." State v. Clarksburg Inn,
Applying these guiding principles, we conclude from our de novo review that all of the plaintiffs' complaints were properly dismissed under Rule 4:6-2(e), as none of the challenged ordinances were ultra vires in that the fees charged under them were reasonably related to the municipalities' exercise of their obligation to promote the safety and welfare of their residents. We therefore affirm each order under appeal substantially for the reasons expressed by Judge Morgan and Judge McMaster in their cogent oral and written statements of reasons. We add only the following comments.
As we observed in Timber Glen, "licensing is a distinct function authorized by [N.J.S.A.] 40:52-1" and, as we held, a municipality "may not mandate by ordinance licensure of residential rentals for 175 days or more, accompanied by an annual licensing fee[,]"
The prohibition against requiring licenses did not abrogate a municipality's power to regulate rental property within its jurisdiction, including requiring that they be inspected before being occupied by a new tenant or its ability to "charge a fee to fund the costs of the inspections and the issuance of the certificates." N.J.S.A. 40:48-2.12m ; see also Dome Realty, Inc.,
Landlords are also subject to ordinances that require that they obtain COs under certain circumstances, which might include the payment of a separate fee.
Similarly, the fact that an ordinance calls for additional information to be provided for registration than what the State mandates, see N.J.S.A. 46:8-28, and charges a reasonable, associated fee does not deem the ordinance ultra vires.
Turning to the remaining argument that plaintiffs should have been allowed to proceed to discovery in order to determine the reasonableness of the fees charged by the ordinances, we conclude that it is without merit and does not warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E). Suffice it to say, that plaintiffs have made no showing that the fees were unreasonable and they are "not entitled to turn the discovery process into a fishing expedition."
*218Ellis v. Hilton United Methodist Church,
In light of our determination that plaintiffs' respective complaints were properly dismissed, we need not address Brody and O'Hara's contention that the court erred by denying their cross-motion for summary judgment or their motion for reconsideration.
We will acknowledge, however, that a municipality calling the fees being properly charged "license fees" flies in the face of Timber Glen and causes considerable confusion. In order to correct that problem in these cases and hopefully prevent similar claims in the future, we remand these matters to Judges Morgan and McMaster for *1064entry of an order directing that the affected municipalities strike the reference to their fees as being license fees and changing the designation of any requirement for registration or inspection from being part of a licensing requirement. See United Prop. Owners Ass'n of Belmar v. Borough of Belmar,
Affirmed.
Plaintiffs Kathleen O'Hara and William R. Brody also appeal from the Law Division's orders denying their motions for partial summary judgment and reconsideration of the dismissal of their complaint.
The ordinance invalidated in Timber Glen, provided in pertinent part: "[N]o person shall occupy any Residential Rental Unit nor shall the owner permit the occupancy of any[ ] residential rental unit within the Township of Hamilton if said unit has not been Licensed by the Bureau of Fire Prevention on forms which shall be provided for that purpose."
Woodbury, N.J., Landlord/Tenant Licensing ch. 114, art. I, §§ 114-1 to -20 (2000).
Glassboro, N.J., Rental Housing ch. 379, §§ 379-1 to -10 (2004).
Deptford, N.J., Ordinance O.16.12 (Oct. 16, 2012).
Westville, N.J., Rental Property ch. 272, art. I, §§ 272-1 to -27 (2006).
National Park, N.J., Code of National Park Rental Units ch. 97, art. I, §§ 1 to 19 (2007).
Plaintiffs filed cross-motions for partial summary judgment as to liability that the judge denied.
N.J.S.A. 40:48-2.12c provides:
Any ordinance adopted pursuant to this act may provide for the registration of the owners and management of every building and structure in the municipality which is occupied by [two] or more families as tenants of the owner or lessor. Such registration shall be with the clerk of the municipality upon forms prescribed by and furnished by the municipality. Every such registration form shall include the name and address of the owner, the name and address of the lessor if other than the owner, and the name and address of an agent in charge of the premises residing in the municipality.
The statute provides:
The governing body of a municipality may adopt ordinances regulating the maintenance and condition of any unit of dwelling space, upon the termination of occupancy, in any residential rental property for the purpose of the safety, healthfulness, and upkeep of the structure and the adherence to such other standards of maintenance and condition as are required in the interest of public safety, health and welfare. Such ordinances shall require the owner of any residential rental property, prior to rental or lease involving a new occupancy of any unit of dwelling space in such property, to obtain a certificate of inspection or occupancy for the unit of dwelling space. Such certificate of inspection or occupancy shall be issued by the municipality upon the inspection of the unit of dwelling space by a municipal inspector and his findings that such unit meets the standards provided by law. The municipality may charge a fee to fund the costs of the inspections and the issuance of the certificates....
[N.J.S.A. 40:48-2.12m.]
In the remainder of his oral decision, the judge reviewed each of the other municipalities' ordinates in detail and explained how they were the same or similar to Woodbury's as compared to the one in Timber Glen.
Washington, N.J., Rental Property and Landlord Registration ch. 185 §§ 185-1 to -21 (2005).
Paulsboro, N.J., Rental Property ch. 59B, art. I, §§ 59B-1 to -19 (2016).
In 1997, Paulsboro adopted an ordinance, see Paulsboro, N.J., Rental Property ch. 59B, art. I, §§ 59B-1 to -20 (1997), that required the registration, inspection and licensing of residential rental units. That ordinance, was adopted "to [e]nsure that residential rental units are properly maintained, to require landlords to comply with the Property Maintenance Code and to protect the lives and property of the Borough residents." To achieve this purpose, "rental unit[s were required to be] registered, inspected and licensed in accordance with [the o]rdinance." It provided: "Upon the filing of a completed registration form, and payment of the prescribed fee, and a satisfactory inspection[,] the owner shall be entitled to the issuance of a license ...." There was no separate fee required for the issuance of the license. The ordinance required periodic inspections stating "[e]ach rental unit shall be inspected at least once every [twelve-month] period[,]" and there was no fee required to be paid for the inspections. The 2016 ordinance makes no mention of a licensing requirement.
After we issued our opinion in Timber Glen, Downs initially filed an earlier action challenging Paulsboro's 1997 ordinance. In response, on March 1, 2016, Paulsboro adopted its current ordinance, which removes all licensing requirements. This prompted Downs to file a separate action challenging the 2016 ordinance as also being invalid pursuant to Timber Glen. Judge McMaster dismissed both actions on July 28, 2016, and Downs filed separate appeals. On September 28, 2016, we granted Downs' motion to consolidate the appeals from the dismissal of both of her complaints.
In Mill Village, we reviewed the validity of an ordinance that required rental units to be annually registered at a cost of $100 and to be inspected annually and with each change in occupancy. slip op. at 4-5. We rejected arguments that "the registration requirement was a de facto licensing requirement and therefore invalid[,]" id. at 9, and concluded "[t]he fees ... were imposed for functions related to the City's exercise of regulatory power that was authorized by statute." Id. at 10.
In Lake Valley, we reviewed an ordinance that required the registration of all rental units and "at least one inspection every three years or upon change of occupancy[,]"
In Dome Realty, the New Jersey Supreme Court upheld a municipal ordinance requiring landlords to have their rental units inspected and to obtain a CO immediately prior to allowing a new tenant to take possession as a valid exercise of authority pursuant to N.J.S.A. 40:48-2.12a and N.J.S.A. 40:48-2.
"[T]he conventional occasions for requiring" a CO includes:
(1) the completion of a building -- the purpose being to confirm that it has been constructed in accordance with the building code, the building permit and any other applicable municipal regulation; (2) the alteration of a building -- the purpose being the same as in (1) above; (3) the use of vacant and hitherto unused land -- the purpose being to insure that the intended use conforms to the zoning ordinance and any other pertinent regulation; (4) any change of use -- whether the land be improved or not -- the purpose being as last stated.
... [T]his list [is not] exclusive: "[t]here may be, or there may later develop, other occasions when such a certificate will serve a useful and valid end in land use control."
[Dome Realty, Inc.,83 N.J. at 231 ,416 A.2d 334 (fourth alteration in original) (citations omitted) (approving the requirement for a CO upon a tenant vacating an apartment).]
We observe that Cona raised this argument for the first time in his reply brief. Although "[r]aising an issue for the first time in a reply brief is improper[,]" and may lead to our decision not to consider it, Borough of Berlin v. Remington & Vernick, Eng'rs,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.