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Robinson v. City of Ventnor

A-2336-98T1 (N.J. Super. App. Div. 2000) (Unpublished)

DEVELOPMENT—A development agreement with a municipality for a project that was developed over forty years was found to call for compliance with engineering specifications as they changed over time and not just with the standards in effect at the beginning.

A developer purchased three large lots at public sale. One of the conditions of the sale required the buyer, “upon construction of any building on the land, to ‘install all utilities including ..., streets, ... and storm water drains without cost to the city and as directed by the City Engineer.’” The construction of streets was subject to a further requirement that they “be given a tar and crushed stone treatment in accordance with the Standard Specifications of the New Jersey State Highway Department and the specifications of the Federal Housing Administration or the Veterans Administration.” A dispute arose about paving of the streets. The problem with the streets was that over the forty years that development of these properties took place, the paving standards for roadways had changed substantially. The developer argued that it was only responsible for the cost of a “tar and crushed stone treatment, ” irrespective of the fact that the paving standards for the roadways had changed. The Court held for the municipality. In its view, the sales conditions required the developer to pave streets in accordance with prevailing standards even though, at the time of the original agreement, a tar and crushed stone treatment was required. It reached this conclusion based upon the following. First, the developer had the obligation to install all of the improvements “without cost to the city.” The Court found that this meant that the municipality did not intend to incur any costs with respect to the development. Next, the documents and subsequent clarifying resolutions and settlement agreements required the developer to obtain “final approval of the Governing Body or the Planning Board of [the municipality] for all streets, ..., plans and specifications, and to meet all requirements of the Planning Sub-division Ordinances [.]” This meant that the parties knew that the development would take place over a period of time and that construction standards undoubtedly would change. The Court’s analysis was that “[i]f the parties had intended plaintiff’s obligations to install only tar and crushed stone streets, paragraph 9 would not have required plaintiff to submit its ‘plans and specifications’ for streets and other enumerated improvements to the municipal agencies identified in that paragraph.” Subsequent resolutions and a settlement agreement stressed that installations were to be “without cost to the [municipality] and as directed by the City Engineer.” With respect to streets that the municipality ultimately agreed to install, a thirty-five year old settlement agreement made it clear that the municipality would be permitted to assess the costs of installation to the developer and all others benefitted by the improvement. “The assessment was not limited to the cost of a tar and crushed stone street.” As part of the evidence submitted to the lower court, the developer provided letters that it had written twenty-five to thirty years earlier. The developer’s intent was to show how the parties interpreted the contract. Like any contract entered into between private parties, a municipal contract can be modified, even by the conduct of the parties, during the course of its performance. Nonetheless, “[w]here it is claimed that the actions of the parties have modified an otherwise clear contract, the intention to modify must be ‘mutual and clear.’ Unilateral conduct by one of the parties in insufficient to prove the modification.”


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