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Van Harken v. The Borough of Bloomingdale

2005 WL 2548255 (N.J. Super. App. Div. 2005) (Unpublished)

MUNICIPALITIES; SEWERAGE CHARGES—Courts will not disturb utility rates imposed by municipalities unless the rates are found to be patently unreasonable.

Two men were the owners and managing partners of a four-building residential complex. The complex received municipal sanitary sewer service. The municipality owned, operated, and maintained a public sanitary collection system and from time to time, the municipality enacted ordinances to regulate the system. One such ordinance provided the method by which property owners were required to pay for the operation and maintenance of the sewer system. It imposed an ad valorem tax and a sewer user charge on property owners according to a classification system. The classification system designated owners of single family properties in one class, and owners of multi-family units in another class. The municipality adopted a new ordinance which gave the owners of single family properties a fifteen percent credit on their user charges. The ordinance did not give owners of multi-family units a similar credit. Shortly after the ordinance was enacted, there was a water main break and a fire hydrant leak resulting in the owners of the complex being overcharged for water. This resulted in a corresponding increase in its sewer bill. The owners requested an adjustment from the municipality for the excess charges and the municipality refused to grant the request. The owners then sued the municipality asserting that the classification system used to access sewer charges was unfair and unreasonable because it provided owners of single family units with a credit that it did not provide to owners of multi-family units. They further requested reimbursement for the amount of the overcharges. The lower court ruled in favor of the municipality and the owners appealed. On appeal, the owners argued that the lower court erred when it didn’t find that the methodology used by the municipality in calculating sewer charges was unreasonable. They further asserted that the court erred in not holding that they were entitled to reimbursement for overcharges caused by the water main break and the fire hydrant leak.

The Appellate Division affirmed the lower court’s ruling. In reaching its determination, the Court emphasized that utility rates imposed by municipalities cannot be disturbed by a court unless the rates are found to be patently unreasonable. It held that the owners failed to prove that the sewer charges were patently unreasonable. In reaching this conclusion, it focused on the owners’ engineer’s testimony at trial, where he stated that there was nothing wrong with the methodology used by the municipality in fixing sewer charges. It also rejected the owners’ assertion that the fifteen percent reduction in consumption charges given to owners of single family property owners was unreasonable because the owners failed to take into account that owners of multi family units were charged fifty dollars less per unit. It also found that the owners did not prove that they suffered any adverse consequences by the fifteen percent credit given to single family unit owners. As a result, the Court affirmed the lower court’s holding.


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