(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Wanaque Borough Sewerage Authority v. Township of West Milford, et al. (A-82-95)
Argued January 30, 1996 -- Decided June 26, 1996
O'HERN, J., writing for a unanimous Court.
In 1966, the Boroughs of Wanaque, Ringwood, Pompton Lakes and the Township of West Milford
joined to form the Wanaque Valley Regional Sewerage Authority Study Committee (Study Committee) to
analyze whether treated sewerage could be collected in the Wanaque watershed basin. West Milford was
represented in that study by the West Milford Municipal Utilities Authority (WMMUA), a separate legal
entity created pursuant to a provision of the Municipal and County Utilities Authorities Law that authorized
West Milford to create a municipal authority with sole jurisdiction over the collection, treatment and disposal
of the town's sewage.
In 1968, the Study Committee issued a report proposing the development of a regional interim plan.
Based on that plan, Pompton Lakes withdrew from the Study Committee. In August 1969, the three
remaining towns adopted parallel joint resolutions authorizing the Study Committee to apply for a $457,000
loan from the State Department of Health. The parties agreed to contribute their proportionate share of the
repayment of the loan, if necessary, to the extent that each municipality had benefited. The application was
approved, and the State loaned the funds to the Study Committee. The money funded environmental and
engineering studies in West Milford, Ringwood and Wanaque, as well as preliminary engineering plans and
specifications for a regional sewer system that would serve all three municipalities.
On January 6, 1971, the Township of West Milford adopted an ordinance in conjunction with
Ringwood and Wanaque consenting to the formation of the Wanaque Valley Regional Sewerage Authority
(WVRSA). Because the WMMUA had sole jurisdiction over sewage collection and disposal within the
Township of West Milford, it was also necessary for the WMMUA to consent to the formation of the
regional sewerage authority. As part of its formation, the WVRSA agreed to assume the debts of the Study
Committee.
Once created, the WVRSA became a distinct and independent public entity. Under the Sewerage
Authorities Law (the Law), the WVRSA was: financially independent; authorized to agree to accept a loan
or donation from a municipality or municipal utilities authority; and authorized to enter into "service
agreements" between it and a municipality or municipal utilities authority.
West Milford appointed representatives to serve on the WVRSA but never agreed to loan or donate
funds to the WVRSA. West Milford also did not enter into a service agreement with the WVRSA because it
did not have the authority to do so, having delegated sole jurisdiction over sewage collection to the
WMMUA. In 1976, the WMMUA advised the WVRSA that it would not execute a service agreement or
use the regional facility for the treatment of its sewage. In 1981, Ringwood Borough also decided not to
enter into a service agreement with the WVRSA.
In 1986, the Wanaque Borough Sewerage Authority (WBSA) instituted suit against, among others,
the WVRSA, the Township of West Milford, the Borough of Ringwood and its sewerage authority, and the
Borough of Wanaque. The WBSA sought reimbursement for certain of the WVRSA's costs because, as the
sole customer of the WVRSA, the WBSA was the only entity left to absorb the planning expenses of the
study. The WVRSA, seeking essentially the same relief as the WBSA, filed a cross-claim against the
Borough of Ringwood, its sewerage authority, and the Township of West Milford, and filed a third-party
complaint against the WMMUA. Both the WVRSA and the WBSA claimed that costs were incurred not
only for the planning, design, construction and operation of a treatment plant and system, but significant
additional costs were incurred because of the withdrawal of West Milford and Ringwood. The WBSA and
the WVRSA also alleged that West Milford and the WMMUA were unjustly enriched by those studies.
At the conclusion of a non-jury trial, the trial court concluded that Ringwood Borough Sewerage
Authority, as the only public entity that had executed a contract with WVRSA in accordance with the
statutory requirements, was responsible for its fair share of all costs incurred up to the date of its withdrawal
from the WVRSA. The trial court dismissed the claims against the other entities, concluding that the
WVRSA had presented no evidence that could support a theory of implied contract. The court also found
that, because the WVRSA had expressly agreed to assume the debts of the Study Committee, there could be
no recovery under a joint venture claim.
The Appellate Division reversed the trial court's dismissal of the claims against the Township of
West Milford and the WMMUA, finding that as long as a governmental entity is not statutorily prohibited
from contracting on the subject, and it receives a benefit, it is liable for the reasonable value of the services
rendered. The court also concluded that the parties presented sufficient evidence at trial to require the trial
court to have considered and ruled on the WVRSA's joint venture theory. The Appellate Division remanded
the matter for consideration of whether any losses were recoverable pursuant to a joint venture theory.
The Supreme Court granted West Milford's petition for certification.
HELD: Under the theory of quasi-contract, the Township of West Milford is liable for a proportionate share
of the costs incurred by the Wanaque Valley Regional Sewerage Authority Study Committee during
the planning stages of a regional sewerage authority.
1. New Jersey law recognizes only very limited circumstances in which a third party may enforce a public
contract adopted without proper procedures. New Jersey law does, however, permit recovery to the extent of
any benefit conferred on, and knowingly accepted by, the municipality. In an express contract, the agreement
is manifested by a writing or spoken words. In a contract implied-in-fact, the agreement is manifested by
other conduct. Courts often find and enforce implied promises by interpreting the promisor's words and
conduct in light of the surrounding circumstances. (pp. 9-11)
2. A contract implied-in-law, or quasi-contract, is imposed by law for the purpose of bringing about justice,
without reference to the intention of the parties. It is the duty that defines the quasi-contract, and the scope
of that duty is a question of law to be decided by a court. Like the equitable doctrine of restitution, the key
element of a quasi-contract claim is that one party has been unjustly enriched at the expense of another.
Recovery under both doctrines is typically measured by the amount the defendant has benefitted from the
plaintiff's performance. (pp. 11-12)
3. In this case, the Appellate Division properly determined the quasi-contract issue. The common law would
have implied a fictional promise to remedy an unjust enrichment. West Milford received a benefit from the
planning studies. Although the Township determined not to join the WVRSA, the environmental and
engineering studies undoubtedly provided West Milford with valuable information that enabled it to reach
that conclusion. Hence, in the circumstances of this case, it is fair to impose some liability on West Milford
for the expenses associated with those planning studies. The Court disagrees, however, that the matter
should have been remanded for a determination of whether the WVRSA has established West Milford's
liability on a joint venture theory. If there is to be a joint venture implied in law, it is difficult to see how the
terms of such an implied joint venture could differ materially from those created pursuant to a quasi-contract
theory of recovery. Further, it is left to the trial court to assess the equities as to whether prejudgment
interest or a schedule of payments should be allowed. (pp. 12-16)
Judgment of the Appellate Division is AFFIRMED insofar as it would allow the Wanaque Valley
Regional Sewerage Authority to recover in quasi-contract from the Township of West Milford and
REVERSED insofar as it would allow such recovery under a theory of joint venture. The matter is
REMANDED to the Law Division for further proceedings consistent with this opinion.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, GARIBALDI, STEIN and
COLEMAN join in JUSTICE O'HERN's opinion.
SUPREME COURT OF NEW JERSEY
A-
82 September Term 1995
WANAQUE BOROUGH SEWERAGE AUTHORITY,
Plaintiff,
v.
TOWNSHIP OF WEST MILFORD, A
Municipal Corporation of the State
of New Jersey,
Defendant-Appellant,
and
BOROUGH OF RINGWOOD, A Municipal
Corporation of the State of New
Jersey, BOROUGH OF WANAQUE, A
Municipal Corporation of the State
of New Jersey and RINGWOOD BOROUGH
SEWERAGE AUTHORITY,
Defendants,
and
WANAQUE VALLEY REGIONAL SEWERAGE
AUTHORITY,
Defendant and Third-Party
Plaintiff-Respondent,
v.
WEST MILFORD MUNICIPAL UTILITIES
AUTHORITY; EUGENE RICHARDS, West
Milford Township Construction
Official; JOHN B. GREENE, West
Milford Township Chief Sanitarian;
JACOB MAAS, Borough of Ringwood
Construction Code Official; GENE
OSIAS, Borough of Ringwood Health
Officer; and STATE OF NEW JERSEY
DEPARTMENT OF ENVIRONMENTAL
PROTECTION,
Third-Party Defendants.
Argued January 30, 1996 -- Decided June 26, 1996
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
281 N.J. Super. 22 (1995).
Martin F. Murphy argued the cause for
appellant (Johnson, Murphy, Hubner, McKeon,
Wubbenhorst & Appelt, attorneys; (Mr. Murphy
and Robert H. Oostdyk, Jr., on the brief).
Richard S. Miller argued the cause for
respondent (Williams, Caliri, Miller & Otley,
attorneys).
The opinion of the Court was delivered by
O'HERN, J.
This appeal concerns the liability of a founding
municipality for the debts of a regional sewerage authority. The
debts were incurred as planning expenses prior to the provision
by the regional authority of waste water treatment facilities to
serve the needs of the citizens of the constituent
municipalities. Over the twenty-year period between the
formation of the concept of a regional authority and the
commencement of this lawsuit in 1986, certain of those
municipalities had withdrawn from the regional plan. This
dispute concerns the liability of the Township of West Milford
for a proportionate share of certain expenses incurred during the
planning stages before West Milford withdrew from the regional
scheme. The specific question is whether, in the absence of a
statutorily required service agreement, West Milford may be held
liable for that share, especially considering that another
independent agency, the West Milford Municipal Utilities
Authority (WMMUA), had the franchise to provide sewer service to
the citizens of that municipality. We agree with the Appellate
Division that in the circumstances of this case liability may be
imposed upon West Milford, but limit recovery to the extent that
West Milford citizens would be unjustly benefitted if they did
not pay the proportionate share.
For purposes of this appeal we accept generally the facts set forth in West Milford's petition for certification. In 1966, the Boroughs of Wanaque, Ringwood, Pompton Lakes and the Township of West Milford joined to form the Wanaque Valley Regional Sewerage Authority Study Committee (Study Committee) to analyze the feasibility of collecting the treated sewerage in the Wanaque watershed basin. The Wanaque watershed basin is in the northwest parts of Bergen and Passaic Counties and was at that time largely rural. A substantial portion of the West Milford area is occupied by public land owned by the City of Newark. "Essentially undeveloped, [that] land comprises much of the watershed that feeds Newark's reservoirs and ultimately provides water to consumers in the city." Newark v. West Milford Township, 7 N.J. Tax 35, 36 (1984).
West Milford was represented in that initial study effort by the West Milford Municipal Utilities Authority, a separate legal entity created pursuant to N.J.S.A. 40:14B-4, a provision of the Municipal and County Utilities Authorities Law. That Act
authorizes a municipality to create such a municipal authority
and charge it with responsibility for collecting, treating and
disposing of the town's sewage. N.J.S.A. 40:14B-4, -19.
In 1968, the Study Committee issued a "Comprehensive Report
on Sewerage Facilities" that proposed the development of a
regional interim plan that would augment Pompton Lakes' existing
facility and create a new facility to treat sewerage from
Wanaque, West Milford and Ringwood. Believing that its interests
would not be served by that plan, Pompton Lakes withdrew from the
Study Committee. Because that initial report was funded in full
by a $150,000 grant from the State Department of Health, that
expenditure forms no part of this appeal.
The three remaining towns continued to participate in the
Study Committee, which modified its plans in light of Pompton
Lakes' withdrawal. In August 1969, Wanaque, Ringwood and the
WMMUA adopted parallel joint resolutions authorizing the Study
Committee to apply for a $457,000 loan from the State Department
of Health. The parties agreed to contribute their proportionate
share of the repayment of the loan, in the event it became
necessary, "to the extent that it has benefited thereby and not
otherwise." The application was subsequently approved, and the
State loaned the funds to the Committee. The money funded
environmental and engineering studies in West Milford, Ringwood
and Wanaque, as well as preliminary engineering plans and
specifications for a regional sewerage system that would serve
all three municipalities.
On January 6, 1971, following the conclusion of those
preliminary studies, the Township of West Milford adopted an
ordinance in concert with Ringwood and Wanaque consenting to the
formation of a regional sewerage authority known as the Wanaque
Valley Regional Sewerage Authority (WVRSA or Regional Authority).
Because the West Milford Municipal Utilities Authority, created
in 1964, had sole jurisdiction of the subject matter of sewage
collection and disposal within the Township of West Milford, it
was also necessary for that body to consent to the formation of
the regional sewerage authority. N.J.S.A. 40:14B-19. As part of
its formation, the WVRSA agreed to assume the debts of the Study
Committee.
Once created, the WVRSA became a distinct and independent
public entity "constituting a political subdivision of the State
established as an instrumentality exercising public and essential
governmental functions to provide for the public health and
welfare . . . ." N.J.S.A. 40:14A-7. Under the Sewerage
Authorities Law, N.J.S.A. 40:14A-1 to -37, the WVRSA was
financially independent, possessing its own power to raise
revenue through service charges and the issuance of bonds. The
Legislature provided a mechanism for a municipality or municipal
authority to enter into contractual commitments with a regional
sewerage authority. N.J.S.A. 40:14A-9 authorizes a local unit (a
municipality or municipal utilities authority) to loan or donate
monies to a sewerage authority as may be agreed upon between the
local unit and the sewerage authority. N.J.S.A. 40:14B-49
provides for the entry of "service agreements" between a
municipality or municipal utilities authority and a regional
sewerage authority.
Pursuant to N.J.S.A. 40:14A-4(c), West Milford appointed
representatives to serve on the WVRSA. However, West Milford
never agreed to loan or donate funds to the Regional Authority
nor did it enter into a service agreement with the Regional
Authority. As noted, the Township did not have the authority to
enter into a service agreement, having delegated sole
jurisdiction over sewerage collection to its municipal utilities
authority in 1964.
In 1972, the WVRSA proposed a service agreement to the West
Milford Municipal Utilities Authority that would have provided
for the establishment of charges, rates and payments for services
by the Regional Authority. The Regional Authority, and the three
municipalities through their respective municipal authorities,
engaged in negotiations over the terms and conditions of that
proposed service agreement. In 1976, the West Milford Municipal
Utilities Authority advised the Regional Authority that it would
not execute a service agreement or use the regional facilities
for the treatment of its sewerage. Consequently, neither West
Milford nor its municipal utilities authority ever entered into a
service agreement with the WVRSA.
In 1981, Ringwood Borough decided not to enter into an
agreement with the Regional Authority. As a result of those two
events, it became necessary to redesign the planned sewerage
treatment facility.
In 1986, the Wanaque Borough Sewerage Authority (WBSA)
commenced this action against various parties, including the
WVRSA, the Township of West Milford, the Borough of Ringwood and
its sewerage authority, and the Borough of Wanaque, seeking
reimbursement for certain of the WVRSA's costs. (As the sole
customer of the WVRSA, the WBSA was the only entity left to
absorb the planning expenses of the two decades.) The WVRSA, by
cross-claim against the Borough of Ringwood, its sewerage
authority, and the Township of West Milford, and by third-party
complaint against the West Milford Municipal Utilities Authority,
sought essentially the same relief as the WBSA. The WBSA and
WVRSA claimed that costs were incurred not only for the planning,
design, construction and operation of a treatment plant and
system, but significant added costs were incurred because of the
withdrawal of West Milford and Ringwood. The WBSA and WVRSA also
alleged that West Milford and its municipal utilities authority
were unjustly enriched by those studies.
The matter was tried without a jury in the Superior Court,
Law Division, Passaic County. The trial court found that the
Ringwood Borough Sewerage Authority was the only public body that
had executed a contract with the WVRSA in accordance with the
statutory requirements of N.J.S.A. 40:14B-49, and held the
Ringwood Borough Sewerage Authority responsible for "its fair
share of all costs incurred up to the date of its withdrawal from
the WVRSA." The trial court dismissed the claims against the
other entities, concluding that the WVRSA had presented no
evidence that could support a theory of implied contract. It
ruled that recovery against a governmental entity under a theory
of implied contract is limited to those circumstances in which
the entity "has the particular power to act and . . . does enter
into a contract [that] is for some reason found to be void but
nevertheless the other contracting party having acted and
extended itself in good faith is entitled to payment for those
services or goods." The court also found that because the WVRSA
had expressly agreed to assume the debts of the Study Committee,
there could be no recovery under a joint venture claim.
On appeal, the Appellate Division reversed the trial court's
dismissal of the claims against the Township of West Milford and
its utility authority, finding that as long as a governmental
entity is not statutorily prohibited from contracting on a
subject, and it receives a benefit, it is liable to the extent of
the "reasonable value of the services rendered." The court also
concluded that the parties presented sufficient evidence at trial
to require the trial court to have considered and ruled on the
WVRSA's theory that the Regional Authority was the product of a
joint venture among the constituent public entities. The
Appellate Division noted that a finding of a joint venture would
lead to common law remedies being available to a participant in a
joint venture upon wrongful termination of the joint venture by
another participant. The court ordered that on remand "resulting
losses or wasted expenditures, if any, not otherwise comprehended
within the implied contract claim, but determined to result from
wrongful termination by a joint venturer, shall also be
considered."
We granted West Milford's petition for certification.
142 N.J. 458 (1995). The West Milford Municipal Utilities Authority
did not seek review of the judgment.
West Milford's principal argument is that it would be against public policy to allow imposition of liability against a public body if the correct statutory procedures for incurring debt were not followed. For example, if a governing body were to enter a contract without following proper procedures, it would be against public policy to allow any recovery. Public bidding laws must be strictly construed to prevent the unauthorized imposition of public liability. Such is definitely the case under federal law. Pursuant to the Tucker Act, 28 U.S.C. §§ 1346, 1491, Congress has waived sovereign immunity with respect to actions under express or implied contracts. "[N]umerous decisions have held that this waiver of sovereign immunity is limited to express contracts and contracts implied in fact and does not extend to contracts implied in law or founded upon equitable principles." Knight Newspapers, Inc. v. United States, 395 F.2d 353, 357 (6th Cir. 1968) (citations omitted). Our law recognizes only very limited circumstances in which a third party may enforce a public
contract adopted without procedural regularity. See 405 Monroe
Co. v. City of Asbury Park,
40 N.J. 457, 466 (1963) (holding that
disputed arrangement was lease and not prohibited installment
sale). New Jersey law does, however, permit recovery "to the
extent of [any] benefit conferred upon and knowingly accepted by
the municipality." Id. at 463 (citation omitted). And when two
contiguous municipalities have acted in the common interest under
a legislative grant of power, the contractual undertaking is to
be assessed in terms of "the general public good and welfare."
Borough of West Caldwell v. Borough of Caldwell,
26 N.J. 9, 31
(1958).
We must digress for a moment to review the terminology.
Contracts are traditionally classified as
express, implied-in-fact or implied-in-law.
The contract is express if the agreement is
manifested by written or spoken words, and
implied-in-fact if the agreement is
manifested by other conduct. "Contract
implied in law" is a somewhat disfavored
synonym for "quasi-contract." The
authorities agree that a quasi-contract is
not a contract at all, since there is no
actual manifestation of assent. The common
law of quasi-contract is supposed to have
developed for procedural reasons [there
simply being no writ for the form of action
into which such a claim could fall].
[Robert A. Long, Jr., Note, A Theory of
Hypothetical Contract, 94 Yale L.J. 415, 415
n.3 (1984) (citations omitted).]
Thus, contracts implied in fact are no different than express contracts, although they exhibit a different way or form of expressing assent than through statements or writings. Courts often find and enforce implied promises by interpretation of a
promisor's word and conduct in light of the surrounding
circumstances. See Restatement (Second) of Contracts § 4 comment
a (1979); id. at § 5 comment a ("The terms of a promise or
agreement are those expressed in the language of the parties or
implied in fact from other conduct.").
A contract implied in the law is a bird of another feather.
While it is commonly referred to as a quasi-contract, in reality
it is not a contract at all.
As explained by the Court in Saint Paul Fire
& Marine Ins. Co., a quasi-contractual
obligation is wholly unlike an express or
implied-in-fact contract in that it is
"imposed by the law for the purpose of
bringing about justice without reference to
the intention of the parties."
32 N.J. 17,
22 (1960) . . . . "In the case of actual
contracts the agreement defines the duty,
while in the case of quasi contract the duty
defines the contract." Insulation
Contracting & Supply v. Kravco, Inc.,
209 N.J. Super. 367, 376 (App. Div. 1986).
[Saint Barnabas Medical Ctr. v. County of
Essex,
111 N.J. 67, 79 (1988) (citations
omitted).]
The scope of the duty is a question of law to be decided by the court. In Saint Barnabas Medical Center, the duty was inferred from the public policies implicit in the various statutes and regulations pertaining to the provision of medical health benefit services to the inmates of county institutions. The rigidity of Anglo-American pleadings required some tangible basis for the enforcement of an implied-in-law contract. Without explicitly admitting that their decisions were based on notions of fairness and equity, courts "impose[d] a `fictional' promise
into the situation -- where there was in fact none at all." Judy
Beckner Sloan, Quantum Meruit: Residual Equity in Law,
42 DePaul
L. Rev. 399, 408 (1992) (footnote omitted).
In essence, a contract action implied-in-law is a
restitutionary claim. Like the equitable doctrine of
restitution, the key element of a quasi-contract claim is that
one party has been unjustly enriched at the expense of another.
Recovery under both doctrines is typically measured by the amount
the defendant has benefitted from the plaintiff's performance.
In a truer sense the court can force the
fictionally breaching party (i.e., the
enriched party) to perform; the performance
required is to compensate the injured party.
[Frederic] Woodward, in his work The Law of
Quasi Contracts, stated that there are only
two "essential elements" of a contract
implied in law: "(1) that the defendant has
received a benefit from the plaintiff," and
"(2) that the retention of the benefit by the
defendant is inequitable."
[Ibid. (citing Frederic C. Woodward, The Law
of Quasi Contracts 9 (1913)) (footnote
omitted).]
Applying those principles to the facts of this case leads us
to affirm the Appellate Division on the issue of quasi-contract.
The trial court was correct to conclude that without a promise
there could be no contract. But that does not mean that without
a promise there can be no duty.
The common law would have implied a fictional promise to
remedy an unjust enrichment. The time has long since passed when
law can or should rely on fictions. Chief Justice Weintraub once
said that "fictions tend to intrude into situations for which
they were not invented." Michaels v. Brookchester, Inc.,
26 N.J. 379, 385 (1958). Thus, in our most recent consideration of these
issues in Saint Barnabas Medical Center, supra, we examined the
nature of the services performed by the hospital, the extent of
the duty of the County to provide those services, and the extent
to which it benefitted by the performance of that duty by another
party.
111 N.J. 67.
This case presents a complex set of interrelating statutes
and regulations designed to reduce water pollution and provide
the public with a safe and adequate supply of water. The
Jeffersonian ideal of leaving all governance to the smallest
units of government still has an abstract appeal. Adrienne Koch,
The Philosophy of Thomas Jefferson 164-65 (1957) (describing
Jefferson's belief in the necessity that republics be small).
But it has become increasingly necessary in modern society for
communities to form regional organizations to satisfy more
efficiently their individual needs.
That the project did not turn out ultimately to serve the
needs of the residents of West Milford does not detract from the
fact that they received a benefit from the planning studies.
Although the Township determined that it was better to go it
alone, the environmental and engineering studies undoubtedly
provided West Milford with valuable information that enabled it
to reach that conclusion. We are informed that West Milford has
been designated a conservation community for purposes of Mt.
Laurel planning. In addition, the members of the WVRSA
representing West Milford were surely conscious of those planning
efforts as they progressed over the years. (West Milford
continued to hold seats on the WVRSA and took no action to seek
statutory dissolution from its inception in 1971 through the
various stages of this litigation.) Hence, we agree, in the
circumstances of this case, that it is fair to impose some
liability on West Milford for the expenses associated with those
planning studies. As noted, "in the case of quasi contract the
duty defines the contract." Saint Barnabas Medical Center,
supra, 111 N.J. at 80 (quoting Insulation Contracting, supra, 209
N.J. Super. at 376 (citation omitted). We have no doubt that
West Milford had a duty to its citizens to explore the provision
of safe and healthful waste water treatment facilities.
We disagree with the Appellate Division, however, that the
case should be remanded for a determination of whether the WVRSA
has established West Milford's liability on a joint venture
theory. The trial court found that the Study Committee was
"undoubtedly" a joint venture, but concluded that the agreement
by the WVRSA, the successor enterprise, to assume the Study
Committee's debts relieved the Committee of its financial
obligations. The relationship among the parties to the WVRSA is
defined clearly by statute. The manner in which a regional
sewerage authority is formed, the respective rights and
obligations of the entities consenting to the formation of the
authority, and the methods by which the authority may finance its
obligations are expressly dealt with in N.J.S.A. 40:14A-1 to -37.
Specific statutory provisions govern the dissolution of a
regional sewerage authority and the responsibilities of the
municipalities forming that authority upon its dissolution.
N.J.S.A. 40:14A-4(h). It is difficult to see how a joint venture
could be implied in fact when the only expressions thereof are
those that established the Regional Authority. If there is to be
such a thing as a joint venture implied in law, we fail to see
how the terms of such an implied joint venture could differ
materially from those created pursuant to a quasi-contract theory
of recovery.
There is merit to the argument that whatever duty might be
implied in law should be imposed upon the public body with the
authority to provide the sewer service--in this case, the West
Milford Municipal Utilities Authority. However, if equity is the
measure of the duty, it would seem to us inequitable to impose
the duty on the municipal utilities authority. We were informed
at oral argument that only about 10" of West Milford's 7,000
dwelling units are served by the West Milford Municipal Utilities
Authority. Thus, the entire financial burden would fall upon a
small sector of the community. Although the Wanaque watershed
could serve about one-half of the area of West Milford, the
studies benefitted all residents of the municipality to a greater
or lesser degree. Therefore, all residents of West Milford
should share in the burden of paying for the cost of those
studies.
A final concern: Because we are dealing with matters of
equity, we believe that it might be unfair to require West
Milford to pay interest on the amounts claimed as though the
money had been loaned to West Milford and it had the use and
enjoyment of the money during the pendency of the litigation.
See A.J. Tenwood Associates v. Orange Senior Citizens Hous. Co.,,
200 N.J. Super. 515, 525 (App. Div.) (declaring that appellate
courts should "defer to the trial court's exercise of discretion
involving prejudgment interest unless it represents a manifest
denial of justice."), certif. denied,
101 N.J. 325 (1985). It
appears to us that each of the parties share some responsibility
for failing to have resolved this matter long ago. It must have
been apparent as early as 1976 that the regional sewerage
authority was not holding together. There may be some inequity
suggested in that the trial court entered judgment against the
Ringwood Borough Sewerage Authority with interest; however, the
Ringwood Borough Sewerage Authority actually entered and breached
a service agreement with the WVRSA, which places it in a slightly
different position than West Milford. We leave to the Law
Division an assessment of the equities as to whether prejudgment
interest or a schedule of payments should be allowed.
The judgment of the Appellate Division is affirmed insofar
as it would allow the WVRSA to recover in quasi-contract from the
Township of West Milford and reversed insofar as it would allow
such recovery under a theory of joint venture. The matter is
remanded to the Law Division for further proceedings in
accordance with this opinion.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, GARIBALDI, STEIN and COLEMAN join in JUSTICE O'HERN's opinion.
NO. A-82 SEPTEMBER TERM 1995
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
WANAQUE BOROUGH SEWERAGE AUTHORITY,
Plaintiff,
v.
TOWNSHIP OF WEST MILFORD, A Municipal
Corporation of the State of New Jersey,
Defendant-Appellant,
and
BOROUGH OF RINGWOOD, etc., et al.,
Defendants,
and
WANAQUE VALLEY REGIONAL SEWERAGE
AUTHORITY,
Defendant and Third-Party
Plaintiff-Respondent,
v.
WEST MILFORD MUNICIPAL UTILITIES
AUTHORITY, et al.,
Third-Party Defendants.
DECIDED June 26, 1996
Chief Justice Wilentz PRESIDING
OPINION BY Justice O'Hern
CONCURRING OPINION BY
DISSENTING OPINION BY