CHRISTOPHER C. CONA, ETC. VS. TOWNSHIP OF WASHINGTON SHARON DOWNS, ETC. VS. BOROUGH OF PAULSBORO WILLIAM R. BRODY VS. CITY OF WOODBURY (L-1602-15, L-0180-16, L-0487-16 AND L-1102-15, GLOUCESTER COUNTY AND STATEWIDE)(CONSOLIDATED) ( 2018 )


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  •                 NOT FOR PUBLICATION WITHOUT THE
    APPROVAL OF THE APPELLATE DIVISION
    SUPERIOR COURT OF NEW JERSEY
    APPELLATE DIVISION
    DOCKET NOS. A-5067-15T3
    A-5615-15T3
    A-0443-16T3
    CHRISTOPHER C. CONA,
    individually and as a class
    representative on behalf of           APPROVED FOR PUBLICATION
    others similarly situated,
    August 29, 2018
    Plaintiff-Appellant,                APPELLATE DIVISION
    v.
    TOWNSHIP OF WASHINGTON,
    Defendant-Respondent.
    _______________________________
    SHARON DOWNS, individually and
    as a class representative on
    behalf of others similarly
    situated,
    Plaintiff-Appellant,
    v.
    BOROUGH OF PAULSBORO,
    Defendant-Respondent.
    ______________________________
    WILLIAM R. BRODY and
    KATHLEEN D. O'HARA,
    individually and on behalf of
    others similarly situated,
    Plaintiffs-Appellants,
    v.
    CITY OF WOODBURY, BOROUGH OF
    WESTVILLE, BOROUGH OF GLASSBORO,
    BOROUGH OF NATIONAL PARK, and
    TOWNSHIP OF DEPTFORD,
    Defendants-Respondents.
    _____________________________________
    Argued May 24, 2018 – Decided August 29, 2018
    Before Judges Simonelli, Haas and Rothstadt.
    On appeal from Superior Court of New Jersey,
    Law Division, Gloucester County, Docket Nos.
    L-1602-15, L-0180-16, L-0487-16 and L-1102-
    15.
    Lewis   G.  Adler   argued   the  cause   for
    appellants (Lewis G. Adler, attorney; Lewis
    G.   Adler,  Roger   C.   Mattson  and   Paul
    DePetris, of counsel and on the briefs).
    Brian P. Shotts argued the cause for
    respondents Township of Washington (in A-
    5067-15) and Township of Deptford (in A-
    0443-16) (Grace, Marmero & Associates, LLP,
    attorneys; Brian P. Shotts, on the briefs).
    M. James Maley, Jr. argued the cause for
    respondent Borough of Paulsboro (in A-5615-
    15) (Maley Givens, PC, attorneys; M. James
    Maley, Jr. and Erin E. Simone, on the
    brief).
    James P. Pierson argued the cause for
    respondent City of Woodbury (in A-0443-16)
    (Angelini,    Viniar   &    Freedman,    LLP,
    attorneys; James P. Pierson, on the brief).
    Gary   M.   Marek  argued   the  cause   for
    respondents Borough of Westville and Borough
    of Glassboro (in A-0443-16) (Law Office of
    Timothy D. Scaffidi, attorneys; Gary M.
    Marek and Timothy D. Scaffidi, on the
    briefs).
    2                         A-5067-15T3
    Walter F. Kawalec, III argued the cause for
    respondent Borough of National Park (in A-
    0443-16) (Marshall Dennehey Warner Coleman &
    Goggin, attorneys; Walter F. Kawalec, III
    and Ashley L. Toth, on the brief).
    The opinion of the court was delivered by
    ROTHSTADT, J.A.D.
    In 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, 
    441 N.J. Super. 514
     (App. Div. 2015) in
    their appeals from orders1 entered in the Law Division dismissing
    their   complaints      that     alleged    defendant     municipalities'
    ordinances that required plaintiffs to pay certain license fees
    are ultra vires.       In Timber Glen, the ordinance we reviewed
    required landlords to obtain a license before any residential
    rental unit could be occupied and pay an annual license fee of
    $100 per unit.2      
    Id. at 519
    .      The municipality contended it had
    1
    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.
    2
    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
    (continued)
    3                            A-5067-15T3
    authority under the Licensing Act, N.J.S.A. 40:52-1, to require
    such licenses and that its authority was compatible with its
    regulatory power under N.J.S.A. 40:48-2.12m.                       
    Id. at 523
    .          The
    stand-alone license fee it charged was in addition to fees it
    required for mandatory "annual habitability inspections . . . ."
    
    Id. at 519
    .
    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
         (citation      omitted).       We       concluded      that    a    1998
    amendment    to     the    Licensing     Act   prohibited          the   licensing       of
    rental units rented for 175 days or more and that any ordinance
    attempting to impose such a requirement was "invalid as ultra
    vires and unenforceable."             
    Id. at 532
    .          However, we noted that
    "[o]ur opinion [was] confined to the authority to license and
    [did] not address [a municipality's] regulatory or inspection
    authority granted by other statutes designed to assure rental
    premises    remain     safe,      building     and    fire       code    compliant      and
    structurally sound."            
    Id.
     at 532 n.4 (citation omitted).
    (continued)
    forms which shall be provided for that purpose."                                 441    N.J.
    Super. at 519 (second alteration in original).
    4                                       A-5067-15T3
    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 fees 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 regulatory 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 ordinance3 requires landlords
    3
    Woodbury, N.J., Landlord/Tenant Licensing ch. 114, art. I, §§
    114-1 to -20 (2000).
    (continued)
    5                                 A-5067-15T3
    to secure a license that "attest[ed] that the rental unit had
    been properly registered" under the ordinance.                         Before a unit
    can   be    registered      and   occupied,         the    ordinance    requires         an
    inspection "for the purpose of determining Woodbury City Code
    compliance     and    compliance        with        [the    ordinance's]          Housing
    Standards . . . ."          Annual      registration        of    rental     units      and
    payment of a $100 "license fee" have to be completed before the
    city will issue a license to permit their rental.
    The Glassboro ordinance4 also requires annual registration
    and   the   payment    of    a    fee   before       it    will   issue      a    license
    permitting the rental of a unit.                    In addition, if there is a
    change in occupancy, a new registration and an additional fee
    have to be paid.       A license will not be issued, however, unless
    the unit passes an inspection to insure there are no "safety
    violations" and that the units meet the ordinance's "performance
    standards . . . ."       The $160 "annual registration fee [that the
    ordinance    requires]      include[s]        all    inspections       and       one   re[-
    ]inspection at no additional fee."
    Brody,    a    landlord     who    maintains         rental    properties          in
    defendants Borough of Westville, Borough of National Park and
    (continued)
    4
    Glassboro, N.J., Rental Housing ch. 379, §§ 379-1 to -10
    (2004).
    6                                       A-5067-15T3
    the    Township         of     Deptford,       challenged      each          of      those
    municipality's ordinances.              The Deptford ordinance5 contains a
    registration and licensing requirement, but does not require re-
    registration upon a change in occupancy, although it requires
    re-inspection.           Inspection       is   required     "to     determine           the
    condition          of    rental        facilities,        rental         units          and
    rooming/boarding houses in order . . . to safeguard the health,
    safety,      welfare     of    the    occupants   . . . and       of    the       general
    public."      The ordinance further provides that a fee has to be
    paid upon registration before a license will be issued.                           It also
    provides for a re-inspection fee upon a change in occupancy.                             No
    separate licensing fee is imposed.
    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 ordinance6 imposes an
    "annual registration fee and first inspection fee" of fifty or
    sixty dollars per rental unit depending on the number of rental
    units on a property.            It also has a re-inspection fee and late
    fee   that    it     charged    for    untimely   payments.            The    ordinance
    provides      that      "inspection      shall    be     for   the       purpose         of
    5
    Deptford, N.J., Ordinance O.16.12 (Oct. 16, 2012).
    6
    Westville, N.J., Rental Property ch. 272, art. I, §§ 272-1 to
    -27 (2006).
    7                                      A-5067-15T3
    determining . . . Land Use and Development compliance and, to
    the extent applicable, to determine if the property complies
    with the Property Maintenance Code, Uniform Construction Code,
    Housing Code and/or Building Code and/or Uniform Fire Safety
    Act."     Westville's ordinance does not designate any of its fees
    as license fees.
    Similarly, National Park's ordinance7 provides "[u]pon 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 . . . ."                             Payment of the
    fee was due "[a]t the time of the filing of the registration
    form . . . ."       The ordinance calls for "inspections to determine
    the     condition        of     rental        facilities,       rental       units,       and
    rooming/boarding         houses        in     order    [to]     . . . safeguard           the
    health,    safety,       welfare        of    the    occupants       . . . and       of   the
    general    public."           Periodic       inspections      are    also    required      to
    ensure      "zoning,          [and]      compliance        . . .       with      Property
    Maintenance,       the        Uniform       Construction      Code,        Housing    Code,
    . . . the      Building        Code     and    the    Uniform       Fire    Safety    Act."
    National Park's ordinance also does not mandate the payment of a
    separate fee for the issuance of a license.
    7
    National Park, N.J., Code of National Park Rental Units ch.
    97, art. I, §§ 1 to 19 (2007).
    8                                 A-5067-15T3
    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. 8                  In his
    oral decision placed on the record on that date, Judge Morgan
    discussed      our   holding   in   Timber      Glen,    the    significance     of
    footnote four in that case, and the distinction between a fee
    charged   by    a    municipality   to   offset     costs      of   regulation   as
    compared to generating revenue, as discussed in Timber Glen and
    Daniels v. Point Pleasant, 
    23 N.J. 357
     (1957).                      The judge then
    framed the issue before him as being, "Do we have a license-type
    of ordinance or is it a regulation–type of . . . ordinance?"                     He
    defined a license as being the granting of "authority to go out
    and    conduct       [the   subject]         activity"    and       "[r]egulations
    . . . . [as] relat[ing] to the manner by which the activity is
    to be conducted."           Relying on N.J.S.A. 40:48-2.12a, N.J.S.A.
    40:48-2.12a1, N.J.S.A. 40:48-2.12c,9 and N.J.S.A. 40:48-2.12m10
    8
    Plaintiffs filed cross-motions for partial summary judgment as
    to liability that the judge denied.
    9
    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
    (continued)
    9                                A-5067-15T3
    the judge noted that municipalities are authorized to regulate
    buildings in order to insure the public's health and safety and
    (continued)
    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.
    10
    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.]
    10                        A-5067-15T3
    make inspections for that purpose, require registrations, and
    issue certificates of occupancy (CO) and charge fees for those
    certificates.
    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 because 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
    comply 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.
    11                            A-5067-15T3
    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,    
    57 N.J. 384
          (1971)      and     found
    persuasive      the    Law    Division's   decision        in    Devine      v.    Mantua
    Township, 
    28 N.J. Super. 299
     (Law Div. 1953), and concluded that
    the fees being charged by the municipalities were reasonably
    "relate[d] to that regulation and [was] not being utilized as a
    tax revenue."         He turned to plaintiffs' CRA claim and found that
    since the fees paid were for regulatory purposes, there was no
    taking in violation of their constitutional rights.11
    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
    11
    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.
    12                                      A-5067-15T3
    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, 
    538 U.S. 216
    (2003),     plaintiffs           argued     the    motion      judge      overlooked         the
    Court's    determination            that    the    government's        taking     of    money,
    like     real       or     other    personal       property,        was    a    taking       for
    constitutional purposes.
    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 it was clear that a
    satisfactory inspection was a condition to the issuing of the
    license.        Addressing the municipalities' charging of a premium
    13                                       A-5067-15T3
    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 ordinance12 that requires
    landlords to submit annual registrations, as well as upon a
    change of occupancy, and to pay a fee "prior to the issuance of
    a license . . . ."             It also provides that "[e]ach rental unit
    shall be inspected at least once every twelve-month period."
    12
    Washington, N.J., Rental Property and Landlord Registration
    ch. 185 §§ 185-1 to -21 (2005).
    14                                     A-5067-15T3
    Inspections are required to determine "[z]oning, compliance and,
    to the extent applicable, to determine if the property complies
    with . . .      Property     Maintenance        and     Housing   Standards,            and
    Uniform     Construction     Code, . . .       and     the   Uniform       Fire    Safety
    Act."     If the inspection is unsatisfactory, the property cannot
    be   registered    "nor     shall    a   license       issue"   and    the     premises
    cannot be occupied "until the necessary corrections have been
    made so as to bring the property and rental unit into compliance
    with    the    applicable     code       and   the     property       is     thereafter
    subsequently inspected, registered, and licensed."                         In addition,
    the ordinance prohibits the registration or licensing of any
    rental unit "unless all municipal taxes, water and sewer charges
    and any other municipal assessments are paid on a current basis"
    and all units are in compliance with all applicable codes and
    regulations.      The only fee imposed, which was to be paid upon
    registration of the rental unit, is based on the number of units
    on a property.
    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
    15                                      A-5067-15T3
    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 that's taken can't be considered a takings under
    the   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."
    16                                    A-5067-15T3
    Finally,   we   review   plaintiff   Sharon    Downs   challenge    to
    defendant the Borough of Paulsboro's March 1, 2016 ordinance13
    governing     rental    properties     that       removed   all    licensing
    requirements from an earlier version of the same ordinance. 14
    Under the 2016 ordinance, owners of rental units are required to
    file a registration application annually and with each change in
    occupancy for any rental unit, and pay a $100 inspection fee per
    unit    to   ensure    compliance    with   the     applicable    codes   and
    regulations.      It also imposes a re-inspection fee, stating: "In
    the event that a re-inspection of a rental unit is deemed to be
    necessary . . . the owner . . . must pay a [fifty dollar] re-
    13
    Paulsboro, N.J., Rental Property ch. 59B, art. I, §§ 59B-1 to
    -19 (2016).
    14
    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.
    17                             A-5067-15T3
    inspection fee."    The ordinance provides that a rental unit that
    fails inspection cannot be registered.      A "rental unit may [also
    not] be registered unless all municipal taxes, water and sewer
    charges and any other municipal assessments are paid . . . ."
    The ordinance mandates that the rental of any residential unit
    is   prohibited    "unless   the   rental   unit   is   registered    in
    accordance with" the ordinance.
    On April 15, 2016, Downs filed her complaint challenging
    the 2016 ordinance validity.15      Judge Jean B. McMaster granted
    Paulsboro's motion and dismissed Downs' complaint with prejudice
    on July 28, 2016, for the reasons stated in her oral decision
    placed on the record on the same date, after considering the
    parties' earlier written submissions and oral arguments on May
    3, 2016.   The judge first acknowledged that municipalities may
    charge fees to defray the costs of the exercise of their power
    to regulate, but such fees cannot be charged simply "for revenue
    purposes" and must be reasonable and related to the exercise of
    15
    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.
    18                          A-5067-15T3
    a municipality's police power.            The judge concluded the $100 fee
    charged by Paulsboro was reasonable and "clearly [related to]
    advanc[ing] a substantial public interest[,] . . . public health
    and . . . . insuring that rental premises remain safe."                      As
    such, charging the fees did not constitute a taking in violation
    of the CRA and, further, that because the fee charged were for
    "registration and inspection" they did not violate Timber Glen's
    holding    that    prohibited     using   fees   as    "a   revenue-generating
    tax."
    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
     (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.
    On 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
    19                             A-5067-15T3
    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
    20                               A-5067-15T3
    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.
    Downs 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 State v. Mill Village
    Apartments,      No.     A-0522-14       (App.    Div.     Feb.      10,    2016),16        Lake
    16
    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
    (continued)
    21                                       A-5067-15T3
    Valley Associates, LLC v. Township Of Pemberton, 
    411 N.J. Super. 501
     (App. Div. 2010),17 and Dome Realty, Inc. v. Paterson, 
    83 N.J. 212
     (1980)18 are distinguishable from the ordinances here.
    She   further   contends     that        the    "the    volunteer        [payment]   rule
    doesn’t    apply    to     the     CRA    or     the     facts    of     this   case[.]"
    According to Downs, "the 1998 amendment to the Licensing Act and
    [Timber    Glen]     are    retroactive[.]"               Last,     she     argues    her
    "complaints     pled      viable     [Uniform          Declaratory       Judgment    Law]
    claims[,] which the trial court failed to address[.]"
    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,
    (continued)
    fees . . . were imposed for functions related to the City's
    exercise of regulatory power that was authorized by statute."
    Id. at 10.
    17
    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[,]" 
    411 N.J. Super. at 502
    , and rejected plaintiff's argument that the
    requirements imposed by the ordinance exceeded those explicitly
    delegated by the legislature and were not permitted, 
    id. at 504
    ,
    holding that the ordinance was not preempted by legislative
    action. 
    Id. at 506-07
    .
    18
    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. 
    83 N.J. at 219, 229-30
    .
    22                                   A-5067-15T3
    
    450 N.J. Super. 286
    ,   290     (App.   Div.   2017).          That   standard
    requires us to examine the challenged pleadings to determine
    "whether     a   cause    of    action     is    'suggested'      by    the     facts."
    Teamsters Local 97 v. State, 
    434 N.J. Super. 393
    , 412 (App. Div.
    2014) (quoting Printing Mart-Morristown v. Sharp Elecs. Corp.,
    
    116 N.J. 739
    , 746 (1989)).              We search the pleading "in depth and
    with liberality to determine whether a cause of action can be
    gleaned even from an obscure statement."                  Seidenberg v. Summit
    Bank, 
    348 N.J. Super. 243
    , 250 (App. Div. 2002) (citing Printing
    Mart-Morristown, 
    116 N.J. at 746
    ).                 "[I]t is the existence of
    the fundament of a cause of action . . . that is pivotal[.]"
    Teamsters Local 97, 434 N.J. Super. at 412-13 (second alteration
    in original) (quoting Banco Popular N. Am. v. Gandi, 
    184 N.J. 161
    , 183 (2005)).
    "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, 
    423 N.J. Super. 103
    , 113
    (App. Div. 2011) (citing Camden Cty. Energy Recovery Assocs.,
    L.P. v. N.J. Dep't of Envtl. Prot., 
    320 N.J. Super. 59
    , 64 (App.
    Div. 1999), aff'd, 
    170 N.J. 246
     (2001)).                  Ordinarily, dismissal
    for failure to state a claim is without prejudice, and the court
    has discretion to permit a party to amend the pleading to allege
    additional facts in an effort to state a claim.                    See Hoffman v.
    23                                   A-5067-15T3
    Hampshire Labs, Inc., 
    405 N.J. Super. 105
    , 116 (App. Div. 2009).
    Although leave to amend should be liberally granted, "without
    consideration of the ultimate merits of the amendment," it need
    not    be    granted     where,     an   amendment     would       be    a    "futile"    and
    "useless endeavor."           Notte v. Merchs. Mut. Ins. Co., 
    185 N.J. 490
    , 501 (2006) (citation omitted); see also Prime Accounting
    Dep't v. Twp. of Carney's Point, 
    212 N.J. 493
    , 511 (2013).
    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, 
    375 N.J. Super. 624
    , 632 (App. Div.
    2005) (citing First Peoples Bank of N.J. v. Twp. of Medford, 
    126 N.J. 413
    ,    418      (1991)).        "Municipal       ordinances          are   normally
    liberally       construed     in     favor      of    the    municipality           and   are
    presumed valid, with the burden of proving otherwise placed upon
    the party seeking to overturn the ordinance."                            State v. Golin,
    
    363 N.J. Super. 474
    ,     481-82       (App.     Div.    2003)       (citations
    omitted);       Dome     Realty,    Inc.,       
    83 N.J. at 235
           (stating     that
    "courts place a heavy burden on the proponents of invalidity").
    Only a showing of "clear and compelling evidence" may overcome
    this presumption.           Spring Lake Hotel & Guest House Ass'n. v.
    Spring Lake, 
    199 N.J. Super. 201
    , 210 (App. Div. 1985).
    24                                     A-5067-15T3
    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[,]" 441 N.J. Super. at 532, because to
    require a "license [for such] rental properties . . . by its
    nature   includes   a   revenue    generating    component,       [which]   is
    circumscribed by the provisions of the Licensing Act."                Id. at
    527 (citing Bernardsville Quarry, 
    129 N.J. at 229
    ).
    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
    25                              A-5067-15T3
    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.,   
    83 N.J. at 227-28
    .     A    municipality    is   also    granted
    specific authority to regulate local "buildings and structures
    and their use and occupation to prevent and abate conditions
    therein harmful to the health and safety of the occupants of
    said buildings and structures and the general public in the
    municipality."         N.J.S.A.     40:48-2.12a.         "Specific     statutes
    [authorize]   imposing     registration      requirements    for     residences
    containing two or more families, and regulating 'the maintenance
    and condition of any unit of dwelling space, upon termination of
    occupancy[.]'"       Timber Glen, 441 N.J. Super. at 526 (citations
    omitted).
    Landlords are also subject to ordinances that require that
    they obtain COs under certain circumstances, which might include
    the payment of a separate fee.19           See, e.g., N.J.A.C. 5:23-2.23;
    19
    "[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
    (continued)
    26                               A-5067-15T3
    N.J.A.C. 5:23-2.23A.        A municipality may regulate rental units
    and buildings as a whole, and the combination might involve some
    degree of overlap.        For example, a rental unit is inspected for
    compliance with tenancy regulations, and the building in which
    it is located is inspected to insure it is sound and constructed
    in   accordance    with    required    building    permits.        See   N.J.A.C.
    5:23-2.23A.        That   overlap     does   not    limit   a     municipality's
    ability to offset its costs for providing those services by
    charging   fees,    as    long   as   they   are   not   simply    exercises    in
    revenue production.        We discern no such exercise in these cases
    as we did in Timber Glen.
    (continued)
    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
     (fourth
    alteration in original) (citations omitted)
    (approving the requirement for a CO upon a
    tenant vacating an apartment).]
    27                               A-5067-15T3
    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.20                   "[T]he
    Legislature has empowered [municipalities with the authority] to
    adopt    an   inspection     and      certification    scheme       for    rental
    housing[,]" Dome Realty, Inc., 
    83 N.J. at 232
    , and it is within
    a municipality's authority to charge a reasonable fee to defray
    the costs it incurs in carrying out that authority.                         Nelson
    Cooney & Son, Inc., 
    57 N.J. at
    390 n.4.
    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."                 Ellis v. Hilton
    20
    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, 
    337 N.J. Super. 590
    , 596 (App. Div. 2001)
    (citing State v. Smith, 
    55 N.J. 476
    , 488 (1970)); Quigley v.
    Esquire Deposition Servs., 
    409 N.J. Super. 69
    , 74 (App. Div.
    2009), we choose to address Cona's argument, and conclude it is
    without merit.
    28                                 A-5067-15T3
    United Methodist Church, ___ N.J. Super. ___, ___ (2018) (slip
    op. at 9) (citing State v. Broom-Smith, 
    406 N.J. Super. 228
    , 239
    (App. Div. 2009), aff'd, 
    201 N.J. 229
     (2010)).
    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 entry 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, 
    343 N.J. Super. 1
    , 39 (App. Div. 2001)
    (stating that "[t]he trial judge had the authority to engage in
    'judicial    surgery,'       or    narrow       construction       of     a    statute     or
    ordinance,    to     free    it    from       constitutional       doubt       or   defect"
    (citations     omitted)).              With    that   deletion,         "the    remaining
    29                                    A-5067-15T3
    provisions      present     . . . viable         legislative     action,
    constitutionally   sound,   and   capable   of    lawful   enforcement."
    
    Ibid.
    Affirmed.
    30                            A-5067-15T3