TOWNSHIP OF WYCKOFF VS. VILLAGE OF RIDGEWOOD (L-5651-12, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0363-17T2
TOWNSHIP OF WYCKOFF,
BOROUGH OF GLEN ROCK,
and BOROUGH OF MIDLAND
PARK, all on behalf of themselves
and all others similarly situated,
Plaintiffs-Appellants/
Cross-Respondents,
v.
VILLAGE OF RIDGEWOOD,
Defendant-Respondent/
Cross-Appellant.
Argued May 21, 2019 – Decided August 5, 2019
Before Judges Rothstadt, Gilson and Natali.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-5651-12.
Joseph B. Fiorenzo argued the cause for
appellants/cross-respondents (Sills Cummis & Gross,
PC, attorneys; Joseph B. Fiorenzo, of counsel and on
the briefs; Gregory Edward Reid, on the briefs).
William W. Northgrave argued the cause for
respondent/cross-appellant (Mc Manimon Scotland &
Baumann, LLC, attorneys; William W. Northgrave and
Thaddeus John Del Guercio, on the briefs).
PER CURIAM
This appeal arises out of disputes over several rate increases the
Ridgewood Water Utility (Utility) charged for potable water. Defendant Village
of Ridgewood (Ridgewood or defendant) owns and operates the Utility, which
supplies water to the residents of Ridgewood and three other municipalities.
Plaintiffs, the Township of Wyckoff, Borough of Glen Rock, and Borough of
Midland Park, challenged three ordinances passed by Ridgewood that authorized
the Utility to increase rates by approximately thirty-seven percent over five
years.
Following a bench trial, the trial court held that the ordinances were
arbitrary, capricious, and unreasonable, and, thus, invalid. The court then
remanded the matter to the Ridgewood Council to establish appropriate rates for
the years in question. The trial court also ordered that plaintiffs be refunded the
difference between the rates actually charged and the rates to be established on
remand. Those rulings were embodied in a judgment entered on July 20, 2017.
Plaintiffs appeal from that judgment, and defendant cross-appeals.
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Plaintiffs argue that the trial court erred in remanding the matter and they
should be refunded the difference between the invalid rates and the rates that
had been in effect before the ordinances were adopted. Plaintiffs also argue that
the trial court should have required defendant to return millions of dollars that
were transferred from the Utility to Ridgewood as surplus. Finally, plaintiffs
assert that they were entitled to attorney's fees. On its cross-appeal, defendant
argues that the trial court erred in invalidating the ordinances, in capping the
annual amount of surplus that can be transferred from the Utility to Ridgewood
at five percent of the Utility's budget, and in not finding plaintiffs' complaint
was time-barred.
Having considered the arguments of all parties in light of the record and
law, we affirm substantially for the reasons set forth in the comprehensive 104-
page opinion issued by Judge Lisa Perez-Friscia. The factual findings made by
Judge Perez-Friscia are supported by substantial, credible evidence. Moreover,
we discern no error in her legal conclusions.
I.
Ridgewood is a municipal corporation that owns and operates the Utility
as authorized by the County and Municipal Water Supply Act (Water Supply
Act), N.J.S.A. 40A:31-1 to -24. In addition to providing potable water to
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residents of Ridgewood, the Utility also supplies water to the residents of
Wyckoff, Glen Rock, and Midland Park. Thus, the Utility has over 20,000
customers, including more than 1000 who are not residents of Ridgewood.
The Utility controls or operates fifty-four wells and numerous buildings,
water treatment facilities, and storage tanks. It also has approximately thirty-
five full-time employees, and uses various support services supplied by
Ridgewood. Accordingly, the Utility periodically requests Ridgewood to set the
water rates it charges to its customers to generate the revenue to operate.
Effective in 2010, 2011, and 2012, Ridgewood adopted three ordinances,
which increased by a total of more than thirty-seven percent the water usage
rates charged by the Utility. Thus, customers went from paying $3.32 per
thousand gallons of water to $4.68.
The first ordinance, Ordinance No. 3236, became effective January 1,
2010 (the 2010 Ordinance). It was adopted by the Ridgewood Council after
hearing from representatives of the Utility and Ridgewood. Those
representatives informed the Council that there had not been a rate increase since
2004, the Utility's operating expenses had increased, capital projects had been
undertaken and were anticipated, and the Utility had incurred a deficit of over
$400,000 in 2008, and was projecting a $500,000 deficit for 2009.
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The Ridgewood Council was also provided with a comparison of the water
usage rates charged in nearby communities. The Council was then advised that
Ridgewood's proposed rate increase would be in the middle range of the rate s
charged in other communities.
Furthermore, the Council was given a report prepared by Louis C. Mai, a
Certified Public Accountant and Registered Municipal Accountant. Mai had
been retained by Ridgewood in 2008 to perform audits, and was asked in 2009
to review and develop a new rate structure for the Utility. Mai told the
Ridgewood Council that the Utility was running a deficit. He also projected that
water consumption rates would decline in 2009, causing a reduction in the
Utility's anticipated revenues.
In preparing the information and projections provided to the Ridgewood
Council, representatives of the Utility, Ridgewood, and Mai relied on allocation
of indirect costs from Ridgewood to the Utility. Those cost allocations included
charges for fire, police, healthcare, pension, and other expenses for services
provided to the Utility by Ridgewood. Those cost allocations were based on a
study conducted in 2003.
After receiving and considering the information provided to it, the
Ridgewood Council voted to adopt the 2010 Ordinance. That ordinance
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increased the water usage rates by approximately twenty-one percent, from
$3.32 per thousand gallons to $4.00.
In late 2010, the Ridgewood Council considered another water usage rate
increase. The Council was asked to adopt Ordinance No. 3272, to become
effective January 1, 2011 (the 2011 Ordinance). Under the 2011 Ordinance,
water usage rates would increase by five percent, going from $4.00 per thousand
gallons to $4.20.
Representatives from Wyckoff, Glen Rock, and Midland Park objected to
the proposed 2011 Ordinance at a public hearing the Ridgewood Council
conducted in December 2010. In particular, the other municipalities presented
testimony from Gary Higgins, a financial advisor hired by Wyckoff, Glen Rock,
and Midland Park.
Higgins informed the Ridgewood Council that he had reviewed financial
data from the Utility going back to 2004. He told the Council that twenty-two
percent of the Utility's $12,600,000 budget for 2010 was comprised of indirect
costs allocated from Ridgewood to the Utility. Higgins then opined that most
of those allocated costs bore no relationship to the operations of the Utility.
Higgins also stated that there was no support for the reported deficits of the
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Utility. Thus, Higgins concluded that the 2010 rate increase was not necessary,
and that the proposed 2011 rate increase of five percent was "not legitimate."
Representatives of the Utility and Ridgewood provided different
information to the Council in consideration of the 2011 Ordinance. In that
regard, Mai advised the Council that water consumption was below average and
that the 2010 rate increase had not generated the anticipated revenues. Mai also
opined that the five percent rate increase in 2011 was necessary to balance the
Utility's budget. Ultimately, the Ridgewood Council voted to adopt the 2011
Ordinance.
A third water usage rate increase was adopted, effective in 2012. That
ordinance, Ordinance No. 3319, increased water usage rates by five percent,
from $4.20 per thousand gallons to $4.41 (the 2012 Ordinance). The 2012
Ordinance also provided: "Each year thereafter [Ridgewood], at [its] sole
discretion shall increase water rates effective January 1 of that year, in an
amount not to exceed 3%." Accordingly, water usage rates were increased in
2013 and 2014 by three percent each year. Thus, between 2010 and 2014, the
water usage rates charged by the Utility increased by approximately thirty-seven
percent.
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On February 1, 2010, a month after the 2010 Ordinance became effective,
Wyckoff filed a proposed class action complaint in lieu of prerogative writs
challenging the 2010 Ordinance. The complaint sought to declare the 2010
Ordinance invalid and requested damages for all water charges improperly
assessed. In May 2011, the case was certified as a class action, in which
Wyckoff, Glen Rock, and Midland Park acted as class representatives for their
residents.
In July 2012, plaintiffs filed an amended class action challenging the 2011
and 2012 Ordinances, in addition to the 2010 Ordinance. Plaintiffs alleged that
the ordinances were arbitrary, capricious, and unreasonable, violated statutory
mandates, and discriminated against class members in violation of the state and
federal constitutions.
Among other things, plaintiffs claimed that the rate ordinances
Ridgewood adopted in 2010, 2011, and 2012 were inconsistent with N.J.S.A.
40A:31-10(a), which requires annual rental charges to be "uniform and equitable
for the same type and class of use," and violated N.J.S.A. 40A:31-10(c), which
limits the type of costs that can be included in establishing water rates. Plaintiffs
claimed that the water rates established in the three ordinances improperly
permitted the Utility to include millions of dollars of Ridgewood's municipal
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operating expenses, such as the cost of providing health insurance to non-Utility
employees, police department salaries and expenses, fire department salaries
and expenses, and a significant portion of the fees charged by Ridgewood's
attorney. Plaintiffs also claimed that the net effect of those improper allocations
of expenses created a de facto lack of uniformity between the rates charged to
Ridgewood residents and those charged to non-residents. Plaintiffs sought a
declaratory judgment that the ordinances were invalid, an injunction preventing
enforcement of the ordinances, refunds of the increases in water charges paid
under the ordinances, compensatory damages, and attorney's fees.
Ridgewood filed an answer and counterclaim. The counterclaim asserted
that if Ridgewood was required to "recast the . . . Utility budget[s]," it would
"make appropriate adjustments to its rates" and would seek to recoup any
shortfall in the rates charged to the plaintiffs' class of ratepayers.
Thereafter, the parties engaged in discovery. In 2013, plaintiffs and
defendant filed cross-motions for summary judgment. On December 27, 2013,
the trial court denied both motions for summary judgment and, instead, the
court, sua sponte, transferred the case to the Board of Public Utilities (BPU) for
an administrative proceeding to establish the appropriate water usage rates for
the years in question. We, however, granted leave to appeal the order
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transferring the matter to the BPU, reversed, and remanded the case to the trial
court. Twp. of Wyckoff v. Vill. of Ridgewood, No. A-2703-13 (App. Div. July
15, 2015).
Following the remand, the trial court considered the substance of the
summary judgment motions and denied both motions. The trial court then
conducted a fourteen-day bench trial in late 2016 and early 2017. At trial,
plaintiffs called six witnesses: Frank Moritz, the Director of the Utility from
1991 to 2015; Dorothy Stikna, the Chief Financial Officer of Ridgewood from
2004 to 2010; Mai; Katie Chen, a Principal Accountant for Ridgewood from
2005 to 2012; Stephen Sanzari, the Treasurer of Ridgewood; and Higgins.
Defendant called three witnesses: David Scheibner, the Business Manager for
the Utility; James Ten Hoeve, the Manager of Ridgewood from 2003 to 2009;
and Steven Wielkotz, a financial expert.
Based on the testimony from the various witnesses and the documents and
exhibits that were introduced into evidence, the trial court made extensive
findings of facts. The court also made credibility findings, often crediting some
of a particular witness's testimony, while not accepting other testimony from
that same witness.
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The trial court found that Ridgewood did not have a proper factual
foundation to support the rate increases in the 2010, 2011, and 2012 Ordinances.
In that regard, the court found that plaintiffs, primarily through the testimony of
Higgins, established that some of the indirect expenses allocated to the Utility
were unreasonable. Specifically, the court found that Ridgewood had based its
allocation of indirect expenses on a study conducted in 2003, but no new or
recent study or reconciliation had been conducted. The trial court also made a
number of other specific factual findings supporting its overall finding that
Ridgewood did not have a reliable foundation for increasing the water usage
rates.
In that regard, the court found (1) the water rate increases were made when
Ridgewood was facing difficult financial times, and one of the ways that
Ridgewood considered reducing its expenses was by allocating certain of its
costs to the Utility; (2) no reliable financial data supported the reported and
projected deficits at the Utility; (3) there had been a high turnover of senior
personnel at the Utility and Ridgewood, which contributed to poor financial
reporting, reviews, and projections; (4) the costs allocated to the Utility in 2010
through 2012 were not verified or based on reliable financial data; (5) the Mai
report did not independently review costs and the projected water consumption
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was flawed; thus, that report, which the Ridgewood Council relied upon in
enacting the 2010 Ordinance, was not reliable; and (6) the water usage rate
comparisons presented to the Ridgewood Council in connection with the 2010
Ordinance were "not demonstrated to be an accepted competent methodology
for establishing a rate structure."
The trial court also found, however, that other indirect expenses were
reasonably allocated to the Utility. Thus, the trial court accepted some of
Higgins's testimony and opinions, but rejected other portions. In particular, the
trial court rejected Higgins's "all or nothing" approach of disallowing all indirect
costs allocated to the Utility. The court also rejected Higgins's opinion as to the
amount of damages due to plaintiffs. In contrast, the trial court accepted the
testimony of defendant's expert, Wielkotz, to the extent that Wielkotz opined
that some rate increases were necessary and that plaintiffs were not entitled to a
complete refund of all the rate increases.
Based on its factual findings, the trial court then analyzed the legal
arguments presented by the parties. The trial court first addressed defendant's
argument that plaintiffs' challenges to the ordinances were untimely under Rule
4:69-6(a). That rule requires prerogative writ actions to be filed within forty-
five days of the action sought to be challenged. The court reasoned that it was
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in the interest of justice to enlarge the forty-five-day time limit, as allowed under
the rule.
The trial court then turned to the substance of the case, and determined
that plaintiffs had demonstrated that the 2010, 2011, and 2012 Ordinances were
arbitrary, capricious, and unreasonable because they were adopted without a
factual foundation substantiating the need for rate increases. The court also
found that the rate increases were inconsistent with N.J.S.A. 40A:31-10(c).
In striking down the 2012 Ordinance, the trial court also struck down the
provision that allowed the Utility to increase the rates by three percent each year
in 2013 and 2014. Relying on N.J.S.A. 40A:31-10(c), the trial court held that
Ridgewood had to pass an ordinance, based on a proper record, to implement
future rate increases. The court reasoned that the Water Supply Act precluded
Ridgewood from authorizing automatic rate increases.
Turning to damages, the court found that plaintiffs had not established a
specific amount of their alleged damages. In that regard, the trial court found
that plaintiffs had not presented evidence that allowed the court to make
appropriate allocations and reimbursement computations. Consequently, the
trial court concluded that a remand to the Ridgewood Council was necessary so
the Council could determine the appropriate rate structure. The court direc ted
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that the record be supplemented on remand so that revenues and direct costs
could be reviewed and substantiated by the Ridgewood Council.
The court then ordered that a refund be "distributed to plaintiffs, based on
the difference between the rate charged and the appropriate rate[s] determined
[by the Ridgewood Council] on remand." The trial court retained jurisdiction to
further review the matter as necessary.
Next, the trial court dismissed defendant's counterclaim, holding that
Ridgewood could not retroactively transfer surpluses from the Utility. The court
found, however, that Ridgewood was permitted to authorize the annual transfer
of an available surplus in an amount not to exceed five percent of the Utility's
costs of operation. The court further instructed that any surplus transferred
"must be authorized and included in the local budget, in accordance with
statutory criteria, and same should be adopted by ordinance." It found that
"[t]aking an automatic cumulative 5% surplus transfer [was] not authorized by
statute."
Finally, the court found that "the circumstances in this matter [did not]
dictate the equitable allowance of litigation costs and attorney's fees." The court
noted that the residential ratepayers of Wyckoff, Glen Rock, and Midland Park
had an interest in correctly establishing the water rates.
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The court embodied its final rulings in a judgment entered on July 20,
2017. That judgment (1) invalidated the 2010, 2011, and 2012 Ordinances; (2)
remanded the matter to the Ridgewood Council to conduct a hearing to
recalculate and establish the rates; and (3) ordered refunds to plaintiffs of the
difference between the rates charged and the appropriate rates determined by the
Ridgewood Council on remand. The court supported its judgment with a
thorough, written opinion.
Plaintiffs moved for reconsideration. The trial court, however, denied that
motion in an order entered on September 1, 2017. Thereafter, plaintiffs appealed
and defendant cross-appealed. Plaintiffs also moved for a stay of the remand
proceedings pending appeal. That motion was denied both by the trial court and
by us.
II.
On appeal, plaintiffs make three primary arguments, with numerous
related sub-arguments. Plaintiffs contend that the trial court erred by (1)
remanding the issue of setting appropriate water usage rates and not making a
ruling and award of damages to the class; (2) failing to award just over $3.6
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million in damages to plaintiffs for the improper transfer of surpluses from the
Utility to Ridgewood; and (3) not awarding plaintiffs attorney's fees. 1
In its cross-appeal, defendant argues that the trial court erred in (1) ruling
that the three ordinances were arbitrary, capricious, and unreasonable; (2)
finding that the water usage rate comparisons to surrounding communities were
not a proper consideration in establishing water rate increases; (3) making
certain findings that were against the weight of the evidence; (4) capping the
annual transfer of the Utility's surplus at five percent of its budget; and (5) not
finding that plaintiffs' complaint was time-barred.
Comparing the issues raised on the appeal and cross-appeal, and
synthesizing some of those issues, we are presented with five primary issues.
The issues are whether the trial court erred by (1) not finding that plaintiffs'
challenge to the ordinances was time-barred; (2) invalidating the three
ordinances; (3) remanding the matter to the Ridgewood Council to set
1
In their reply brief, plaintiffs contended that the trial court also erred by
allowing defendant's expert to testify to opinions that had not been included in
his report. That issue was not included in plaintiffs' notice of appeal or as an
argument in their initial brief on appeal. Instead, plaintiffs referenced the issue
in the statement of facts in their initial brief and first raised the issue as an
argument in their reply brief. Because "[i]t is improper to introduce new issues
in a reply brief," we decline to consider this argument. In re Bell Atl.-N.J., Inc.,
342 N.J. Super. 439, 442 (App. Div. 2001). Moreover, we are not persuaded by
this argument.
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appropriate water usage rates; (4) ruling that surpluses could be transferred from
the Utility to Ridgewood, but capping the annual surplus transfer; and (5) not
awarding plaintiffs attorney's fees.
Initially, we identify our standard of review. Municipal actions enjoy a
presumption of validity. Cona v. Twp. of Washington, 456 N.J. Super. 197, 215
(App. Div. 2018) (quoting State v. Clarksburg Inn, 375 N.J. Super. 624, 632
(App. Div. 2005)). Accordingly, courts have a "limited role . . . in reviewing
municipal rates for utility services." Meglino v. Twp. Comm. of Eagleswood,
103 N.J. 144, 152 (1986). "An ordinance establishing [such] rates will be upset
only if patently unreasonable." New Providence Apartments Co. v. Mayor &
Council of New Providence, 423 N.J. Super. 210, 216 (App. Div. 2011)
(alteration in original) (quoting Meglino, 103 N.J. at 152). The party seeking to
challenge an ordinance has the burden to establish that the ordinance is either
invalid, or that it is arbitrary, capricious, or unreasonable. Timber Glen Phase
III, LLC v. Twp. of Hamilton, 441 N.J. Super. 514, 523-24 (App. Div. 2015).
Nevertheless, when a municipal utility supplies water to non-residents, a court
should strictly construe the enabling legislation to protect non-resident
customers. See Mayor & Mun. Council of Clifton v. Passaic Valley Water
Comm'n, 115 N.J. 126, 137-38 (1989).
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Here, the parties engaged in a fourteen-day trial, where they presented
evidence beyond the record developed before the Ridgewood Council. The trial
court then made extensive findings of facts and conclusions of law. "Final
determinations made by [a] trial court sitting in a non-jury case are subject to a
limited and well-established scope of review." City Council of Orange Twp. v.
Edwards, 455 N.J. Super. 261, 271 (App. Div. 2018) (quoting D'Agostino v.
Maldonado, 216 N.J. 168, 182 (2013)). We will not "disturb the factual findings
of the trial court 'unless we are convinced that they are so manifestly
unsupported by[,] or inconsistent with[,] the competent, relevant[,] and
reasonably credible evidence as to offend the interests of justice.'" Id. at 272
(alterations in original) (quoting D'Agostino, 216 N.J. at 182). A trial court's
credibility determinations are also accorded deference because the court "'hears
the case, sees and observes the witnesses, and hears them testify,' affording it 'a
better perspective than a reviewing court in evaluating the veracity of a
witness.'" Ibid. (quoting Gnall v. Gnall, 222 N.J. 414, 428 (2015)). "To the
extent that the trial court interprets the law and the legal consequences that flow
from established facts, we review its conclusions de novo." Motorworld, Inc. v.
Benkendorf, 228 N.J. 311, 329 (2017) (first citing D'Agostino, 216 N.J. at 182;
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then citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366,
378 (1995)).
A. Whether Plaintiffs' Complaint Was Time-Barred
Plaintiffs brought an action in lieu of prerogative writs. Rule 4:69-6(a)
states: "No action in lieu of prerogative writs shall be commenced later than 45
days after the accrual of the right to the review, hearing or relief claimed[.]"
Accord Save Camden Pub. Schs. v. Camden City Bd. of Educ., 454 N.J. Super.
478, 489 (App. Div. 2018) (quoting R. 4:69-6(a)). This rule is "aimed at those
who slumber on their rights." Hopewell Valley Citizens' Grp., Inc. v. Berwind
Prop. Grp. Dev. Co., 204 N.J. 569, 579 (2011) (quoting Schack v. Trimble, 28
N.J. 40, 49 (1958)).
Rule 4:69-6(a) does not define when actions in lieu of prerogative writs
accrue, therefore, questions of accrual are left to substantive law. Harrison
Redevelopment Agency v. DeRose, 398 N.J. Super. 361, 401 (App. Div. 2008).
Substantive law establishes that a cause of action pursuant to Rule 4:69-6
challenging the actions of a municipal government accrues on the date that the
actions are adopted. See Concerned Citizens of Princeton, Inc. v. Mayor &
Council of Princeton, 370 N.J. Super. 429, 446-47 (App. Div. 2004).
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Here, plaintiffs challenge the water usage rate increases implemented in
the 2010, 2011, and 2012 Ordinances. The 2010 Ordinance was adopted on
December 14, 2009, and became effective on January 1, 2010. Plaintiffs filed
their initial action on February 1, 2010. Thus, that action was timely.
Thereafter, plaintiffs amended the complaint to challenge the 2011 and
2012 Ordinances after those ordinances were adopted. Furthermore, a fair and
plain reading of plaintiffs' original complaint establishes that plaintiffs would
be challenging any future rate increases. Accordingly, the amended complaint
was also timely.
Defendant argues that although the complaint challenges the 2010, 2011,
and 2012 Ordinances, plaintiffs base that challenge on contentions that the cost
allocations that occurred between 2004 and 2009 were improper and without
factual bases. Consequently, defendant argues that plaintiffs are really
challenging the allocation of expenses between 2004 and 2009. Moreover,
defendant contends that in 2004, the New Jersey Department of Community
Affairs, Local Finance Board approved Ridgewood's water usage rate increase,
and plaintiffs did not file a timely challenge to that administrative action.
Defendant's arguments concerning the time-bar issue are not based on a
fair or accurate reading of plaintiffs' complaint. Plaintiffs are not challenging
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the rate increase that was implemented in 2004. Instead, plaintiffs challenge
three ordinances that were adopted between December 2009 and June 2012.
That plaintiffs argue that the rate increases are based on improper cost
allocations does not convert their action into a challenge to the Utility's or
Ridgewood's budgets for years 2004 through 2009. In short, plaintiffs timely
filed their complaint and the trial court did not err in denying defendant's
motions to dismiss the complaint as time-barred.
B. Whether the Three Ordinances Were Invalid
As previously noted, Ridgewood owns and operates the Utility under the
authority granted to it in the Water Supply Act. The Water Supply Act allows
municipalities, such as Ridgewood, to "prescribe and, from time to time, alter
rates or rentals to be charged to users of water supply services." N.J.S.A.
40A:31-10(a). The rates must be "uniform and equitable for the same type and
class of use or service of the facilities[.]" Ibid.
In setting rates, a municipality
shall establish a rate structure that allows . . . [it] to:
(1) Recover all costs of acquisition,
construction or operation, including the
costs of raw materials, administration, real
or personal property, maintenance, taxes,
debt service charges, fees and an amount
equal to any operating budget deficit
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occurring in the immediately preceding
fiscal year;
(2) Establish a surplus in an amount
sufficient to provide for the reasonable
anticipation of any contingency that may
affect the operation of the utility, and, at
the discretion of the [municipality], allow
for the transfer of moneys from the budget
for the water supply facilities to the local
budget in accordance with [N.J.S.A.
40A:4-35.1].
[N.J.S.A. 40A:31-10(c).]
The Utility is subject to the "jurisdiction, regulation and control" of the
BPU because it "suppl[ied] water to more than 1,000 billed customers within
another local unit[.]" L. 1989, c. 109, § 1; N.J.S.A. 40A:31-23(d)(1). See also
L. 1975 c. 184, § 1. Effective January 5, 2006, that provision of the Water
Supply Act was amended to exempt municipalities from the BPU's rate-setting
jurisdiction "whenever any supplying local unit or units charge the same rates
or rentals to the billed customers outside of the supplying local unit or units as
are charged to customers within the supplying local unit or units[.]" L. 2005, c.
267, § 1; N.J.S.A. 40A:31-23(e). The Utility continued to be subject to the
jurisdiction of the BPU for service and reliability. N.J.S.A. 40A:31-23(f).
Instead of being subject to the BPU's rate-setting jurisdiction,
municipalities must authorize rate increases by adopting an ordinance. N.J.S.A.
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40A:31-23(e). By requiring an ordinance, the Legislature ensured that
municipal water usage rate increases would be subject to the normal procedures
and notice requirements governing ordinances. Accordingly, the municipality
must give advanced notice of a proposed rate increase and hold a public hearing
before adopting the ordinance implementing the rate increase. Ibid. See also
N.J.S.A. 40:49-2 (detailing procedures for passing municipal ordinances);
N.J.S.A. 10:4-9 (requiring public notice prior to all meetings of public bodies).
The Water Supply Act also requires that the rate increases are to be based
on reliable financial information. See N.J.S.A. 40A:31-10(c). In that regard,
N.J.S.A. 40A:31-10(c) identifies specific "costs" that can be recovered through
water usage rates. Ibid. See also N.J.S.A. 40A:31-3(b) (defining "cost").
Here, the trial court found that Ridgewood did not have a reliable factual
basis for the rate increases it implemented in the 2010, 2011, and 2012
Ordinances. The court made that finding based on the extensive evidence
presented during the trial. The court also supported that overall finding by
making a number of specific factual findings. Moreover, those factual findings
were based on credibility determinations that the trial court made regarding the
testimony provided by the nine witnesses who appeared at trial.
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The principal factual findings by the trial court included findings that (1)
Ridgewood did not establish whether and in what amount the Utility had
operating deficits, and (2) Ridgewood used unreliable revenue projections.
To support the rate increases in the 2010 Ordinance, Ridgewood relied on
testimony from Moritz and Mai. The trial court found that neither Moritz nor
Mai properly accounted for the substantial indirect costs that were allocated to
the Utility. The court also found that Ridgewood had not conducted a reliable
examination of the Utility's deficits and indirect costs. Thus, the court found
that the method by which the Utility's deficits were determined "was not credibly
established" and the financial information provided to the Ridgewood Council
was "question[able]." The trial court also found that the information provided
to the Ridgewood Council included unreliable revenue projections because there
was no rate study conducted to support the rate increases.
The trial court made similar findings with regard to the rate increases
implemented in the 2011 and 2012 Ordinances. Again, the court found that
those increases were not supported by reliable financial information or studies.
Moreover, the court found that in 2011 and thereafter, the Ridgewood Council
had been advised that there were significant concerns about the reliability of the
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cost allocations, the Utility's deficits, and whether any rate increase was
warranted.
All of the trial court's factual findings are amply supported by the evidence
presented at the trial. Those findings are also supported by the court's credibility
determinations. We discern no basis to reject any of the principal factual
findings made by the trial court.
Applying the trial court's factual findings to the law, we also agree with
the legal conclusions the trial court reached. Specifically, we agree that the rate
increases implemented in the 2010, 2011, and 2012 Ordinances were arbitrary,
capricious, and unreasonable because they lacked an adequate factual basis. As
previously noted, the Water Supply Act requires rates to be based on specific
costs. See N.J.S.A. 40A:31-10(c)(1). Here, the evidence established that
Ridgewood did not have accurate or reliable financial reports or data
establishing the costs of the Utility and whether and in what amount the Utility
had deficits.
Defendant makes three primary arguments in challenging the trial court's
findings that the three ordinances were invalid. First, defendant contends that
no one, including plaintiffs, objected to the 2010 Ordinance. Defendant then
goes on to argue that the Council relied on information provided by the Utility
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and senior Ridgewood officials and that reliance was reasonable. We reject that
argument given the factual findings made by the trial court. The Ridgewood
Council was told that indirect costs allocated from Ridgewood comprised part
of the Utility's operating expenses. The Council was also told that those
allocations were based on a study conducted in 2003, and no new study or
reconciliation had ever been performed. Given those facts, the Council had an
obligation to question the financial information provided to it to ensure that the
information was reliable. The trial court found the Council did not conduct that
due diligence and that finding is supported by credible evidence.
Second, defendant contends that the trial court did not give appropriate
consideration to the water rate comparisons information that had been provided
to the Council. The Council had been told that rates from other communities
had been reviewed and that the proposed increase in 2010 would be in the middle
range of those other rates. The trial court correctly found that the comparisons,
in and of themselves, could not be the basis for a rate increase. The Water
Supply Act requires that rate increases be based on the actual costs of the Utility.
See N.J.S.A. 40A:31-10(c). The comparisons, however, do not focus on the
actual costs incurred by the Utility.
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Finally, defendant takes issue with four specific factual findings made by
the trial court. Defendant argues that the trial court erred in finding that (1)
there was no support for the allocation of time and expenses of Utility employees
doing work for Ridgewood; (2) Ridgewood failed to establish that the Utility
had deficits; (3) there was no factual support for the allocation of the entire
salary of Moritz to the Utility; and (4) Mai had no reliable basis for his
projections of revenue and water consumption.
Initially, we note that none of these factual findings, either individually or
in combination, undermine the trial court's primary factual finding that
Ridgewood lacked a reliable basis for establishing the rate increases in the three
ordinances. In addition, having reviewed the record, the trial court's factual
findings on all four of the challenged facts are supported by credible evidence
in the record.
First, the trial court found Stikna, Ridgewood's former Chief Financial
Officer, to be credible when she testified that the allocations were never
reconciled in accordance with the 2003 study, and that the Utility was never
reimbursed by Ridgewood for its employees' work performed for the benefit of
Ridgewood. Second, although the Utility calculated a deficit, the trial court
determined that that deficit was not based on reliable data, as Mai testified that
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he did not perform a cost allocation study, but rather compiled data that was
"spoon fed" to him by Stikna and the finance department. Third, the trial court
found that the allocation of Moritz's entire salary to the Utility was not justified
because he testified that he spent an hour to an hour-and-one-half on work for
Ridgewood each day, and Stikna testified that indirect costs such as work
performed for Ridgewood were never reconciled or reviewed. Fourth, the court
found that Mai's predictions of revenue and water consumption for 2010 were
flawed because Mai testified that he used the lowest water consumption rates to
project water consumption for October, November, and December 2009, which
ultimately affected the projection for 2010.
C. The Remand to the Ridgewood Council
Plaintiffs argue that the trial court erred in remanding the matter to the
Ridgewood Council to establish appropriate rates. They contend that they were
entitled to a refund of the difference between what the rates were in 2009 and
the invalid rate increases in the 2010, 2011, and 2012 Ordinances. Thus,
plaintiffs seek a refund of the approximately thirty-seven percent increase in
rates put into effect beginning January 1, 2010. That is, an approximately
twenty-one percent increase in 2010, a five percent increase in 2011, a five
percent increase in 2012, a three percent increase in 2013, and a three percent
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increase in 2014. Plaintiffs assert that they submitted evidence, through their
expert Higgins, to show that their damages as of July 31, 2016, were
$13,834,324. We disagree.
Ridgewood was authorized by the Water Supply Act to set appropriate
rates for the Utility. See N.J.S.A. 40A:31-10(a). The trial court found that
Ridgewood did not have reliable financial information to properly set the
increased rates that it implemented under the three ordinances. In that regard,
the trial court found that much of the information provided to the Ridgewood
Council was unreliable, out of date, and not verified. Critically, the trial court
also found that since the last rate increase in 2004, the Utility had increased
expenses and had undertaken significant capital improvements. Therefore, the
trial court found that Ridgewood may well have the right to increase the rates,
but it needed to do it based on a proper factual record.
Consequently, the trial court remanded the matter to the Ridgewood
Council to set appropriate rates for the periods after January 1, 2010. The trial
court also ruled that plaintiffs will be entitled to receive the difference between
what they paid for their water under the invalid ordinances and the appropriate
rates established on remand. Furthermore, the trial court retained jurisdiction to
review the proceedings on remand and the award of a refund.
A-0363-17T2
29
The trial court had the legal authority and acted appropriately in
remanding the matter to the Ridgewood Council. It is well established that
claimants are entitled to a refund of excessive fees if those fees are determined
to be improper. See Automatic Merch. Council of N.J. v. Twp. of Edison, 102
N.J. 125, 130-31 (1986) (quoting In re Increase in Fees by N.J. State Bd. of
Dentistry, 84 N.J. 582, 587 (1980)). "[O]rdinarily the proper procedure is for
the agency [or municipality] to redetermine the fees in accordance with correct
principles and to refund the excess." Id. at 131 (citing State Bd. of Dentistry,
84 N.J. at 589-90). In other words, where a municipal action is authorized by
statute, but the municipality acts improperly, it can thereafter properly exercise
its authority under the statute to calculate a refund to those harmed by the
improper action. See id. at 130-32.
For example, in Automatic Merchandising, our Supreme Court addressed
a situation where a municipality had imposed an excessive licensing fee for
vending machines. See 102 N.J. at 127-28, 130. The Court directed the
municipality to "reenact the fee schedule for the regulatory year in question and
[to] refund the balance to the claimants." Id. at 131. See also N.J. Builders
Ass'n v. Borough of Mendham, 263 N.J. Super. 88, 96 (App. Div. 1993) (finding
a municipality's failure "to use a proper method in calculating [a water
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30
connection] fee is neither a waiver nor a forfeiture of its right to collect a
reasonable connection fee"). In short, the trial court's remand was in accordance
with established authority and we discern no basis for reversing that remand.
In challenging the trial court's remand, plaintiffs make four principal
arguments. First, they contend that the trial court erroneously conflated the
separate and distinct proofs for liability and damages. We disagree. The trial
court made detailed findings concerning the lack of a proper factual basis for
the rate increases implemented in the 2010, 2011, and 2012 Ordinances. As
already discussed, however, the court also made detailed findings, which are
amply supported by the record, that the Utility had costs that may well justify
rate increases. Since the court was not provided with evidence that would allow
it to calculate those increases, the court was within its authority to remand the
matter to the Ridgewood Council for a proper determination of appropriate rates.
Second, plaintiffs contend that our prior decision compelled the trial court
to make a calculation of plaintiffs' damages. Not so. The issue before us in our
prior decision was whether the trial court had erred in transferring the matter to
the BPU. The question whether the matter could be remanded to the Ridgewood
Council was not presented or determined by our prior decision. Accordingly,
we have not previously determined this issue.
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Third, plaintiffs argue that New Jersey law provides that a refund is the
appropriate remedy. To support that position, plaintiffs cite to In re Increase in
Fees by New Jersey State Board of Dentistry, 84 N.J. 582, 587 (1980); Riker v.
Mayor & Aldermen of Jersey City, 38 N.J.L. 225 (Sup. Ct. 1876); and Mayor &
Municipal Council of Clifton v. Passaic Valley Water Commission, 115 N.J. 126
(1989). These three cases, however, either support a remand or are
distinguishable from the facts at issue here.
Specifically, the decisions in State Board of Dentistry and Riker support
the remand and refund ordered by the trial court in this case. In State Board of
Dentistry, after this court invalidated a license and registration fee schedule set
by the New Jersey State Board of Dentistry, and after that Board calculated a
new lawful fee schedule, the Supreme Court ruled that the Board did not have a
"right" to keep the excess fees charged. 84 N.J. at 587 (quoting Riker, 38 N.J.L.
at 228). Thus, the Court "remand[ed] the case to the State Board of Dentistry
for calculation and distribution of the proper refund[.]" Id. at 590.
Similarly, in Riker, the plaintiff sought a refund of the difference between
an invalidated sewer assessment and a recalculated assessment. 38 N.J.L. at
225, 227. In Riker, the Court held the plaintiff was entitled to the refund based
on the commissioners' recalculated assessment. 38 N.J.L. at 225, 228.
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Accordingly, both State Board of Dentistry and Riker support the calculation of
damages based on the difference between the unlawful rate actually charged and
the municipality's recalculated lawful rate based on actual Utility costs.
Next, the facts underlying the Court's decision in Clifton are
distinguishable from the instant matter. In Clifton, the Court determined that a
multijurisdictional water utility's distribution of funds to its owner -cities was
invalid as there was no legislative authorization for such distribution of funds .
115 N.J. at 136, 141, 147. Therefore, the Court ordered the full amounts
distributed to be refunded to the water utility, because the utility had no statutory
right to make the distributions. 115 N.J. at 141, 145-47. Here, in contrast, the
Utility has a statutory right to set rates, see N.J.S.A. 40A:31-10(a), but the trial
court determined that the rates set by the Utility were invalid because they were
arbitrary, capricious, and unreasonable. Accordingly, a remand is appropriate
to allow the Utility to validly exercise its rate-setting authority. Cf. Twp. of
Middletown v. Simon, 193 N.J. 228, 251 (2008) (acknowledging "a distinction
between an act utterly beyond the jurisdiction of a municipal corporation and
the irregular exercise of a basic power under the legislative grant in matters not
in themselves jurisdictional" (quoting Middletown Twp. Policemen's
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33
Benevolent Ass'n Local No. 124 v. Twp. of Middletown, 162 N.J. 361, 368
(2000))).
Finally, plaintiffs assert that their expert set forth the calculation of
damages, which was unchallenged at trial. The specific findings of fact made
by the trial court do not support that argument. As previously noted, the trial
court rejected plaintiffs' expert's position on damages, a rejection amply
supported by substantial, credible evidence.
D. The Surpluses
The parties make two arguments concerning the surpluses the Utility
transferred to Ridgewood. First, plaintiffs argue the trial court erred in failing
to award them just over $3.6 million as damages for the alleged improper
transfer of surpluses from 2011 to 2016. Second, defendant contends that not
only were surplus transfers permitted, but the trial court erred in capping future
annual surplus transfers at five percent of the Utility's cost of operation.
Whether Ridgewood is permitted to transfer surpluses from the Utility
involves the interpretation of several statutory provisions, specifically, N.J.S.A.
40A:31-10, N.J.S.A. 40A:31-23, and N.J.S.A. 40A:4-35.1. Accordingly, our
review of these issues is de novo. Saccone v. Bd. of Trs. of Police & Firemen's
Ret. Sys., 219 N.J. 369, 380 (2014) (first citing McGovern v. Rutgers, 211 N.J.
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34
94, 107-08 (2012); then citing Russo v. Bd. of Trs., Police & Firemen's Ret.
Sys., 206 N.J. 14, 27 (2011); and then citing State v. Gandhi, 201 N.J. 161, 176
(2010)).
When interpreting a statute, the primary goal is to give effect to the intent
of the Legislature. State v. Lenihan, 219 N.J. 251, 262 (2014) (quoting State v.
Hudson, 209 N.J. 513, 529 (2012)). "[T]he best indicator of that intent is the
plain language chosen by the Legislature." Ibid. (alteration in original) (quoting
Gandhi, 201 N.J. at 176). "[W]ords and phrases shall be read and construed with
their context, and shall, unless inconsistent with the manifest intent of the
[L]egislature or unless another or different meaning is expressly indicated, be
given their generally accepted meaning, according to the approved usage of the
language." State v. Hupka, 203 N.J. 222, 232 (2010) (quoting N.J.S.A. 1:1-1).
"If the statute is clear and unambiguous on its face and admits of only one
interpretation, [a court] need delve no deeper than the act's literal terms to divine
the Legislature's intent." State v. Butler, 89 N.J. 220, 226 (1982).
The Water Supply Act permits municipalities to establish surpluses for a
water utility for anticipated contingencies. N.J.S.A. 40A:31-10(c)(2). It also
allows, in certain circumstances, municipalities to transfer some of that surplus
to its local budget. Ibid. Specifically, the Water Supply Act states:
A-0363-17T2
35
In fixing rates . . . the local unit . . . [can] . . .
[e]stablish a surplus in an amount sufficient to provide
for the reasonable anticipation of any contingency that
may affect the operation of the utility, and, at the
discretion of the local unit or units, allow for the
transfer of moneys from the budget for the water supply
facilities to the local budget in accordance with
[N.J.S.A. 40A:4-35.1].
[N.J.S.A. 40A:31-10(c)(2).]
In turn, N.J.S.A. 40A:4-35.1 provides that a surplus not exceeding five
percent of the annual cost of the Utility's operation may be transferred to the
municipality when the Utility is "regulated by the [BPU] pursuant to subsection
d. of N.J.S.[A.] 40A:31-23[.]" Subsection (d) of N.J.S.A. 40A:31-23 provides
that "a local unit or local units owning and operating water supply
facilities . . . which supply water to more than 1,000 billed customers within
another local unit, shall be subject to the jurisdiction, regulation and control of
the [BPU][.]"
Paragraph (e) of N.J.S.A. 40A:31-23 exempts certain utilities from the
BPU's rate-setting jurisdiction. In that regard, subsection (e) provides that:
[W]henever any supplying local unit or units charge the
same rates or rentals to the billed customers outside of
the supplying local unit or units as are charged to
customers within the supplying local unit or units, the
local unit or units owning and operating water supply
facilities . . . shall, with respect to the rates or rentals to
be charged to users of water supply services, be exempt
A-0363-17T2
36
from the jurisdiction, regulation and control of the
[BPU].
[N.J.S.A. 40A:31-23(e).]
N.J.S.A. 40A:31-23(f) provides that "[n]othing in subsection e. of this
section shall be construed to exempt any supplying local unit or units supplying
billed customers outside of the supplying local unit or units, from the
jurisdiction, regulation and control of the [BPU], with respect to service and
reliability."
In applying the language used by the Legislature, these statutory
provisions authorize a municipality, such as Ridgewood, to transfer surplus from
its utility, but cap the annual transfer at five percent of the utility's costs of
operation. First, N.J.S.A. 40A:31-10(c)(2) authorizes a surplus and a transfer of
some of that surplus "in accordance with" N.J.S.A. 40A:4-35.1. Second,
N.J.S.A. 40A:4-35.1 applies to any municipality supplying a utility service that
is regulated by the BPU pursuant to subsection (d) of N.J.S.A. 40A:31-23.
Third, N.J.S.A. 40A:31-23(d) gives the BPU jurisdiction over a utility owned
by a municipality when that utility "suppl[ies] water to more than 1,000 billed
customers within another local unit[.]" Fourth, N.J.S.A. 40A:31-23(e) exempts
from the BPU's jurisdiction the "rates" charged by such utilities. Finally,
A-0363-17T2
37
N.J.S.A. 40A:31-23(f) clarifies that a utility remains subject to the BPU's
jurisdiction with regard to "service and reliability."
In summary, while subsection (e) exempts rate setting from the BPU's
jurisdiction, subsection (f) clarifies that the BPU retains jurisdiction over such
utilities for other purposes. Therefore, N.J.S.A. 40A:4-35.1 applies to the
Utility because the Utility is still subject to the BPU's jurisdiction for service
and reliability.
Both plaintiffs and Ridgewood argue that N.J.S.A. 40A:4-35.1 does not
apply because the Utility's rates are not subject to regulation by the BPU.
Plaintiffs then argue that there is no statutory authority permitting a transfer of
any surplus. Relying on Clifton, plaintiffs go on to argue that all transfers must
be vacated and the monies returned to the Utility. They also assert that the
$3,641,649 transferred between 2011 and 2016 should be awarded to them as
damages.
Ridgewood also argues that N.J.S.A. 40A:4-35.1 does not apply, asserting
that N.J.S.A. 40A:4-35 governs. That statutory section provides:
If, in any year as a result of the operation of such
utility . . . , there shall be a surplus, . . . then such
surplus, when authorized by the . . . body controlling
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38
the utility . . . , may be included in the budget as an item
of miscellaneous revenue[.]
[N.J.S.A. 40A:4-35.]
We disagree with both parties' positions. As already summarized,
N.J.S.A. 40A:4-35.1 applies. The Legislature withdrew the BPU's jurisdiction
only over "rates . . . to be charged," but left such utilities subject to the BPU's
jurisdiction for other purposes, such as "service and reliability." N.J.S.A.
40A:31-23(e) and -23(f).
Moreover, to accept plaintiffs' argument would ignore N.J.S.A 40A:31-
10(c)(2), which expressly authorizes surpluses. Because there is statutory
authority for surpluses and the transfer of some portion of the surplus , Clifton
does not control. Furthermore, to accept defendant's position would conflict
with Clifton, which determined N.J.S.A. 40A:4-35 does not apply to a municipal
utility that supplies water to customers outside the municipality. See 115 N.J.
at 145.
E. The Attorney's Fees
Finally, plaintiffs argue that they are entitled to an award of attorney's fees
as the prevailing representatives of a class. In that regard, they contend that the
litigation resulted in a tangible benefit to all ratepayers because the rate
increases in the 2010, 2011, and 2012 Ordinances were invalidated.
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39
Accordingly, plaintiffs requested the trial court to order defendant to pay their
attorney's fees through a fund in court in accordance with Rules 4:32-2(h) and
4:42-9(a)(2).
"[T]he prevailing party in litigation generally is not entitled to an award
of attorneys' fees." Henderson v. Camden Cty. Mun. Util. Auth., 176 N.J. 554,
564 (2003). There are, however, exceptions to that general rule. "One exception
to that rule is that attorneys' fees may be awarded from a 'fund in court.'" Ibid.
(quoting R. 4:42-9(a)(2)). Rule 4:32-2(h) states that in an action certified as a
class action, an application for attorney's fees may be made in accordance with
Rule 4:42-9. Rule 4:42-9, in turn, authorizes attorney's fees in eight instances,
including "[o]ut of a fund in court." R. 4:42-9(a)(2). Specifically, the fund-in-
court exception states:
The court in its discretion may make an allowance out
of such a fund, but no allowance shall be made as to
issues triable of right by a jury. A fiduciary may make
payments on account of fees for legal services rendered
out of a fund entrusted to the fiduciary for
administration, subject to approval and allowance or to
disallowance by the court upon settlement of the
account.
[R. 4:42-9(a)(2).]
The fund-in-court exception applies to "situations in which equitably
allowances should be made and can be made consistently with the policy of the
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40
rule that each litigant shall bear his [or her] own costs." Sunset Beach
Amusement Co. v. Belk, 33 N.J. 162, 168 (1960). Such a situation exists "when
a party litigates a matter that produces a tangible economic benefit for a class of
persons that did not contribute to the cost of the litigation," making it "unfair to
saddle the full cost" of the litigation upon the plaintiff. Henderson, 176 N.J. at
564 (first citing Silverstein v. Shadow Lawn Sav. & Loan Ass'n, 51 N.J. 30, 45
(1968); then quoting Sunset Beach Amusement Co., 33 N.J. at 168).
Whether the fund-in-court exception applies requires a two-step analysis.
Porreca v. City of Millville, 419 N.J. Super. 212, 227-28 (App. Div. 2011).
"First, the court must determine as a matter of law whether plaintiff is entitled
to seek an attorney fee award under the fund in court exception as articulated in
Henderson." Id. at 228. Second, if the court determines the plaintiff has met
the threshold, the court has discretion to make an award by considering "the
totality of the facts of the case." Ibid. We have explained that
[t]he critical question in considering plaintiff's
entitlement to request attorney's fees under this Rule is
whether a fund in court was created as a result of
[plaintiff's] litigation. There need not be recovery of a
lump sum fund of money; it is sufficient if the fund is
the subject matter of the litigation and is thus brought
under the control of the court.
[Ibid.]
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Here, the trial court denied plaintiffs an award of attorney's fees. In
making that ruling, the trial court found that the circumstances of this matter did
not dictate the equitable allowance of attorney's fees. The trial court explained
that all ratepayers had an interest in correctly delineating water usage rates and
the circumstances of this case did not warrant an award of attorney's fees to the
plaintiffs.
We discern no error in the trial court's decision not to award attorney's
fees. The trial court correctly recognized that plaintiffs had a legal basis for an
award of attorney's fees under the fund-in-court exception in Rule 4:42-9(a)(2).
The trial court, however, exercised its discretion and denied an award of
attorney's fees given the circumstances of this case. In particular, we note that
the ratepayers in Wyckoff, Glen Rock, and Midland Park effectively did
participate in the litigation through their municipalities because those
municipalities used public funds to pay their attorney's fees.
Having reviewed all the arguments put forward on the appeal and cross-
appeal, we have rejected each of those arguments. To the extent that we did not
address specific sub-arguments, it is because we deem such arguments as not
warranting a discussion in a written opinion. See Rule 2:11-3(e)(1)(E).
Affirmed.
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