Only The Squeaky Wheel Gets The Oil

by:  Gregory S. Ricciardi

On July 22, 2011, the Appellate Division affirmed this old adage in Pacilli Homes, LLC v. Township of Harrison.  In Pacilli, the Appellate Division was called upon to decide whether the Shore Builders ruling from 2010 should be applied prospectively or retroactively. On the last episode of Shore Builders, the New Jersey Supreme Court held that a recreational fee ordinance, which allowed developers of multi-unit residential subdivisions to pay a fee in lieu of setting aside land for recreational and open space purposes was invalid. The ordinance in question was not permitted by the Municipal Land Use Law and hence the ordinance was deemed invalid. However, the Township had already collected fees in lieu of constructing on-site facilities to the tune of $1,195,100.00 and allocated these funds to specific projects. The plaintiffs in this case had contributed $79,000.00. The Appellate Division concluded that the threshold questions decided in Shore Builders were not novel questions of law, but simply “an application of existing precedent to a specific fee.” Therefore, developers that had paid the fee could seek reimbursement from the Township retroactively.

But what was that about the “squeaky wheel”? Unfortunately for the named plaintiff’s, they did not challenge the ordinance at the time it was imposed. Nothing in the record indicates that payment was made under protest or that the fee was challenged at the time of the project approval, the adoption of the ordinance or in the execution of the developer’s agreement. “Having failed to protest the payments and having allowed the recreational facilities to be constructed, the plaintiff cannot now seek to recover these admittedly invalidly assessed fees. “

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