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3 N.J.A.R. 307

Laurel Builders v. Environmental Protection, The Department of
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Citation: 3 N.J.A.R. 307
Decision Date: 1981
Synopsis: The parties in this action brought cross motions for summary decision to determine whether or not petitioner is entitled to a sewer extension ban exemption, pursuant to N.J.A.C. 7:9-13.6(a)1. The petitioner contended that it had made substantial expenditures in good faith reliance upon a permit or approval, thereby qualifying for an exemption and that the State should be estopped from denying an exemption by reason of certain alleged dilatory conduct by the Divi- sion of Water Resources. The administrative law judge found that the petitioner had pur- chased 11 acres of land for development and an additional two acres of land needed for drainage at a price of $25,000. The petitioner proceeded to expend $4,671.50 (all but $31.50 was spent for legal, engineering and filing fees) to obtain final approval for the develop- ment. On June 2, 1980, a year after receiving such approval, the petitioner applied for a sewer extension permit which it had known it would need since the inception of the project to provide adequate drainage of the property. On August 5, 1980, the Department of Environmental Protection issued a formal sewer extension ban covering the sewer plant that would service petitioner's development. On August 18, 1980, the petitioner's application was reviewed and denied solely on the basis of the sewer extension ban. The administrative law judge rejected the petitioner's contention that the $25,000 paid for the drainage land plus the legal and engi- neering fees needed for approval constituted the substantial expendi- tures required by the regulation to qualify for a sewer extension ban exemption. The judge determined that the specific language of the regulation prohibits engineering, architectural and legal fees from being considered in determining whether substantial expenditures have been made. The judge also rejected the petitioner's contentior that the $25,000 paid for the drainage land should be considered comparable to the installation of drainage pipe. In addition, the judge determined that even if these expenditures had met the other requirements of the regulation, the expenditures were not made in good faith reliance upon a permit or approval since it is well settled that such expenditures must follow a permit and not be in anticipation of it. As to the petitioner's argument that the State should be estopped from denying an exemption because of its alleged dilatory action, the judge found that any expenditures made by the petitioner were not made in reliance upon any extended failure by the Division of Water Resources to follow its own regulations or upon any Division advice that no sewer ban was in effect. Accordingly, the administrative law judge concluded that the peti- tioner had not met the criteria for a sewer extension ban and that the Division was not estopped from denying the exemption. Peter R. Richards, Esq. for Petitioner (Richards, Martinez & Mul- laney, Attorneys) Susan J. Vercheak, Deputy Attorney General, for ,Respondent (James R. Zazzali, Attorney General of New Jersey, Attrorney)
Rule(s) Cited: 7:9-13.6(a)