PER CURIAM.
Plaintiffs Oaks Development Corporation, John J. Brunetti and Midtown Water Company appeal from orders entered by the Law Division, which together resulted in the dismissal with prejudice of all of their claims against defendant Old Bridge Municipal Utilities Authority. The Authority cross-appeals from the dismissal of its counterclaim against plaintiffs. For the reasons that follow, we affirm in part, reverse in part and remand the matter to the trial court for further proceedings.
We briefly summarize the salient facts, drawn from the record on appeal.
Plaintiffs are the owners of approximately 2,500 acres of land in the Township of Old Bridge. Joseph J. Brunetti, the father of John J. Brunetti, acquired those properties in the 1950's, and the Township thereafter granted Midtown a franchise to operate a private water company in that area. The State also authorized Midtown to exercise water diversion rights, and allowed it to operate as a public utility for the withdrawal, extraction, sale and delivery of potable water.
Midtown subsequently drilled a well, built a treatment plant, installed necessary pumps and collateral equipment, and erected a standpipe in its franchise area. Sometime later, the Authority commenced a condemnation action to acquire some of Midtown's real property, as well as its machinery, equipment and franchise rights. Midtown contested the action.
To resolve the condemnation action, Midtown, Joseph J. Brunetti and the Authority entered into an agreement, dated December 13, 1967, in which Midtown agreed to sell and convey to the Authority its artesian well, pumps, equipment, storage tanks and associated facilities, as well as certain real property, in exchange for the payment of specified amounts. Midtown also agreed to relinquish all water diversion rights in the property.
The Authority agreed that it would, at its own cost and expense, construct and erect all wells, pumps, storage and treatment facilities and other appurtenances necessary to furnish and provide an ample supply of potable water of sufficient pressure and volume so that Joseph J. Brunetti and his grantees could develop and use their lands in the franchise area for any lawful purpose.
The Authority additionally agreed to furnish, and Midtown agreed to take, a supply of water of up to five million gallons per day through metered connections with the Authority's mains. Midtown agreed to provide and install at its own cost and expense, meter vaults, meters and meter equipment. The agreement specified the rates that would be charged for the water used.
In addition, Midtown granted the Authority an exclusive and irrevocable option to purchase its entire distribution system, along with any supply or storage facilities that it may have created. The parties agreed upon the purchase price for the system, which included $600 from single-family residential water users and specified amounts from other water users.
Thereafter, Midtown, the Estate of Joseph J. Brunetti, and the Authority entered into an agreement, dated January 18, 1986. This agreement provided that all of Midtown's existing water users in the franchise area would become the Authority's customers, without payment of any kind by the Authority. The agreement specified the amounts the customers would be charged for the water they used. However, the parties agreed that Midtown's customers would not be required to pay fees for any connections made within the franchise area.
The 1986 agreement additionally stated in pertinent part:
The agreement also stated that, "In the event that the within agreement is contrary to any previous Agreements, Resolutions, Ordinance as established by the [Authority] or the Municipal Government, then the within Agreement shall be controlling."
In January 1995, the Authority and John J. Brunetti entered into an agreement to construct sewer lines on three properties that Brunetti owned. The agreement provided that the Authority would construct a forty-two inch sewer main, and Brunetti would construct various sewer lines, which would connect with the Authority's forty-two inch line. The agreement specified the times in which Brunetti would be required to construct the lines.
Plaintiffs commenced this action to secure orders requiring the Township and its Planning Board to approve the Oaks at Glenwood, a development that they proposed to construct on 433 acres of land in Midtown's franchise area. The development includes commercial space and 1,384 housing units. Plaintiffs intend to set aside 138 of the residential units for low and moderate income households. In December 2004, the trial court entered an order requiring the Planning Board to approve the development. The Board thereafter adopted a resolution, dated March 1, 2005, approving the development.
On May 2, 2006, Midtown submitted an application to the Authority to extend water service to plaintiffs' proposed development. The Authority deemed the application incomplete, finding that it did not comply with its rules and regulations and the 1986 water agreement. The Authority requested that Midtown "complete its application showing the lines and facilities needed to provide water service to the project, including an onsite water storage facility" that is sufficient to meet the development's peak day and fire flow demands.
The Authority thereafter retained CME Associates, a firm of consulting and municipal engineers, to determine the impact the development would have on its water distribution system and the improvements that would be required to provide water to the development. CME issued a report dated February 15, 2007.
CME noted that the Authority's water supply system is divided into five zones: Browntown, Sayrewoods, Old Bridge, Route 516, and Lake Ridge. The Authority supplies water from three sources: the Browntown water treatment plant, the Old Bridge water plant and three interconnections with the Middlesex Water Company. Plaintiffs' proposed development is in the Browntown service area.
CME used a computer model to assess the system's capacity and the effect the development will have on the system. CME stated that anticipated demand from the development would affect the Browntown and Route 516 service areas. According to CME, during peak day conditions, the Authority would have to operate three pumps at the Perrine Road pump station and all five pumps at the Browntown plant.
CME stated that the Browntown plant did not have the redundancy required to meet the anticipated peak day demands. CME also stated that the additional water drawn from the Browntown plant would reduce the flow into and level of the storage tank at Route 516, which will lower pressures in that zone. CME recommended that the Authority construct an elevated water storage tank with a minimum of two million gallons. CME said this would reduce the demand on the Browntown plant and the Route 516 pump station during peak day demand, and provide redundancy in the event of a supply pump failure.
CME also recommended improvements to the Browntown plant in order to isolate the plant's treatment system from the distribution system. CME noted that Browntown had a large pump system but due to certain limitations, it operated at a reduced capacity in order to ensure the integrity of the water. CME suggested improvements so that the plant could operate at full capacity and provide needed redundancy.
It is not entirely clear from the record, but at some point either the Authority or CME concluded that a one million gallon water storage tank would be sufficient. In addition, either CME or the Authority's engineers concluded that improvements to the Higgins Road/Route 516 interconnection were required. The estimated cost of all of the improvements was about sixteen million.
In February 2009, with leave of court, plaintiffs filed an amended complaint, in which they claimed that the Authority had improperly interfered with water and sewer service in the Midtown franchise area. Plaintiffs alleged that the Authority had refused to honor its contractual obligation to provide an adequate supply of water to the development, and instead sought to "coerce" plaintiffs into constructing improvements for the benefit of the entire system.
Plaintiffs alleged that the improvements the Authority demanded were not reasonably required to service the development. Plaintiffs additionally alleged that the Authority and its employees had impeded the construction of sewer improvements that are needed to serve the development. They stated that, under the 1995 sewer agreement, Brunetti was required to construct certain sewer lines, which was to be accomplished in three phases.
Plaintiffs alleged that the Authority had improperly delayed approvals of plans and specifications, thereby delaying construction of the sewer improvements. They further alleged that the Authority was wrongfully seeking to impose additional costs upon them, claiming that its sewer system had deteriorated because plaintiffs had not constructed the housing units to serve the system.
In their amended complaint, plaintiffs sought: an injunction to protect scarce water resources for the development (Count VII), rescission of the contracts based upon a failure of consideration (Count VIII), specific performance for breach of contract (Count IX), breach of the covenant of good faith and fair dealing (Count X), rescission of the contracts based upon fraud in the inducement (Count XI), an injunction estopping the Authority from hindering their efforts to obtain water service (Count XII), the return of certain illegal exactions (Count XIII), damages for the illegal exactions and unjust enrichment (Count XIV), damages for the violation of constitutional rights (Counts XV), and relief due to the unconstitutional failure to provide affordable housing (Count XVI).
The Authority filed an answer disputing plaintiffs' claims. The Authority also asserted a counterclaim, alleging that Brunetti breached his obligation under the 1995 sewer agreement by failing to construct the sewer lines in the time required. The Authority claimed that, as a result of Brunetti's breach, it had been forced to repair and replace one of its sewer lines. The Authority sought specific performance and damages.
In October 2009, plaintiffs filed a motion seeking scarce resource restraints to preserve water supplies for their development. Plaintiffs also sought an order tolling the contractual and permit deadlines for the development pursuant to
The Authority opposed plaintiffs' motion and filed a cross-motion seeking a declaration that the 1986 water agreement superseded the 1967 water agreement and was the controlling contract between the parties with regard to the cost of providing water service to plaintiffs' properties. The Authority additionally sought an order declaring plaintiffs in anticipatory breach of the 1986 water agreement.
The trial court considered the motions on March 26, 2010, after which the judge entered an order dated April 5, 2010, which denied plaintiffs' motion for scarce resource restraints, and granted the Authority's cross-motion. The judge found that the 1986 agreement was the controlling agreement between the parties. The judge determined that the 1986 agreement was clear and unambiguous and discovery was not required concerning the terms of the agreement or the circumstances under which it was made.
The judge also entered an order dated April 7, 2010, which granted plaintiffs' motion to toll the contractual and permit deadlines for the development and denied the Authority's motion for a declaration of anticipatory breach. The judge pointed out that plaintiffs had not stated or implied they would not perform their obligations under the 1986 agreement.
In May 2010, the Authority filed a motion seeking partial summary judgment on the issue of the parties' obligations under the water agreements. Plaintiffs opposed the motion and argued that summary judgment should not be granted because they had not been afforded the opportunity for discovery and there were genuine issues of material fact regarding the terms of the agreement and the consideration received by the parties.
The judge considered the motion on July 23, 2010, and rendered a decision from the bench, granting the Authority's motion for partial summary judgment, which was memorialized in an order dated August 9, 2010. The judge determined that plaintiffs were required to construct and pay for the lines and facilities needed to provide water to their proposed development.
The judge rejected plaintiffs' contention that a fair share analysis was required because, under the 1986 agreement, the Authority was not required to spend any money to bring water to the development. The judge stated that plaintiffs may be obligated to construct a water storage facility, if it is determined to be necessary to connect the Authority's mains to plaintiffs' development.
After the argument on its motion, the Authority filed another motion for summary judgment, seeking to dispose of plaintiffs' remaining claims.
The judge granted summary judgment to the Authority on plaintiffs' claims for rescission based on a failure of consideration (Count VIII), specific performance (Count IX), rescission based on fraud in the inducement (Count XI), equitable estoppel (Count XII), illegal exactions (Count XIII), constitutional violations (Count XV), and unconstitutional failure to provide low and moderate income housing (Count XVI). The judge denied the Authority's motion for summary judgment on plaintiffs' claims of breach of the implied covenant of good faith and fair dealing (Count X), and illegal exactions and unjust enrichment (Count XIV).
In April 2012, another judge conducted a bench trial on plaintiffs' claims in Counts X and XIV, and on the Authority's counterclaim. At the conclusion of plaintiffs' case, the trial judge granted the Authority's motion to dismiss, finding that plaintiffs had not presented sufficient evidence to establish their damages.
The trial continued on the Authority's counterclaim, after which the judge found that Brunetti materially breached the 1995 sewer agreement but found that the Authority had not established by a preponderance of the evidence that the breach was a proximate cause of its damages. The judge determined, however, that the Authority was entitled to specific performance of the agreement.
The judge entered an order dated April 19, 2012, memorializing his decision to dismiss Counts X and XIV of plaintiffs' complaint. The judge also entered an order dated May 23, 2012, which declared Brunetti in material breach of the 1995 sewer agreement and ordered specific performance of the agreement. Plaintiffs' appeal and the Authority's cross-appeal followed.
Plaintiffs argue that the motion judge erred by granting partial summary judgment to the Authority and declaring that the 1986 water agreement required plaintiffs to construct and pay for all of the lines and facilities required to supply water to the Oaks at Glenwood development.
When reviewing an order granting summary judgment, we apply the same standards that the trial court applies when ruling on a summary judgment motion.
In granting partial summary judgment in favor of the Authority, the motion judge explained that
We are convinced that the judge correctly determined that the 1986 agreement controlled the relationship of the parties with regard to the costs of the lines and facilities that are required to connect plaintiffs' development to the Authority's water supply system. As we stated previously, in the 1967 agreement, the Authority agreed to construct at its own cost and expense all of the wells, pumps, storage and treatment facilities, and other appurtenances necessary to furnish and provide an ample supply of potable water so that Joseph J. Brunetti and his grantees could develop their properties.
The 1986 agreement provides, however, that Midtown would bear the cost of constructing "all lines and other facilities within the franchise area in order to connect" with the Authority's existing water supply system. The 1986 agreement additionally states that, "It is the expressed understanding of all parties that nothing in this [a]greement shall ever be construed to require the payment by the [Authority] of any monies whatsoever for any purpose whatsoever." In addition, the 1986 agreement states in pertinent part that, if the terms therein are inconsistent with any prior agreement, the 1986 agreement is the controlling agreement.
Thus, the 1986 agreement clearly and unambiguously requires Midtown to bear the costs of "all lines and other facilities" needed to connect the users in plaintiffs' proposed development with the Authority's water supply system. The agreement also clearly and unambiguously provides that the agreement cannot be interpreted to require the Authority to pay "any monies whatsoever for any purpose whatsoever."
Plaintiffs contend, however, that the motion judge erred by interpreting the agreement without affording them an opportunity for discovery. Plaintiffs contend that discovery was required regarding the intention of the parties and the circumstances surrounding the execution of the agreements. We disagree.
Whether a provision of a contract is clear or ambiguous is a question of law for the court.
The relevant terms of the 1986 agreement are clear and unambiguous as to the parties' respective obligations for the costs of the lines and facilities required to connect plaintiffs' development to the Authority's system. Therefore, the trial court was not required to afford the parties an opportunity for discovery before interpreting the agreement.
Although we are convinced that the motion judge correctly found that the 1986 agreement is the controlling agreement, and requires plaintiffs to bear the costs of all lines and facilities needed to connect their properties to the Authority's system, the judge erred by failing to state that there is a genuine issue of material fact as to whether the specific improvements at issue here are required to connect plaintiffs' property to the Authority's system. In his decision, the judge appeared to recognize that this issue had not been resolved, by stating that plaintiffs "may" be required to construct the water storage tank if it is "necessary" to connect the development to the Authority's mains.
We note that while plaintiffs are obligated under the 1986 agreement to bear the cost of constructing the lines and other facilities that are reasonably required to connect their properties to the Authority's system, they are not contractually bound to bear the costs of any other improvements to the Authority's system. Although the 1986 agreement states that nothing therein shall be construed to require the Authority to pay any monies for any purpose whatsoever, that provision must be viewed in the context of the entire agreement.
In our view, the payments referred to in that provision are payments reasonably required to connect properties in the franchise area to the Authority's existing mains. The 1986 agreement makes clear that the Authority cannot be required to pay those costs. However, the 1986 agreement does not relieve the Authority of its obligation to construct and maintain facilities otherwise required for the operation of its system.
Indeed, in its brief filed in this matter, the Authority recognizes that obligation. It stated that:
The Authority additionally notes that connection fees are imposed under
Furthermore, in his decision, the judge stated that there was no need for a fair share analysis because, under the 1986 agreement, the Authority cannot be required to pay any monies for any purpose. We agree that a fair share analysis is not required but for a different reason. A fair share analysis is not required because the 1986 agreement only requires plaintiffs to bear the costs of lines and other facilities reasonably required to connect to the Authority's mains. The agreement does not require plaintiffs to bear the costs of other improvements to the Authority's system.
We therefore conclude that the judge correctly found that the 1986 agreement was the controlling agreement between the parties but erred by failing to state that there remained a genuine issue of material fact as to whether plaintiffs are contractually bound to bear the costs of the specific improvements at issue in this case.
Accordingly, the order of April 5, 2010, which declared the 1986 agreement the controlling agreement between the parties, and the order of August 9, 2010, granting partial summary judgment to the Authority on that issue, are affirmed in part and reversed in part.
Next, plaintiffs argue that the trial court erred by granting summary judgment to the Authority on Counts VIII, IX, XI, XII, XIII, XV, and XVI.
In this count, plaintiffs sought rescission of the 1967 and 1986 agreements because they allegedly did not receive the benefit of their bargains with the Authority. Plaintiffs claim that they conveyed their rights to the Authority with the understanding that the Authority would operate its system to provide an adequate supply of water service to their development. Plaintiffs maintain that the Authority has not honored its commitments under the agreements and, as a consequence, they did not receive the consideration they bargained for.
The motion judge determined that the Authority was entitled to summary judgment on this claim because plaintiffs obtained valid consideration, specifically the waiver of connection fees in exchange for their promise to bear the infrastructure costs to connect their properties to the Authority's water system. The judge determined that there was no genuine issue of material fact as to whether plaintiffs received valid consideration for the transfer of the rights.
The judge correctly determined that the Authority was entitled to summary judgment on this claim. The 1986 agreement states that plaintiffs must bear the costs of the lines and facilities required to connect their properties to the Authority's system, and customers in the franchise area are not obligated to pay any fees for connections to the system. Thus, the judge correctly concluded there was no basis for rescission of the agreements based on a failure of consideration and the Authority was entitled to summary judgment on this claim.
Plaintiffs sought specific performance by the Authority of its agreement to provide an ample supply of water to plaintiffs so that they could develop their properties. The judge found that plaintiffs were seeking to enforce the Authority's contractual obligation to provide an adequate supply of water to their properties. The judge noted, however, that the Authority had not refused to provide water and water was not a scarce resource.
The record supports the judge's determination. There was no evidence showing that the Authority had refused to provide an adequate supply of water to plaintiffs' development. Thus, the judge correctly determined that the Authority was entitled to summary judgment on this claim.
Plaintiffs sought rescission of the contracts based on fraud in the inducement. Plaintiff alleged that they had relied upon the Authority's representation that it would construct the necessary wells and facilities required to furnish an ample supply of water so that they could develop their properties.
Plaintiffs further alleged that the Authority's representation was a material consideration that induced them to execute the agreements and transfer their rights to the Authority. They claimed that the Authority breached its obligation under the agreements by failing to provide water to their development.
In our view, the judge did not err by granting summary judgment to the Authority on this claim. It is undisputed that the Authority has agreed to provide an ample supply of water to plaintiff's property. There is a disagreement between the parties as to their respective obligations under the agreements for the cost of the specific improvements at issue in this case.
However, plaintiffs did not present any evidence establishing that the Authority falsely represented it would provide an adequate supply of water to plaintiffs' properties. The judge noted that the Authority stands by its promise to provide an adequate supply of water to the development and to maintain its system in order to do so.
Therefore, the judge correctly determined that there was no basis to rescind the agreements based on fraud in the inducement, and the Authority was entitled to summary judgment on this claim.
Plaintiffs alleged that the Authority should be estopped from hindering their efforts to obtain water service for the property. Plaintiffs contend that they relied to their detriment upon the Authority's representation that it would provide an adequate supply of water to their properties. Plaintiffs sought an injunction enjoining the Authority from taking further action to prevent the development of their properties. The judge stated that there was no evidence showing the Authority would not provide an ample supply of water to plaintiffs' properties when it is appropriate to do so. The judge found that there was no act of repudiation by the Authority that would justify the granting of injunctive relief, based on an estoppel theory.
The record supports the judge's determination. The judge correctly determined that the Authority was entitled to summary judgment on this claim.
Plaintiffs alleged that the Authority was seeking to impose excessive costs upon them for improvements needed to supply water to the development. They claim the Authority wrongfully required them to bear more than their fair share of costs of what they claim are off-site improvements to the Authority's deficient water system.
The judge determined that the Authority was entitled to summary judgment on this claim because plaintiffs are obligated under the 1986 agreement to bear all of the expenses required to have the Authority provide an adequate supply of water to the development. The judge stated that plaintiffs are "fully responsible for the costs of the water infrastructure."
The record indicates that the Authority's engineers and consultants recommended that plaintiffs construct an elevated water storage tank of up to one million gallons, improvements to the Browntown plant, and improvements to the pipeline at the Higgins Road/Route 516 interconnection. Plaintiffs insisted that these improvements are not required to provide an adequate supply of water to their properties. They alleged that the Authority was requiring them to bear the costs of improvements needed to correct existing deficiencies in the Authority's system.
We are convinced that there is a genuine issue of material fact as to whether the costs of these improvements are costs that plaintiffs are obligated to pay under the 1986 agreement, specifically whether these are costs of lines and facilities in the franchise area that are required "in order to connect with the existing ... Authority mains."
We therefore conclude that the judge erred by granting summary judgment to the Authority on this claim.
In Count XV, plaintiffs claimed that the Authority breached the water agreements by failing to bear certain costs required to provide them with an adequate supply of water for their development. Plaintiffs alleged that, in doing so, the Authority violated their constitutional rights under the Contracts Clause and the Privileges and Immunities Clause under the United States Constitution.
Plaintiffs have not, however, cited any authority for the proposition that a breach of contract, standing alone, violates either constitutional provision. We therefore conclude that the judge did not err by granting summary judgment to the Authority on this claim.
In Count XVI, plaintiffs claimed that defendants breached their constitutional obligation to provide a realistic opportunity for the construction of affordable housing in the Township.
Plaintiffs did not, however, present any evidence showing that the Authority demanded that they pay for the improvements at issue in order to thwart the development of low and moderate income housing. The judge correctly determined that the claim that defendants breached their duty to provide a realistic opportunity for the construction of affordable housing failed as a matter of law.
Accordingly, we conclude that the motion judge correctly found that the Authority was entitled to summary judgment on Counts VIII, IX, XI, XII, XV, and XVI, but erred by granting summary judgment to the Authority on Count XIII.
As we stated previously, a trial was conducted on plaintiffs' claims of breach of the covenant of good faith and fair dealing (Count X), and for illegal exactions and unjust enrichment (Count XIV). After plaintiffs rested their case, the judge granted the Authority's motion to dismiss both claims pursuant to
In Count X, plaintiffs alleged that the Authority breached the covenant of good faith and fair dealing by failing to consider their application for water service in good faith. Plaintiffs alleged that, as a result of the Authority's wrongdoing, they have been unable to commence construction of their development. Among other relief, plaintiffs sought specific performance of the agreements and damages.
In Count XIV, plaintiffs claimed that the Authority wrongfully insisted that they pay for certain studies of the Authority's water system and other items. Plaintiffs contend that the Authority has been unjustly enriched by these payments. Plaintiffs sought compensatory and punitive damages, an accounting and sanctions for the alleged wrongful conduct.
The trial judge correctly found that plaintiffs had not established damages on either count. Although plaintiffs disputed the obligation to pay for the improvements allegedly required to connect their properties to the Authority's system, there was no evidence that they had actually paid those costs.
Furthermore, plaintiffs did not submit any credible evidence showing that they suffered a $16,758,030 loss because construction of their development was delayed. Plaintiffs also did not submit proofs of the costs of studies and other items the Authority had wrongfully required them to pay.
Nevertheless, in Count X, plaintiffs did not merely seek damages. They also sought specific performance. Plaintiffs presented evidence at trial indicating that the Authority breached the 1986 agreement and acted in bad faith by insisting that they pay for improvements that were not required to connect their properties to the Authority's system.
Plaintiffs' engineering expert, Paul Paparella, testified that the improvements required by the Authority were not necessary to support plaintiffs' development. He stated, "a [water storage] tank is not needed at the site of the Oaks Development and it's not really a very good place to put a tank." Paparella also stated that he had not seen sufficient evidence to show the development created the need for improvements to the Higgins Road/Route 516 interconnection, and it was unreasonable for the Authority to ask plaintiffs to make improvements to the Browntown water treatment plant.
In addition, Peter Calafati, plaintiffs' former Vice President and Chief Operations Officer, testified that he understood from the Authority that the development would have a minimal impact upon the water flow in the Authority's system, and water flow problems would exist in the system regardless of whether the project was built. Calafati further testified that the Authority had conceded that the improvements to the Browntown plant were not required by plaintiffs' development. Calafati said the Authority had also conceded that the storage tank was not necessary for plaintiffs' project but it was something the Authority wanted.
Plaintiffs' evidence was sufficient to support their claim that the Authority breached the 1986 agreement by demanding that they pay costs of improvements that are not required to furnish water to the development. If accepted by the trier of fact, this evidence would justify the grant of specific performance in plaintiffs' favor. Thus, the Authority was not entitled to judgment on Count X.
Plaintiffs additionally argue that the trial judge erred by refusing to permit them to present testimony from Arthur Bernard, who had been previously appointed by the court as special master in the litigation. Among other tasks, Bernard acted as a mediator between the parties. Plaintiffs contend that Bernard's testimony would have supported their claims. We are convinced this argument is without sufficient merit to warrant discussion.
We therefore conclude that the trial judge did not err by dismissing the claim in Count XVI, but erred by dismissing the claim in Count X. We remand for further proceedings on that count.
In its cross-appeal, the Authority argues that the trial judge erred by failing to award it compensatory damages on its counterclaim. We disagree.
As we have explained, the 1995 sewer agreement required Brunetti to construct sewer lines in several phases. Those lines would be connected to a forty-two inch line that the Authority would construct. The Authority claimed that Brunetti breached the agreement by failing to construct the Phase II line. The Authority alleged that Brunetti's breach led to a decreased cleansing flow through the forty-two inch line over some fifteen years and was the direct and proximate cause of the deterioration of that line. The Authority alleged it had been forced to spend $1.3 million to repair the line.
At the trial, Michael J. Samuel, the Authority's consulting engineer, testified concerning the deterioration of the Authority's forty-two inch line. Samuel stated that the deterioration was due to microbially-induced corrosion, which occurs over time when hydrogen sulfide and other sewer-related gases begin to wear down a concrete pipe. Samuel stated that, to achieve a self-cleaning flow there should be at least two to three million gallons of flow per day in the pipe.
Samuel added that during his inspection, he observed about one million gallons per day in the line. He testified that the flow from the Oaks at Glenwood development was expected to be between one-half and one million gallons per day. He said that, if Brunetti had constructed the Phase II line as required by the contract, the low flow would have been eliminated.
The judge found that the Authority had not shown that if Brunetti had completed the Phase II line when required, the resulting flow would have been sufficient to create the cleansing effect and protect the Authority's line from deterioration. The judge pointed out that the expected flow from Brunetti's line would have only created a total flow of up to two-and-one-half million gallons per day in the Authority's line.
The judge determined that because Samuel had testified that a cleansing flow required between two and three million gallons per day, the evidence did not establish that Brunetti's failure to comply with the contract caused the deterioration of the Authority's line. The evidence showed that the Authority's line could have deteriorated even if Brunetti had built the Phase II line, as required by the contract.
The Authority argues that the judge erred by failing to credit Samuel's testimony. We do not agree. The judge credited Samuel's testimony but, as we have explained, Samuel's testimony supported the judge's finding that the Authority did not establish that Brunetti's failure to construct the Phase II sewer line caused the Authority's line to deteriorate. We must defer to the trial court's finding of fact because it is based on sufficient credible evidence in the record.
For the foregoing reasons, we remand the matter to the trial court for a trial on Counts X and XIII. Plaintiffs may rely upon the evidence presented at the previous trial. The trial judge should determine whether the improvements at issue, specifically the water storage tank, improvements to the Browntown treatment plant and the improvements to the Higgins Road/Route 516 interconnection, are reasonably required to connect plaintiffs' properties to the Authority's water supply system.
If so, plaintiffs are contractually bound to pay those costs. However, if the costs are not reasonably required for the connections but are costs of improvements otherwise required for the Authority's system, plaintiffs are not contractually bound to pay them.
The trial court's orders challenged in the appeal are affirmed in part, and reversed in part. The order at issue in the cross-appeal is affirmed. The matter is remanded to the trial court for further proceedings in conformity with this opinion. We do not retain jurisdiction.
