A New Jersey court has upheld a ruling that affects water and sewer connection fees for Midtown Water Company and its affiliates. The decision, issued by the New Jersey Superior Court Appellate Division on October 21, 2026, clarifies the terms of agreements between Midtown Water Company, Brunetti Organization, and Old Bridge Municipal Utilities Authority. This ruling is significant for the parties involved, as it determines whether Midtown Water Company must pay certain fees for developments within its franchise area.
The case, titled Midtown Water Company v. Old Bridge Municipal Utilities Authority, originated from a dispute over various agreements made between the parties dating back to the 1950s. The court's decision affirms the lower court's finding that Midtown Water Company and its affiliates are not required to pay water and sewer connection fees for certain properties within the franchise area.
Background
Midtown Water Company, along with the Brunetti Organization and John J. Brunetti, Jr., are the plaintiffs in this case. They acquired property in Old Bridge, New Jersey, in the 1950s and received state approval for water and sewage franchises in the area. Over the years, they entered into several agreements with the Old Bridge Municipal Utilities Authority, which is the defendant in this case. These agreements included provisions regarding the construction and maintenance of water and sewer systems.
One key agreement from 1967 required the Old Bridge Municipal Utilities Authority to provide sufficient water to the entire franchise area in exchange for water wells sold by the plaintiffs. In 1995, the parties entered another agreement that allowed the plaintiffs to install new sewage lines at their own expense and waived the requirement for them to pay connection fees. This agreement has no expiration date, which became a central point of contention in the case.
The dispute escalated when the plaintiffs filed a lawsuit in December 2023, seeking a declaratory judgment that they were not obligated to pay water and sewer fees for developments within the franchise area. They also claimed breach of contract and other related claims against the defendant. The Old Bridge Municipal Utilities Authority counterclaimed, seeking to impose reasonable time limits on the agreements and challenging the plaintiffs' ability to assign their rights under those agreements.
The Ruling
On March 27, 2025, the lower court granted summary judgment to the plaintiffs and denied the defendant's motion for partial summary judgment. The New Jersey Superior Court Appellate Division affirmed this decision, stating, "The agreement providing plaintiffs were not responsible for water and sewer fees was unambiguous and contained no expiration provisions." The judges involved in the ruling were Mawla, DeAlmeida, and Chase.
The court found that both parties were sophisticated and had legal representation, and noted that the plaintiffs had made significant investments in infrastructure based on the agreements. The judge emphasized that the agreements were clear and did not include any expiration dates, indicating that the defendant could not unilaterally alter the terms of the contract.
Furthermore, the court rejected the defendant's argument that the agreements were against public policy. The ruling pointed out that the parties had entered into the agreements voluntarily and that the defendant had not presented sufficient evidence to support its claims regarding public policy concerns. The court also emphasized that the plaintiffs had the right to assign their agreements to successors in interest, which included developers within the franchise area.
Impact
This ruling has significant implications for the future of water and sewer fee agreements in New Jersey. It confirms that municipalities must adhere to the terms of contracts they enter into, even if they may later find those terms unfavorable. The decision reinforces the principle that agreements made by municipal authorities are binding unless explicitly stated otherwise.
Moreover, the ruling sets a precedent for similar cases involving municipal agreements and the rights of private entities. It clarifies that unless an agreement explicitly prohibits assignment, parties may assign their rights as long as they are successors in interest. This outcome could influence how municipalities negotiate future contracts and how they handle fee structures with private developers.
What's Next
The Old Bridge Municipal Utilities Authority may consider appealing the decision to a higher court, but details regarding an appeal were not specified in the court filing. There are no related cases pending at this time. The outcome of this case will likely shape future interactions between municipal authorities and private developers in New Jersey.