                                NOT FOR PUBLICATION WITHOUT THE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-3063-17T1

CAROL CRISPINO, VILMA
VERBER, MARK EDWARDS,
JORGE CABRERA, STEPHEN
CAPPADORA, PAUL O'KEEFE,
KENNETH GARDNER, and
MARY GARDNER,

          Plaintiffs-Respondents,

v.

TOWNSHIP OF SPARTA,

          Defendant-Appellant.


                   Argued April 1, 2019 – Decided May 6, 2019

                   Before Judges Fasciale and Rose.

                   On appeal from Superior Court of New Jersey, Law
                   Division, Sussex County, Docket No. L-0500-16.

                   Thomas N. Ryan argued the cause for appellant
                   (Laddey Clark & Ryan, LLP, attorneys; Thomas N.
                   Ryan and Jessica A. Jansyn on the briefs).
            John E. Ursin argued the cause for respondents
            (Schenck Price Smith & King, LLP, attorneys; John E.
            Ursin and Sandra Calvert Nathans, on the brief).

PER CURIAM

      This appeal has its genesis in the imposition of a special assessment by

defendant Township of Sparta on the owners of fifty-eight properties for the

rehabilitation of a private dam owned by the Glen Lake Beach Club, Inc.

(GLBC).    Plaintiffs Carol Crispino, Vilma Verber, Mark Edwards, Jorge

Cabrera, Stephen Cappadora, Paul O'Keefe, Kenneth Gardner and Mary Gardner

are eight of those property owners. The assessment was imposed pursuant to

Resolution 6-1, which was adopted by the Township Council following

recommendations by the Township's expert consultant, Scott Holzhauer, CTA,

SCGREA.

      Thereafter, plaintiffs filed a complaint in lieu of prerogative writs in the

Law Division.     Pertinent to this appeal, plaintiffs challenged the special

assessment, seeking a declaration that the resolution was void. Following oral

argument, the trial court granted plaintiff's application and remanded the matter

to the Council to recommence the special assessment process. The Township

filed a motion for reconsideration, which the court denied as to the issues on

appeal. In sum, the trial court concluded the Council should have "excluded"


                                                                          A-3063-17T1
                                        2
Holzhauer's report because the expert's method of allocating the assessment was

a "net opinion" and, as such, reliance on the report was "arbitrary and

unreasonable."

         On appeal, the Township renews the arguments it raised before the trial

court.     Because we conclude the court improperly determined the expert's

opinion was net, and Holzhauer's report provided a sufficient basis to support

the Township's adoption of Resolution 6-1, we reverse.

                                        I.

         The GLBC is a private association, which was established to enable its

members and their guests "to enjoy boating, fishing, swimming and socializing

in a peaceful and pleasant environment" on the lake created by the private dam

at issue. Memberships with voting rights are available to property owners who

reside within a certain proximity to the lake; "special membership[s]" without

voting rights are available to members who do not live in that proximity.

Although plaintiffs are not members of the GLBC, their proximity to the dam

qualifies them for membership.

         In approximately 2002, the New Jersey Department of Environmental

Protection (NJDEP) mandated repairs and rehabilitation of the dam (project) to

comply with State codes. In 2008, the GLBC applied for a loan to finance the


                                                                         A-3063-17T1
                                         3
project pursuant to the NJDEP's Dam Restoration and Inland Waters Projects

Loan Program, N.J.A.C. 7:24A-1.1 to -5.1. As required by N.J.S.A. 58:4-12(d),1

the Township cosigned the loan agreement, and planned for its repayment

through a special assessment on the properties benefitting from the project. In

2012, the GLBC noticed "property owners within the surrounding area" of the

lake that the Township would allocate and collect the cost of the project from

"various property owners."

        Thereafter, the Council enacted ordinances, which authorized a special

assessment to repay the loan, and established the Assessment Commission to

determine the assessment. 2        Among other things, the Commission was



1
    N.J.S.A. 58:4-12(d) provides, in pertinent part:

              Loans awarded under this section to owners of private
              dams or lake associations shall require local
              government units to act as co-applicants. The cost of
              payment of the principal and interest on these loans
              shall be assessed, in the same manner as provided for
              the assessment of local improvements generally under
              chapter 56 of Title 40 of the Revised Statutes, against
              the real estate benefited thereby in proportion to and not
              in excess of the benefits conferred . . . .
2
   In its initial decision the trial court also declared void the Township's
ordinance appointing the Commission.          On reconsideration, the court
determined that ordinance was valid. The ordinance's validity is not an issue on
appeal.
                                                                           A-3063-17T1
                                          4
empowered to survey the property after the improvement was completed; hold

a hearing on notice to "all owners of all real estate affected"; and "[c]ertify the

amount of the assessment to the Mayor and Council by a written report duly

signed and accompanied by a map showing the subject real estate."

      The Township then appointed Holzhauer to assist in determining the

assessment.    Holzhauer made multiple site inspections, during which he

observed the project and the properties identified within the GLBC's boundary.

Among other documents, Holzhauer reviewed the GLBC's by-laws, the

governing statutes for private and public improvement projects, and the co -

borrower agreement between the Township and the GLBC.

      In an eleven-page report, exclusive of exhibits, Holzhauer recommended

the Commission allocate the special assessment among fifty-eight properties

within the boundary of the GLBC because only those properties derived a

"specific benefit" from the project.          Holzhauer defined the boundary by

transposing the perimeter description contained in the GLBC's by-laws onto the

Township's "most current [t]ax [m]aps[.]" Holzhauer did not include those

properties "excluded by law, by the [c]o-[b]orrower [a]greement, or by the terms

of the NJDEP [l]oan [a]greement, or that have otherwise been deemed to not be

viable for building and/or lake access . . . ."


                                                                           A-3063-17T1
                                          5
       In designating properties for assessment, Holzhauer considered the

Commission's "function," i.e.,

             to "allocate" the complete cost of the project in a logical
             manner – based on incremental benefit as judged or
             warranted – among ALL of the property owners within
             the project boundary that c[ould] be reasonably
             perceived as gaining a "peculiar benefit" or
             "advantage" (as per [N.J.S.A. 40:56-273]). In this
             community, the benefit attributable to the . . . lake is
             based on the recreational amenity (through optional
             membership) it provides to any desirous owner within
             the reserve boundary, and the scenic vistas that are
             available to a great majority of the properties that
             surround it.

       Pertinent to this appeal, Holzhauer selected fifty-eight properties based on

the owners' "right . . . to become a member of the [GLBC] and therefore have

access to the lake and other [GLBC] amenities." Holzhauer opined that the right

to membership "enhance[d the] property value for these property owners" that

was not otherwise available to anyone outside the GLBC boundary.




3
    Pursuant to N.J.S.A. 40:56-27:

             All assessments levied under this chapter for any local
             improvement shall in each case be as nearly as may be
             in proportion to and not in excess of the peculiar
             benefit, advantage or increase in value which the
             respective lots and parcels of real estate shall be
             deemed to receive by reason of such improvement.
                                                                           A-3063-17T1
                                         6
      Holzhauer's allocation among the selected property owners was based on

a "[three]-tier approach," under which he assigned values for: (1) basic

membership option lots; (2) lake access lots; and (3) lakefront lots. Because all

fifty-eight properties were eligible for membership in the GLBC, Holzhauer

"assigned a single 'share value' of 1.0." The properties located "immediately

across the street from the lake, enjoying direct pedestrian access to the lake and

generally unobstructed views, were assigned an incremental 0.5 share value over

the base share value." The lakefront properties, "which enjoy unimpeded direct

access to the lake, along with the potential for establishing lake edge

improvements (docks, etc.), were assigned an incremental 1.0 share value over

the base share." Holzhauer allocated the total cost of the assessment to each

property based on its share value.

      In June 2016, the Commission recommended that the Council adopt

Holzhauer's "formulaic approach . . . result[ing] in the special assessments as

reflected in the spreadsheet" set forth in his report. During the next two months,

the Council held public meetings concerning a proposed resolution to adopt the

special assessment. During the July 26, 2016 meeting, after some affected

property owners commented that the Commission failed to consider certain




                                                                          A-3063-17T1
                                        7
information concerning the GLBC's boundaries, the Council carried the

resolution.

      The Commission then considered the information and determined it did

not affect Holzhauer's special assessment allocation, and recommended that the

Township adopt Holzhauer's report. On August 23, 2016, the Council held a

final public meeting, during which it adopted Resolution 6-1 permitting the

Township to impose the special assessment.

      Relevant here, in its ensuing decision the trial court rejected Holzhauer's

opinion as net for failure to "provide a methodology for including the houses

that were selected to be a part of the special assessment." Recognizing the expert

need not employ a "fair market benefit analysis," the court nonetheless

determined Holzhauer's methodology was arbitrary because it was based on

eligibility for membership in the GLBC. The court elaborated:

              [S]uch indiscriminate power on behalf of the GLBC
              invites ludicrous results. Under that theory, the GLBC,
              a private entity, could have amended [its] by-laws to
              include the whole Township of Sparta, and that could
              have been used as a methodology by the expert,
              requiring all property owners in the Township to
              contribute to the assessment.




                                                                          A-3063-17T1
                                        8
                                      II.

                                      A.

      We begin our review by recognizing we ordinarily defer to a trial court's

decision to admit expert testimony to "ensure that the proffered expert does not

offer a mere net opinion." Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J.

344, 371-72 (2011); N.J.R.E. 703. An expert is required to "'give the why and

wherefore' that supports the opinion, 'rather than a mere conclusion.'" Townsend

v. Pierre, 221 N.J. 36, 54 (2015) (quoting Borough of Saddle River v. 66 E.

Allendale, LLC, 216 N.J. 115, 144 (2013)).

      Arguably, however, the Rules of Evidence do not apply to hearings

conducted by a municipality seeking to impose a special assessment.          Cf.

N.J.R.E. 101(a)(3) ("proceedings before administrative agencies shall not be

governed by the [R]ules"); N.J.S.A. 50:55D-10(e) (providing planning boards

are not subject to the Rules); Baghdikian v. Bd. of Adjustment, 247 N.J. Super.

45, 49 (App. Div. 1991) (stating that a zoning board "cannot be equated with

courts" and "procedural safeguards employed in judicial proceedings" should

not be "imported wholesale" into proceedings before a land use board (quoting

City of Hackensack v. Winner, 82 N.J. 1, 29 (1980))). On that basis alone, the

court's application of the net opinion rule to bar Holzhauer's unrefuted


                                                                        A-3063-17T1
                                       9
methodology was misplaced. Indeed, a non-testimonial hearing by a municipal

body considering a special assessment, should not be subject to the stringent

evidential standards applicable to judicial proceedings. See N.J.R.E. 101(a)(2).

      Nonetheless, assuming arguendo that the net opinion rule applies here,

Holzhauer's report clearly sets forth the "why" and "wherefore" of his

methodology.      For example, Holzhauer limited the universe of properties

affected by the assessment to those "within the boundary of the [GLBC][,]" thus

dispelling the trial court's concern that the GLBC's by-laws could have been

amended to include every property in the Township.           Nor do we discern

Holzhauer's methodology was arbitrary where, as here, it was based on those

properties that "have access to the lake and other [GLBC] amenities." Indeed,

Holzhauer selected the assessed properties because they met the statutory

definition of "peculiar benefit" or "advantage" by virtue of their proximity to the

lake and its recreational amenities "through optional membership[.]"

Holzhauer's report further detailed his analysis and methodology for his "share

value" allocation.   We therefore agree with the Township that its expert's

opinion was not net and was properly considered by the Council in adopting

Resolution 6-1.




                                                                           A-3063-17T1
                                       10
                                       B.

      Moreover, the standard of judicial review applicable to actions of

municipal governments is highly deferential. Courts do not sit in judgment of

the wisdom of municipal actions. Municipal ordinances and resolutions are

presumed to be valid and rational. See First Peoples Bank of N.J. v. Twp. of

Medford, 126 N.J. 413, 418 (1991); Hutton Park Gardens v. Town Council of

W. Orange, 68 N.J. 543, 564 (1975). In the absence of a constitutional or

statutory violation, municipal action may be overturned only if it was arbitrary,

capricious, or unreasonable. See, e.g., Ten Stary Dom P'ship v. Mauro, 216 N.J.

16, 33 (2013); Powerhouse Arts Dist. Neighborhood Ass'n v. City Council of

Jersey City, 413 N.J. Super. 322, 332 (App. Div. 2010); Cohen v. Bd. of

Adjustment, 396 N.J. Super. 608, 615 (App. Div. 2007).

      However, "municipal action is not arbitrary and capricious if exercised

honestly and upon due consideration, even if an erroneous conclusion is

reached." Bryant v. City of Atl. City, 309 N.J. Super. 596, 610 (App. Div. 1998).

Further, municipal actions enjoy a presumption of validity. Ibid. Accordingly,

"a challenge to the validity of a municipal . . . action must overcome the

presumption of validity—a heavy burden." Ibid. Thus, courts focus on whether

there was substantial evidence to support the decision. See Concerned Citizens


                                                                         A-3063-17T1
                                      11
of Princeton, Inc. v. Mayor & Council of Princeton, 370 N.J. Super. 429, 453

(App. Div. 2004).

      In exercising its review, the court presumes assessments were regularly

made and confirmed. See N.J.S.A. 40:56-33.4 A property owner bears the

burden of rebutting that presumption by clear and convincing evidence.

McNally v. Teaneck Twp., 75 N.J. 33, 44 (1977); In re Pub. Serv. Elec. & Gas

Co., 18 N.J. Super. 357, 364 (App. Div. 1952). On the one hand, the court does

not simply search the record to determine if there is sufficient, credible evidence

to support the municipality's decision as it would in review of an administrative

agency decision. See, e.g. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997)

(reciting the scope of review of administrative agency fact-finding). On the

other hand, the court does not conduct a trial de novo on the proper assessment.

Instead, the reviewing court is required to determine whether it is persuaded, by

clear and convincing evidence, that the challenged decision was not "just and

fair." N.J.S.A. 40:56-54.




4
  Although N.J.S.A. 40:56-33 pertains to public assessments, as noted above,
loans made for private dams under N.J.S.A. 58:4-12(d) are assessed "in the same
manner as provided for the assessment of local improvements generally under
chapter 56 of Title 40 of the Revised Statutes."


                                                                           A-3063-17T1
                                       12
      Because we have concluded Holzhauer's opinion was not a net opinion,

and the methodology utilized in his report was properly considered by the

Council, we further conclude the Township's decision to adopt Resolution 6 -1

was neither arbitrary nor unreasonable. Rather, the municipal action here was

just and fair.

      Reversed.




                                                                      A-3063-17T1
                                    13
