Court Opinion

ID: 4430569
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:43:45.22099+00
Date Added: 2024-06-11T14:50:51.170885
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
               APPROVAL OF THE APPELLATE DIVISION

                                  SUPERIOR COURT OF NEW JERSEY
                                  APPELLATE DIVISION
                                  DOCKET NOS. A-5067-15T3
                                              A-5615-15T3
                                              A-0443-16T3

CHRISTOPHER C. CONA,
individually and as a class
representative on behalf of           APPROVED FOR PUBLICATION
others similarly situated,
                                          August 29, 2018
     Plaintiff-Appellant,                APPELLATE DIVISION

v.

TOWNSHIP OF WASHINGTON,

     Defendant-Respondent.
_______________________________

SHARON DOWNS, individually and
as a class representative on
behalf of others similarly
situated,

     Plaintiff-Appellant,

v.

BOROUGH OF PAULSBORO,

     Defendant-Respondent.
______________________________

WILLIAM R. BRODY and
KATHLEEN D. O'HARA,
individually and on behalf of
others similarly situated,

     Plaintiffs-Appellants,

v.
CITY OF WOODBURY, BOROUGH OF
WESTVILLE, BOROUGH OF GLASSBORO,
BOROUGH OF NATIONAL PARK, and
TOWNSHIP OF DEPTFORD,

     Defendants-Respondents.
_____________________________________

         Argued May 24, 2018 – Decided August 29, 2018

         Before Judges Simonelli, Haas and Rothstadt.

         On appeal from Superior Court of New Jersey,
         Law Division, Gloucester County, Docket Nos.
         L-1602-15, L-0180-16, L-0487-16 and L-1102-
         15.

         Lewis   G.  Adler   argued   the  cause   for
         appellants (Lewis G. Adler, attorney; Lewis
         G.   Adler,  Roger   C.   Mattson  and   Paul
         DePetris, of counsel and on the briefs).

         Brian P. Shotts argued the cause for
         respondents Township of Washington (in A-
         5067-15) and Township of Deptford (in A-
         0443-16) (Grace, Marmero & Associates, LLP,
         attorneys; Brian P. Shotts, on the briefs).

         M. James Maley, Jr. argued the cause for
         respondent Borough of Paulsboro (in A-5615-
         15) (Maley Givens, PC, attorneys; M. James
         Maley, Jr. and Erin E. Simone, on the
         brief).

         James P. Pierson argued the cause for
         respondent City of Woodbury (in A-0443-16)
         (Angelini,    Viniar   &    Freedman,    LLP,
         attorneys; James P. Pierson, on the brief).

         Gary   M.   Marek  argued   the  cause   for
         respondents Borough of Westville and Borough
         of Glassboro (in A-0443-16) (Law Office of
         Timothy D. Scaffidi, attorneys; Gary M.
         Marek and Timothy D. Scaffidi, on the
         briefs).

                               2                         A-5067-15T3
          Walter F. Kawalec, III argued the cause for
          respondent Borough of National Park (in A-
          0443-16) (Marshall Dennehey Warner Coleman &
          Goggin, attorneys; Walter F. Kawalec, III
          and Ashley L. Toth, on the brief).

     The opinion of the court was delivered by

ROTHSTADT, J.A.D.

     In these matters, which we considered back-to-back and have

consolidated   for    purposes   of    writing   one   opinion,   plaintiff

landlords rely upon our opinion in Timber Glen Phase III, LLC v.

Township of Hamilton, 441 N.J. Super. 514 (App. Div. 2015) in

their appeals from orders1 entered in the Law Division dismissing

their   complaints      that     alleged    defendant     municipalities'

ordinances that required plaintiffs to pay certain license fees

are ultra vires.       In Timber Glen, the ordinance we reviewed

required landlords to obtain a license before any residential

rental unit could be occupied and pay an annual license fee of

$100 per unit.2      Id. at 519.      The municipality contended it had

1
   Plaintiffs Kathleen O'Hara and William R. Brody also appeal
from the Law Division's orders denying their motions for partial
summary judgment and reconsideration of the dismissal of their
complaint.
2
     The ordinance invalidated in Timber Glen, provided in
pertinent part: "[N]o person shall occupy any Residential Rental
Unit nor shall the owner permit the occupancy of any[]
residential rental unit within the Township of Hamilton if said
unit has not been Licensed by the Bureau of Fire Prevention on
                                                     (continued)

                                      3                            A-5067-15T3
authority under the Licensing Act, N.J.S.A. 40:52-1, to require

such licenses and that its authority was compatible with its

regulatory power under N.J.S.A. 40:48-2.12m.                       Id. at 523.          The

stand-alone license fee it charged was in addition to fees it

required for mandatory "annual habitability inspections . . . ."

Id. at 519.

      We   rejected       the    municipality's       position      in    Timber       Glen,

noting,     "the    powers       to   regulate       and    to    license,       although

related, are discrete" and that the power to regulate did not

include the power to require a license and payment of a fee.

Id.   at   526     (citation      omitted).       We       concluded      that    a    1998

amendment    to     the    Licensing     Act   prohibited          the   licensing       of

rental units rented for 175 days or more and that any ordinance

attempting to impose such a requirement was "invalid as ultra

vires and unenforceable."             Id. at 532.          However, we noted that

"[o]ur opinion [was] confined to the authority to license and

[did] not address [a municipality's] regulatory or inspection

authority granted by other statutes designed to assure rental

premises    remain     safe,      building     and    fire       code    compliant      and

structurally sound."            Id. at 532 n.4 (citation omitted).

(continued)
forms which shall be provided for that purpose."                                 441    N.J.
Super. at 519 (second alteration in original).

                                          4                                       A-5067-15T3
       The issue raised in the present appeals is whether fees

imposed by defendant municipalities are for revenue generation

as    prohibited   under   Timber   Glen,    or    if   they    are    reasonably

related    to   the   municipalities'      exercise     of    their   regulatory

powers as authorized by statute.                 The plaintiffs' complaints

alleged the municipalities violated the New Jersey Civil Rights

Act    (CRA),   N.J.S.A.   10:6-1     to   -2,    and   that    the    ordinances

requiring the payment of license fees were ultra vires under

Timber     Glen,   entitling   them    to    damages     and     a    declaratory

judgment awarding them injunctive relief.                    The municipalities

responded by filing motions to dismiss under Rule 4:6-2(e).                    The

trial court judges who considered the matters found that the

challenged ordinances were distinguishable from the ordinance

invalidated in Timber Glen, as the fees were permissible under a

municipality's regulatory powers in order to defray costs for

inspections or registration of rental units.                   For the reasons

that follow, we affirm.

       The challenges raised by each plaintiff are summarized as

follows.     O'Hara brought her challenges against defendants City

of Woodbury and the Borough of Glassboro where she maintained

properties for rent.       The Woodbury ordinance3 requires landlords

3
   Woodbury, N.J., Landlord/Tenant Licensing ch. 114, art. I, §§
114-1 to -20 (2000).
                                                     (continued)

                                       5                                 A-5067-15T3
to secure a license that "attest[ed] that the rental unit had

been properly registered" under the ordinance.                         Before a unit

can   be    registered      and   occupied,         the    ordinance    requires         an

inspection "for the purpose of determining Woodbury City Code

compliance     and    compliance        with        [the    ordinance's]          Housing

Standards . . . ."          Annual      registration        of    rental     units      and

payment of a $100 "license fee" have to be completed before the

city will issue a license to permit their rental.

      The Glassboro ordinance4 also requires annual registration

and   the   payment    of    a    fee   before       it    will   issue      a    license

permitting the rental of a unit.                    In addition, if there is a

change in occupancy, a new registration and an additional fee

have to be paid.       A license will not be issued, however, unless

the unit passes an inspection to insure there are no "safety

violations" and that the units meet the ordinance's "performance

standards . . . ."       The $160 "annual registration fee [that the

ordinance    requires]      include[s]        all    inspections       and       one   re[-

]inspection at no additional fee."

      Brody,    a    landlord     who    maintains         rental    properties          in

defendants Borough of Westville, Borough of National Park and

(continued)
4
    Glassboro, N.J., Rental Housing ch. 379, §§ 379-1 to -10
(2004).

                                          6                                       A-5067-15T3
the    Township         of     Deptford,       challenged      each          of      those

municipality's ordinances.              The Deptford ordinance5 contains a

registration and licensing requirement, but does not require re-

registration upon a change in occupancy, although it requires

re-inspection.           Inspection       is   required     "to     determine           the

condition          of    rental        facilities,        rental         units          and

rooming/boarding houses in order . . . to safeguard the health,

safety,      welfare     of    the    occupants   . . . and       of    the       general

public."      The ordinance further provides that a fee has to be

paid upon registration before a license will be issued.                           It also

provides for a re-inspection fee upon a change in occupancy.                             No

separate licensing fee is imposed.

      Westville's       and    National    Park's      ordinances       also      require

annual registration and the payment of a fee before licenses

will be issued to landlords.               Westville's ordinance6 imposes an

"annual registration fee and first inspection fee" of fifty or

sixty dollars per rental unit depending on the number of rental

units on a property.            It also has a re-inspection fee and late

fee   that    it     charged    for    untimely   payments.            The    ordinance

provides      that      "inspection      shall    be     for   the       purpose         of

5
    Deptford, N.J., Ordinance O.16.12 (Oct. 16, 2012).
6
   Westville, N.J., Rental Property ch. 272, art. I, §§ 272-1 to
-27 (2006).

                                           7                                      A-5067-15T3
determining . . . Land Use and Development compliance and, to

the extent applicable, to determine if the property complies

with the Property Maintenance Code, Uniform Construction Code,

Housing Code and/or Building Code and/or Uniform Fire Safety

Act."     Westville's ordinance does not designate any of its fees

as license fees.

      Similarly, National Park's ordinance7 provides "[u]pon the

filing    of   a   completed          registration     form     and    payment       of   the

prescribed fee and a satisfactory inspection, the owner shall be

entitled to the issuance of a license . . . ."                             Payment of the

fee was due "[a]t the time of the filing of the registration

form . . . ."       The ordinance calls for "inspections to determine

the     condition        of     rental        facilities,       rental       units,       and

rooming/boarding         houses        in     order    [to]     . . . safeguard           the

health,    safety,       welfare        of    the    occupants       . . . and       of   the

general    public."           Periodic       inspections      are    also    required      to

ensure      "zoning,          [and]      compliance        . . .       with      Property

Maintenance,       the        Uniform       Construction      Code,        Housing    Code,

. . . the      Building        Code     and    the    Uniform       Fire    Safety    Act."

National Park's ordinance also does not mandate the payment of a

separate fee for the issuance of a license.

7
   National Park, N.J., Code of National Park Rental Units ch.
97, art. I, §§ 1 to 19 (2007).

                                               8                                 A-5067-15T3
      O'Hara and Brody filed an initial complaint in August 2015,

which they amended in April 2016. Judge David W. Morgan granted

the municipalities' motions to dismiss on June 28, 2016. 8                  In his

oral decision placed on the record on that date, Judge Morgan

discussed      our   holding   in   Timber      Glen,    the    significance     of

footnote four in that case, and the distinction between a fee

charged   by    a    municipality   to   offset     costs      of   regulation   as

compared to generating revenue, as discussed in Timber Glen and

Daniels v. Point Pleasant, 23 N.J. 357 (1957).                      The judge then

framed the issue before him as being, "Do we have a license-type

of ordinance or is it a regulation–type of . . . ordinance?"                     He

defined a license as being the granting of "authority to go out

and    conduct       [the   subject]         activity"    and       "[r]egulations

. . . . [as] relat[ing] to the manner by which the activity is

to be conducted."           Relying on N.J.S.A. 40:48-2.12a, N.J.S.A.

40:48-2.12a1, N.J.S.A. 40:48-2.12c,9 and N.J.S.A. 40:48-2.12m10

8
   Plaintiffs filed cross-motions for partial summary judgment as
to liability that the judge denied.
9
    N.J.S.A. 40:48-2.12c provides:

            Any ordinance adopted pursuant to this act
            may provide for the registration of the
            owners and management of every building and
            structure in the municipality which is
            occupied by [two] or more families as
            tenants of the owner or lessor.        Such
            registration shall be with the clerk of the
                                                      (continued)

                                         9                                A-5067-15T3
the judge noted that municipalities are authorized to regulate

buildings in order to insure the public's health and safety and

(continued)
          municipality upon forms prescribed by and
          furnished by the municipality.    Every such
          registration form shall include the name and
          address of the owner, the name and address
          of the lessor if other than the owner, and
          the name and address of an agent in charge
          of    the    premises   residing    in   the
          municipality.
10
     The statute provides:

           The governing body of a municipality may
           adopt ordinances regulating the maintenance
           and condition of any unit of dwelling space,
           upon the termination of occupancy, in any
           residential rental property for the purpose
           of the safety, healthfulness, and upkeep of
           the structure and the adherence to such
           other standards of maintenance and condition
           as are required in the interest of public
           safety, health and welfare. Such ordinances
           shall require the owner of any residential
           rental property, prior to rental or lease
           involving a new occupancy of any unit of
           dwelling space in such property, to obtain a
           certificate of inspection or occupancy for
           the   unit   of   dwelling   space.     Such
           certificate of inspection or occupancy shall
           be issued by the municipality upon the
           inspection of the unit of dwelling space by
           a municipal inspector and his findings that
           such unit meets the standards provided by
           law.   The municipality may charge a fee to
           fund the costs of the inspections and the
           issuance of the certificates. . . .

           [N.J.S.A. 40:48-2.12m.]

                                10                        A-5067-15T3
make inspections for that purpose, require registrations, and

issue certificates of occupancy (CO) and charge fees for those

certificates.

    Turning to the challenged ordinances, he observed that the

municipalities' "ordinances have very similar framework."                He

found that the ordinances were different from the one addressed

in Timber Glen because in order to get a license under the

framework of the challenged ordinances, a landlord had to comply

with various regulations that were authorized by statute, not

just pay a fee as was the case in Timber Glen.         The distinction,

he concluded, gave the challenged ordinances "the appearance of

. . . regulation, as opposed to simply a licensing act."             After

reviewing   in   detail   the   specific   contents   of   the   ordinance

challenged in Timber Glen, and commenting on what parts related

to regulation versus licensing, the judge turned to the subject

ordinances, which he also discussed in detail.

    During his review, Judge Morgan observed that unlike Timber

Glen, Woodbury's ordinance required landlords to pay a fee and

comply with various regulations before being able to obtain a

license.    He stated:

            [W]hen   you   read   . . . [the]   ordinances
            they're . . . a very integrated set of
            ordinances   that   basically   regulate   the
            conduct, the operations of the apartment.

                                    11                            A-5067-15T3
                    And charge a fee for the license that
               you get, once you've demonstrated after an
               inspection that you're in compliance with
               those regulations.

                    So it becomes much more of a regulatory
               –type of adoption, as opposed to what you
               see in [Timber Glen.] . . .

               I'm satisfied that the ordinances that we
               have, . . . are much more in the form and
               framework of a regulation that [has] as
               their component the issuance of a document,
               which indicates that [you have] complied
               with the regulation.

       The judge followed the Court's decision in Nelson Cooney &

Son,    Inc.    v.    South   Harrison,    57    N.J.   384      (1971)      and     found

persuasive      the    Law    Division's   decision        in    Devine      v.    Mantua

Township, 28 N.J. Super. 299 (Law Div. 1953), and concluded that

the fees being charged by the municipalities were reasonably

"relate[d] to that regulation and [was] not being utilized as a

tax revenue."         He turned to plaintiffs' CRA claim and found that

since the fees paid were for regulatory purposes, there was no

taking in violation of their constitutional rights.11

       Brody and O'Hara filed a motion for reconsideration.                              In

their    motion,      they    argued   that     contrary        to   Judge    Morgan's

findings,       Woodbury's     ordinance       did   not    require       inspections

11
    In the remainder of his oral decision, the judge reviewed
each of the other municipalities' ordinates in detail and
explained how they were the same or similar to Woodbury's as
compared to the one in Timber Glen.

                                          12                                      A-5067-15T3
before issuing a license.                   They also contended that the fees

associated with inspections required by other municipalities'

ordinances          were     already        charged      in     connection        with       the

applications         for     a     CO.      As     Judge      Morgan      described       their

position,       "plaintiff[s']            argument      [was    that]      landlords         are

required       to    pay     a     higher    fee       for    the   combination         rental

license/[CO] than a non-landlord would have to pay for just the

[CO], but with the municipality expending the same amount of

work."     Finally, relying on the United States Supreme court's

opinion in Brown v. Legal Foundation of Washington, 538 U.S. 216

(2003),     plaintiffs           argued     the    motion      judge      overlooked         the

Court's    determination            that    the    government's        taking     of    money,

like     real       or     other    personal       property,        was    a    taking       for

constitutional purposes.

       Judge     Morgan       considered         the   parties'     oral       arguments      on

September 2, 2016, and on September 6, 2016, he entered an order

denying plaintiffs' motion, supported by a written statement of

reasons.        The judge conducted a detailed analysis of Woodbury's

ordinance, conceded that on "first blush [it] appear[ed] to be

an 'apply and pay' type of ordinance" similar to the one in

Timber Glen, but upon closer examination it was clear that a

satisfactory inspection was a condition to the issuing of the

license.        Addressing the municipalities' charging of a premium

                                              13                                       A-5067-15T3
inspection fee in addition to charging one for issuing a CO, the

judge found the argument unpersuasive because plaintiffs did not

plead       in    their    complaint     that    the    fee    being       charged      was

excessive.            Moreover,     he     concluded         that   "the      licensing

ordinances require the municipality to engage . . . in work over

and above that encompassed by a [CO] review, most notably the

review      of    tenant    screening     submissions         and   compliance          with

standards for occupants of the rented unit."                    Finally, the judge

rejected         plaintiffs'    argument       "that    requiring      a    fee     for    a

license      required      under   an    ultra       vires    ordinance      creates       a

constitutional        taking    supporting       a   civil    rights       claim"    under

Brown    because      unlike    "when    the    government      appropriates         money

from    a    specifically      identified       fund   of    money[,] . . .         a     law

imposing the obligation to pay a generalized monetary liability

such as a tax or fee . . . is not a taking."

       We turn next to plaintiff Christopher C. Cona's challenge

to defendant Township of Washington's ordinance12 that requires

landlords to submit annual registrations, as well as upon a

change of occupancy, and to pay a fee "prior to the issuance of

a license . . . ."             It also provides that "[e]ach rental unit

shall be inspected at least once every twelve-month period."

12
    Washington, N.J., Rental Property and Landlord Registration
ch. 185 §§ 185-1 to -21 (2005).

                                           14                                     A-5067-15T3
Inspections are required to determine "[z]oning, compliance and,

to the extent applicable, to determine if the property complies

with . . .      Property     Maintenance        and     Housing   Standards,            and

Uniform     Construction     Code, . . .       and     the   Uniform       Fire    Safety

Act."     If the inspection is unsatisfactory, the property cannot

be   registered    "nor     shall    a   license       issue"   and    the     premises

cannot be occupied "until the necessary corrections have been

made so as to bring the property and rental unit into compliance

with    the    applicable     code       and   the     property       is     thereafter

subsequently inspected, registered, and licensed."                         In addition,

the ordinance prohibits the registration or licensing of any

rental unit "unless all municipal taxes, water and sewer charges

and any other municipal assessments are paid on a current basis"

and all units are in compliance with all applicable codes and

regulations.      The only fee imposed, which was to be paid upon

registration of the rental unit, is based on the number of units

on a property.

       On November 25, 2015, Cona filed a complaint challenging

Washington      Township's         ordinance.           Judge     Morgan          granted

Washington's motion to dismiss on July 8, 2016 after considering

oral argument.       The judge found the "ordinance . . . doesn't

have    a     combination     of     what      would     appear       licensing         and

regulatory-type requirements" because "it integrates regulation

                                          15                                      A-5067-15T3
with the issuance of the registration and licensing, which[ is]

different[ from] the[] ordinance[ challenged in Timber Glen],

which simply was, pay your money, get your license . . . and

that was not permitted, authorized, enabled by the licensing

act."    The judge explained that the ordinance in Timber Glen

required "a whole separate fee as it relates to the inspections

and . . . there is no tie-in between the two; there's no, you

don't get your license if your inspection isn't so good."                       He

concluded the ordinances had "regulatory qualities to them" that

addressed "tenant screening" and registration, inspections, unit

occupation     limits,   payment   of    taxes     and    other     municipal

obligations.

      Judge Morgan also addressed Cona's CRA claim.            He concluded

that "the money that's taken can't be considered a takings under

the   Constitution."     Addressing     Cona's    contention      that     a   fee

being charged for a CO and a landlord's license was improper,

Judge   Morgan    stated:   "[T]he      fact     that    there[    are]        two

requirements . . . does not necessarily negate the ability" to

require both fees to address inspections and registrations in

satisfaction of "regulation as opposed to pure licensing."

                                   16                                    A-5067-15T3
       Finally,   we   review   plaintiff   Sharon    Downs   challenge    to

defendant the Borough of Paulsboro's March 1, 2016 ordinance13

governing     rental    properties     that       removed   all    licensing

requirements from an earlier version of the same ordinance. 14

Under the 2016 ordinance, owners of rental units are required to

file a registration application annually and with each change in

occupancy for any rental unit, and pay a $100 inspection fee per

unit    to   ensure    compliance    with   the     applicable    codes   and

regulations.      It also imposes a re-inspection fee, stating: "In

the event that a re-inspection of a rental unit is deemed to be

necessary . . . the owner . . . must pay a [fifty dollar] re-

13
   Paulsboro, N.J., Rental Property ch. 59B, art. I, §§ 59B-1 to
-19 (2016).
14
   In 1997, Paulsboro adopted an ordinance, see Paulsboro, N.J.,
Rental Property ch. 59B, art. I, §§ 59B-1 to -20 (1997), that
required   the   registration,   inspection  and   licensing  of
residential rental units.      That ordinance, was adopted "to
[e]nsure that residential rental units are properly maintained,
to require landlords to comply with the Property Maintenance
Code and to protect the lives and property of the Borough
residents."    To achieve this purpose, "rental unit[s were
required to be] registered, inspected and licensed in accordance
with [the o]rdinance."     It provided: "Upon the filing of a
completed registration form, and payment of the prescribed fee,
and a satisfactory inspection[,] the owner shall be entitled to
the issuance of a license . . . ."     There was no separate fee
required for the issuance of the license.          The ordinance
required periodic inspections stating "[e]ach rental unit shall
be inspected at least once every [twelve-month] period[,]"and
there was no fee required to be paid for the inspections.    The
2016 ordinance makes no mention of a licensing requirement.

                                     17                             A-5067-15T3
inspection fee."    The ordinance provides that a rental unit that

fails inspection cannot be registered.      A "rental unit may [also

not] be registered unless all municipal taxes, water and sewer

charges and any other municipal assessments are paid . . . ."

The ordinance mandates that the rental of any residential unit

is   prohibited    "unless   the   rental   unit   is   registered    in

accordance with" the ordinance.

     On April 15, 2016, Downs filed her complaint challenging

the 2016 ordinance validity.15      Judge Jean B. McMaster granted

Paulsboro's motion and dismissed Downs' complaint with prejudice

on July 28, 2016, for the reasons stated in her oral decision

placed on the record on the same date, after considering the

parties' earlier written submissions and oral arguments on May

3, 2016.   The judge first acknowledged that municipalities may

charge fees to defray the costs of the exercise of their power

to regulate, but such fees cannot be charged simply "for revenue

purposes" and must be reasonable and related to the exercise of

15
    After we issued our opinion in Timber Glen, Downs initially
filed an earlier action challenging Paulsboro's 1997 ordinance.
In response, on March 1, 2016, Paulsboro adopted its current
ordinance, which removes all licensing requirements.       This
prompted Downs to file a separate action challenging the 2016
ordinance as also being invalid pursuant to Timber Glen. Judge
McMaster dismissed both actions on July 28, 2016, and Downs
filed separate appeals.    On September 28, 2016, we granted
Downs' motion to consolidate the appeals from the dismissal of
both of her complaints.

                                   18                          A-5067-15T3
a municipality's police power.            The judge concluded the $100 fee

charged by Paulsboro was reasonable and "clearly [related to]

advanc[ing] a substantial public interest[,] . . . public health

and . . . . insuring that rental premises remain safe."                      As

such, charging the fees did not constitute a taking in violation

of the CRA and, further, that because the fee charged were for

"registration and inspection" they did not violate Timber Glen's

holding    that    prohibited     using   fees   as    "a   revenue-generating

tax."

    The judge supplemented her reasons in the order she entered

on July 28, 2016, in which she stated:

               Under Bernardsville Quarry v. Bernardsville,
               129 N.J. 221 (1992) a municipality has [a
               right] to charge fees which are incidental
               to its police power to regulate pursuant to
               [N.J.S.A.] 40:48-2.   [Timber Glen] does not
               affect   the   municipality's    ability  to
               regulate for the health [and] safety of its
               residents ([f]ootnote [four] is duly noted).
               [The] municipality remains empowered to
               conduct inspections [and] register units for
               [the general] welfare.       Timber Glen is
               distinguishable from ordinances at issue in
               these matters.

    On appeal, each of the plaintiffs essentially argues the

same points.           Brody and O'Hara argue it was error for Judge

Morgan    to    deny    their   cross-motions    for   summary   judgment   and

dismiss their complaint because contrary to the judge's finding,

the ordinances they challenged were similar to the one in Timber

                                       19                             A-5067-15T3
Glen    and       therefore    ultra   vires.          According   to     plaintiffs,

"[u]sing the guise of licensing tenancies, defendants try to

illegally levy a tax for revenue purposes without legislative

authority . . . ."            They contend that the judges' reliance on

case     law      the     judges    found    controlling     or    persuasive      was

inapposite and that they made out viable claims under the CRA

and were entitled to a declaratory judgment in their favor.

According to plaintiffs, the municipalities did not establish

they were entitled to dismissal of plaintiffs' complaint under

Rule 4:6-2(e).            They assert their "complaints were amply pled[

and t]he trial court permitted no discovery to test the view

that the ordinance fees were reasonable in comparison to the

expenses defendants incurred and services defendants provided

. . . ."          Brody and O'Hara also contend it was error for Judge

Morgan       to    deny     their    motions     for    reconsideration      because

"Woodbury also charges a separate fee for a [CO] inspection

. . . ."

       Cona also argues that it was error to dismiss his complaint

because "comparing the [Washington] ordinance and the [Timber

Glen] ordinance[,] which the Appellate Division ruled was ultra

vires[,] leads to the conclusion that the [Washington] ordinance

is likewise ultra vires[.]"                 He contends that the fees imposed

by     the    Washington      ordinance      are   unreasonable      in    light    of

                                            20                               A-5067-15T3
Washington's       CO    requirement,        which     also      requires        a    fee   for

inspection.      He also argues "the order dismissing the complaint

is    deficient"      because     it    "fails    to   provide       a     place      for    the

[c]ourt to note that the motion was opposed . . . ."                                 Last, in

his    reply     brief,        Cona     asserts      for    the      first       time       that

Washington's       ordinance's          registration          fee     is     unreasonable

because the information collected through the registration is

duplicative of what landlords already provide through the New

Jersey Landlord Registration Statute, N.J.S.A. 46:8-28.

       Downs argues that it was error for the court to dismiss her

complaints because Paulsboro's 1997 and 2016 ordinances, "like

the [Timber Glen] ordinance . . .                 [are] ultra vires[.]"                  Downs

also    contends        "the    trial    court    erred         by   holding         that    the

licensing      fees     are    merely    lawful    registration            and   inspection

fees[.]"        She     asserts       that   "[t]his       is    a   'takings'          and/or

confiscation [CRA] case" and that "the complaint pleads viable

CRA    takings     and/or      confiscation       violations[.]"                 Downs      also

argues that the ordinances found valid in State v. Mill Village

Apartments,      No.     A-0522-14       (App.    Div.     Feb.      10,    2016),16        Lake

16
    In Mill Village, we reviewed the validity of an ordinance
that required rental units to be annually registered at a cost
of $100 and to be inspected annually and with each change in
occupancy.  slip op. at 4-5.   We rejected arguments that "the
registration requirement was a de facto licensing requirement
and therefore invalid[,]" id. at 9, and concluded "[t]he
                                                    (continued)

                                             21                                       A-5067-15T3
Valley Associates, LLC v. Township Of Pemberton, 411 N.J. Super.

501 (App. Div. 2010),17 and Dome Realty, Inc. v. Paterson, 83

N.J. 212 (1980)18 are distinguishable from the ordinances here.

She   further   contends     that        the    "the    volunteer        [payment]   rule

doesn’t    apply    to     the     CRA    or     the     facts    of     this   case[.]"

According to Downs, "the 1998 amendment to the Licensing Act and

[Timber    Glen]     are    retroactive[.]"               Last,     she     argues    her

"complaints     pled      viable     [Uniform          Declaratory       Judgment    Law]

claims[,] which the trial court failed to address[.]"

      We   review    de    novo     a    trial    court's        order    dismissing     a

complaint under Rule 4:6-2(e), applying the same standard as the

trial court.       See Stop & Shop Supermarket Co. v. Cty. of Bergen,

(continued)
fees . . . were imposed for functions related to the City's
exercise of regulatory power that was authorized by statute."
Id. at 10.
17
    In Lake Valley, we reviewed an ordinance that required the
registration of all rental units and "at least one inspection
every three years or upon change of occupancy[,]" 411 N.J.
Super. at 502, and rejected plaintiff's argument that the
requirements imposed by the ordinance exceeded those explicitly
delegated by the legislature and were not permitted, id. at 504,
holding that the ordinance was not preempted by legislative
action. Id. at 506-07.
18
     In Dome Realty, the New Jersey Supreme Court upheld a
municipal ordinance requiring landlords to have their rental
units inspected and to obtain a CO immediately prior to allowing
a new tenant to take possession as a valid exercise of authority
pursuant to N.J.S.A. 40:48-2.12a and N.J.S.A. 40:48-2. 83 N.J.
at 219, 229-30.

                                           22                                   A-5067-15T3
450   N.J.   Super.      286,   290     (App.   Div.   2017).          That   standard

requires us to examine the challenged pleadings to determine

"whether     a   cause    of    action     is    'suggested'      by    the     facts."

Teamsters Local 97 v. State, 434 N.J. Super. 393, 412 (App. Div.

2014) (quoting Printing Mart-Morristown v. Sharp Elecs. Corp.,

116 N.J. 739, 746 (1989)).              We search the pleading "in depth and

with liberality to determine whether a cause of action can be

gleaned even from an obscure statement."                  Seidenberg v. Summit

Bank, 348 N.J. Super. 243, 250 (App. Div. 2002) (citing Printing

Mart-Morristown, 116 N.J. at 746).                 "[I]t is the existence of

the fundament of a cause of action . . . that is pivotal[.]"

Teamsters Local 97, 434 N.J. Super. at 412-13 (second alteration

in original) (quoting Banco Popular N. Am. v. Gandi, 184 N.J.

161, 183 (2005)).

      "A pleading should be dismissed if it states no basis for

relief   and     discovery      would    not    provide   one."         Rezem     Family

Assocs., LP v. Borough of Millstone, 423 N.J. Super. 103, 113

(App. Div. 2011) (citing Camden Cty. Energy Recovery Assocs.,

L.P. v. N.J. Dep't of Envtl. Prot., 320 N.J. Super. 59, 64 (App.

Div. 1999), aff'd, 170 N.J. 246 (2001)).                  Ordinarily, dismissal

for failure to state a claim is without prejudice, and the court

has discretion to permit a party to amend the pleading to allege

additional facts in an effort to state a claim.                    See Hoffman v.

                                           23                                   A-5067-15T3
Hampshire Labs, Inc., 405 N.J. Super. 105, 116 (App. Div. 2009).

Although leave to amend should be liberally granted, "without

consideration of the ultimate merits of the amendment," it need

not    be    granted     where,     an   amendment     would       be    a    "futile"    and

"useless endeavor."           Notte v. Merchs. Mut. Ins. Co., 185 N.J.

490, 501 (2006) (citation omitted); see also Prime Accounting

Dep't v. Twp. of Carney's Point, 212 N.J. 493, 511 (2013).

       The result of these appeals turn on whether the challenged

ordinances are valid.              "A municipal ordinance under review by a

court       enjoys   a   presumption       of     validity    and       reasonableness."

State v. Clarksburg Inn, 375 N.J. Super. 624, 632 (App. Div.

2005) (citing First Peoples Bank of N.J. v. Twp. of Medford, 126

N.J.    413,    418      (1991)).        "Municipal       ordinances          are   normally

liberally       construed     in     favor      of    the    municipality           and   are

presumed valid, with the burden of proving otherwise placed upon

the party seeking to overturn the ordinance."                            State v. Golin,

363     N.J.    Super.      474,     481-82       (App.     Div.    2003)       (citations

omitted);       Dome     Realty,    Inc.,       83   N.J.    at    235       (stating     that

"courts place a heavy burden on the proponents of invalidity").

Only a showing of "clear and compelling evidence" may overcome

this presumption.           Spring Lake Hotel & Guest House Ass'n. v.

Spring Lake, 199 N.J. Super. 201, 210 (App. Div. 1985).

                                             24                                     A-5067-15T3
    Applying these guiding principles, we conclude from our de

novo review that all of the plaintiffs' complaints were properly

dismissed   under   Rule      4:6-2(e),   as   none   of    the   challenged

ordinances were ultra vires in that the fees charged under them

were reasonably related to the municipalities' exercise of their

obligation to promote the safety and welfare of their residents.

We therefore affirm each order under appeal substantially for

the reasons expressed by Judge Morgan and Judge McMaster in

their cogent oral and written statements of reasons.                  We add

only the following comments.

    As we observed in Timber Glen, "licensing is a distinct

function authorized by [N.J.S.A.] 40:52-1" and, as we held, a

municipality   "may     not    mandate    by    ordinance    licensure      of

residential rentals for 175 days or more, accompanied by an

annual licensing fee[,]" 441 N.J. Super. at 532, because to

require a "license [for such] rental properties . . . by its

nature   includes   a   revenue    generating    component,       [which]   is

circumscribed by the provisions of the Licensing Act."                Id. at

527 (citing Bernardsville Quarry, 129 N.J. at 229).

    The prohibition against requiring licenses did not abrogate

a municipality's power to regulate rental property within its

jurisdiction, including requiring that they be inspected before

being occupied by a new tenant or its ability to "charge a fee

                                     25                              A-5067-15T3
to fund the costs of the inspections and the issuance of the

certificates."        N.J.S.A.    40:48-2.12m;     see   also   Dome    Realty,

Inc.,   83   N.J.    at   227-28.     A    municipality    is   also    granted

specific authority to regulate local "buildings and structures

and their use and occupation to prevent and abate conditions

therein harmful to the health and safety of the occupants of

said buildings and structures and the general public in the

municipality."         N.J.S.A.     40:48-2.12a.         "Specific     statutes

[authorize]   imposing     registration      requirements    for     residences

containing two or more families, and regulating 'the maintenance

and condition of any unit of dwelling space, upon termination of

occupancy[.]'"       Timber Glen, 441 N.J. Super. at 526 (citations

omitted).

      Landlords are also subject to ordinances that require that

they obtain COs under certain circumstances, which might include

the payment of a separate fee.19           See, e.g., N.J.A.C. 5:23-2.23;

19
     "[T]he conventional occasions for requiring" a CO includes:

                    (1) the completion of a building -
                    - the purpose being to confirm
                    that it has been constructed in
                    accordance with the building code,
                    the building permit and any other
                    applicable municipal regulation;
                    (2) the alteration of a building -
                    - the purpose being the same as in
                    (1) above; (3) the use of vacant
                    and hitherto unused land -- the
                                                                   (continued)

                                      26                               A-5067-15T3
N.J.A.C. 5:23-2.23A.        A municipality may regulate rental units

and buildings as a whole, and the combination might involve some

degree of overlap.        For example, a rental unit is inspected for

compliance with tenancy regulations, and the building in which

it is located is inspected to insure it is sound and constructed

in   accordance    with    required    building    permits.        See   N.J.A.C.

5:23-2.23A.        That   overlap     does   not    limit   a     municipality's

ability to offset its costs for providing those services by

charging   fees,    as    long   as   they   are   not   simply    exercises    in

revenue production.        We discern no such exercise in these cases

as we did in Timber Glen.

(continued)
                   purpose being to insure that the
                   intended   use  conforms  to  the
                   zoning ordinance and any other
                   pertinent   regulation;  (4)  any
                   change of use -- whether the land
                   be improved or not -- the purpose
                   being as last stated.

           . . . [T]his   list   [is  not]   exclusive:
           "[t]here may be, or there may later develop,
           other occasions when such a certificate will
           serve a useful and valid end in land use
           control."

           [Dome Realty, Inc., 83 N.J. at 231 (fourth
           alteration in original) (citations omitted)
           (approving the requirement for a CO upon a
           tenant vacating an apartment).]

                                        27                               A-5067-15T3
       Similarly, the fact that an ordinance calls for additional

information to be provided for registration than what the State

mandates,     see   N.J.S.A.    46:8-28,     and    charges    a    reasonable,

associated fee does not deem the ordinance ultra vires.20                   "[T]he

Legislature has empowered [municipalities with the authority] to

adopt    an   inspection     and      certification    scheme       for    rental

housing[,]" Dome Realty, Inc., 83 N.J. at 232, and it is within

a municipality's authority to charge a reasonable fee to defray

the costs it incurs in carrying out that authority.                         Nelson

Cooney & Son, Inc., 57 N.J. at 390 n.4.

       Turning to the remaining argument that plaintiffs should

have been allowed to proceed to discovery in order to determine

the reasonableness of the fees charged by the ordinances, we

conclude that it is without merit and does not warrant further

discussion in a written opinion.             R. 2:11-3(e)(1)(E).          Suffice

it to say, that plaintiffs have made no showing that the fees

were    unreasonable   and     they    are   "not   entitled       to   turn    the

discovery process into a fishing expedition."                 Ellis v. Hilton

20
   We observe that Cona raised this argument for the first time
in his reply brief. Although "[r]aising an issue for the first
time in a reply brief is improper[,]" and may lead to our
decision not to consider it, Borough of Berlin v. Remington &
Vernick, Eng'rs, 337 N.J. Super. 590, 596 (App. Div. 2001)
(citing State v. Smith, 55 N.J. 476, 488 (1970)); Quigley v.
Esquire Deposition Servs., 409 N.J. Super. 69, 74 (App. Div.
2009), we choose to address Cona's argument, and conclude it is
without merit.

                                       28                                 A-5067-15T3
United Methodist Church, ___ N.J. Super. ___, ___ (2018) (slip

op. at 9) (citing State v. Broom-Smith, 406 N.J. Super. 228, 239

(App. Div. 2009), aff'd, 201 N.J. 229 (2010)).

    In light of our determination that plaintiffs' respective

complaints were properly dismissed, we need not address Brody

and O'Hara's contention that the court erred by denying their

cross-motion        for     summary       judgment         or     their       motion      for

reconsideration.

    We will acknowledge, however, that a municipality calling

the fees being properly charged "license fees" flies in the face

of Timber Glen and causes considerable confusion.                             In order to

correct    that     problem       in    these      cases    and    hopefully        prevent

similar claims in the future, we remand these matters to Judges

Morgan and McMaster for entry of an order directing that the

affected municipalities strike the reference to their fees as

being     license     fees    and        changing     the       designation         of    any

requirement for registration or inspection from being part of a

licensing requirement.            See United Prop. Owners Ass'n of Belmar

v. Borough of Belmar, 343 N.J. Super. 1, 39 (App. Div. 2001)

(stating that "[t]he trial judge had the authority to engage in

'judicial    surgery,'       or    narrow       construction       of     a    statute     or

ordinance,    to     free    it    from       constitutional       doubt       or   defect"

(citations     omitted)).              With    that   deletion,         "the    remaining

                                              29                                    A-5067-15T3
provisions      present     . . . viable         legislative     action,

constitutionally   sound,   and   capable   of    lawful   enforcement."

Ibid.

    Affirmed.

                                  30                            A-5067-15T3