author: Collins, J. C. C.,

text:
    THOMAS SCHECK, AN INFANT BY HIS GUARDIAN AD LITEM, HAROLD V. SCHECK, INDIVIDUALLY, PLAINTIFF v. HOUDAILLE CONSTRUCTION MATERIALS, INC., DEFENDANT.
    Superior Court of New Jersey Law Division
    Decided November 20, 1972.

      Mr. Rudolph Markowitz for plaintiff.

      Mr. Myron J. Bromberg for defendant (Messrs. Porzio, Bromberg and Newman, attorneys).
   Collins, J. C. C.,

Temporarily Assigned. Plaintiff has moved to vacate an order entered by this court on June IS, 1971 which dismissed the first and second counts of his amended complaint. This court has agreed to consider tlie motion as one pursued in accordance with R. 4:50-1(f), and briefs have accordingly been filed to supplement the oral arguments of counsel.

This matter arises out of injuries suffered by the infant plaintiff when he dove off an apparently abandoned barge located in a body of water on defendant’s property. Plaintiff’s complaint, as amended by papers filed with the court on May 24, 1971, alleged in its first count that defendant owed a duty to see that the area in question was safe for the uses to which it knew the property was being put by infant trespassers and/or licensees. In his second count plaintiff alleged defendant “wilfully, wantonly and/or maliciously fail[ed] to guard, or warn against, a dangerous condition, nse, structure or activity.” The order entered on June 18, 1971 struck, with prejudice, the entire first count, and struck “that portion of the second count which charges defendant with ‘wanton’ failures * * * so that after entry of this order, the allegations of paragraph two of the second count of the amended complaint shall be limited to allegations that defendant ‘did wilfully and/or maliciously fail to guard, or warn against, a dangerous condition, use, structure or activity.’ ”

This court entered the order in conformance with what it then believed to be the proper interpretation of N. J. S. A. 2A:42A-1 et seq. In reaching its conclusion at that time this court had no interpretative case law available to it, but only the bald wording of the statute. I now feel, in the light of subsequent case law and further research into the appl icable legislative history, that this court’s initial interpretation of N. J. S. A. 2A:42A—1 et seq. was in error.

The act in question, L: 1968, c. 73 (N. J. S. A. 2A:42A-1 et seq.) reads:

An act relating to the liability of owners, lessees and occupants of premises towards persons entering on their premises for sport and recreational activities in certain cases, and repealing chapter 107 of the laws of 1962.
Be it enacted by the Senate and General Assembly of the State of New Jersey:
C. 2A :42A-2 Definition.
1. As used in this act “sport and recreational activities” means and includes: hunting, fishing, trapping, horseback riding, training of dogs, hiking, camping, picnicking, swimming, skating, skiing, sledding, tobogganing and any other outdoor sport, game and recreational activity including practice and instruction in any thereof.
C. 2A:42A-3 Limitation of liability of owner, lessee or occupant of premises.
2. Except as provided in section 3 of this act:
a. An owner, lessee or occupant of premises, whether or not posted as provided in section 23:7-7 of the Revised Statutes, owes no duty to keep the premises safe for entry or use by others for sport and recreational activities, or to give warning of any hazardous condition of the land or in connection with the use of any structure or by reason of any activity on suck premises to persons entering for suck purposes;
b. An owner, lessee or occupant of premises who gives permission to another to enter upon such premises for a sport or recreational activity or purpose does not thereby (1) extend any assurance that the premises are safe for such purpose, or (2) constitute the person to whom permission is granted an invitee to whom a duty of care is owed, or (3) assume responsibility for or incur liability for any injury to person or property caused by any act of persons to whom the permission is granted.
C. 2A:42A-4 liability not limited in certain instances.
3. This act shall not limit the liability which would otherwise exist.
a. For willful or malicious failure to guard, or to warn against a dangerous condition, use, structure or activity; or
b. For injury suffered in any case where permission to engage in sport or recreational activity on the premises was granted for a consideration other than the consideration, if any, paid to said landowner by the State; or
c. For injury caused, by acts of persons to whom permission to engage in sport or recreational activity was granted, to other persons and to whom the person granting permission, or the owner, lessee or occupant of the premises, owes a duty to keep the premises safe or to warn of danger.
O. 2A :42A-1 Repealed.
4. “An act limiting the liability of landowners of agricultural lands or woodlands for personal injuries to or the death of any person while hunting or fishing upon the landowner’s property,” approved July 6, 1962 (P. L. 1962, c. 107), is repealed.
C. 2A:42A-5 Act does not create liability.
5. Nothing in this act shall create a duty of care or ground of liability for damages for the death or injury to person or property.
6. This act shall take effect July 1, 1968.

The legislative history of this statute is sparse, although the efforts of Arthur S. Applebaum, Assistant Research Director of the New Jersey Legislative Services Agencj-, Division of Legislative Information and Research, and his staff, have provided all the information that appears to be available in this regard. The court expresses its thanks to Mr. Applebaum and his staff for their valuable assistance.

The statute whose interpretation is currently in issue replaced an earlier legislative enactment, L. 1962, c. 107. This earlier law, entitled “An act limiting the liability of landowners of agricultural lands or woodlands for personal injuries to or the death oí any person while hunting or fishing upon the landowner’s property,” was very limited in the scope of the protection which it afforded. In effect it protected only farmers and possessors of forest lands from liability for injuries incurred by persons while hunting or fishing upon their property. In the years from 1965 to 1968 five bills were introduced in our Legislature to modify the provisions and effect of the 1962 statute. While there were apparently no statements filed with these hills, in none of them does any language appear which would indicate to this court that the Legislature intended to abrogate the principles contained within the line of cases headed by Strang v. South Jersey Broadcasting Corp., 9 N. J. 38 (1952). This court must, therefore, agree with the views expressed by Judge Byrne in his decision in O’Connell v. Forest Hill Field Club, 119 N. J. Super. 317 (Law Div. 1972):

The 1968 act was intended to broaden the former act which protected owners of agricultural land or woodlands from liabiilty for injuries to hunters or fishermen. There is, however, nothing in the legislative history of the act to show that the Legislature intended it to apply to an infant trespasser. The most likely interpretation that could be placed on this act is that it was intended to protect the landowners from liability to sportsmen who come upon their property, be they licensees or trespassers. The original act limited the scope of hunters and fishermen, but theLegislature finding that to be inadequate in this day where people have more leisure time and various recreational activities abound, it enacted the more comprehensive law. Yet no where is there any indication that it should apply to the situation at hand. There is no legislative history, no statement attached to the bill as introduced, no statement by the Governor when the bill was signed into law indicating an intent to substantially modify the line of cases from Strang, supra., to date. [At 326]

Plaintiff has relied in large part upon Judge Byrne’s decision, noted above, as the basis for its motion to vacate our previous order. However, as defendant has pointed out, the facts in O’Connell differ markedly from those currently before us. Defendant has particularly emphasized the fact that the infant plaintiff here is 11 years older than the three-year-old child involved in the O’Connell case. Defendant argues, in effect, that the O’Connell child was incapable of fofming the intent requisite to bring the exclusions of the act into play, and that in any case the infant trespasser rule is unavailable to a plaintiff of the Sheck boy’s age under the circumstances of this case.

In Strang v. South Jersey Broadcasting Co., supra, 9 N. J. at 45, Justice Heher noted that “The basis of liability is the foreseeability of harm, and the measure of duty is care in proportion to the foreseeable risk.” See also Taylor v. N. J. Highway Authority, 22 N. J. 454, 463 (1956). In viewing the role which the age of a child may play in the determination of whether the infant trespasser rule is applicable or not our courts have clearly indicated that there are to be no arbitrary cutoff points beyond which its protection is unavailable. Hoff v. Natural Refining Products Co., 38 N. J. Super. 222, 230-236 (App. Div. 1955). See also Dobrzynski v. Liveright, 118 N. J. L. 589, 591 (E. & A. 1937); Nichols v. Grunstein, 105 N. J. L. 363 (E. & A. 1929).

* * * If the justification for expanding the liability of the possessor of land as to trespassing children is founded on the “immaturity” of children and their consequent want of the “discretion and judgment essential to their own security,” there is no place for the assumption in law that any particular child, in the absence of conclusive evidence thereof, has shed his immaturity at any particular age. In this domain the law may wisely find its guide in the general sense of mankind. Nor should there intrude the notion that at any given age the child “should know better.” We are here necessarily dealing in pragmatics, not theories of improvement of child behavior. Close curtailment of liability by law will not dull the instinct of the child for carefree play. But the fair application of the rule of liability on a realistic basis will encourage the adoption of safety measures by industrial and other land occupiers and sub-serve the intent of the rule that the risk of foreseeable injuries to children be borne by those best able on the whole to prevent them. Hoff v. Natural Refining Products Co., supra. 38 N. J. Super. at 234.

See also Scheffer v. Braverman, 89 N. J. Super. 452 (App. Div. 1965); Bush v. N. J. & N. Y. Transit Co., Inc., 30 N. J. 345 (1959)

Although this infant plaintiff is close to being of an age at which it would be possible to hold as a matter of law, in the light of the testimony produced at the depositions of plaintiff, that he was not entitled to the protection of the infant trespasser rule, there is still enough of a doubt in the court’s mind to compel us to consider this question to be one for the jury. Coughlin v. United States Tool Co., Inc., 52 N. J. Super. 341 (App. Div. 1958); Bush v. N. J. & N. Y. Transit Co., Inc., supra, 30 N. J. at 353-354. Further, this court believes that the question of the intent which the infant plaintiff had when he entered upon defendant’s lands and whether said intent was of such a nature as to call into play the statutory protection of N. J. S. A. 2A:42A-1 et seq. would also be one for the jury, assuming, of course, the other prerequisites for that provision’s application had also been met. Unfortunately for defendants this court believes one such prerequisite has not been met and, consequently, that N. J. S. A. 2A:42A-1 et seq. is totally inapplicable to this case.

In setting up the protections provided for in the 1962 statute the Legislature clearly intended it to apply solely to wooded properties and farmlands. However, as time passed our Legislature felt a need to expand upon the categories of land protected. Thus in L. 1968, c. 73 we see the terms “agricultural lands or woodlands” changed to the broader term, “premises.” While it is apparent that the Legislature intended to expand the immunities to be provided landowners, this did not mean, as was noted in the O’Connell decision, that the Legislature had suddenly decided to wipe out the entire line of Slrang cases nor to overturn the principle that “human safety is of far greater concern than unrestricted freedom in the use of land.” Strang v. South Jersey Broadcasting Co., supra., 9 N. J. at 45; Simmel v. New Jersey Coop. Co., 28 N. J. 1 (1958). What, then, did this change of language represent? It reflected a legislative policy decision fully in keeping with our State’s prior decisional law. In effect, the Legislature has decided that properties other than farm and woodlands would warrant the protection intended. But what properties, and why? The principle seems to lie in the rationale of the Simmel case, supra. There our highest court stated:

It should be recognized * * * that the landowner or occupier is not an insurer of the infant. He had no duty to periodically inspect the premises in order to ascertain whether third persons, themselves trespassers, might have created dangerous artificial conditions thereon. * * * [At this time] there is no necessity to determine whether the landowner or occupier has a duty to inspect the premises where he himself has created such condition. [28 N. J. at 11]

The Legislature, in full agreement with the above concept, decided to incorporate it in a statute which distinguishes between property where it would be unreasonable to expect that an owner, occupier or lessee could closely supervise access to his land by outside interlopers intent upon using it for recreational purposes, and property where it could be expected that an owner, occupier or lessee would be cognizant of intrusions upon it without need for special inspection. Thus a farmer could not be expected to patrol his land on anything like a regular basis to observe possible interlopers. Likewise a company could own a large tract of land whereon extensive stretches would be almost totally unoccupied while other sections, for example where there were buildings, would be subjected to relatively regular scrutiny by the occupiers. The test as to whether the statute would apply would be the reasonableness of the expectation that a landholder would, without extraordinary effort, maintain a supervision of the property in question which would be expected to reveal whether any persons had entered upon his land for recreational purposes and whether any artificial conditions existed which might pose a danger to such interlopers. Ostroski v. Mt. Prospect Shoprite, Inc., 94 N. J. Super. 374 (App. Div. 1967). In areas where such interlopers may be reasonably expected to be discovered there would be only a limited immunity granted, in regard to gratuitous licensees, where in return for permission to use the land such licensees would be considered to have waived the rights they would otherwise have had. As to other interlopers the previously existing principles of duty were to continue. Where it would be unreasonable to expect that a landowner would be able to detect interlopers on anything hut a sporadic basis, the immunity granted would be extended to a point where only “maliciousness or wilfullness” on the part of the landowner would suffice to permit a recovery for injuries suffered.

In effect, our Legislature has thus simply expanded upon the principle of foreseeability central to the holdings in so many of our cases dealing with the duties of landholders to licensees and trespassers upon their properties. Turpan v. Merriman, 57 N. J. Super. 590 (App. Div. 1959), certif. den. 31 N. J. 549 (1960); Taylor v. N. J. Highway Authority, supra.; Scheffer v. Braverman, supra. This is not to say that there is now a duty to inspect for dangerous conditions created by third parties, or to search for dangerous natural conditions. See Simmel v. N. J. Coop. Co., supra; Ostroski v. Mt. Prospect Shoprite, Inc., supra.; Ramundo v. Turi, 92 N. J. Super. 73 (App. Div. 1966) certif. den. 48 N. J. 141 (1966); Callahan v. Dearborn Developments, Inc., 57 N. J. Super. 437 (App. Div. 1959), aff’d 32 N. J. 27 (1960). What it does indicate is that the law of this State is still that

A landowner is liable for injuries sustained by an infant trespasser if tlie landowner knows or should know that children are likely to trespass [Restatement, Torts, § 339(c)]; and that structure or other artificial condition on landowner’s property involves an unreasonable risk of serious bodily harm to them if he fails to maintain proper safeguards [Id. § 339(b)] ; if the children, because of their youth, do not discover or realize the risk of harm inherent in the condition [Sec. 339(c)]; and if the utility to the possessor of maintaining the condition is slight as compared to the risk to Ike child involved [Id. § 339(d)], [Coughlin v. U. S. Tool Co., Inc., supra., 52 N. J. Super. at 346]

Defendant calls to our notice “the established principle of finality of judgments,” and cites to us the eloquent opinion of Judge Fritz in Bauer v. Griffin, 104 N. J. Super. 530, 540 (Law Div. 1969), aff’d 108 N. J. Super. 414 (App. Div. 1970), certif. den. 56 N. J. 245 (1970). The ease involved there concerned a settlement based solely upon a set of factual circumstances. Here we are concerned with what this court has determined to be a misinterpretation of the legal effect of a statute, where that misinterpretation was brought to light by a reported decision subsequent to that misinterpretation. To let matters stand as they are would do violence to our basic concepts of justice. To quote Judge Fritz, “Fairness and justice are lodestars without peer.” 104 N. J. Super. at 545-546. “* * * [T]he very essence of [R. 4:50-1] (f) is its capacity for relief in exceptional situations. And in such exceptional eases its boundaries are as expansive as the need to achieve equity and justice.” Court Investment Co. v. Perillo, 48 N. J. 334, 341 (1966). To limit plaintiff to his complaint as it is presently worded in the light of the recognition of our earlier error would be unjust, oppressive and inequitable. Quagliato v. Bodner, 115 N. J. Super. 133, 138 (App. Div. 1971); Greenberg v. Owens, 31 N. J. 402, 411 (1960) (Jacobs, J. dissenting). We do not have here a trial error, with a later attack upon a judgment. Hodgson v. Applegate, 31 N. J. 29 (1959). Rather, we have a final order, made as a matter of law, upon the construction to be given to plaintiff’s complaint and the limitations to be placed upon his possibility of recovery due to the court’s interpretation of a statute. The error made here was prior to a trial which has not yet occurred and thus was made “without reference to the evidence in the case.” Hodgson v. Applegate, supra, at 40.

“The principle of finality of judgments is one of repose. It dictates that litigation must eventually be ended and that at some point the prevailing party be allowed to rely confidently on the inviolability of his judgment. But it is not an absolute rule, and must be weighed in the balance with the equally salutary principle that justice should be done in every case.” Hodgson v. Applegate, supra, at 43.

Plaintiff’s motion is granted.


source: Caselaw Access Project

author: Huot, J. D. C.

license: Public Domain

text:
    ERNEST ZANKMAN, PLAINTIFF, v. TIRENO TOWERS AND CARMELO LUPPINO, DEFENDANTS.
    Bergen County District Court
    Decided November 10, 1972.

      Mr. Edward Goldberg, attorney for plaintiff.

      Mr. August Landi, attorney for defendants.
   Huot, J. D. C.

This ease involves a claim for damages for an alleged unlawful entry and distraint. Plaintiff Ernest Zankman entered into a two-year lease with defendants Tireno Towers Corporation and its president, Carmelo Luppino, for the rental of an apartment in Tireno Towers. Piainiiff executed the lease in his own name and in the name of New Jersey Steel Products Co. He intended to use the apartment not only as a residence but also as a place to make and receive business calls and correspondence. The lease was executed on September 27, 1971 and plaintiff took possession of the apartment on October 1, 1971. He paid the November rent but failed to pay the December rent when it became due on December 1, notifying defendants that he would be late. On December 29 or 30, plaintiff received a telegram advising him that unless the rental payment for December was received by 11 a.m. on December 30, arrangements would be made to padlock his apartment. On December 30 plaintiff was ill and left his apartment to fill a prescription given him by his doctor. While he was at the drugstore, his apartment was padlocked. He was not allowed to remove his furnishings until January 8, 1972. Plaintiff contends that the entry and padlocking of his apartment and the distraint of his furnishings was unlawful.

The outcome of this controversy rests upon the construction to he given N. J. S. A. 2A:39—1 and N. J. S. A. 2A:33—1. N. J. S. A. 2A:39-1 is captioned “Unlawful entry prohibited” and provides in part:

* * with regard to any real property occupied solely as a residence by the party in possession, such party shall not be made in any manner without the consent of the party in possession unless the entry and detention is made pursuant to legal process * * *

N. J. S. A. 2A:33-1 concerns distraints and provides in part:

* * * No distraint shall be permitted for money owed on a lease or other agreement for the occupation of any real property used solely as a residence of the tenant.

The question presented is whether plaintiff occupied his apartment “solely as a residence” within the meaning of the two statutes. Plaintiff executed the lease in his own name and in the name of New Jersey Steel Products Co. He made some incidental use of the apartment in his capacity as a salesman. Do these facts remove this apartment from the protection afforded by the statutes ?

Preliminarily, it should be noted that the terms of the lease involved herein provide that the landlord may change the locks on the doors and take possession of the apartment in the event of any default of the terms of the lease. A landlord may not provide in his lease to do that which the law forbids. Statutes suspending or restricting a landlord’s remedy to recover possession of leased premises from the tenant are a legitimate exercise of the police power of the State. Wagner v. Mayor, etc., Newark, 42 N. J. Super. 193 (Law Div. 1956).

The question posed in the instant matter is whether this apartment was being used “solely as a residence” within the contemplation of the statutes. The inquiry is narrowed to the application of this phrase to the facts involved, because if the apartment comes within the purview of the statutes, as quoted above, the acts of defendant landlord were patently violative of the statutes.

In construing a statute we are to give the statutory language its ordinary meaning. ‘Residence” may be defined as “the place in which one lives; a dwelling; an abode.” American Heritage Dictionary of the English Language, (1st ed. 1969, 1970). The same dictionary defines “solely” as “1. alone, singly. 2. Entirely; exclusively.” Initially, the strict meaning of these words would indicate that any use of the premises for other than exclusively residential purposes would remove the apartment from the protection of the two statutes involved herein. But this court is mindful of the fact that the statute must be viewed as a whole in an effort to ascertain its objective and policy. “It is the obvious reason of a law that gives it life, not the strict, literal sense of terms.” Joseph v. Moore, 102 N. J. Super. 598 (Law Div. 1968). “The reason of the statute, i. e., the motive which led to the making of it, is one of the most certain moans of establishing the true sense of the words.” Fidelity Union Trust Co. v. Berenblum, 91 N. J. Super. 551 (App. Div. 1966). To advance the objective and policy of these statutes the court must not give so restricted an interpretation to the legislative language. The Legislature was concerned with safeguarding the integrity of a person’s dwelling. The apartment that is involved here was plaintiff’s residence in every sense of the word. He ate there, slept there and kept his personal belongings there. That he also signed his company name on the lease and made business calls from his apartment did not make it any less his “residence,” as the Legislature contemplated that word.

In summary, this court holds that the apartment rented by plaintiff was used “solely as a residence” within the meaning of N. J. S. A. 2A:39-1 and N. J. S. A. 2A:33-1. The entry by defendants and their distraint of plaintiff’s furnishings constituted a violation of those statutory provisions.

The court finds that plaintiff has sustained damages for food and clothing by reason of defendants’ actions in the amount of $120. Under the provisions of N. J. S. A. 2A:39-8, which provides for damages for unlawful entry, plaintiff is entitled to treble damages of $360 for defendants’ violation of N. J. S. A. 2A:39-1. He is also entitled to $120 for defendants’ unlawful distraint under N. J. S. A. 2A:33—1.

Plaintiff also claims that he sustained a loss of income by reason of defendants’ actions. The court finds no merit in this claim since the only business use made of the property was the use of the telephone, and plaintiff’s assessment of damages is too speculative.

Defendant has asked for damages for alleged damage done to their apartment by plaintiff. The court has studied the photographs submitted and finds that there was no damage done to the apartment. Defendant is entitled to retain the security deposit given by plaintiff for December rent.

There will be a judgment for plaintiff and against defendants for $480.


author: Carton, J. A. D.

text:
    MARY WILLIAMS, PLAINTIFF-APPELLANT, v. AMERICAN HOME ASSURANCE CO., ET AL., DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Submitted September 19, 1972
    Decided November 16, 1972.

      Before Judges Lewis, Carton and Mintz.

      Messrs. James & Addas, attorneys for appellant (Mr. Frank P. Addas, on the brief).

      Mr. Edward V. Ryan, attorney for respondents (Mr. William J. Gannon, on the brief).
   The opinion of the court was delivered by

Carton, J. A. D.

The issue on this appeal is whether coverage is provided to the driver of a rented vehicle against damage claims by passengers under a liability insurance policy filed pursuant to the Motor Vehicle Rental Statute, N. J. S. A. 45:21—1 et seq.

There is no substantial dispute as to the salient facts. Defendant Chrysler Leasing Corp. owned a Plymouth sedan which it leased to defendant Econo-Car International, Inc., which in turn leased it to defendant Econo-Car of Jersey City, a corporation.

Defendant William Stewart, on March 26, 1965, rented the Plymouth from Econo-Car of Jersey City under a written rental agreement which referred to certain insurance protection provided by virtue of the rental agreement. When he applied for the rental Stewart stated that he had a valid Mew Jersey driver’s license when, in fact, and unknown to him, his license had been revoked a short time previously for failure to respond to a summons in a traffic violation. In the application for the rental he did not list any other person as an intended driver of the vehicle. Accordingly, the attendant at the rental agency informed him that no one else was authorized to drive the vehicle.

At the time of the making of the rental agreement there iras in force an insurance policy issued by defendant American Home Assurance Co., which was made applicable to all vehicles owned by Chrysler Leasing Corp., leased to EconoCar International, and rented, held for rental or used for business purposes by the latter or its authorizeed dealers. This document is a blanket policy, apparently intended to be applicable on a nationwide basis, and has as its basic instrument the printed standard combination automobile policy, appended to which are numerous endorsements.

On March 29, three days after renting the ear, Stewart permitted Mary Williams to drive. There is nothing in the record to indicate that she was made aware of the rental arrangements. While Mary Williams was driving the car, accompanied by Stewart who sat in the front seat, it struck a utility pole. At that time Mary Williams had no driver’s license, although it appears that she had procured a learner’s permit about seven months earlier which had been renewed several times but had expired some four weeks before the accident.

Alan riding in the car were passengers Helen James, Edward. James and Snsan Tynes, who sustained personal injuries in the accident. They brought actions against the driver to recover for these injuries. That litigation precipitated the present declaratory judgment action by Williams to determine the extent of the coverage afforded to her by the insurance policy.

The action proceeded against defendant American Home Assurance Co. only, the case being dismissed by consent as to defendants Chrysler, .Econo-Car International and EconoCar of Jersey City. The action was also dismissed as to Stewart, who had not been served with process. No one appeared on behalf of the passengers in the personal injury actions and trial thereof was stayed pending determination of the coverage issue.

After a trial by the court without a jury, the trial judge expressed the opinion that Williams was not afforded protection under either the terms of the policy required to be filed by N. J. S. A. 45:21-1 et seq. or under the considerably broader language of the policy actually filed.

Specifically, the trial judge ruled that Williams was neither an agent nor a servant of lessee Stewart and consequently did not fall within the language of the statute which mandated that the filed policy “shall provide for the payment * * * of any final judgment recovered by any person on account of the ownership, maintenance and use of such motor vehicle by either the owner or the lessee or bailee, his agent or servant * * *." (Emphasis added). Since determination of this appeal proceeds on other grounds, we need not decide whether, in the factual context presented here, Williams might be considered the agent of Stewart for purposes of the statute.

The trial judge held that although the insurance company was bound by the provisions of the policy broader in scope than those mandated by the statute, Williams was not covered because she was not an insured as defined in the policy. He held, further, that even if Williams came within the category of an insured, Stewart’s misrepresentations that he was a licensed driver and that only he would drive the car voided the policy and relieved the insurer of any responsibility to either Stewart or Williams. With respect to the injured passengers, he concluded that the mandatory noncaneellability clause in the policy did not bar the insurer from cancelling the policy on account of Stewart’s misrepresentations, for the reason that the statute did not extend protection to occupants of the rented car.

The trial judge correctly held that the carrier was bound by the terms of its contract despite the fact that coverage was provided therein greater than' required by the statute. That determination is based upon the sound principle that a statute requiring an insurer to file a policy providing certain mandatory coverage should not have the effect of relieving the insurer of obligations it has expressly contracted for. Cosmopolitan Mutual Ins. Co. v. Continental Cas. Co., 28 N. J. 554 (1959).

In our view, however, the trial judge took too narrow a view of the obligation of the insurance company to the driver of the car and the injured passengers under the policy provisions and those of the rental agreement. Consideration of the question whether the driver of the car was an insured and, if so, the further question whether thé policy was rendered void because of misrepresentations by Stewart, requires a detailed scrutiny, not only of the policy provisions, but also of the rental arrangements through which the policy was made applicable to persons renting the ear'.

When Stewart applied to Econo-Car of Jersey City to rent the car he stated to its representative that he was a licensed driver and then exhibited his 1965 New Jersey driver’s license. The representative requested additional information, on the basis of which she filled in certain spaces on the application card and he completed others. This card makes no reference to the name of the .lessor. On one side appears Stewart’s name and incidental information relating to his employment and personal description. At the. foot of the card, just above Stewart’s signature, appears the following:

The foregoing representations are made under the pains and penalties of perjury for the purpose of obtaining automobile rental service, and I will notify the company if I change my place of employment.

The other side of the card contains a number of boxes for additional information, but the only one filled out contains Stewart’s New Jersey driver’s license number and a notation of its expiration date as “1/66.”

The only other document presented to Stewart consisted of a single sheet, the first page of which is entitled “Standard Rental Agreement” and contains terms and conditions of the rental.

On the top of the other side of the sheet (denominated “Page 2”) there appears the legend, “Rental Agreement,” followed by “Econo-Car International, Inc.” (although the car was presumably intended to be rented by Econo-Car of Jersey City). This page consists of a form divided into two parts— one for use of the rental agency for the entry of information as to mileage, etc., and the other containing miscellaneous information to be supplied by the renter. None of this is pertinent here with the exception of a notation of Stewarts driver’s license number and the expiration date, At the foot of the page is the printed statement, “This rental agreement subject to terms and conditions on reverse side (Page 1).” Below this statement appears Stewart’s signature. His is the only signature on the document. No provision is made for execution anywhere on behalf of the lessor.

It becomes necessary now to describe the pertinent terms and conditions of the printed rental agreement form. After reciting that the lessor thereby leases the vehicle to the renter (including any additional renter signing the agreement), there follows in item (3) :

RENTER AGREES THAT SAID VEHICLE SHALL NOT BE OPERATED * * * (e) by any person other than (1) the Renter or additional Renter who signed this agreement, (2) any employee or employer of tlie Renter while used for business purposes of the Renter or (3) a driver for whom Lessor has given written consent, provided always that any such additional Renter, driver, employee or employer of the Renter must he 25 years of age and a qualified licensed driver * * *.

Item (5), which contains the only reference to insurance that appears anywhere in the document (or elsewhere), provided, in pertinent part:

Renter participates as an insured in the benefits of automobile bodily injury and property damage liability insurance and is bound by and agrees to the terms, conditions, limitations, and restrictions thereof even though all of them are not outlined herein. Such insurance provides bodily injury or death liability limits of at least $100,000 for each person in each accident, and subject to the foregoing limitation $300,000 limits for all persons in each accident, and property damage liability limits to $25,000 for each accident. * * *

In item (5) the renter further agrees, among other things, that the insurance does not cover liability imposed or assumed by an insured under any workmen’s compensation law or any contract of any nature. It also requires the prompt reporting of accidents and obliges the renter or driver to deliver to the Econo-Car station from which the vehicle is rented, or to the lessor’s insurer as soon as practicable, any legal process received by the renter or driver relating to claims or suits.

So far as the record discloses, neither Econo-Car of Jersey City, nor anyone else, provided Stewart with a copy of the blanket insurance policy or any further description of its provisions, or even the name of the company which issued the policy.

The introductory language of the filed policy follows standard policy phraseology that the insurer

* * * [a]grees with the insured, named in the declarations made a part hereof * * ® [t]o pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of the bodily injury, sickness or disease * * * sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the automobile.

Through an endorsement the insurance is also made specifically applicable to the rentee as an insured. The particular assureds named in the declaration are Chrysler Leasing Corp. and various other sublessees or affiliates and dealers.

We turn, then, to the omnibus provision of the policy, which provides as follows:

III. Definition of Insured: (a) With respect to the insurance for bodily injury liability and for property damage liability the unqualified word “insured” includes the named insured and, if the named insured is an individual, his spouse if a resident of the same household. and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or such spouse or with the permission of either. * * *

The omnibus clatise extends the insurance coverage, not only to Stewart as an assured, but also as to any person using the automobile with the permission of the named insured. Stewart, as the rentee and as an assured, of course had the permission of a named assured under the rental agreement to operate the car. But he was not given authority to permit Williams to drive the car by the named assureds. In fact, in permitting Williams to operate the vehicle he literally violated the terms of the rental agreement—this despite the fact that Stewart was riding in the automobile with the permittee.

The next inquiry, therefore, is whether the driver of the car and the injured passengers were deprived of protection under the policy because, at the time the accident happened, it was not being driven by one who had received permission of the original named insured. We think not.

A liability insurance contract is for the benefit of the public as well as for the benefit of the named or additional insured. Odolecki v. Hartford Accident & Indemnity Co., 55 N. J. 542, 549 (1970). The Legislature has implemented this public policy by assuring an available fund for the innocent victims of automobile accidents. See Motor Vehicle Security Responsibility Law, N. J. S. A. 39:6-23 to 60; Unsatisfied Claim and Judgment Eund Law, N. J. S. A. 39:6-61 to 91; Motor Vehicle Liability Security Eund Act, N. J. S. A. 39:6-92 to 104.

Accordingly, our Supreme Court, in Mattis v. Nationwide Ins. Co., 33 N. J. 488, 497 (1960), held that if a person is given permission to use a motor vehicle in the first instance, any subsequent use, though not within the contemplation of the parties, is a permissive use within the standard omnibus clause in an automobile liability insurance policy.

This holding was reaffirmed in Small v. Schuncke, 42 N. J. 407 (1964) and Selected Risks Ins. Co: v. Zullo, 48 N. J. 362 (1966). In the latter ease the Supreme Court discussed the financial responsibility laws cited above and indicated that their import was to assure that all persons wrongfully injured by motor vehicles would have financially responsible persons to look to for damages, and that persons registering motor vehicles provide such financial responsibility by automobile liability insurance. 48 N. J. at 368. Consequently, it held that an insurer could not depart from the omnibus coverage described in N. J. S. A. 39:6-46 (a) and, therefore, policies issued- by it must conform to the “initial permission” rule.

In Odolecki v. Hartford Accident & Indemnity Co., supra, the Supreme Court, in accord with the above policy consideration, extended the initial permission rule to prohibited second permittees as well as prohibited uses:

We fail * * * to see the distinction between a case where a first permittee exceeds the scope of permission in terms of time, place, or purpose, and a case where he exceeds the scope of permission in terms of use of the vehicle by another. Once an owner voluntarily hands over the keys to his car, the extent of permission he actually grants is as irrelevant in the one case as in the other. * * * [at 549-550]

The reasoning in these eases applies equally as well to the situation before us. In harmony with the financial responsibility laws cited above, the Legislature has indicated its desire to assure compensation to the innocent victims of negligently driven automoblies for rent as well as those in private use. N. J. S. A. 45:21-1 et seq. In light of this policy there appears to be no reason to distinguish the lessor of a rented automobile from one who loans his private car in determining liability for injuries resulting from operation of his automobile beyond the scope of his initial permission. Certainly this result must obtain where the filed policy contains a standard omnibus provision of the kind giving rise to this expression of public policy.

It will be recalled that Stewart is not a party to this proceeding. It is therefore not necessary to consider here the effect, if any, which breach of the terms of the rental agreement by Stewart may have upon the coverage extended to him as an insured. Cf. Allstate Ins. Co. v. Vincent Meloni, 98 N. J. Super. 154 (App. Div. 1967).

We turn to whether the statements made by Stewart at the time of the rental, that he was a licensed driver of New Jersey and that no one else would drive the automobile, were misrepresentations voiding the policy. In general, a misrepresentation by the insured, whether contained in the policy itself or in the application for insuarnce, will support a forfeiture of the insured’s rights under the policy if it is untruthful, material to the particular risk assumed by the insurer, and reasonably relied upon by the insurer issuing the policy. Merchants Indemnity Corp. of New York v. Eggleston, 68 N. J. Super. 235, 244 (App. Div. 1961), aif’d 37 N. J. 114 (1962); Allstate Ins. Co. v. Meloni, 98 N. J. Super. 154, 158 (App. Div. 1967).

It is not disputed that Stewart’s statement that he was a licensed driver was in fact untrue. It was thus a misrepresentation and, though not knowingly false, would ordinarily under the prevailing view constitute a basis for voiding the policy. See 43 Am. Jur. 2d, Insurance, § 397 et seq. (1969), and see Annotation, “Materiality of false statements by applicant for automobile insurance as to license revocations or suspensions or traffic violations,” 89 A. L. R. 2d 1027 (1963). But see Johnson v. Metropolitan Life Ins. Co., 53 N. J. 423 (1969), as to the effect of innocent misrepresentations in a life insurance policy.

Stewart’s statement concerning the operation of the car by others is of somewhat different nature. That statement was promissory in character and related to future acts on the part of the insured. It was therefore not, correctly speaking, a misrepresentation of fact, but merely an expression of future intention. Some courts, however, have treated both types of statements as having essentially the same effect, although the reasoning by which they arrive at that conclusion is not entirely clear. See 43 Am. Jur. 2d, Insurance, § 397 et seq. (1969), and 7 Am Jur. 2d, Automobile Insurance, § 14 et seq. (1963).

Defendant’s theory is that Stewart, as the prospective assured, made these statements to the rental concern as agent for the insurance company, thereby inducing execution of the rental agreement and the issuance of the insurance. The argument proceeds that the rental agreement and the application form a part of the insurance policy.

We see no reason why the lessor of a rented car may not be considered an agent for such purposes or why representations made to it for the purpose of procuring the issuance of an insurance policy or as a condition for providing coverage under an existing one should not be treated in the same fashion as those made directly to the insurance carrier. See 7 Appleman, Insurance Law and Practice, § 4453 at 484 (Bd. Supp. 1972). However, the question remains as to whether Stewart, the prospective assured, knew or reasonably could be expected to know that any statements made by him in conjunction with the rental arrangement might affect the validity of the insurance provided for his benefit and that of third persons.

Here the rentee appears neither to have seen the policy or a copy of it, nor to have been informed of the pertinent provisions of the policy or even of the name of the company. As we have noted above, the only reference to the existence of insurance at all is the recital in the rental agreement that the rentee is entitled to the benefits of insurance and will be bound by its terms notwithstanding they are “not outlined in the agreement.”

The rental documents contain nothing which indicates that the statements incorporated therein constitute representaions of the insurance policy or for any other purpose. In this regard, we note that the only statements labeled as representations were at the foot of the application form and related only to the applicant’s residence and employment or personal details descriptive of the applicant. The only consequence mentioned for violation of these representations was that the applicant subjected himself to the penalties of perjury.

Under these circumstances it is extremely doubtful that these statements should he considered as misrepresentations sufficient to void the policy. In arriving at such conclusion we are mindful of the general rule that ambiguities in an insurance policy (if the rental documents are to be considered as a part of the insurance policy) must he resolved against the insurer. Bryan Const. Co. v. Employers’ Surplus Lines Ins. Co., 60 N. J. 375 (1972). This conclusion would seem to be especially applicable where, as here, the insurer seeks to void the policy, not as between the insurance company and the rentee as an assured, but as to innocent third persons.

Even assuming that the statements in question constituted misrepresentations which would otherwise render the insurance void ab initio, that result is precluded here by the mandatory requirements of the statute, N. J. S. A. 45:21-1 et seq. Section 3 thereof provides that the policy required to be filed

* * * contain a provision for a continuing liability thereunder, subject to the aforesaid limits of liability, notwithstanding any recovery thereon, and shall further provide that nothing contained therein, nor the violation of any of the provisions thereof, shall relieve the insurer, within the limit of liability aforesaid, from the payment of any such judgment; but this provision shall not,- as between the insurer and the assured, affect the rights given by the policy to the insurers against the assured because of any such violation or otherwise. * * *

Section 7 provides for the cancellation of policies filed under the statute pursuant to the terms of such policies, but only as to accidents occurring subsequent to the effective date of cancellation.

As the author states in 7 Am. Jur. 2d, Automobile Insurance, § 9 at 303 (1963),

It has been universally held or recognized that an insurer cannot, on the ground of fraud or misrepresentations relating to the inception of the policy, retrospectively avoid coverage under a compulsory or financial responsibility insurance law so as to escape liability to a third party. * * *

See Annotation, “Rescission or avoidance, for fraud or misrepresentation, of compulsory, financial responsibility, or assigned' risk automobile insurance,” 83 A. L. R. 2d 1104 (1962).

We see no valid reason why this general principle should not be applicable to insurance policies filed pursuant to the mandatory requirements of N. J. S. A. 45:21-1 et seq. Similar considerations apply. Cf. Atlantic National Ins. Co. v. Armstrong, 65 Cal. 2d 100, 52 Cal. Rptr. 569, 416 P. 2d 801 (Sup. Ct. 1966).

We see no substance in the argument that the injured passengers were barred from recovery because they were occupants of the ear and as such did not come within-the class of persons whom the policy of the statute was intended to protect. They were persons for whom protection was provided in the policy.. Since the policy was filed pursuant to the statute, it was noneancellable after the accident had occurred as to such injured parties. The fact that the coverage provided under the policy extends protection to them broader in scope than the statutory minimum does not, as we see it, provide any ground for making the noncaneellability provision inapplicable. ,,

Moreover, the assumption that occupants of rented cars as a class are denied benefits appears wholly unfounded. N. J. S. A. 45:21-2 requires the car owner to file a policy of insurance

?: * * insuring such owner against loss from the liability imposed by law upon such owner for damages on account of bodily injury or death suffered by any person other than a person in the employ of such owner, or a person in, on or about such motor vehicle in the status of a driver, passenger for hire or occupant * * *. [Emphasis added]

Thus, occupants are included in the category of persons denied the protection under the statute as against the owner.

The following section (N. J. S. A. 45:21-3) requires that such policy “shall provide for the payment * * * of any final judgment recovered by any person on account of the ownership, maintenance and use of such motor vehicle by either the owner or the lessee or bailee, his agent or servant * * (Emphasis added). Therefore, the statute does not preclude recovery under its required insurance policy by the occupants of a rented automobile against a negligent rentee or one driving with his permission. See 7 Appleman, Insurance Law and Practice, § 4453 at 484 (Bd. Supp. 1972), for a discussion of cases involving the rights of occupants of rented vehicles against drivers under different policy or statutory language.

Reversed.

      This interpretation is confirmed by the legislative history of the ear rental statute. The word “occupant” first appears in the 1930 amendment (L. 1930, c. 30, p. 326). The prefatory statement to that act recites:
      The purpose of this act is to correct a slight defect iu the amendatory act passed in 1929 and to make the compulsory insurance of U-Drive ears more practical in serving its original purpose of affording protection to persons injured by irresponsible drivers of such cars. This amendment puts teeth into the act of 1926 which was rendered practically useless by the amendments of 1927 and 1928.
      See McLeary v. Maryland Casualty Co., 109 N. J. L. 244 (E. & A. 1932), for what seems a.dubious interpretation of the effect of this amendment on the right of passengers to recover against the rentee of the car.


author: Per Curiam.

text:
    IVY HILL PARK SECTION FIVE, INC., A NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT, v. NARENDRA HANDA AND SAUNDRA HANDA, HIS WIFE, DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued November 8, 1972
    Decided November 28, 1972.

      Before Judges Larrecque, Kolovsky and Matthews.

      Mr. Robert Diamond argued the cause for appellant (Messrs. Diamond and, Pitman, attorneys).

      Mr. Stanley Varon argued the cause for respondents {Newark Legal Services Project, attorneys; Mr. Walter M. Mitchell, on the brief).
   Per Curiam.

Plaintiff instituted this summary action for recovery of premises under N. J. S. A. 2A:18-53, subd. b, alleging that defendants held over after a default in payment of rent. The trial judge entered a judgment of possession in favor of plaintiff, but ordered that issuance of the warrant of removal be stayed for approximately 2yj> months, until March 1, 1972. At oral argument we were informed that defendant Saundra Handa was still in possession of the premises.

Plaintiff appeals that portion of the judgment entered below which stayed the issuance of a warrant for possession for approximately 2)4 months. Its basis for appeal is that the trial court exceeded its jurisdiction in its delay of the warrant of removal. We agree that a jurisdictional question is raised since it is contended that the provisions of the controlling statute were not complied with. Leachman v. Kite, 133 N. J. L. 240, 241 (Sup. Ct. 1945).

The authority granted to a trial judge under N. J. S. A. 2A:42-10.6 to stay the issuance of a warrant for possession may be exercised under the plain language of the section only if the stay is conditioned on the payment of past and future rent due to the landlord. Of course, if the rent is paid the action for dispossess would terminate. Saveriano v. Saracco, 97 N. J. Super. 43 (App. Div. 1967).

So much of the judgment of the Essex County District Court as stayed the issuance of the warrant for possession is reversed.


author: Consodine, J. S. C.

text:
    L. P., PLAINTIFF, v. S. P., DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided December 1, 1972.

      Mr. Harry M. Rapkin for plaintiff (Messrs. Iannaccone, Rapkin, Chessin & Carrion, attorneys).
   Consodine, J. S. C.

Research fails to disclose reported case law in the matrimonial field on transvestism as extreme cruelty. Plaintiff charges, proves and corroborates the accusation. Defendant answered but did not appear at trial.

In transvestism the individual is driven by some obscure but irresistible fetishistic urge to dress up in clothes of the opposite sex for libidinal gratification. The masculine transvestite seems more feminine than masculine. His whole personality is dominated by the desire to be identified with the female sex. He wants to be thought of as a member of that sex. His dress, manner, occupational interests and associations are all designed to enhance his feeling of being a woman. The partial or complete transformation negates the primary purpose of marriage.

See generally: Karpman, The Sexual Offender and his Offenses, 14; 112 (1954); Reinhardt, Sex Perversions and Sex Crimes, 78-100 (1957); Gebhard, Gagnon, Pomeroy and Christenson, Sex Offenders; An Analysis of Types, 409-413 (1965).

On the proofs I find that plaintiff is entitled to a divorce on the ground of such extreme cruelty as makes it improper or unreasonable to expect her to continue to cohabit with defendant.

Judgment accordingly.


author: Larner, A. J. S. C.

text:
    GOLD MILLS, INC., A DELAWARE CORPORATION, PLAINTIFF, v. ORBIT PROCESSING CORPORATION, A NEW JERSEY CORPORATION, AND D’ELIA DETECTIVE AGENCY, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided November 15, 1972.

      Mr. Elijah Miller for plaintiff (Messrs. Shanley & Fisher, attorneys; Mr. Joseph L. Cook on the brief).

      Mr. Eugene A. Johnson for defendant Orbit Processing Corporation (Messrs. Dittmar, DeBona, Goldberg, Johnson, Byrne & Donnelly, attorneys.)

      Mr. Vincent G. Pezzuti, Jr., for defendant D'Elia Detective Agency (Mr. Joseph S. E. Verga, attorney).
   Larner, A. J. S. C.

Plaintiff Gold Mills, Inc. had delivered to defendant Orbit Processing Corporation certain textile goods for processing. On December 20, 1970 these ■goods were stolen from the premises of Orbit, together with the tractor-trailer in which they were contained. Plaintiff brought suit against Orbit, as bailee, and against D’Elia Detective Agency. The latter was brought into the litigation on the allegation that it was liable to plaintiff because of its failure to exercise due care to protect the tractor-,trailer and its contents. pursuant to a duty undertaken by virtue of a written contract with Orbit to furnish security guards.

Defendant D’Elia Detective Agency moved for summary-judgment on the legal theory that its only duty was to its Contracting party, Orbit, and that neither duty uot liability exists in favor of Gold Mills, a stranger to the contract. -Gold Mills counters that liability may exist on a factual .exploration at. trial based on (1) its right as a third-party beneficiary under the contract; or (2) the liability of D’Elia for negligence in failing to carry ont its contractual undertaking with due care.

The depositions establish a minimal factual basis for negligent performance by D’Elia in order to withstand a motion for summary judgment. It therefore becomes necessary to decide whether plaintiff is entitled to redress in view of its status as a stranger to D’Elia’s contract with Orbit.

Eor plaintiff to succeed on a contract theory it must qualify as a third-party beneficiary under the common law rules as codified by N. J. S. A. 2A:15-2. This statute provides :

A person for whose benefit a contract is made, either simple or sealed, may sue thereon in any court and may use such contract as a matter of defense in an action against him although the consideration of the contract did not move from him.

The essence of contract liability to a third party is that the contract be made for the benefit of said third party within the intent and contemplation of the contracting parties. Unless such a conclusion can be derived from the contract or surrounding facts, a third party has no right of action under that contract despite the fact that he may derive an incidental benefit from its performance. Crown Fabrics Corp. v. Northern Assur. Co., Ltd., 124 N. J. L. 27 (E. & A. 1939); Brooklawn v. Brooklawn Housing Corp., 124 N. J. L. 73 (E. & A. 1939) and Moorestown Management, Inc. v. Moorestown Center, Inc., 104 N. J. Super. 250 (Ch. Div. 1969). Under such circumstances, he is neither a creditor beneficiary nor a donee beneficiary but is merely an incidental beneficiary who acquires no enforceable rights under the contract.

The contract between Orbit and D’Elia provided that D’Elia would provide a certain number of uniformed guards on the Orbit premises to guard the plant and to protect Orbit’s property. Plaintiff Gold Mills is not mentioned in the contract nor referred to therein as an intended beneficiary of the contract or services to be rendered by D’Elia. At best, Gold Mills was but an incidental beneficiary of the contract stemming from the obvious benefit derived from the additional security for its goods by virtue of the guard service. Such benefit, however, is insufficient to qualify it as a creditor beneficiary entitled to bring suit arising out of the breach of contract. Plaintiff’s action against D’Elia is not maintainable on that theory.

The remaining issue, therefore, is whether plaintiff’s claim can be sustained on a theory of negligence arising out of alleged failure of defendant to exercise due care in the performance of its undertaking. Does the absence of privity bar an action by plaintiff for damages to its goods which allegedly resulted from defendant’s negligence in the performance of its contractual undertaking? Such liability, if any, is not bottomed upon the contractual obligations of defendant, albeit the act of performance necessarily arises because defendant entered into a contract with Orbit.

Regardless of lack of privity, it is clear that if a contractor does something affirmative in a negligent manner which causes damage to a third party, he is liable for the resulting damage. Bacak v. Hogya, 4 N. J. 417 (1950); Marvin Safe Co. v. Ward, 46 N. J. L. 19 (Sup. Ct. 1884). This follows whether the tortfeasor has an existing relationship with the injured person or not, since a volunteer is as liable for his negligent acts as one whose duty is imposed because of the legal consequences of his status toward the injured person. O’Neill v. Suburban Terrace Apartments, Inc., 110 N. J. Super. 541 (App. Div. 1970); Barbarisi v. Caruso, 47 N. J. Super. 125 (App. Div. 1957); Freddi-Gail, Inc. v. Royal Holding Corp., 45 N. J. Super. 471 (App. Div. 1957), and LaBrasca v. Hinchman, 81 N. J. L. 367 (Sup. Ct. 1911).

Plaintiff herein bases its claim of negligence on the fact that defendant embarked upon performance of its security contract with Orbit, and that its employees failed to exercise due care in failure to station themselves at an appropriate position to observe the trucks going in and out of the parking lot, which failure was a proximate cause of the loss of the cargo. Plainly, this does not constitute an affirmative act of negligence but rather a failure to do something which it is contended a reasonably prudent expert should have done. Does liability to a third party arise from such non-action ?

Because of a slavish devotion to the element of privity as a basis for the existence of a duty, courts in the past have refused to impose liability on the contractor in favor of a noncontracting party, unless the act of negligence was one of misfeasance. Franklin v. May Department Stores Co., 25 F. Supp. 735 (E. D. Mo. 1938); E. N. Emery Co. v. American Refrigerator Transit Co., 194 Iowa 926, 189 N. W. 824 (Sup. Ct. 1922); Brown v. T. W. Phillips Gas & Oil Co., 195 F. 2d 643 (3 Cir. 1952). A dichotomy thus developed between negligent misfeasance and nonfeasance, with liability attaching to the former and immunity from liability to the latter.

In the comprehensive opinion of Judge Conford in Miller v. Muscarelle, 67 N. J. Super. 305 (App. Div. 1961), in the analogous situation of liability of an employee to a third party for his failure to perform a duty owed to his employer, it was determined that liability is not dependent upon a finding whether the negligence is nonfeasance or misfeasance. In that opinion the court further observed:

There seems no sound reason why the privity rule should not be disregarded, where irrelevant in Ihe light of modern tort concepts, as fully in cases where the defendant has contracted with a third person for labor or services as where the contract is for the sale of chattels, [at 328]

See Prosser on Torts (4th ed. 1971) § 93 at 622.

I also can fathom no reason why the privity rule or the dichotomy between misfeasance and nonfeasance should control in the area of liability of an independent contractor to a third party. See Seavey, “Reliance on Gratuitous Promises,” 64 Harv. L. Rev. 913, 916. Such liability should exist when the contractor has undertaken performance, whether his negligent performance results from the doing of something which a reasonably prudent person would not have done or from the failure to do something which a reasonably prudent person would have done. So long as the privity rule is no longer viable in the area of tort liability there is no reason why a contractor should not have the same duties toward a stranger to the contract as any member of society to another, i. e., to exercise due care to avoid injury to another’s person or property.

The caveat, however, is that such liability does not attach where the contractor has failed to commence performance. Such an exception has a basis in logic and reason. Unless he has embarked on performance, he is remote from the ambit of activity which spawns the negligence underlying the cause of action. Under such circumstances his sole dereliction arises from a total failure to perform the contract — a dereliction which stems purely from his contractual undertaking rather than from a duty to other members of society beyond that contract. To permit liability to third parties for total failure to perform a contract would in effect create a new class of beneficiaries entitled to sue for breach of contract rather than for breach of a duty arising out of tort concepts. To expand contract liability to that extent would be fraught with untold new liability potentials not as yet recognized in current developments of law.

In the Restatement, Torts 2d (1965), the American Law Institute has adopted the following rule:

§ 324A. Liability to Third Person for Negligent Performance of Undertaking
One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
(a) his failure to exercise reasonable care increases the risk of such harm, or
(b) he has undertaken to perforin a duty owed by the other to the third person, or
(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.

Note that the American Law Institute expresses no opinion as to whether the making of a contract without entering upon performance is sufficient to result in liability.

By way of illustration of the meaning of paragraph (b), supra, the Restatement presents the following example:

2. The A Telephone company employs B to inspect its telephone poles. B negligently inspects and approves a pole adjoining the public highway. Because of its defective condition the pole falls upon and injures a traveler upon the highway. B is subject to liability to the traveler. [Explanatory Note, § 324A, comment (d) at 144]

The context of the facts in our case also falls within the provision of § 324A(b). Defendant, by undertaking the contract to provide guards at the plant of Orbit, assumed in part at least a duty which Orbit owed to .plaintiff, and it did so with the reasonable foreseeable consequence that if it failed to exercise due care, the owners of goods at the Orbit processing plant might be damaged. The Restatement rule would impose liability under such a set of facts.

Analogous cases have arisen in other jurisdictions with differing fact patterns. For example, an elevator service company has been held liable to a third party for negligent inspection pursuant to a contract with the owner. Evans v. Otis, 403 Pa. 13, 168 A. 2d 573 (Sup. Ct. 1961); Wroblewski v. Otis Elevator Co., 9 App. Div. 2d 294, 193 N. Y. S. 2d 855 (App. Div. 1959); Durham v. Warner Elevator Mfg. Co., 166 Ohio St. 31, 139 N. E. 2d 10 (Sup. Ct. 1956); Banaghan v. Dewey, 340 Mass. 73, 162 N. E. 2d 807 (Mass. Sup. Jud. Ct. 1959); Otis Elevator Co. v. LePore, 229 Md. 52, 181 A 2d 659 (Ct. App. 1962). Similarly liability has been imposed upon an insurance company to a third party for negligent inspection of an assured’s premises or equipment. Hill v. U. S. F. & G. Co., 428 F. 2d 112 (5 Cir. 1970); Mays v. Liberty Mutual Ins. Co., 323 F. 2d 174 (3 Cir. 1963); Smith v. American Employers’ Ins. Co., 102 U. H. 530, 163 A. 2d 564 (N. H. Sup. Ct. 1960). Cf. Van Winkle v. American Steam Boiler Co., 52 N. J. L. 240 (Sup. Ct. 1940) (decided, however, on a theory of expanded liability because of concept of a dangerous instrumentality).

In view of the foreging, it is evident that plaintiff has a prima facie cause of action against D’Elia Detective Agency for negligence in performance arising out of the contract with Orbit, whether that negligence is denominated as misfeasance or nonfeasance. It is entitled to have its case tested by proofs at a plenary trial. Hence, the motion for summary judgment is denied.


author: Milmed, J. S. C.

text:
    ITALO D. SCERBO; EVA M. VANDERHOOF; MARY T. McKENNA; MARGARET T. COLLINS; AND JOSEPH J. BRENNAN, PLAINTIFFS, v. BOARD OF ADJUSTMENT OF THE CITY OF ORANGE; GEORGE MILES; KEVIN DONNELLY; CARL ZAZZARO; WILLIAM CASSINI; AND OLIVER SWENSON, AS MEMBERS OF THE BOARD OF ADJUSTMENT OF THE CITY OF ORANGE, CITY OF ORANGE, A MUNICIPAL CORPORATION, AND D. A. R. E., INC., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided November 30, 1972.

      Mr. Thomas Grant Bernard appeared for plaintiffs (Messrs. Bernard, Netchert & Silverlieb, attorneys).

      Mr. Alfonso C. Viscione appeared for defendants Board of Adjustment of the City of Orange, George Miles; Kevin Donnelly; Carl Zazzaro; William Cassini and Oliver Swenson, as members of the Board of Adjustment.

      Mr. Barry R. Mandelbaum appeared for defendant D. A. R. E., Inc. (Messrs. Mandelbaum, Mandelbaum & Gold, attorneys).
   Milmed, J. S. C.

Is a residential narcotic rehabilitation and treatment center which is governed by the provisions of L. 1970, c. 334 (N. J. S. A. 26:2G—21 et seq.) a “hospital,” qualified as an “institutional” use under the terms of the local zoning ordinance? Did the local zoning board have jurisdiction to grant a variance where the notice to neighboring property owners under N. J. S. A. 40:55-44 made no specific mention that a “variance” was being sought? These are two of the principal issues to be determined in this action in lieu of prerogative writs.

Defendant, D. A. R. E., Inc. (Drug Addiction Rehabilitation Enterprise, Inc.) seeks to operate within the City of Orange a narcotic and drug abuse rehabilitation and treatment center governed by the provisions of L. 1970, c. 334 (N. J. S. A. 26:2G-21 et seq.). The essential facts are not in dispute. In the spring of 1971 it (D. A. R. E.) purchased the premises at 19 High Street in Orange, New Jersey, formerly occupied by the Y.W.C.A. The land is irregularly shaped, and the building is a three-story frame structure. In the fall of 1971 it submitted to the building inspector of the City of Orange plans for extensive alteration of the building. By letter of October 14, 1971 the building inspector advised, among other things, that it was his interpretation of the local building code,

* * * that the building when altered according to your plans, would meet the requirements of the Building Code of the City of Orange, for Institutional Uses.
This is to further advise you that the Building Department will issue a permit according to the plans submitted by you, subject to the provisions of an amendment to the Zoning Ordinance of the City of Orange number 1083-G13-M10, which we had discussed as of this date.

Application was thereupon made by D. A. R. E. to the Board of Adjustment of the City of Orange for approval of the issuance of a permit for the alteration of 19 High Street, Orange, New Jersey, for a residential treatment center pursuant to local zoning ordinance amendment 1083-G13-M10. The application sets forth a brief description of the premises and discloses that “The lot size is less than one acre and the principal structure is located within 25 feet of side property lines.”

Notice was given by certified mail, return receipt requested, to the property owners within 200 feet of the subject property. The notice sets forth the time and place of public hearing before the board of adjustment “for approval pursuant to Zoning Ordinance Amendment No. 1083-G13-M10 for the use of the subject premises as a residential treatment center for drug dependent persons,” and also a brief description of the premises owned by Drug Addiction Eehabilitation Enterprise, Inc. and located at 19 High Street, Orange, New Jersey.

After extensive hearings before the board of adjustment, the board on February 9, 1972 adopted its resolution, which is sought to be set aside in this action, granting a special exception (N. J. S. A. 40:55-39 (b)) and variance (N. J. S. A. 40:55-39(c)) for the use of the premises as a residential drug rehabilitation center, a facility “to fulfill the need for resident drug rehabilitation for all Orange drug dependent residents who would qualify and benefit from this form of rehabilitation.”

In its resolution the board found, in substance, that D. A. R. E. satisfies the definition of a hospital under the amendatory zoning ordinance 1083-G13-M10; that it is an institution for the rehabilitation of drug dependent persons; that it is a therapeutic community; that the existing building on the premises has been used as a residence since 1917; that “it would be impractical and a hardship to insist on the side yard requirement as there would be no way to conform with the requirements of the ordinance”; that D. A. R. E. “attempted to purchase additional property and has been refused”; that by reason of the exceptional situation and condition of the property, strict application of the lot size and side yard requirements of the ordinance “would undoubtedly deprive the owners of the reasonable use of the property and result in exceptional and undue hardship upon the owners of the property” and be contrary to the public good; that there is a drug abuse problem in Orange; that D. A. R. E.’s drug rehabilitation program meets a pressing social need; that implementation of the educational program provided by D. A. R. E. would aid in combating the growing abuse of drugs; that D. A. R. E. maintains adequate safeguards, including the screening of proposed residents and the maintenance of a drug-free atmosphere, with frequent urine testing and half-hour bed checks; that fear that the general welfare, morals, health and safety of the surrounding neighborhood would be adversely affected has been unsubstantiated; that the City of Orange would not be acting “for the common good if it allowed fear of the problem to hinder adequate and reasonable attempts at its solution”; that the relief applied for by D. A. R. E. “can be granted without substantial detriment to the public good and will not be detrimental to the health, safety and general welfare of the community, and that the drug problem in Orange is real, critical, and urgent, and requires immediate attention”; that the premises are located in a residential area, as the term is used in amendatory zoning ordinance 1083-G13-M10; that D. A. R. E. has met the burden of proof imposed upon it under the terms of this amendatory zoning ordinance and N. J. S. A. 40:55-39(c), and that adequate notice was given to the neighboring property owners. By its resolution, the board granted the application by D. A. R. E. for the use of the premises as a drug rehabilitation center, as well as relief from the minimum lot size and side yard requirements of the amendatory ordinance, i. e., ordinance 1083-G13-M10.

Plaintiffs contend that an “institutional” use is not permitted in the applicable “B-3 High-Rise Apartment and Office District” in the municipality; that the proposed residential treatment center for drug dependent persons is not a “hospital” qualified as an “institutional” use under the terms of the applicable local zoning ordinance, i. a., ordinance 1083-G13—M10; that if the proposed center is an “institutional” use, D.A.E.E., in regard to this facility, is governed by, and has not complied with, the provisions of N. J. S. A. 30:11-1 et seq., relating to the licensing and regulation of private hospitals; that the notice by D.A.E.E. to neighboring property owners under N. J. S. A. 40:55-44 was not adequate to provide the board of adjustment with jurisdiction to grant the variance; and that the action of the local board of adjustment in granting the special exception and variance was arbitrary, capricious and unreasonable.

It is undisputed that the property owned by D.A.E.E. at 19 High Street in Orange is located in a “B-3 High-Eise Apartment and Office District” in the municipality. Article XIXA of the local zoning ordinance, which was added by amendment approved January 9, 1970, sets forth, among other things, the permitted and prohibited uses in this district. In specifying the uses permitted in the district, which include “multi-family dwellings with a minimum height of six stories,” section 19A.1 declares that, “This zone district allows the most intensive residential use in the City and business and professional offices.” Section 19A.2 prohibits in the district “Combined apartment and office buildings * * * except that medical offices shall be allowed to occupy not over 10 per cent of the building floor space.”

Describing the area surrounding the subject premises at the initial hearing before the board of adjustment, Anthony Church, an architect testifying in support of the application by D.A.R.E., pointed out that the building at 19 High Street would be in line with the surrounding buildings, and that

Prom the street, as you face tbe building on the right-hand side is a high-rise brick apartment. To the left is the Orange Savings Bank, and across the street there is a doctor’s office and there are stores. It is completely a commercial type area as far as that is concerned, and it completely blends as far as the area is concerned, and it would not be an eyesore as far as standing out as being an institution type building. There are commercial businesses, residences, and a high-rise, and it is completely a diversed area as far as that is concerned.

Ordinance 1083-G13-M10 of the City of Orange, approved May 6, 1964, referred to in the application of D.A.R.E. to the board of adjustment, also amends the local zoning ordinance. Section 1 defines “Institutional Uses” as,

Non-profit institutions limited to churches, schools teaching academic subjects, hospitals, public libraries, museums, art galleries and city buildings.

Section IV of this amendatory ordinance provides that “Institutional uses may be located in any business or industrial zone,” and that “Said uses are also permitted in any residential zone.” (Emphasis added). The same section sets forth certain requirements to be met by every institutional use permitted in the city after the enactment of the amendment, including that there be “a minimum lot size of 1 acre,” and that “Ho principal structure shall be located within 25 feet of any side property line.” The section also provides: that an institutional use “shall only be permitted as a ‘special exception’ pursuant to N. J. S. [A.]-40:55-39 (b)”; that a 'site plan of the proposed use, including certain specific data, be submitted to the board of adjustment, and that sufficient additional data be provided as specified by the board of adr justment to enable the board to determine compliance with requirements of the zoning ordinance “and to determine the best possible physical layout for the proposed use from the standpoint of its relationship to the general health, safety and welfare of the City of Orange.” Before approving any such use the board Is required to “assure itself or require proper guarantees that the location of the proposed use will not be detrimental to the public health, safety, morals and general welfare of the community.”

As indicated, by the express terms of the amendatory zoning ordinance referred to in the application by D.A.R.E. (ordinance 1083—G13—MTO), an institutional use may be located or permitted in any residential, business or industrial zone in the municipality if allowed by the municipal board of adjustment under the amendatory ordinance and as a “special exception” pursuant to N. J. S. A. 40:55—39(b). “Any” residential zone undoubtedly means and includes a residential zone of whatever kind. The “B-3 High-Rise Apartment and Office District” is essentially a residential zone in which the land use is limited to certain multi-family dwellings and professional and business uses. Any institutional use, as defined in ordinance 1083-G-13-M10, may accordingly be located in such district when approved by the local board of adjustment pursuant to that ordinance.

The proposed residential narcotic rehabilitation and treatment center is a “hospital,” and as such qualifies as an “institutional” use under the terms of ordinance 1083-G13-M10. The parties concede that D.A.R.E. is governed by the provisions of L. 1970, c. 334 (N. J. S. A 26:2G—21 et seq.) That statute defines the term “Narcotic and drug abuse treatment center,” as used in the legislation, to mean

any establishment, facility or institution, public or private, whether operated for profit or not, which primarily offers, or purports to offer, maintain, or operate facilities for the residential or outpatient diagnosis, care, treatment, or rehabilitation of two or more nonrelated individuals, who are patients as defined herein, excluding, however, any hospital or mental hospital otherwise licensed by Title 30 of the Revised Statutes. [N. J. S. A. 26:2G-22(a)]

N. J. S. A. 26:2G-22(b) defines the word “patient," as used in the legislation, to mean

a person who is addicted to, or otherwise suffering physically or mentally from the use, or abuse of, narcotic drugs and who requires . continuing care of a narcotic and drug abuse treatment center.

A hospital is defined as “An institution for the reception and care of sick, wounded, infirm, or aged persons; * * *." Black’s Law Dictionary (4th ed. 1951), at 871. See also, 41 C. J. S., Hospitals, § 1 at 331. The record before the board of adjustment clearly establishes that the proposed treatment center falls within this definition of a hospital, namely, an institution for the reception and care of sick persons. Drug addiction is a “disease" recognized as such by the Legislature. See N. J. S. A. 26:2G-1. “Most frequently, it connotes physical dependence, resulting from excessive use of certain drugs." Report of the Presidents Commission on Law Enforcement and Administration of Justice (February, 1967), The Challenge of Crime in a Free Society, at 212. Dr. Eugene Sims, a physician, medical director of D.A.R.E., testifying before the board in support of the application, referred to drug addiction as “the number one mental health problem in America." A recent editorial in the New Jersey Law Journal observes that “* * * the drug disease is fast becoming a plague and, if left unchecked, may soon destroy our society," and that “The problem is primarily a social and medical one." “Drug Abuse—A Challenge to Our Society," 95 N. J. L. J. 484 (May 18, 1972).

Under the applicable legislation, N. J. S. A. 26:2G-2.3, no narcotic and drug abuse treatment center is permitted to operate within the State except pursuant to a certificate of approval obtained from the Commissioner of the State Department of Health upon application made therefor pursuant to the terms of the statute (L. 1970, c. 334). The trial brief submitted on behalf of D.A.R.E. indicates that such certificate has been applied for by it. Under such certificate, which is a prerequisite to its operation at the subject premises, D.A.E.E. would accordingly be under the supervision of the State Commissioner of Health and required to comply with the rules, regulations and minimum standards of treatment of patients as promulgated by the Commissioner. N. J. S. A. 26:2G-25. Additional safeguards are provided in the legislation. Thus, N. J. S. A. 26:2G-26 provides that

The commissioner shall make or cause to be made such inspection of the premises, for which a certificate of approval has been issued, from time to time, as he may deem necessary to be assured that the holder thereof and the premises comply at all times with the provisions of this act and the rules and regulations promulgated, and the minimum standards established hereunder.

And N. J. S. A. 26:2G—27 provides, in part, that

The commissioner after a hearing may deny, revoke, or suspend any certificate of approval granted under authority of this act to any person, firm, partnership, corporation or association violating the provisions hereof or the rules and regulations promulgated hereunder.

In regard to safeguards maintained at a D.A.E.E. operated residential treatment center, Dr. Sims explained his duties in connection with the operation of the D.A.E.E. residential treatment center on Littleton Avenue in Newark, stating:

My duties are, number one, to prevent the development of illness for the residents in the Therapeutic Community on Littleton Avenue in Newark, to treat illnesses and to provide for the necessary physical examinations performed on the applicants accepted for admission by the Newark Health Department.
I inspect the facility as to cleanliness, sanitation, ventilation and with particular reference to the sanitation of the cooking and dining facilities and as to the sleeping accommodation areas * * * And I’m also involved in the detoxification of the applicants to the Therapeutic Community prior to their acceptance in the program.

Dr. Sims also explained the urinalysis program at the institution, pointing out that urinalyses of residents are taken “Two or three times a week as a rule, and whenever indicated.”

The facility proposed to be conducted as a residential narcotic rehabilitation and treatment center by D.A.R.E. at 19 High Street in Orange, being a "hospital” qualified as an "institutional” use under the terms of the applicable local zoning ordinance and governed by the provisions of L. 1970, c. 334 (N. J. S. A. 26:2G-21 et seq.), and accordingly under the supervision of the State -Commissioner of Health, does not come within the definition of a “private hospital” as set forth in chapter 11 of Title 30 of the Revised Statutes, as amended, relating to the licensing and regulation of private hospitals. In this respect, N. J. S. A. 30:11-8 provides in its opening paragraph:

A private men tal hospital, private nursing home, convalescent home or private hospital, for the purpose of this chapter, is defined as any institution, whether operated for profit or not, which is not maintained, supervised or controlled 6y an agency of the government of the State or of any county or municipality, and which maintains and operates facilities for the diagnosis, treatment or care of 2 or more nonrelated individuals, who are patients as defined herein. [Emphasis added]

Neither the application filed by D. A. R. E. with the board of adjustment nor its notice to adjoining property owners used the term “special exception” or "variance.” In the circumstances of the case, the use of this exact terminology was not required. Here, both the application and the notice clearly specified the relief which was being applied for. The application sought approval of the issuance of a permit for the alteration of 19 High Street in Orange "for a residential treatment center.” The application set forth a brief description of the premises and expressly stated that "The lot size is less than one acre and the principal structure is located within 25 feet of side property lines.” The notice of hearing given by D. A. R. E. to the neighboring property owners was in compliance with N. J. S. A. 40:55-44. It also complied with the requirements of N. J. S. A. 40 :55—53 that “The notice shall contain a brief description of the property involved, its location, a concise statement of the matters to be heard and the date, time and place of such hearing.” It set forth the date, time and place of the public hearing scheduled before the board, a brief description of the premises involved, its location, i. e., 19 High Street, Orange, New Jersey, and a concise statement of the matter to he heard before the board, i. e., “* * * the use of the subject premises as a residential treatment center for drug dependent persons.” In light of the contents of the application and notice, the board properly treated the application as if made both for a “special exception” under ordinance 1083-G13-M10 and N. J. S. A. 40:55-39(b) and for a “variance” under N. J. S. A. 40:55-39(c). Cf. Gougeon v. Slone Harbor, 52 N. J. 212, 218 (1968). Notice of the date, time and place of hearing and of the relief sought was also published in the Orange Transcript.

The notice provided was sufficient to alert the neighboring landowners to the relief sought by D. A. R. E. The essence of the notice was that hoard of adjustment action was requested to permit the use of premises located at 19 High Street in Orange, New Jersey, as a residential treatment center for drug dependent persons. Any person opposed to or in favor of the proposed use was accordingly given adequate notice of the purpose of the hearing and of the subject of the hearing. See Healy v. Board of Appeals of Watertown, 356 Mass. 130, 248 N. E. 2d 1 (Sup. Jud. Ct. 1969), and Carson v. Board of Appeals of Lexington, 321 Mass. 649, 75 N. B. 2d 116 (Sup. Jud. Ct. 1947). See also Annotation, “Construction and Application of Statute or Ordinance Provisions Requiring Notice as Prerequisite to Granting Variance or Exception to Zoning Requirement,” 38 A. L. R. 3d 167, 229.

Exact terminology is not required in zoning cases. Courts will treat the matter for what it really is, notwithstanding the terminology used. [Root v. City of Erie Zoning Board of Appeals, 180 Pa. Super. 38, 118 A. 2d 297, 299 (Super. Ct. 1955)]

The initial hearing before the board of adjustment was held in compliance with the notice to neighboring property-owners. At each hearing public announcement was made as to the time and place for the next meeting. It appears from the record before the board that full opportunity was afforded to any proponent or objector to be heard. The hearings before the board were in accord with the notices sent to the property owners situated within 200 feet of the subject property. As to these property owners the requirements of the statutes as to notice were met. See Kramer v. Bd. of Adjust., Sea Girt, 45 N. J. 268, 277 (1965).

The grant of a special exception under the terms of the local zoning ordinance and N. J. S. A. 40:55-39(b), and the grant of a variance under N. J. S. A. 40:55-39(c), are each subject to the negative criteria set forth in N. J. S. A. 40:55-39, i. e., that

No relief may be granted or action taken under the terms of this section unless such relief can he granted without substantial detriment to the public good and will not substantially impair the intent and purpose of the zone plan and zoning ordinance.

And, the variance contemplated by N. J. S. A. 40:55-39(c) may be granted

Where by reason of exceptional narrowness, shallowness or shape of a specific piece of property, or by reason of exceptional topographic eonditions, or by reason of other extraordinary and exceptional situation or condition of such piece of property, the strict application of any regulation enacted under the act would result in peculiar and exceptional practical difficulties to, or exceptional and undue hardship upon the owner of such property * * *; provided, however, that no variance shall be granted under this paragraph to allow a structure or use in a district restricted against such structure or use.

Here, the essential findings of the hoard and its determination to grant the special exception and variance axe well grounded in the extensive record before the hoard. The action of the hoard was not arbitrary, capricious or unreasonable, or in manifest abuse of its discretionary authority. There was no evidence before the board showing that allowing the proposed use of the premises as a residential narcotic rehabilitation and treatment center would “substantially impair the intent and purpose of the zone plan and zoning ordinance.” Cf. Kunzler v. Hoffman, 48 N. J. 277, 285 (1966).

The proofs amply established that there is a drug abuse problem in Orange requiring the implementation of an effective drug rehabilitation and treatment program, and that the proposed institutional use is “essential or desirable for the welfare of the community and its citizenry or substantial segments of it, * * *” and “entirely appropriate and not essentially incompatible with the basic uses * * *” in the B -3 High-Rise Apartment and Office District in the area surrounding the subject premises. See Tullo v. Millburn Tp., 54 N. J. Super. 483, 490 (App. Div. 1959).

Benjamin F. Jones, a commissioner of the City of Orange, testifying in support of the application, pointed out that

1 organized the Drug Abuse Council in the City of Orange with the hope that this organization would direct and establish an appropriate drug abuse program for the City. At the time of this organization our initial concern was to provide the earliest possible effective program for the problem that was upon us.
The Council investigated a number of areas that provided this type of service, and after these investigations and interrogations, we decided that D. A. R. E. was the program that came nearest to the program that we felt would meet our needs in Orange. We thought it would not be appropriate for the Drug Abuse Council to wait until such time as each of us became a so-called expert on drug abuse and then to initiate such a program. We recommended that a contract, renewable on an annual basis with D. A. R. E. be effected, * * *.

Joseph B. McCartney, Jr., an independent real estate appraiser, testifying in opposition to the application, commented that

* * * There is, of course, a great deal of misunderstanding about what this is to be used for, nevertheless, the fear is there and the fear is real, and I do believe that if D. A. R. E. was allowed to use these premises for this reason, that it would be detrimental to the area. * *■ *

He stated that his “personal belief” was

* * * that if D. A. R. E. is located at 19 High Street, that people will be afraid to come into this area, that it will contribute to the decline of the area itself and the possible rebuilding of the area. In commenting on the type of fear expressed to him he stated,
They are afraid of drug addicts, they believe that drug addicts are harmful to them, that they are going to hurt them physically. They are afraid of them, and they don’t want them there.

The record before the board, however, fails to substantiate such fears as applied to the proposed D. A. R. E. residential treatment center. According to Dr. Sims,

The addict in a good rehabilitation program is in a therapeutic community and cannot commit crimes. Other addicts who are out in the streets and maybe those who are just involved in the Out Roach Program, those are the ones that are committing the crimes. * * *
People have suggested that we try and put these centers out in the country, they will get more fresh air. It is like you are saying let’s put a hospital out in the country, but the disease is in the cities and it is here in the streets of Orange, it is not out in the country. Let’s have the treatment facilities available for the sick people where ever the people are sick.

The evidence before the board supports its finding that the municipality would not be acting “* * * for the common good if it allowed fear of the problem to hinder adequate and reasonable attempts at its solution.”

In light of the critical problem of drug dependent persons existing in the municipality, the necessity of providing a drug rehabilitation center to meet their needs, and the exceptional situation and condition of the property, all referred to in the board’s resolution, its finding that strict application of the lot size and side yard requirements of the zoning ordinance would result in exceptional and undue hardship upon the owner of the property and would be contrary to the public good, is eminently sound. The cited negative criteria set forth in N. J. S. A. 40:55-39 have been satisfied. The record before the board sufficiently demonstrates that exceptional and undue hardship, resulting from the exceptional shape of the property described in the application and the unavailability of adjacent or contiguous land with which to enlarge the premises, would be visited upon the applicant if an exception and variance were denied. Cf. 165 Augusta Street, Inc. v. Collins, 9 N. J. 259 (1952), and Gougeon v. Stone Harbor, supra, and the same case at 54 N. J. 138 (1969).

In Bove v. Bd. of Adjust., Emerson, 100 N. J. Super. 95 (App. Div. 1968), the court points out:

As stated in Kramer v. Bd. of Adjust., Sea Girt, supra, 45 N. J., at p. 296, public bodies because of their peculiar knowledge of local conditions must be allowed wide latitude in their delegated discretion. See also Booth v. Bd. of Adjust., Rockaway Tp., 50 N. J. 302, 306 (1967). Furthermore, there is attached to a decision of the board a presumption of correctness, fairness and proper motive and the burden of proving otherwise is on the party attacking it. Kramer v. Bd. of Adjust., Sea Girt, supra, 45 N. J., at p. 285; Ardolino v. Florham Park Board of Adjustment, supra, 24 N. J. at p. 105; Yahnel v. Bd. of Adjust. of Jamesburg, 79 N. J. Super. 509; 517 (App. Div. 1963), certification denied 41 N. J. 116 (1963); Holman v. Bd. of Adjustment, Norwood, supra, 78 N. J. Super. at p. 79 [at 302]

Plaintiffs have failed to sustain that burden.

This court is satisfied from the record before the zoning board of adjustment and the argument of counsel at the hearing in this action that the board properly reached its determination to grant the special exception and variance for the nse of the premises as a residential drug rehabilitation center. The determination of the zoning board on the application of D. Ai R. E. is affirmed.

      By dimensions, i. e., 71.61' x 243.14' x 126.78' x 72.86' x 54.67' x 170.10'.

      In their complaint and at the pretrial conference plaintiffs additionally contended that the determination of the local zoning board should be set aside by reason of an alleged conflict of interest on the part of two members of the board of adjustment. However, that contention was withdrawn by plaintiffs at the hearing in this court after they had taken the depositions of the two members of the board upon oral examination.
      No claim was asserted or relief sought by plaintiffs in their complaint in this action against defendant City of Orange. Accordingly, after hearing on motion, the application of the city for summary judgment in its favor dismissing the complaint as to it, was granted.

      Functions transferred from the State Department of Institutions and Agencies to the State Department of Health by L. 1971, c. 136, §§ 19, 22 and 23. (N. J. S. A. 26:2H-19, 26:2H-22 and 26:2H-23).

      High Street in Orange is a county road. Under the circumstances, notice of hearing before the local zoning board of adjustment was required to be given to the county planning board. N. J. S. A. 40 :55“58. While this requirement was not complied with, the record filed in this action indicates that, subsequent to the zoning board resolution of February 9, 1972, the Planning Board of Essex County reviewed the application by D. A. R. E. and found “no objection to this apxdication.”