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Scatuorchio v. Jersey City Incinerator Authority

Decided: November 23, 1953.

MARJORIE SCATUORCHIO AND MICHAEL A. SCATUORCHIO, INC., A CORPORATION OF NEW JERSEY, PLAINTIFFS-RESPONDENTS,
v.
JERSEY CITY INCINERATOR AUTHORITY, A PUBLIC CORPORATION, CITY OF JERSEY CITY, A MUNICIPAL CORPORATION, AND HUDSON CITY CONTRACTING CO., A CORPORATION OF NEW JERSEY, DEFENDANTS-APPELLANTS



On appeal from Superior Court, Hudson County, Law Division.

For modification -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. Opposed -- None. The opinion of the court was delivered by Burling, J. Oliphant, J., concurring in result.

Burling

This is an appeal in a proceeding in lieu of the former prerogative writ of certiorari, instituted by the plaintiffs Marjorie A. Scatuorchio and Michael A. Scatuorchio, Inc., a New Jersey corporation (hereinafter called the plaintiffs) against Jersey City Incinerator Authority (hereinafter called the Authority), City of Jersey City (hereinafter called the city), and Hudson City Contracting Co., a New Jersey corporation (hereinafter called Hudson), defendants. The complaint, in general, constituted an attack on garbage and refuse disposal contracts entered into between Hudson and the Authority. The Superior Court, Law Division, granted the plaintiffs' motion for summary judgment. From the judgment entered as a consequence thereof, the defendants appealed to the Superior Court, Appellate Division. Prior to hearing there certification was allowed on our own motion.

The course of decision in this case, and the determination on this appeal, is guided by the specific mandate of Rule 3:56-3 (now R.R. 4:58-3), applicable to civil actions in lieu of the former proceedings under the prerogative writs by virtue of Rules 3:81-2 and 3:81-3 (now R.R. 4:88-2, 3). The pertinent portion of Rule 3:56-3, supra, provided that a summary judgment "shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show palpably that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment * * * as a matter of law. * * *"

The complaint alleged that for approximately 30 years the corporate plaintiff had held contracts with the city for the collection and removal of ashes, garbage, kitchen refuse and waste paper from all the streets of the City of Jersey City, and the last contract expired by its terms on December 31, 1952. This was admitted by the Authority and by the city, but Hudson answered to the effect that it had no knowledge upon which to admit or deny these allegations. The depositions and affidavits filed, however, disclose no genuine

issue of fact to be decided in this connection. At a date far in advance of the termination date of the corporate plaintiff's contract, the Authority was created. The affidavit of Mr. Sudnik, secretary of the Authority, which is not controverted in this respect, declared that the Authority was created under the terms of L. 1948, c. 348 (N.J.S.A. 40:66 A -1 et seq.), in December 1951 and the date of its organization was January, 1952. There is no genuine issue in this case as to the fact or time of creation and organization of the Authority, although the complaint had averred that the date of its creation was December 1950. This appears to have been a typographical error.

In October 1952 the city advertised for bids for the scavenger contract for a period beginning January 1, 1953, on specific "proposals and specifications," and the corporate plaintiff submitted its bid "in all respects complying" therewith, at the time (October 21, 1952) and place specified. No other bid was submitted, but the bid was rejected on the ground that the city, having theretofore created the Authority, was without power to contract in this field of endeavor. This, alleged in the complaint, was admitted by both the city and the Authority. Hudson again averred "no knowledge," but the depositions and affidavits disclose no issue of fact on this item.

In November 1952, it was admitted by the city and the Authority as charged in the complaint, the Authority advertised for bids for the scavenger contract for the period beginning January 1, 1953; the corporate plaintiff submitted its bid at the specified time (November 24, 1952) and place in full compliance with the proposals and specifications; no other bid was submitted; and the bid was rejected on December 2, 1952 by resolution of the Authority for the expressed reason that this was "in the best interests of the City of Jersey City." The corporate plaintiff's bid for the one-year contract was $766,000. Although Hudson expressed its lack of knowledge in the answer, the affidavits and depositions clearly show no genuine issue as to these facts.

In December 1952 the Authority again advertised for bids for the 1953 scavenger contract. Pursuant to the proposal the corporate plaintiff submitted its bid (in compliance with the proposals and specifications) at the time (December 15, 1952) and place fixed for the submission thereof. Another bid was submitted on behalf of Municipal Contracting Co. The bids were rejected on December 15, 1952, Municipal's for the reason that it failed to comply with the proposals and specifications, the corporate plaintiff's for the expressed reason that rejection was in the best interests of the City of Jersey City. So much was admitted by the Authority and the city. Hudson again asserted no knowledge. The affidavit of Mr. Sudnik admits that Municipal's bid did not comply with the advertised prerequisites and specifications and for that reason was rejected on advice of counsel. It appears that the corporate plaintiff's bid was $766,000 and that Municipal's was $680,000, for the one-year contract.

Thereafter (on December 16, 1952) it is admitted by all parties, the city adopted a resolution purporting to declare that an emergency existed with respect to the collection and removal of garbage and refuse materials and purporting to appoint the Authority as its agent during such emergency. It is further admitted that by notice published December 19, 20 and 22, 1952, the Authority advertised said resolution of the city and invited proposals to be made by qualified contractors to the technical director of the Authority, for seavenger work for a period beginning January 1, 1953, not to exceed 60 days.

It is admitted by the Authority and the city that the corporate plaintiff on December 30, 1952 made inquiry of the technical director of the Authority as to whether a scavenger contract had been made and was informed no contract had been entered into. Although Hudson averred it had no knowledge, the depositions and affidavits leave no doubt of the truth of this fact.

It is alleged and admitted that a contract was made between the Authority and Hudson. The pleadings are somewhat at variance in this respect but in the record made

on the filing of depositions and affidavits the full contract appears. This contract was entered into on December 31, 1952, for a one-year term (January 1, 1953 to December 31, 1953), and contained a provision for termination by the Authority on ten days' written notice prior to the termination of any calendar month during the existence of the contract. The contract contained no reference to any "emergency," merely reciting the fact that the Authority had twice advertised for bids and had rejected same, and that Hudson had offered to accept the scavenger contract. The aggregate fee for the year 1953 was set at $720,000, of which $100,800 was to be paid in January 1953, $86,400 in February 1953, $72,000 in March 1953, and the balance in equal monthly payments of $51,200 each.

The plaintiffs on January 6, 1953 filed the original complaint in this action seeking judgment:

"A. Determining and adjudging that the contract between the City or the Authority and Hudson is illegal and void.

B. Restraining and enjoining the City and the Authority from appropriating any moneys for the payment to Hudson and from making any payment to Hudson.

C. Restraining and enjoining the City and the Authority from assigning or directing any employees of the City or the Authority to perform the contract on behalf of Hudson.

D. Ordering, directing and enjoining the City and the Authority to comply with the statutes and to let out a contract on the basis of competitive bidding to the lowest responsible bidder, and upon the security for performance required by the statute.

E. Granting to plaintiffs such other relief as may be just and equitable."

The Superior Court, Law Division, on January 6, 1953 granted an order to show cause directing the defendants to show cause (on January 16, 1953) "why an Order should not be made enjoining and restraining the City of Jersey City from appropriating any funds for the payments of any moneys to defendant Hudson City Contracting Co. in connection with the contract described in the Complaint, and enjoining the City of Jersey City and the Jersey City Incinerator Authority from making any payment to Hudson City Contracting Co. in connection with said contract until

the final determination of this cause," and granted the plaintiffs leave to take depositions. By order filed January 16, 1953 the hearing on the order to show cause was continued until January 23, 1953, but the defendants city and Authority were restrained from paying to defendant Hudson any sum of money beyond 7/31sts of the sum of $100,800 (the January payment set forth in the December 31, 1952, contract, ante) until further hearing, provided Hudson should undertake to collect and remove garbage and refuse in Jersey City until January 23, 1953. On January 23, 1953 the hearing on the order to show cause was held. The Superior Court, Law Division, after hearing and argument, on that date entered an order restraining defendants city and Authority from making any payment to defendant Hudson and under the purported contract between the Authority and Hudson dated December 31, 1952, until final determination of the cause. All three defendants were represented by counsel at the proceedings on January 16 and 23, 1953.

The Authority had advertised again for bids to be submitted January 19, 1953 for a scavenger contract, for the period beginning March 1, 1953 and ending December 31, 1953, terminable upon 30 days' notice. Bids were submitted by the corporate plaintiff and by defendant Hudson. The bids were on a monthly basis, the corporate plaintiff's being $1,000 or more less than Hudson's for each month. The total of the corporate plaintiff's bid was $522,800, whereas that of Hudson was $540,000. The bid of the corporate plaintiff was accompanied by a $50,000 surety bond as specified in the proposal; Hudson's bid was accompanied by a certified check for $25,000. (These facts are set forth in an amended complaint hereinafter adverted to. They were expressly admitted by the Authority, and were not denied by Hudson.)

At a meeting of the Authority held on February 3, 1953, attended by four of the five members thereof, the bids submitted by the corporate plaintiff and by Hudson on January 19, 1953, ante, were rejected on the ground they were too high and a resolution was adopted purporting to declare

an emergency. At the same time and by the same resolution the Authority awarded a contract to Hudson, on a per diem basis, for the scavenger work for the balance of the month of February, at a rate not to exceed $3,416.66 per day. The Authority also directed advertisement for new bids to be submitted February 16, 1953. The Authority admits these facts, and its resolution of February 3, 1953 stated that performance by Hudson was to be in accord with the specifications annexed to its purported contract of December 31, 1952. Hudson avowed lack of knowledge of some of these facts, although admitting the award to it of the February 3, 1953 per diem contract at $3,416 per day. The pleadings, depositions and affidavits on file, with the exhibits incorporated therein, palpably demonstrate that no genuine issue exists in relation to these matters.

On or about February 4, 1953 the plaintiffs filed an amendment to their complaint, reciting, inter alia, the foregoing additional matters and demanding further judgment:

"1. Adjudging and declaring to be illegal and void the contract for a per diem payment to Hudson, and permanently restraining and enjoining any payments to Hudson with respect thereto.

2. Ordering and directing the defendant Authority to accept the bid of plaintiff corporation submitted on January 19, 1953, and to enter into a contract in accordance with the terms thereof.

3. Restraining and enjoining the defendant Authority from acting upon any further proposals for bids for the year 1953, except proposals with ...


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