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Home Owners Construction Co. v. Borough of Glen Rock

Decided: March 20, 1961.

HOME OWNERS CONSTRUCTION CO., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
BOROUGH OF GLEN ROCK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT



For reversal and remandment -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall and Schettino. For affirmance -- None. The opinion of the court was delivered by Jacobs, J.

Jacobs

The Appellate Division affirmed the summary judgment which the Law Division had entered for the defendant. We certified on the plaintiff's application. 33 N.J. 110 (1960).

The plaintiff's complaint alleged in its first count that the Borough of Glen Rock advertised for bids on work to be done on Doremus Avenue, Glen Rock and submitted specifications to the prospective bidders; the plaintiff was the lowest bidder and entered into a contract with the borough on September 6, 1956; in the course of the work the borough requested that the plaintiff perform certain extra services and furnish certain extra materials; and it performed such services and furnished such extra materials for which it claims the sum of $5,877.35 from the borough. The second count repeated the allegations of the first count and sought recovery in quantum meruit. The borough's answer denied most of the allegations in the complaint and set forth three affirmative defenses which alleged that (1) there had been an accord and satisfaction, (2) if the plaintiff furnished labor and materials for which it had not been paid it did so without lawful authority from the borough and (3) the plaintiff executed a written instrument which had the legal effect of extinguishing its claim. After the filing of its answer the borough moved for summary judgment upon the ground that the plaintiff had "been paid in full for the monies allegedly due." An affidavit by Mr. Barney Smith, the borough's Assistant Superintendent of Public Works, was attached to the motion papers and referred to various instruments on file in the Borough Clerk's office. These instruments included Engineer's Certificate No. 1201 which was dated September 10, 1957 and indicated that the balance due the plaintiff was $14,261.45, voucher dated September 23, 1957 for payment in accordance with Engineer's Certificate No. 1201 and check dated September 23, 1957 in the sum of $14,261.45 to the order of and endorsed by the plaintiff. [34 NJ Page 308] An affidavit in opposition to the motion was duly filed. It was signed by Mr. William F. Van Schaik, the president of the plaintiff corporation, and set forth the plaintiff's version of the happenings to the following effect: When the road construction was begun Mr. Van Schaik discussed several items with Mr. Frank Evans who was then Borough Engineer -- (Mr. Evans died prior to the filing of the plaintiff's complaint). It was discovered that the road base was in a very unstable condition and Mr. Evans and Mr. John Smith, the Borough Inspector, advised the plaintiff that it would be necessary to dig 2 1/2 to 3 feet deeper in order to remove the unstable element and replace it with a 2 1/2 inch stone rather than with the normal sub-base fill. The inspector for the State did not feel that this was necessary and "since this was a state aid job (see N.J.S.A. 27:15-1 et seq.) it was not encompassed in the initial specifications." Messrs. Evans and Smith then advised the plaintiff to proceed with the extra excavation and the 2 1/2 inch replacement and that the "additional cost would be paid for by the Borough separately, and not under its state aid contract." Thereafter Mr. Evans, Mr. John Smith and Mr. Barney Smith requested that plaintiff do "additional and extra work which was outside of the initial contract bids with the agreement that this would be paid for by the Borough." On or about September 10, 1957 Mr. Van Schaik discussed with Mr. Evans the payment by the borough for the additional or extra work which had been completed by the plaintiff at the request of the borough officials and Mr. Evans advised that "since the extra work done would have to be paid for by the Borough and was not encompassed under the state aid job as bid, that insufficient moneys had been appropriated by the Borough to cover the extra work." Mr. Evans then advised that the method which had to be followed for the plaintiff to be paid for its work was to sign a voucher "for the work done in accordance with the contract only and limited to such work so that the Borough could recoup from the State of New

Jersey that portion of the price paid in accordance with the state aid program." Mr. Evans also advised that after the borough had recouped from the State "there probably would be sufficient moneys for the payment of the extras or if there were not sufficient moneys for the payment of the extra work that it would be included in the budget for the following year and paid at that time." Mr. Evans told the plaintiff to withhold submission of the bill for the extra work until "after the state aid contract was paid for and the Borough had received its money." As a result, the plaintiff followed the procedure suggested by Mr. Evans and signed the necessary documents. The Borough Engineer's certificate, the voucher and the draft "were not intended to cover the additional or extra work and materials to be paid for by the Borough outside of the contract let under the state aid program but such additional items were specifically to be billed at a later date to be paid by the Borough separately."

In due course the defendant's motion was argued orally before the Law Division. Counsel for the plaintiff at that time stressed that summary judgment would be improper since there was a material factual dispute. In response to the trial court's inquiry as to whether the Engineer had authority to authorize the extra services and materials allegedly furnished by the plaintiff, counsel for the plaintiff stated that the borough's answers to interrogatories acknowledged that "he was authorized" and that in any event he was not "thoroughly prepared" to meet the issue of authorization in view of the fact that the only issue raised by the motion was "whether or not there was an accord and satisfaction, whether the plaintiff was paid for this additional work." At the conclusion of the argument the trial court expressed the view that it appeared "indisputably from the affidavit of the defendant that the items for which the plaintiff seeks recovery in the complaint has been paid for by the defendant to the plaintiff"; and the summary judgment which was entered thereafter set forth that the pleadings and affidavits

showed palpably that there was no genuine issue as to any material fact challenged and "that the defendant is entitled to judgment upon the ground that the plaintiff has been paid in full for the monies sued upon as a matter of law."

The plaintiff's appeal from the summary judgment was duly heard by the Appellate Division which did not direct its attention to the issue of accord and satisfaction or payment but stated that in the exercise of its original jurisdiction it had examined the borough's call for bids, its contract with the plaintiff dated September 5, 1956, the accompanying specifications and the "statements demonstrating the manner and method of financing the payment of the sums to grow due for the improvement of Doremus Avenue." It noted that the contract price was expressly based on estimated quantities and that the quantities were to be increased or decreased as provided in the specifications which, in turn, provided for "extra or reduction orders" by the Engineer and for "supplementary agreements" in the event of certain plan changes. The Appellate Division found that the plaintiff's "failure to obtain extra orders or supplementary agreements" barred recovery by it in contract; it also found that the plaintiff was barred from recovery in contract by the absence of any appropriation for the extra work and materials (see N.J.S.A. 40:2-29; 40:50-6) and the absence of any bidding with respect thereto (see N.J.S.A. 40:50-1). Insofar as the plaintiff's quantum meruit claim was concerned the Appellate Division expressed the opinion that it was barred by statute (N.J.S.A. 40:2-29) and did not come within any of the exceptions recognized by this court in Hudson City, etc., Co. v. Jersey City Incinerator Authority, 17 N.J. 297, 309 (1955). See Home Owners Construction Co. v. Borough of Glen Rock, 59 N.J. Super. 519 (App. Div. 1960).

The Appellate Division affirmed the trial court's action but we are satisfied that the meagre record furnished no proper basis for the entry of summary judgment. See Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 75

(1954); West Side Trust Co. v. Gascoigne, 39 N.J. Super. 467, 470 (App. Div. 1956); Templeton v. Borough of Glen Rock, 11 N.J. Super. 1, 4 (App. Div. 1950). In Gascoigne Justice (then Judge) Francis properly noted that, on a motion for summary judgment, the supporting papers are to be closely scrutinized whereas the opposing papers are to be treated indulgently, that doubts are to be resolved in favor of the conventional trial, and that the matter is not to be decided on affidavits which give rise to conflicting inferences "no matter how strongly they point in one direction or the other." 39 N.J. Super., at p. 470. In Judson the court cautioned against the premature granting of summary judgment and referred approvingly to Templeton where the Appellate Division had said:

"Summary judgment is recognized as a wholesome device which may avoid needless delay and expense in awaiting and conducting trial; and the expeditious determination of a cause is admittedly an important goal of our present rules of practice and judicial administration. Nonetheless when its attainment involves the deprivation of a full and fair trial on disputed facts, its price comes too high. See Doehler Metal Furniture Co. v. United States, 149 F.2d 130, 135 (2 d Cir. 1945); Transcontinental G.P.L. Corp. v. Borough of Milltown, 93 F. Supp. 283, 286 (D.C.D.N.J. 1950). In the Doehler case the court noted the time lost in the federal courts where summary judgments have been improvidently entered and reversed on appeal; similar instances in our state courts are not at all rare. See, e.g., Mitchell v. Wrightstown Community Apartments, Inc., supra [4 N.J. Super. 321 (App. Div. 1949)]; Hodes v. Dunsky, 5 N.J. Super. 333 (App. Div. 1949); Lionshead Lake, Inc. v. Township of Wayne, 9 N.J. Super. 83 (App. Div. 1950). In appropriate circumstances premature summary determination might perhaps be avoided by more liberal use of the court's comprehensive ...


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