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Gualano v. Board of School Estimate of Elizabeth School District

Decided: January 15, 1962.

VICTOR GUALANO, JOSEPH DEL VECCHIO, MIRIAM MICALI AND BERNARD ROSENFELD, PLAINTIFFS,
v.
BOARD OF SCHOOL ESTIMATE OF THE ELIZABETH SCHOOL DISTRICT AND THE CITY OF ELIZABETH IN THE COUNTY OF UNION, A MUNICIPAL CORPORATION OF NEW JERSEY, DEFENDANTS



Civil action in lieu of prerogative writs.

Feller, J.s.c.

Feller

This is an action in lieu of prerogative writs.

Plaintiffs contend that they are teachers under tenure, employed by the Elizabeth Board of Education; that on or about January 12, 1961 the board of education estimated the amount necessary for the school year beginning July 1, 1961 and ending June 30, 1962, which amount was $6,408,248.71; that included in said budget were increases and increments for the teachers -- including the plaintiffs; that on January 13, 1961 the board of education, pursuant to N.J.S.A. 18:6-49, prepared and delivered copies of said budget to each member of the board of school estimate; that on February 14, 1961 the board of school estimate, pursuant to N.J.S.A. 18:6-50, fixed and determined the amount of money necessary to be appropriated for the use

of the public schools in Elizabeth for the school year 1961-1962 at the sum of $6,308,248.71; that further pursuant to N.J.S.A. 18:6-50 the board of school estimate made two certificates of said amount and delivered one copy to the school board and one copy to the City of Elizabeth on February 15, 1961; that R.S. 18:6-53 makes it mandatory that the city shall, upon receipt of the said certificate, appropriate the amount certified to it by the board of school estimate by including it in the tax ordinance, and that such amount shall be assessed, levied and collected in the same manner as money appropriated by the city for other purposes is assessed, levied and collected.

Plaintiffs further contend that on February 28, 1961 the city council voted not to appropriate the amount certified to it by the board of school estimate upon the belief that the amount so certified to it by the board of school estimate exceeded 1 1/2% of the "assessed ratables" of the City of Elizabeth; that the statute, R.S. 18:6-53, provides that no amount in excess of 1 1/2% of the "assessable ratables" of any municipality, as determined by the county board of taxation, shall be appropriated without the concurrence and consent of the governing body; that the Union County Board of Taxation had fixed $433,817,887 as the valuation of the "assessable ratables" of the City of Elizabeth for 1961, and that the amount of $6,308,248.71, as certified to by the board of school estimate, is an amount less than 1 1/2%, and that the defendant City of Elizabeth had no authority to refuse to appropriate the said sum of $6,308,248.71; that on March 28, 1961 the board of school estimate certified to the city council that the sum of $6,147,730.86 was necessary for the school year beginning July 1, 1961, and on March 28, 1961 the city council concurred and consented to said amount; that as the result of the refusal of the City of Elizabeth to appropriate the said amount of $6,308,248.71 and as the result of the appropriation of the reduced amount of $6,147,730.86 the plaintiffs will suffer financial losses.

Thus, plaintiffs demand judgment as follows:

"(a) directing the defendant City to appropriate the sum of $6,308,248.71, being the amount certified to it by the Board of School Estimate for the school year 1961-1962, and forthwith to include such amount in the City's tax ordinance, and

(b) declaring that the language used in R.S. 18:6-53, that the 'valuation of the assessable ratables * * * as determined by the county board of taxation' refers to the valuation of $433,817,887 as determined by the Union County Board of Taxation as the base upon which the one and one-half per centum limitation shall be computed."

The defendants admit most of the facts alleged by plaintiffs but deny the interpretation of R.S. 18:6-53 as contended for by plaintiffs, and deny that the actions of defendants were in violation of said statutes, and further deny that the City of Elizabeth has no authority to refuse to appropriate the sum of $6,308,248.71. Defendants also contend that they had no knowledge or information concerning the tenure status and losses claimed by plaintiffs, but this has been established by affidavits of plaintiffs, the contents of which have not been denied. Defendants also set up a number of separate defenses.

Plaintiffs move for summary judgment to compel the defendant City of Elizabeth to appropriate for school purposes the sum of $6,308,248.71, which is the amount certified to it by the board of school estimate for the year commencing July 1, 1961, and for the interpretation and construction of R.S. 18:6-53.

Defendants have filed a cross-motion for summary judgment based upon the allegations of the complaint, and for the interpretation and construction of R.S. 18:6-53.

I.

In a separate defense defendants assert that the plaintiffs are required to exhaust their administrative remedies before making application to this court. Any failure

to exhaust administrative remedies is no bar to the plaintiffs' right to bring this action.

There is no question that R.R. 4:88-14 provides that, in the usual case, administrative remedies are to be exhausted before a proceeding is to be started in lieu of prerogative writs. This rule provides as follows:

"Except where it is manifest that the interests of justice require otherwise, proceedings under Rule 4:88 shall not be maintainable, so long as there is available judicial review to a county court or inferior tribunal or administrative review to an administrative agency or tribunal, which has not been exhausted."

It will be noted at the outset that the rule is not absolute by its very terms. The rule was intended as a simple rule of ordinary procedure. Ward v. Keenan , 3 N.J. 298 (1949). The rule has constantly been departed from where the interests of justice require. Reference may be had to Waldor v. Untermann , 10 N.J. Super. 188 (App. Div. 1950), which was an action for the ouster of the defendant as a member of the Board of Education of the City of Newark. Justice (then Judge) Jacobs, in discussing this rule, relied on a school case in part when he said, at page 191, regarding the rule:

"However, it was neither jurisdictional nor absolute and was departed from where, in the opinion of the court, the interests of justice so required. See Lane v. Bigelow , 135 N.J.L. 195, 200 (E. & A. 1947); Conaway v. Atlantic City , 107 N.J.L. 404, 408 (Sup. Ct. 1931); Koven v. Stanley , 84 N.J.L. 446, 447 (Sup. Ct. 1913). In the Lane case the Court of Errors and Appeals permitted judicial determination without exhaustion of the administrative remedy available under the Zoning act and adopted the postion taken earlier in the Conaway case that the court had 'power to intervene, and in a proper case will intervene, without waiting for intermediate statutory remedies to be exhausted.' In the Koven case the court entertained a quo warranto proceeding to determine the title to office of members of a school board without awaiting determination of the double appeal to the Commissioner and the State Board of Education. After expressing his thought that the administrative tribunals could not take dispositive action on the issue presented Justice Swayze said: 'I think it clear that where so important a question as the title of

members of a school board to their office is involved, a proper exercise of discretion permits, if it does not require, the speedy adoption of the only final and effective procedure to determine the question.'"

The court, in Waldor , allowed the matter to proceed even though the plaintiff had not exhausted his administrative remedies because (as indicated at page 193) "* * * the matter was of importance to the community and expeditious determination was directly in the public interest." The court also concluded (at page 192) that the matter "* * * did not involve any questions of administrative policy, discretion or judgment." Similarly, this matter is of extreme importance to all connected with the City of Elizabeth, and expeditious determination is imperative, particularly where, as here, the budget and the tax ordinance are affected. Moreover, the questions involved do not concern any administrative policy, discretion or judgment.

In Nolan v. Fitzpatrick , 9 N.J. 477 (1952), the situation was somewhat analogous to that presented here. In the case at bar, the plaintiffs are seeking a determination compelling the City of Elizabeth to make an appropriation certified to it by the board of school estimate. In the Nolan case certain members of the Boulevard Commissioners of the County of Hudson brought an action in lieu of prerogative writs to compel the Board of Chosen Freeholders of the County of Hudson to raise a certain amount certified to such board of chosen freeholders by the boulevard commissioners. The court ultimately held that the defendant board was to appropriate immediately the funds requisitioned by the plaintiff commissioners. Regarding the contention that the plaintiffs had not exhausted their administrative remedies, the late Chief Justice Vanderbilt, speaking for the court, said as follows (at pages 486-487):

"* * * On the contrary, whenever the rule of exhaustion of remedies is asserted as a defense in a proceeding in lieu of prerogative writ Rule 3:81-14 both expressly and in spirit calls for a determination as to whether or not the interests of justice require an exception.

What are the requirements of justice in the instant case? The question presented in this case is solely one of law. Any determination of that question either by the Director of the Division of Local Government, N.J.S.A. 40:2-53, or by the Division of Local Government, N.J.S.A. 52:27BB, would clearly be subject to judicial review, N.J.S.A. 40:2-53 and N.J.S.A. 52:27BB-20. On such judicial review of a question of law the opinions of these administrative tribunals would not be persuasive as they would be on questions of fact within their purview. The only result of requiring an exhaustion of administrative remedies where only a question of law is in issue would be useless delay, and this in the interest of justice cannot be countenanced. The case thus presents another instance (i.e. , where the disposition of the matter depends solely on the decision of a question of law) in addition to the two situations specifically stated in Ward v. Keenan where under Rule 3:81-14 the interests of justice do not require the exhaustion of administrative remedies."

What was said above in Nolan is equally applicable to the case at bar. The question involved in this case is solely a question of law. The only result of requiring an exhaustion of administrative remedies would be useless delay. Therefore, because of the nature of the matter and because the question is solely one of law, this court will proceed and determine the proper construction of R.S. 18:6-53.

II.

Defendants in their answer have attacked, in effect, the right of plaintiffs to raise the question of the validity of the action of the defendant City of Elizabeth in appropriating the sum of $6,308,248.71. The defendants allege this in substance in their first, second, third and eighth separate defenses. Plaintiffs contend that they have been or will be injured by the action of defendants, and that consequently plaintiffs have a clear right to question the legality of such action.

Plaintiffs are tenure teachers employed by the Elizabeth Board of Education. Included in the budget in the amount of $6,308,248.71 were certain increments that plaintiffs, together with all the other teachers, were to receive if the city had appropriated the aforesaid sum. By reason of the

failure of the City of Elizabeth to appropriate this sum, they will not get these increases.

There has been in recent years a more liberal judicial response to an attack of alleged improper public actions. For example, in Koons v. Board of Com'rs of Atlantic City , 134 N.J.L. 329 (Sup. Ct. 1946), the court ultimately held that a resident of a municipality, even though she was not a property taxpayer, could, by means of a writ of certiorari , question a sales tax. At page 338 Justice Heher pointed out the determining factor as to the status of a plaintiff:

"The determinative question is whether the challenger has sustained, or is in immediate danger of sustaining, some direct and certain injury as the result of the enforcement of the statute."

The policy of our Supreme Court may be seen in Walker, Inc. v. Borough of Stanhope , 23 N.J. 657 (1957), where the court decided that the potential loss of business by a businessman was sufficient to give him enough interest to enable him to challenge in a prerogative writ proceeding a certain ordinance even though he was neither a citizen nor a taxpayer of the municipality enacting such ordinance. In reaching this decision Justice Jacobs indicated (at page 661) the significance of the prerogative writ in our State as a safeguard against wrongful official action:

"In our State, perhaps more than any other, the prerogative writ has been broadly made available as a comprehensive safeguard against wrongful official action. Garrou v. Teaneck Tryon Co. , 11 N.J. 294, 302 (1953). In Gimbel v. Peabody , 114 N.J.L. 574, 577 (Sup. Ct. 1935) the plaintiff obtained a writ of certiorari to review proceedings by the Township of Pennsauken and others for the operation of a greyhound racing track in the township. The court set aside the proceedings as violative of the anti-gambling provisions of the Constitution; with respect to the plaintiff's capacity to sue, it remarked that he had the standing of a citizen and taxpayer and that measures 'to test the legality of proceedings in direct violation of the fundamental law of the state should be liberally granted.'"

And at page 666 the court concluded, as indicated above, that the plaintiff had sufficient standing to raise the question involved:

"We are satisfied that, under the particular circumstances presented in the instant matter, the plaintiff may fairly be deemed to have a sufficient standing to maintain its action. There has been real and substantial interference with its business and the serious legal questions it has raised should, in the interest of the public as well as the plaintiff, be passed upon without undue delay."

And in Elizabeth Federal S. & L. Ass'n v. Howell , 24 N.J. 488 (1957), the late Chief Justice Vanderbilt again emphasized, at pages 500-501, the liberal approach of the court regarding the use of the prerogative writ as a form of protection against improper official action:

"Early in our judicial history the courts of this State in almost every respect took a more liberal view of the province of the prerogative writ of certiorari than the courts of any other state, Goodnow, 'The Writ of Certiorari ,' 6 Pol. Sc. Q. 493, 510, 526 (1891). The New Jersey courts extended the scope of certiorari far beyond its limited use at common law to review judicial acts, so as to include quasi -judicial, quasi -legislative, administrative and municipal action. Notwithstanding this liberal tradition, this form of protection against improper official action was further broadened by the Constitution of 1947, Art. VI, Sec. V, par. 4, to make its relief available as a matter of right and not only as a matter of discretion. Ward v. Keenan , 3 N.J. 298, 302-309 (1949)."

Certainly what has been indicated above is applicable here. There can be no question that plaintiffs stand to suffer financially if the public actions of defendants are not questioned. Consequently, plaintiffs certainly have a direct financial interest in this matter. This interest, when coupled with the important public questions involved, gives plaintiffs standing to obtain a determination of the meaning of R.S. 18:6-53. Furthermore, this suit is not based on any alleged improper actions of the board of education. This action is based on the alleged improper actions of the board of school estimate and the City Council of ...


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