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J. Turco Paving Contractor Inc. v. City Council

Decided: October 13, 1965.

J. TURCO PAVING CONTRACTOR, INC., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
CITY COUNCIL OF THE CITY OF ORANGE, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, AND TRI-COUNTY ASPHALT CORPORATION, A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT, AND HOUSING AUTHORITY OF THE CITY OF ORANGE, A BODY POLITIC AND CORPORATE OF THE STATE OF NEW JERSEY, INTERVENOR



Conford, Kilkenny and Leonard. The opinion of the court was delivered by Kilkenny, J.A.D.

Kilkenny

Plaintiff contractor's suit in the Law Division, a proceeding in lieu of prerogative writs challenging the legality of an award of a municipal contract for a public improvement by the City Council of the City of Orange to defendant contractor, Tri-County Asphalt Corporation, instead of to plaintiff as the low bidder, was dismissed by the Law Division on motion of defendants before trial, on the sole ground that plaintiff, who was concededly not a taxpayer of the City of Orange and had not joined a taxpayer as a plaintiff in the action, had no legal standing to bring the suit. Plaintiff appeals from the judgment of dismissal.

Plaintiff was the low bidder at $496,430.50 on the main contract, and at $374,618 on the alternate contract. Tri-County Asphalt Corporation was the next lowest bidder, but was $34,621.50 higher than plaintiff on the main contract, and $40,071.15 higher on the alternate contract. The city council, after a hearing conducted, rejected plaintiff's bid on the ground that (1) plaintiff was not qualified by experience to perform the work required by the contract, and (2) plaintiff had failed to furnish the affidavit, which the advertisement for bids required to be submitted at the time of submission of bids, verifying that plaintiff had an available source of supply for the ready-mixed concrete required in the

performance of the work. The contract was awarded to defendant contractor. No stay having been obtained despite plaintiff's application therefor, defendant contractor has proceeded with the job and, as we were told at oral argument, the work has been about 50% completed.

The Law Division made no factual determination as to plaintiff's qualifications to do the work required by the contract, and did not resolve the question as to whether the city council was legally justified in rejecting plaintiff's low bid because of its failure to submit with its bid the required affidavit as to the ready-mixed concrete. As noted above, dismissal of the suit was based solely on the ground that plaintiff, though it was the low bidder, had no legal standing to sue.

I.

In holding that a plaintiff, who is not a taxpayer of a municipality or who has not joined a taxpayer of the municipality, has "neither legal standing nor sufficient interest to attack the action of a public body of said municipality in the award of a construction contract," the Law Division relied upon the following cases as legal support for its ruling: Albert F. Ruehl Co. v. Bd. of Trustees, Industrial Ed., 85 N.J. Super. 4 (Law Div. 1964); James Petrozello Co. Inc. v. Chatham Tp., 75 N.J. Super. 173 (App. Div. 1962); Camden Plaza Parking v. Camden, 16 N.J. 150 (1954); Waszen v. Atlantic City, 1 N.J. 272 (1949); McGovern v. Trenton, 60 N.J.L. 402 (Sup. Ct. 1897).

These cases do not support the broad proposition of law laid down by the Law Division in the instant case. In fact, McGovern v. Trenton expressly held that a person who, as the lowest bidder, is entitled to have a municipal contract awarded to him may, by certiorari, question the validity of its award to another. As the court therein said:

"Assuming his claim that he was entitled to have the contract awarded to him to be well founded, it cannot be denied that he was

specially and injuriously affected by the action complained of, and is entitled to question its validity by certiorari." (60 N.J.L., at p. 402)

It was with reference to McGovern's further contentions that the contract awarded ought to be annulled because of illegality "of the advertisement for bids and of certain of the specifications" upon which the contract rested, that the court held that his mere status as a bidder would not give him legal standing, in the absence of some "personal or property interest to be specially and immediately affected by the action complained of." (60 N.J.L., at p. 404) As the court observed, "He is not, so far as the case shows, a taxpayer of the city, and has not intervened as such for the purpose of preventing the illegal expenditure of municipal funds." Ibid.

Waszen v. Atlantic City, supra, held that " unsuccessful bidders * * * have no standing to challenge the award of the contract to a rival bidder or to attack allegedly illegal specifications." (1 N.J., at p. 276; italics ours) "The rationale of such a holding is that one cannot endeavor to take advantage of a contract to be awarded under illegal specifications and then, when unsuccessful, seek to have the contract set aside." However, the court found that the coplaintiff Fischer was a citizen and taxpayer, and as such might attack the award and also raise the question of the "illegality of the specifications." The specifications were held to be unreasonable and illegal and the resolution awarding the contract was set aside. Here again, the attack was upon the specifications, and that required the presence of a taxpayer as plaintiff. Plaintiff contractor, in the Waszen case, was merely an "unsuccessful bidder" attacking the very specifications upon which he submitted his bid. It was not a suit by the low bidder challenging the award to a higher bidder, without more, as in the instant case.

In Camden Plaza Parking v. City of Camden, supra, as in Waszen, the unsuccessful bidder attacked the award to another bidder of a lease from the city of municipally-owned land for the ...


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