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P. T. v. Commissioner

Decided: March 2, 1970.

P. T. & L. CONSTRUCTION CO., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
COMMISSIONER, DEPARTMENT OF TRANSPORTATION, STATE OF NEW JERSEY, DEFENDANT-RESPONDENT



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

Weintraub

Plaintiff sues the State on a written contract for public construction. The meritorious issue is whether plaintiff is entitled to the balance of $110,360.64 which the State withheld as damages for alleged delay in completion of the job. The merits were never reached because the trial court sustained the State's defense of immunity from suit. We certified plaintiff's appeal before argument in the Appellate Division.

The Legislature has expressly dealt with this specific claim. After judgment went against it in the present case, plaintiff presented the claim to a subcommittee of the Joint Legislative Appropriations Committee. The subcommittee found for plaintiff in full, and the award was included in a supplemental appropriations bill (S. 813 (1969)). The Governor however vetoed that item, saying (message of June 27, 1969):

"I have decided, for the reasons stated herein, to delete entirely the contested claims from Senate Bill No. 813, which I have signed today. I wish to make it absolutely clear that my action is in no way a determination of the merits of these claims. From the record presented to me, it would have been absolutely impossible to make such a determination. Indeed, it is my desire that no prejudice whatsoever should attach to the rights of the claimants to present their claims again, either before a new forum or once again to appropriations subcommittee."

After restating specific recommendations he had theretofore made with respect to proceedings before a claims committee, the Governor said:

"Since the Legislature has not seen fit to act on my suggestions for reform in its own procedure, I am prepared to recommend and support a new approach, namely, that the Legislature consider eliminating the doctrine of sovereign immunity as a bar to claims against the State based on contractual liability. It seems to me that removal of these contractual claims to the courts would guarantee a fair adjudication to both parties and, most importantly, to the citizens of the State."

He added his willingness to support, with a few minor changes, a pending bill (A. 821) which would have committed such controversies to the judiciary.

Having thus failed, plaintiff continues to press the present action. Plaintiff agrees that Strobel Steel Construction Co. v. State Highway Commission, 120 N.J.L. 298 (E. & A. 1938), stands in the way, but says, and we think correctly, that it should be overruled.

Strobel also involved a construction contract for a public improvement. The court applied a flat rule that the State could not be sued without its consent. Plaintiff there conceded such a rule, but sought, unsuccessfully, to infer a statutory consent to be sued (pp. 301-302).

Strobel overstated the rule of immunity, for sundry actions had succeeded against the State. See East Orange v. Palmer, 47 N.J. 307, 328-329 (1966). Strobel did not discuss the thesis of Haycock v. Jannarone, 99 N.J.L. 183 (E. & A. 1923). That was a suit for trespass brought by the owner of real property against a construction contractor. The contractor denied encroaching on plaintiff's property but asserted that if there were an encroachment, he nonetheless was performing a contract with the State Highway Commission which had the right to enter under its power to condemn. This defense was sustained. The court pointed out that under a statute the State Highway Commission could take possession before condemnation and said that if in fact there was a taking, plaintiff could mandamus the highway commission to institute condemnation proceedings. But the question remained as to how a money judgment could be collected under those circumstances. As to this, the court said (p. 185):

"When the damages have been thus ascertained it is not to be presumed that the legislature has not, or would not, make provision to pay for the land which it had taken in advance of compensation for the benefit of the state. The creation of such an agency with the power to condemn implies that the legislature will make provision to pay the award, otherwise we would have to assume that the state ...


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