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Pied Piper Ice Cream Inc. v. Essex County Park Commission

Decided: January 11, 1974.


Caruso, J.c.c. Temporarily Assigned.


This matter comes before the court as a result of the filing of a complaint (in lieu of prerogative writs) by Pied Piper Ice Cream, Inc., a New Jersey corporation (plaintiff) against the Essex County Park Commission, a body politic (Park Commission) and Good Humor Corporation (Good Humor) wherein plaintiff seeks to set aside the Park Commission's resolution of March 14, 1973 and the contract dated March 30, 1973 between the Park Commission and Good Humor as being invalid and illegal.

The contract, in substance, awards Good Humor the right to sell ice cream and refreshments throughout the Essex County Park system. Alternatively, plaintiff seeks an order directing the Park Commission to refrain from prohibiting it from selling its products within the parks, in competition with Good Humor.

In lieu of oral testimony in open court, the parties have stipulated to present the matter for decision on the submission of memoranda of law and any exhibits they deem appropriate.

The factual background appears to be as follows:

The Park Commission made contact with some ten distributors of ice cream in Essex County in order to determine the capabilities of such distributors to provide regular and daily service in the parks, as well as supplying ice cream to revenue-producing facilities. The recreation division of the Park Commission, upon an initial evaluation, submitted to

the Park Commissioners its analysis that only Good Humor Corporation and the Pied Piper Industries, Inc., were the two companies capable of providing the services mentioned above. The Park Commission, by resolution dated March 14, 1973, determined that the Good Humor would best serve the needs of the Commission and its public. As a result thereof the contract between Good Humor and the Park Commission was entered into on March 30, 1973. This determination by the Park Commission was with the full understanding that the Good Humor proposed to pay the Park Commission a sum of 12 1/2% of the gross of all ice cream sales, and Pied Piper's proposal to pay the Commission an amount equal to 16% of gross sales.

The thrust of plaintiff's argument is that the Park Commission should be compelled to award contracts only on the basis of public bidding, to the highest responsible bidder. In support of its position plaintiff cites statutory provisions applicable to other park commissions and which impose limitations on municipalities and upon bidding where public funds are involved. Plaintiff, while acknowledging that the Park Commission is a body politic, pursuant to N.J.S.A. 40:37-99, and there are no statutory provisions which authorize advertisement and competitive bidding (N.J.S.A. 40:37-96 to 174), nonetheless maintains that the Park Commission is a governmental body and thus subject to the requirements of advertising for bids, sealed bids, and awards to the highest responsible bidder. Plaintiff contends that the trend of case law demonstrates as a matter of public policy, even in the absence of statutory provisions, requires the awarding of such a contract be based upon advertising of bids, sealed bids and public bidding.

The Park Commission maintains it is an autonomous body with its powers derived from its enabling act (N.J.S.A. 40:37-96 to 174), and contends that the competitive bidding statutes do not apply to the Park Commission; no expenditures of public funds are involved, but rather a discretionary

exercise by the Park Commission to provide its patrons of the parks with a convenience and service. The fact that the Park Commission, through its recreational director, solicited informal bids, does not limit the discretionary power of the Commission to disregard formal bidding and to make such contract as it considers most advantageous to it. The Park Commission considered and evaluated the respective informal proposals and made a determination based on the satisfactory service of Good Humor in the past, the quality and public acceptance of the products to be sold, the capacity of the company to provide ample and proper equipment to cover all service requirements as well as the ability to generate the highest level of gross income. The latter consideration being an intangible, subject to the amount of sales, and thus highly speculative. It was the Park Commission's judgment, after an evaluation of the above considerations, to accept the proposal of Good Humor, and thus in good faith it entered into the contract with Good Humor.

The contention of plaintiff is that there is no express statutory provision which permits the Park Commission to enter into a contract with Good Humor, and thus the contract is invalid. This argument is without convincing support. To adhere to a strict construction of the powers contained in the controlling statutes would deny the Park Commission the authority to promote the spirit of the legislation and ...

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