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Housing Authority v. Sagner

Decided: June 1, 1976.

HOUSING AUTHORITY OF THE CITY OF NEWARK, A BODY CORPORATE AND POLITIC, PLAINTIFF-APPELLANT,
v.
ALAN SAGNER, COMMISSIONER, DEPARTMENT OF TRANSPORTATION OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT



Lynch, Larner and Horn. The opinion of the court was delivered by Horn, J.A.D.

Horn

[142 NJSuper Page 334] This appeal raises a single issue -- whether the Contractual Liability Act, N.J.S.A. 59:13-1 et seq. , is applicable to an action brought by a public entity against the State. The trial judge held that it was applicable and dismissed the complaint because of plaintiff's failure to comply with N.J.S.A. 59:13-10, which provides:

59:13-10. Claims affected by this chapter

The time limitations contained in section 5 of this chapter shall not apply to those claims accruing prior to the effective date of this chapter; provided, however, that any law suits on such claims must be filed in a court of competent jurisdiction within 6 months of the effective date of this chapter or they shall be forever barred.*fn1

We are not concerned on this appeal with the merits of the claim asserted against the State. However, for a better understanding of the issue before us we will briefly relate the history which gave rise to the instant action.

Plaintiff was duly organized pursuant to N.J.S.A. 55:14A-1 et seq. as a local housing authority. As such it is a public entity, exercising governmental functions. English v. Newark Housing Auth. , 138 N.J. Super. 425 (App. Div. 1976). On May 3, 1966 plaintiff and the State of New Jersey (State Highway Department, presently organized as the Department of Transportation, N.J.S.A. 27:1A-3), hereinafter designated as the State, entered into a written agreement whereby plaintiff was to acquire so much of certain real property in the City of Newark in a blighted area known as the Old Third Ward Urban Renewal Project between Avon and Springfield Avenues, as was in the then projected right-of-way of the Route 75 freeway.

In consideration of the services of plaintiff in acquiring said lands, providing relocation assistance to the residents affected by the acquisition and the transfer of title to the State, the State agreed to reimburse plaintiff for acquisition and other costs and expenditures specified in the written contract. Clause 13 of the agreement made it effective "if, as, and when, the State Highway Department actually carries out the presently tentative highway plan. Prior to such

final department approval, it is agreed that the State Highway Department is under no obligation to purchase the properties from the LPA [ sic , Local Public Authority -- the plaintiff]." The State denied liability on the merits and in addition set up as a bar the failure of plaintiff to comply with N.J.S.A. 59:13-1 et seq.

On February 21, 1974 or March 1, 1974 plaintiff instituted this action in the Chancery Division, seeking an order to compel the State to accept conveyances of land that it had acquired, allegedly pursuant to the agreement, and for damages in the amount of $11,100,000.*fn2 At the hearing below the parties stipulated that plaintiff's cause of action, if any, accrued on April 7, 1972 and that no notice of claim was ever given by plaintiff to the State as required by N.J.S.A. 59:13-5, 6 or 10. On March 19, 1975 the trial judge entered an order dismissing the complaint on his holding that plaintiff was bound by the provisions of the Contractual Liability Act and had failed to institute the instant action within the time limited by N.J.S.A. 59:13-10.

Plaintiff first contends that the so-called grandfather clause (N.J.S.A. 59:13-10) is not applicable to its claim against the State by virtue of N.J.S.A. 27:5D-1 and 2 which, it argues, constitutes a waiver of sovereign immunity with respect to claims of municipal housing authorities against the State arising out of cooperative agreements entered into between them. This statute authorizes the commissioner of transportation*fn3 and each municipal housing authority to enter into contracts such as the one made between plaintiff and the State Highway Department in 1966, as

already mentioned. Plaintiff refers particularly to that part of N.J.S.A. ...


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