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Malloy v. State

Decided: March 4, 1977.


Bischoff, Morgan and Rizzi. Rizzi, J.s.c., Temporarily Assigned. Morgan, J.A.D. (dissenting).


The issue generated by this appeal is whether the State of New Jersey is immune from suit in a tort action in a case where an employee erroneously informed an applicant for a real estate salesman's license that he had failed the test.

On May 17, 1973 plaintiff took an examination for licensing as a real estate salesman under the direction of the New Jersey Real Estate Commission, as required by N.J.S.A. 45:15-10. On May 23, 1973 he was notified by the

Commission by letter that he had failed the examination. More than a year later, in August 1974, plaintiff was informed by the Commission that the prior letter was in error and that he had passed the examination he took in May 1973. Plaintiff thereafter commenced an action against the State of New Jersey founded in negligence on the part of the State in maintaining its records and in improperly informing him that he had failed, and demanding damages caused thereby, including the cost of real estate courses he later took to prepare for the next examination, and loss of income.

The matter came before the trial judge on defendant's motion for summary judgment based upon the doctrine of immunity allegedly afforded by the New Jersey Tort Claims Act (N.J.S.A. 59:1-1 et seq.). At the same time the judge heard a cross-motion by plaintiff for judgment of liability against defendant. The judge granted defendant's motion for summary judgment and denied plaintiff's cross-motion. This appeal by plaintiff followed.

We are of the view that plaintiff's motion for summary judgment was properly denied since the record below does not support a determination of negligence as a matter of law. As to defendant's motion for summary judgment, we hold that the judge erroneously determined that the State was immunized against this action and we reverse.

It is the contention of the State that it is entitled to immunity by virtues of the provisions of a section of our Tort Claims Act, N.J.S.A. 59:2-5, which provides:

A public entity is not liable for an injury caused by the issuance, denial, suspension or revocation of, or by the failure or refusal to issue, deny, suspend or revoke, any permit, license, certificate, approval, order or similar authorization where the public entity or public employee is authorized by law to determine whether or not such authorization should be issued, denied, suspended or revoked.

The State would draw no distinction between discretionary activity and ministerial activity, but asserts that this section absolutely insulates it against all claims where

the public entity is empowered by law to determine whether to issue or deny a license or other authorization. It asserts that the cited statute does not mandate or support a conclusion, as contended by plaintiff, that where the public entity possesses the requisite statutory authorization it is immune from suit only if the action or inaction in question was discretionary.

The State concedes that the act of the Commission involved in mailing out the result of appellant's examination was a ministerial act, and as to this there can be no doubt.

Historically, the State of New Jersey and its departments and agencies enjoyed complete sovereign immunity in tort actions. Fitzgerald v. Palmer , 47 N.J. 106 (1966). The movement toward the diminution of the doctrine of immunity commenced in New Jersey with the decision in Willis v. Dept. of Conserv. and Econ. Dev. , 55 N.J. 534 (1970). In that case the Supreme Court sanctioned certain types of action against the State, but only prospectively and after January 1, 1971. The Legislature intervened, as it was authorized to do in Willis , to extend the prohibited period to July 1, 1972. Eventually the New Jersey Tort Claims Act was enacted and became effective on July 1, 1972. The act re-established governmental immunity from tort liability except for specific provisions therein establishing liability. A section of the act included a legislative declaration in the following language (N.J.S.A. 59:1-2):

The Legislature recognizes the inherently unfair and inequitable results which occur in the strict application of the traditional doctrine of sovereign immunity. On the other hand the Legislature recognizes that while a private entrepreneur may readily be held liable for negligence within the chosen ambit of his activity, the area within which government has the power to act for the public good is almost without limit and therefore government should not have the duty to do everything that might be done. Consequently, it is hereby declared to be the public policy of this State that public entities shall only be liable for their negligence within the limitations of this act and in accordance ...

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