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Cooper Medical Center v. Johnson

Decided: January 29, 1985.

COOPER MEDICAL CENTER, PLAINTIFF,
v.
JOHN JOHNSON AND TOWNSHIP OF PENNSAUKEN, DEFENDANT/THIRD-PARTY PLAINTIFF, V. INSURANCE COMPANY OF NORTH AMERICA, THIRD-PARTY DEFENDANT



Talbott, J.s.c.

Talbott

In this special civil part matter, plaintiff Cooper Medical Center (Cooper) sues defendants John Johnson and Township of Pennsauken (Pennsauken) for $5,000, the cost of medical services rendered to Johnson reduced to the maximum recoverable in this court. Pennsauken, as third-party plaintiff, seeks indemnification from its insurer, the Insurance Company of North America (INA) and also sues INA for the cost of its defense due to INA's failure to defend Pennsauken in this action. Cooper was unable to serve Johnson.

The facts of this case have been stipulated by the parties. On March 10, 1983, at approximately 1:30 a.m. Patrolman George T. Bowman of the Pennsauken police while responding to a burglary alert in a commercial building located in Pennsauken shot and injured Johnson. The township first-aid squad was summoned by police and transported Johnson to Cooper for treatment. The admission form prepared by Cooper indicates that Johnson was admitted as an emergency, non-custodial patient. The bill for medical services rendered by Cooper is not disputed as to its necessity or reasonableness.

The issues to be decided are whether the township is liable to Cooper for the cost of Johnson's medical treatment and whether INA breached its insurance contract by denying coverage under the terms of the policy and by failing to conduct Pennsauken's defense in this matter.

Cooper advances two theories as a basis for holding Pennsauken liable for Johnson's medical expenses. The first theory

relied upon is that Pennsauken entered into an implied contract to pay for Johnson's medical bills when the township police brought Johnson to the hospital for treatment.

It is well settled that a municipal corporation cannot be bound in contract, express or implied, unless the officer or employee has authority to enter into such a contract on behalf of the corporation. Giardini v. Town of Dover, 101 N.J.L. 444, 446 (Sup.Ct.1925); Potter v. Metuchen, 108 N.J.L. 447, 451 (Sup.Ct.1931). The Pennsauken police clearly do not have the authority to contract for the municipality. The authority to contract on behalf of a municipality is vested solely in the governing body of that municipality or in its legally established purchasing agents or purchasing board. See the Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq. In addition, although it is generally conceded by authorities that a municipality can ratify a contract entered into by an unauthorized agent as long as the contract is one within its corporate powers and is not ultra vires, it was not stipulated that the alleged implied contract between Cooper and Pennsauken was ratified by the appropriate governing body. See Johnson v. Hospital Service Plan of New Jersey, 25 N.J. 134, 140 (1957); M & O Disposal Co., etc. v. Middletown Tp., 100 N.J. Super. 558, 567 (App.Div.1967), aff'd 52 N.J. 6 (1968).

Not only are the police not authorized to contract for the municipality, but the procedures for the formation of a valid contract were not followed. Local public contracts law generally requires competitive bidding on any purchase, contract or agreement which exceeds $4,500. N.J.S.A. 40A:11-3. While professional services of the kind provided by Cooper are exempted from the bidding requirements, the statute requires that a resolution be passed by the municipal governing body to award the contract and that notice of that resolution be published and made available for public inspection. See N.J.S.A. 40A:11-5. Even in the case of an emergency affecting public health, safety or welfare, arguably the case here, a written

requisition must be filed and certified by the officer or director of the department affected by the emergency. N.J.S.A. 40A:11-6. None of the above described procedures were followed in the present case.

This court concludes that Pennsauken is not liable to Cooper in contract.

The second argument advanced by Cooper is that police custody of an injured suspect imposes a constitutional duty on the township to provide medical services and a corresponding duty to pay for those services.*fn1 Although this argument has not been addressed by the New Jersey courts, it was clearly rejected by the United States Supreme Court in City of Revere v. Massachusetts General Hospital, 463 U.S. 239, 103 S. Ct. 2979, 77 L. Ed. 2d 605 (1983). Revere, similar to the present action, involved the shooting of a suspect by a member of the city police force. The suspect was shot while attempting to flee from the scene of a reported breaking and entering. The police summoned a private ambulance and the ...


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