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Yacenda Food Management Corp. v. New Jersey Highway Authority

Decided: July 19, 1985.


On appeal from the Superior Court, Chancery Division, Middlesex County.

Fritz, Gaulkin and Long, JJ. The opinion of the court was delivered by Long, J.A.D.


[203 NJSuper Page 267] On this appeal and cross-appeal we have been asked to decide whether the New Jersey Highway Authority (NJHA) is required to publicly bid for the restaurant operation services provided on the Garden State Parkway (the Parkway) which it administers. Our reading of N.J.S.A. 27:12B-14 constrains us to answer that question in the negative.

The case arose in April of 1984 when NJHA passed a resolution awarding the contract for the operation of six Parkway restaurants to the Marriott Corporation (Marriott) without public bid. Thereafter, plaintiffs Yacenda Food Management Corp. (Yacenda) and David A. Hellman (Hellman) filed a verified complaint seeking to void the agreement between defendants NJHA and Marriott. The complaint, which named Hellman in his capacity as a "resident and taxpayer of the State of New Jersey" and "a patron of the Garden State Parkway and the restaurants thereon," sought a permanent injunction against the performance of the contract, a declaration that the contract is void as against public policy and an order compelling NJHA to publicly advertise for bids. A trial on the merits was held before the Honorable Richard S. Cohen, J.S.C., proceeding in a summary manner pursuant to R. 4:67-5. At the end of Yacenda's case, NJHA and Marriott moved to dismiss the complaint on three grounds: that Yacenda lacked standing to sue because it had a history of prior negotiations with NJHA in an effort to obtain the restaurant concessions without public bidding; that Hellman lacked standing to sue because he was nothing more than a "straw man" for Yacenda who had no individual interest in the outcome of the case, and that the suit was barred by the doctrine of laches because it was filed 31 days after the NJHA resolution was passed. Plaintiff's counsel resisted the motion only as to Hellman, acknowledging the estoppel as to Yacenda.

Judge Cohen ruled that Yacenda had standing to sue but was estopped by its prior conduct from questioning the legality of NJHA's contracting procedures. He found it "necessary" to confer standing on Hellman because a contrary decision would restrict standing to disappointed competitors who do not properly represent the public interest in matters such as this. He rejected defendant's "straw man" theory because taxpayer "[s]tanding itself is sufficient. Its use to front for someone else ought not ordinarily be a disqualification." As to laches, Judge Cohen ruled that Hellman acted with reasonable promptness. Accordingly he denied the motion to dismiss. The defendants

then presented their case. At the close of all evidence Judge Cohen was faced with these questions: whether the operation of restaurant facilities on the Garden State Parkway is required to be publicly bid and, if so, whether such restaurant facilities fall within the "professional service" or "public convenience" exceptions to the public bidding statute.

The bid statute, N.J.S.A. 27:12B-5.2, states in relevant part that:

[N]o contract on behalf of the authority shall be entered into for the doing of any work, or for the hiring of equipment or vehicles, where the sum to be expended exceeds the sum of $2,500.00 unless the authority shall first publicly advertise for bids therefor, and shall award the contract to the lowest responsible bidder . . .

The act also provides a "professional service" exception:

The "public convenience" exception to the bid statute is found in the last paragraph of the Act:

This section shall not prevent the Authority from having any work done by its own employees, nor shall it apply to repairs, or the furnishing of materials, supplies or labor, or the hiring of equipment or vehicles, when the safety or protection of its or other public property or the public convenience require, or the exigency of the authority's service will not admit of such advertisement.

Judge Cohen ruled that the restaurant services sought by NJHA were of a professional nature. He found that the operation of fast food and other standardized restaurant facilities is a combination of sophisticated services requiring scientific knowledge and professional skill and that the planning of the facilities themselves, the selection of equipment, the determination of a standardized menu, the employment and training of personnel and the maintenance of a unique, recognizable and attractive image all call upon creativity, ...

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