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Cogen Technologies v. Boyce Engineering International

Decided: May 30, 1990.

COGEN TECHNOLOGIES NJ VENTURE; MCNAIR ENERGY SERVICES CORPORATION; AND CEA BAYONNE, INC., PLAINTIFFS-APPELLANTS,
v.
BOYCE ENGINEERING INTERNATIONAL INC.; NEW JERSEY STATE BOARD OF PROFESSIONAL ENGINEERS AND LAND SURVEYORS AND STATE OF NEW JERSEY, DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION OF CONSUMER AFFAIRS, DEFENDANTS-RESPONDENTS



On appeal from the Superior Court, Law Division, Hudson County.

Michels, Deighan and R.s. Cohen. The opinion of the court was delivered by Cohen, R.s., J.A.D.

Cohen

Plaintiffs commenced this declaratory judgment action in an attempt to resolve a question of New Jersey law which they thought dispositive of a law suit they were involved in as defendants in a Texas court. Plaintiff Cogen is a New Jersey joint venture of a variety of corporations, which constructed a cogeneration plant in Bayonne. Plaintiff McNair is a Texas corporation which signed an agreement in 1983 with Boyce Engineering International, Inc. (BEI), a Texas corporation, whose subject was their future participation in the design, construction and ownership of cogeneration facilities. Whether BEI did or did not contribute to the design and construction of the Bayonne plant is a matter of factual dispute.

In September 1986, BEI started an action in Texas against Cogen, CEA Bayonne and other related and unrelated parties, for malicious interference, and against McNair and others for a

number of different remedies, clustered around an alleged breach of contract and fraud. It all arose out of BEI's contention that it had the right under the 1983 agreement and a 1984 supplemental understanding to participate in the Bayonne project, and that it was wrongfully cut out by defendants. BEI sought compensatory damages, an accounting, a constructive trust, punitive damages and attorneys' fees.

Among other things, Cogen and McNair took the position in the Texas action that BEI's proposed role in the New Jersey project was the provision of engineering services, that BEI and its principal, Dr. Meherwan P. Boyce, were not licensed in New Jersey to perform engineering services, that the contract was therefore unlawful as applied to a New Jersey project, and that BEI could not therefore seek damages or other relief depending on rights created by the contract.

Cogen, McNair and others moved for summary judgment in the Texas action on their illegal-contract thesis. On January 23, 1989, the trial court denied the motion. It did not announce its reasons.

Plaintiffs then started this action, in April 1989, for a declaratory judgment. Defendants are BEI, the New Jersey State Board of Professional Engineers and Land Surveyors, and the Division of Consumer Affairs. Those agencies have not participated. Other parties in the Texas action were not joined as parties here. Plaintiffs sought a declaration that BEI has practiced or offered to practice professional engineering in New Jersey without being licensed, and that the agreement is therefore void and unenforceable as applied to the Bayonne project. BEI moved to dismiss the complaint on the strength of the existence of the Texas action. At the time, a trial was scheduled in the Texas action for the fall of 1989. The motion was granted and the New Jersey action dismissed without prejudice by Hon. Joseph T. Ryan, for reasons contained in an oral opinion delivered on the record on June 2, 1989. Plaintiffs

promptly appealed to this court and unsuccessfully moved for summary disposition.

The Texas matter was partially tried in November 1989. According to a January 11, 1990, judgment, BEI won a judgment against McNair for some $30 million plus attorneys' fees of $2.5 million. It recovered nothing against Robert McNair and Cogen Technologies NJ Inc., one of the corporate joint venturers that make up plaintiff Cogen in the present case. Counterclaims against BEI were dismissed. We are advised that the trial disposed of BEI's contract claims but not its malicious interference claims against a number of parties, and that the losing defendants intended to make post-trial motions and, if necessary, to appeal. We are also advised that defendants again moved at trial to dismiss BEI's contract claims on the ground of contract illegality, and that the motion was denied.

Our thorough review of the matter convinces us that Judge Ryan's decision to dismiss the New Jersey action was correct for substantially the right reasons. We therefore affirm substantially for the reasons he stated in his oral ...


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