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County of Morris v. Fauver

December 17, 1996

COUNTY OF MORRIS, PLAINTIFF-APPELLANT-CROSS-RESPONDENT,
v.
WILLIAM FAUVER, COMMISSIONER OF THE NEW JERSEY DEPARTMENT OF CORRECTIONS, THE NEW JERSEY DEPARTMENT OF CORRECTIONS AND THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS-CROSS-APPELLANTS.



On appeal from Superior Court, Law Division, Morris County.

Approved for Publication December 19, 1996. As Corrected February 4, 1997.

Before Judges Petrella, Landau and Wallace. The opinion of the court was delivered by Petrella, P.j.a.d.

The opinion of the court was delivered by: Petrella

The opinion of the court was delivered by

PETRELLA, P.J.A.D.

The County of Morris (County) entered into a forty-year contract with the State Department of Corrections (DOC) pursuant to the County Correctional Policy Act (the Act). The State provided funds to the County under the contract to upgrade and expand county correctional facilities. In return, the County agreed to house up to forty state prisoners per day in its facilities for the term of the contract. The eleventh paragraph of the contract provided payment provisions. Except for an initial period, the County was to be reimbursed at a rate equal to the average cost of housing state inmates at three state prisons. *fn1

Based upon a letter from the Commissioner, the County submitted invoices to the State for reimbursement from 1985 to 1992 at a rate of $45 per inmate per day, mistakenly assuming that the figure was proper. After the County determined that the State was not reimbursing it commensurate with the average cost of the three state prisons, the County served a notice of claim under the New Jersey Contractual Liability Act, N.J.S.A. 59:13-1 et seq., dated April 7, 1992, and thereafter instituted suit. *fn2

On cross-motions for summary judgment, the motion Judge concluded that neither party intended to breach the contract with regard to proper reimbursement. However, in so ruling, the Judge found that the parties temporarily abandoned paragraph eleven. The Judge then reinstated that provision for the remainder of the forty-year contract period.

I.

The facts may be succinctly stated. On May 11, 1983, Commissioner William Fauver (Commissioner) of the DOC, and the County entered into the Morris County Correctional Facilities Assistance Contract (the contract) pursuant to the County Correctional Policy Act, N.J.S.A. 30:8-16.3, et seq. (the Act), enacted in January 1982. The Act was designed to:

establish[] in the Department of Corrections a long-term, financial assistance program to provide State grants to participating counties to renovate and construct county correctional facilities so that county correctional services may be developed, implemented, operated and improved. [N.J.S.A. 30:8-16.5(a).]

The Act generally permitted the State to arrange with counties to place state prisoners in county facilities. *fn3 Under these arrangements, the State would provide grants to upgrade county correctional facilities and reimburse the participating county at per diem rates for housing state prisoners.

The County agreed "to construct a 40 bed addition and make renovations to the county correctional facility located within" the County of Morris. The parties acknowledged in paragraph two of the contract that the State Legislature appropriated $2,156,676 to the DOC to assist the County in meeting its construction costs under the agreement.

The third paragraph of the contract recited the language of the Act that:

the Legislature has directed that the terms and conditions of said agreement should provide for the availability and use of a specific number of beds to be reserved for use by prisoners remanded by the State as well as per-diem rates favorable to the State in recognition of its contribution to the construction costs of the facility; .... (emphasis supplied).

Paragraph eleven of the contract sets forth the method for determining the per diem rate of reimbursement by the DOC to the County for ...


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