September 27, 2007
CARTERET ASSISTED LIVING, LLC, PLAINTIFF-APPELLANT,
NEW JERSEY HOUSING AND MORTGAGE FINANCE AGENCY, DEFENDANT-RESPONDENT.
Transferred from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. MER-L-833-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 10, 2007
Before Judges Lintner and Parrillo.
This matter commenced with the filing of a complaint in the Law Division by appellant Carteret Assisted Living, LLC (Carteret), alleging that respondent New Jersey Housing and Mortgage Finance Agency (Agency) breached a contract implied-in- fact and engaged in palpably unreasonable tortious conduct in rejecting appellant's bid to purchase an affordable assisting living facility, which the Agency owned and operated as the result of a loan default. Finding that the matter was actually a challenge to a final decision of a State administrative agency, the Law Division judge, in denying the State's motion to dismiss and never reaching the merits, instead transferred the matter to this court pursuant to Rule 2:2-3(a)(2) because of our exclusive jurisdiction. Appellant now argues the matter should be returned to the Law Division for jury disposition of its tort and contract claims. We disagree. Challenges to final State agency actions are within the exclusive jurisdiction of the Appellate Division, Rule 2:2-3; Rule 2:2-4, but because Carteret failed to meet the 45-day deadline of Rule 2:4-1, we now dismiss the appeal as untimely.
The facts are essentially undisputed. In October 2004, the Agency acquired title to the Carteret Senior Assisted Living Facility (facility) in Elizabeth by way of a deed in lieu of foreclosure. The facility is a 120-bed assisted living center whose housing sponsor defaulted on a $10 million mortgage that secured an Agency loan. Since the default, the Agency has been covering the facility's operating deficits.
In an attempt to sell the facility, the Agency issued a Request for Proposals (RFP) on January 5, 2005, soliciting offers from the public to purchase the facility. Among other things, the RFP directed bidders to submit their proposals to the Agency on or before February 23, 2005 at 11:00 a.m.; instructed on the appropriate format of their proposals; and gave notice that "[a]ny or all bids may be rejected when [the Agency] determines that it is in the public's best interest." Carteret submitted a timely bid in the amount of $1,018,000. Another bid, in the amount of $6 million from Ocean Healthcare Management, LLC (OHM), was also submitted, but because its package was mislabeled, was not received by the time Carteret's bid was opened. However, since the mislabeled bid package was located immediately thereafter, Carteret's representative returned to the bid opening room where, in his presence, the OHM's bid was opened. The Agency evaluated both bids and on April 20, 2005, issued a notice of intent to award to OHM, whose $6 million bid was far closer to the facility's $6.4 million appraisal. When OHM later withdrew its bid on June 1, 2005, the Agency rejected all bids on June 24, 2005.
Carteret formally protested on June 29, 2005, alleging that the winning bid was untimely and that the Agency acted improperly in both considering OHM's bid and later rejecting all bids. On July 1, 2005, the Agency's Executive Director rejected Carteret's protest in its entirety, affirming the Agency's right to reject all bids and to rebid the sale. Carteret opted not to appeal the Agency's July 1, 2005 decision denying its protest.
Subsequently, on August 16, 2005, the Agency resolicited proposals under a second RFP. Carteret was the sole bidder, submitting an identical bid of $1,018,000, which the Agency rejected on October 18, 2005. Thereafter, following discussion with the United States Department of Housing and Urban Development (HUD), the federal agency carrying the risk share insurance on the project, the Agency, as authorized by its enabling statute, advertised for a private sale of the facility. Although Carteret did not respond to this advertisement, the Agency received six offers to purchase the facility, and reached an agreement in principal with one of the offerors.
While the Agency was negotiating the final terms of the agreement, Carteret filed its suit in the Law Division on March 20, 2006, approximately nine months after its receipt of the July 1, 2005 Agency decision rejecting its bid protest. As noted, Carteret's complaint seeks specific performance, breach-of-contract damages and general damages for allegedly palpably unreasonable conduct on the Agency's part. The complaint alleges that the actions taken in the first RFP process, which were also challenged in the bid protest, constituted an "implied contract", which the Agency then breached by considering the allegedly untimely bid, and then rejecting all bids; and further that the Agency's action in twice rejecting its bid was palpably unreasonable. Following the Agency's motion to dismiss for want of jurisdiction, the Law Division judge transferred the matter here.
On appeal, Carteret argues:
I. THE AGENCY'S LETTER OF JULY 1, 2005 CANNOT QUALIFY AS A 'FINAL AGENCY ACTION' AND THUS PLAINTIFF-APPELLANT'S COMPLAINT WAS TIMELY BROUGHT.
II. PLAINTIFF-APPELLANT HAS PRESENTED A PRIMA FACIE CLAIM SOUNDING IN TORT FOR DAMAGES SUFFERED AS A RESULT OF THE AGENCY'S PALPABLY UNREASONABLE ACTIONS AND INACTIONS.
III. THE RFP/RFQ'S DEFINITIVE LANGUAGE AND PLAINTIFF-APPELLANT'S PERFORMANCE, GAVE RISE TO A CONTRACT IMPLIED IN FACT BETWEEN PLAINTIFF-APPELLANT AND THE AGENCY, WHICH THE AGENCY BREACHED.
We reject all of these claims as without merit. R. 2:11-3(e)(1)(E).
The New Jersey Constitution of 1947 provides that "persons aggrieved by action or inaction of state or local administrative agencies could seek review . . . in the Superior Court '. . . on terms and in the manner provided by rules of the Supreme Court . . . .'" Pascucci v. Vagott, 71 N.J. 40, 51-52 (1971) (quoting N.J. Const. art. VI, § 5, ¶ 4). Pursuant to that authority, the Court adopted Rules 2:2-3 and 2:2-4, with the intention that "every proceeding to review the action or inaction of a state administrative agency would be by appeal to the Appellate Division." Cent. R.R. Co. v. Neeld, 26 N.J. 172, 185, cert. denied, 357 U.S. 928, 78 S.Ct. 1373, 2 L.Ed. 2d 1371 (1958). Specifically, Rule 2:2-3 states that "appeals may be taken to the Appellate Division as of right . . . to review final decisions or actions of any state administrative agency or officer." R. 2:2-3(a)(2). So too, "the Appellate Division may grant leave to appeal, in the interest of justice, . . . from an interlocutory decision or action of a state administrative agency or officer, if the final judgment, decision or action thereof is appealable as of right pursuant to R. 2:2-3(a) . . . ." R. 2:2-4.
To be sure, "some actions or inactions of State agencies and officers do not constitute 'administrative' agency action or inaction that is subject to review by the Appellate Division under Rule 2:2-3(a)(2)." D.J. Miller & Assocs., Inc. v. State, Dep't of Treasury, 356 N.J. Super. 187, 191 (App. Div. 2002). One obvious example is tortious conduct that subjects a State agency or officer to liability under the Tort Claims Act (TCA), N.J.S.A. 59:1-1 to 12-3. Ibid. Another example is an action for breach of contract under the Contractual Liability Act (CLA), N.J.S.A. 59:13-1 to -10, "which does not constitute State administrative agency action within the intent of Rule 2:2-3(a)(2) and thus jurisdiction over such a claim resides in the appropriate trial court rather than the Appellate Division."
Id. at 192.
In a thinly disguised effort to fit within the Law Division's jurisdiction and divest this court of ours, Carteret framed its claims as those alleging palpably unreasonable conduct, in violation of the TCA, N.J.S.A. 59:2-3d, and breach of contract implied-in-fact, presumably in violation of the CLA, N.J.S.A. 59:13-4. Ordinarily, if properly pled and substantively based, these claims might be sufficient to vest the Law Division with jurisdiction. However, our "exclusive jurisdiction does not turn on the theory of the challenging party's claim or the nature of the relief sought." Mutschler v. N.J. Dep't of Envtl. Prot., 337 N.J. Super. 1, 8 (App. Div.) (citing Cent. R.R. Co. v. Neeld, supra, 26 N.J. at 184-85), certif. denied, 168 N.J. 292 (2001). Here, stripped to their barest essentials, Carteret's claims, sounding in tort and contract, amount to no more than a collateral challenge to the July 1, 2005 Agency decision denying Carteret's bid protest, and to the Agency's later decision of October 18, 2005, rejecting Carteret's second bid. Indeed, Carteret's tort and contract claims are patently without basis in fact or law.
To state a viable cause of action under the TCA, a claimant must satisfy the "onerous burden" of demonstrating an "obvious and manifest breach of duty", Williams v. Phillipsburg, 171 N.J. Super. 278, 286 (App. Div. 1979), by behavior that is "patently unacceptable under any given circumstance" and so "'manifest and obvious that no prudent person would approve of [the State's] course of action or inaction.'" Kolitch v. Lindedahl, 100 N.J. 485, 493 (1985) (quoting Polyard v. Terry, 148 N.J. Super. 202, 216 (Law Div. 1977), rev'd on other grounds, 160 N.J. Super. 497 (App. Div. 1978), aff'd o.b., 79 N.J. 547 (1979)); see also N.J.S.A. 59:2-3d. Yet the complaint in issue fails to identify any duty owed Carteret by the Agency, much less any breach thereof by conduct so "patently unacceptable" and unsupportable by a prudent person. Just the opposite, the Agency's actions here appear patently reasonable.
Specifically, the Agency is authorized "to hold, sell, assign, lease, encumber, mortgage or otherwise dispose of any real or personal property . . . and to do any of the foregoing by public or private sale, with or without public bidding, notwithstanding the provisions of any other law." N.J.S.A. 55:14K-5e. Moreover, "[a]ny or all bids may be rejected when . . . it is in the public interest so to do." N.J.S.A. 52:34-12a; see also In re Honeywell Info. Sys., Inc. Protest of Contract Award Requisition X-32, 145 N.J. Super. 187, 199 (App. Div. 1976), certif. denied, 73 N.J. 53 (1977). Simply stated, the Agency is vested with the discretion to reject bids that are not in the public's best interest. See also N.J.S.A. 59:2-3a ("A public entity is not liable for an injury resulting from the exercise of judgment or discretion vested in the entity.").
In this case, the Agency communicated its statutory right to reject bids in the RFP which informed potential bidders, including Carteret, that "[a]ny or all bids may be rejected when [the Agency] determines that it is in the public's best interest." Subsequently, in two separate public bids, the Agency rejected Carteret's identical $1,018,000 bids, which, on their face, appear grossly inadequate when compared to the facility's $6.4 million appraisal. Thus, even assuming some duty on the Agency's part, in light of the fact that the Legislature intended "to allow [agencies] sufficient latitude for resourceful and imaginative management of public resources," Williams v. Phillipsburg, supra, 171 N.J. Super. at 286, it cannot be said that the rejection of an offer that did not even amount to twenty percent of the facility's appraised value was unreasonable, much less palpably so.
Equally meritless is Carteret's contract claim, founded on language in the RFP to the effect "[a]ward shall be made with reasonable promptness by written notice to that responsible bidder whose Bid, conforming to this [RFP], will be most advantageous to the Agency." Carteret argues that this provision constitutes a conditional promise to award, that its bids were the only "conforming" bids and the "most advantageous to the Agency," and therefore the Agency was required to grant the award. We disagree.
"An ordinary advertisement for bids is not in itself an offer. The bid itself is an offer, and it creates no right until accepted." Kingston Bituminous Prods. Co. v. N.J. Tpk. Auth., 80 N.J. Super. 25, 36 (App. Div. 1963) (citing 1 Williston on Contracts (3d ed. 1957), § 31, p. 82). To be sure, "definite award language [can raise a writing] from a solicitation for offers from prospective purchasers to a firm offer to sell upon the particular terms, to be accepted by the act of bidding and declaration that the bid is the highest received." Golfinopoulos v. Padula, 218 N.J. Super. 38, 46 (App. Div.), certif. denied, 109 N.J. 45 (1987). However, unlike here, in Golfinopoulos, the "sealed-bid proposal," a document equivalent to a RFP, stated that a "[c]ontract will definitely be awarded on Friday, May 30, 1986 to the highest responsible bidder." Id. at 42 (emphasis added). That language was sufficiently unambiguous to persuade us to construe the sealed-bid proposal as a firm offer to sell. By the same token, we distinguished "between an auction at which the sellers make no commitment to convey the auctioned property, and auctions where, as here, the sellers agree to convey to the highest bidder upon stipulated terms." Id. at 46 (emphasis added).
In contrast to Golfinopoulos, we failed to construe a newspaper's advertisement by a bank soliciting bids for the sale of land as an offer where the ad contained no specific terms and no language indicating the definite awarding of a contract by a date certain to the highest responsible bidder. Jackson v. Manasquan Sav. Bank, 271 N.J. Super. 136, 142-43 (App. Div. 1993) (footnote omitted):
Rather, the advertisement in question can be viewed only as an invitation to the public to inquire as to the purchase of this property. There is no suggestion in the advertisement that there would be an auction or other type of bidding process, nor that the property would be sold to the highest bidder by a certain date. Thus, this mere invitation from the Bank to the public to inquire about the property cannot, as a matter of law, be viewed as a "sale without recourse." [Id. at 143.]
By parity of reasoning, the RFP in this case may only be reasonably viewed as an invitation to the public to solicit bids that meet the stated requirements, with no promise of a definite award to the highest responsible bidder or by a date certain. On the contrary, and as already noted, the Agency is vested with the power to reject "[a]ny or all bids . . . when . . . it is in the public interest so to do." N.J.S.A. 52:34-12a. Significantly, for present purposes, this discretion was communicated to all potential bidders in language in the RFP plainly stating that the Agency reserved the right to reject all bids. Under the circumstances, it cannot reasonably be argued that the RFP constituted a contract either express or implied-in-fact.
Thus, Carteret's claims must be recognized for what they truly are -- a challenge to the denial of its bid protest -- cognizable only in this court, which has exclusive jurisdiction over the matter. R. 2:2-3. "Appeals from final decisions or actions of state administrative agencies or officers . . . shall be taken within 45 days from the date of service of the decision or notice of the action taken." R. 2:4-1(b). Here, Carteret never filed a Notice of Appeal, much less a timely one, from either the July 1, 2005 agency decision denying its bid protest or the October 18, 2005 agency rejection of its last bid.
Of course, "[f]or a state administrative agency to gain repose from an appeal by virtue of the elapse of time from a decision or action, it must give the party sought to be bound unmistakable written notice of the finality of the decision or action." DeNike v. Bd. of Trs., Employees' Ret. Sys. of N.J., 34 N.J. 430, 435 (1961); see also In re CAFRA Permit No. 87-0959-5, 152 N.J. 287, 299 (1997). On this score, Carteret contends neither agency decision is final. We disagree. The Agency's July 1, 2005 letter gave express written notice that it was denying Carteret's bid protest, rejecting all bids, and rebidding the sale. This decision acknowledged the submission as a bid protest, cited case law regarding waiver of defects in bids, referenced actions taken by Agency staff, quoted provisions of the RFP, and stated unequivocally that the Agency's decision to reject all bids and rebid was being affirmed. We consider this a final agency decision, as Carteret apparently also recognized in its July 15, 2005 response to the Executive Director.
The same may be said of the Agency's October 18, 2005 letter rejecting Carteret's second, but identical, bid. The letter gave Carteret unmistakable notice that its bid was rejected, referenced the applicable section of the RFP which reserved this right, and also informed that the Agency would no longer be soliciting any public bids. Given the specificity of this writing, the parties' history, and Carteret's ongoing representation by counsel, we are satisfied that Carteret had "unmistakable written notice of the finality of the decision or action." DeNike, supra, 34 N.J. at 435.
Where there is notice of finality, the 45-day deadline applies. Instead of filing a timely appeal, Carteret knowingly opted to commence suit in the Law Division some nine months after denial of its bid protest, and five months after rejection of its last bid. As such, we dismiss the matter as filed out of time.
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