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L & M Corp. v. Township of West Orange

March 11, 2008

L & M CORPORATION, PLAINTIFF-APPELLANT,
v.
TOWNSHIP OF WEST ORANGE, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, L-7253-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 28, 2007

Before Judges Wefing, R. B. Coleman and Lyons.

Plaintiff, L & M Corporation (L & M), appeals from a January 5, 2007 order dismissing its November 6, 2006 complaint in lieu of prerogative writs with prejudice. Because we conclude the grant of summary judgment was premature, we reverse and remand for further proceedings.

Plaintiff challenges an amendment to the towing ordinance of the Township of West Orange. The amended ordinance, Section 5-32.7(e), provides as follows:

No licensee may be listed more than once and no licensee may rent or lease equipment, employees, storage spaces from or to any other licensee in the West Orange Township rotation, or enter into any other arrangements the effect of which will multiply the licensee's participation in the rotation. Additionally, no licensee shall lease equipment, employees or storage space from any towing vendor who currently leases equipment, employees or storage space to any other licensee.

According to the legislative history of the amended ordinance, the objective of the amendment is to prevent towing companies from capturing more than one slot in the municipal towing rotation:

This is intended to prevent licensees from multiplying the licensee's participation in the rotation. Also toward that goal, this Ordinance adds subsection (e) to Chapter 5, Section 32.7, prohibiting the leasing of equipment, employees or storage space from one towing company to another within the Township's rotation. These provisions are meant to specifically prohibit towing companies from setting up shadow entities in order to reserve more than one slot in the towing rotation.

The Township also argues the amended ordinance was adopted to ensure that sufficient equipment, vehicles and storage space are available to the Township at the time of the licensee's rotation.

On July 18, 2006, the West Orange Township Council held a hearing regarding the appointment of licensees for towing for and on behalf of the Township Police Department. Among the applicants for towing licenses were Twin Towing, Inc. (Twin), All State Salvage Co. (All State), Select Towing (Select), Frank's, and West Orange Towing. Plaintiff L & M, is a leasing company. It was not an applicant to become a towing licensee. It does, however, have leasing arrangements with three of the towing license applicants: Select, Frank's, and West Orange Towing. In addition, John McElroy is the president of both L & M and Select and they share the same address, in West Orange. The three licensing applicants leased the same personnel, storage space, and equipment from L & M.

After an initial investigation, the Township awarded towing licenses to Twin, All State, and Select based apparently on the advice of the Township attorney and on the terms of the newly amended ordinance. The Township reasoned that since L & M had agreements to lease identical equipment to three of the towing vendors, the selection of more than one company which leased from L & M would represent approval of collusion. According to the legislative history of the ordinance, the Township aimed to prevent such action.

On or about August 30, 2006, L & M filed its complaint in the instant action to dispute the Township's decision and to challenge the constitutionality of the amendment to the towing ordinance. On November 6, 2006, in lieu of filing an answer, the Township filed a motion for summary judgment. The court heard ...


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