On appeal from Superior Court of New Jersey, Law Division, Hudson County, No. L-5270-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Wefing, R. B. Coleman, and Lyons.
The law firm of Gold, Albanese, Barletti & Velazquez ("Gold") appeals from a trial court order granting summary judgment to defendant Jersey City Municipal Utilities Authority ("Authority"). After reviewing the record in light of the contentions advanced on appeal, we reverse.
On June 24, 2004, the Authority passed a resolution authorizing its Executive Director to retain the Gold firm for one year to provide legal services in connection with the Authority's responsibilities for managing the city's water infrastructure and its ownership and maintenance of the sewer infrastructure. The resolution stated that the contract for services relating to water infrastructure would be in the amount of $25,000 and for sewer infrastructure, in the amount of $90,000. It also specified hourly rates of $170 per hour for partners in the firm, $140 per hour for associates of the firm, and $75 per hour for paralegals. In the event that court appearances were required, these rates were adjusted to $185 per hour for partners and $155 per hour for associates. A copy of the resolution, which was prepared by staff counsel for the Authority, was published in the Jersey Journal.
On June 28, 2004, the Gold firm and the Authority executed two separate contracts, one relating to the water infrastructure, one relating to the sewer infrastructure. The contract relating to water infrastructure contained the following provision:
Since neither the Authority nor Gold can anticipate the amount of legal services that may be required under this Agreement, the Authority shall have the right to review this Agreement with Gold in the event legal fees for services rendered exceed $25,000.
The contract relating to sewer infrastructure contained an identical provision, save for the fact that it reserved the Authority's right to review the contract in the event that fees exceeded $90,000. These contracts were prepared by staff counsel for the Authority.
Gold began to render legal services to the Authority and, in accordance with the procedure specified in the contracts, submitted monthly statements. The Authority's protocol was to have these statements reviewed by its Senior Staff Attorney and its Director of Administration and Financial Management. If these two individuals approved the statements, they would be placed upon the agenda for approval by the commissioners. This procedure was followed uneventfully at first, and the Gold firm was paid the sum of $50,786.45 for its services through September 30, 2004. Thereafter, although the Gold firm continued to provide legal services, and its monthly statements for those services were regularly approved by the Authority's Senior Staff Attorney and Director of Administration and Financial Management, the statements were not included on the Authority's agenda for approval. The Authority made no complaint as to quality or necessity of the legal services performed; neither did it ever inform Gold that it was not going to pay the bills submitted. In sum, the Authority simply failed to consider the question whether the Gold firm should be paid for the work it had performed.
The amount owing to the firm continued to increase as the firm continued to provide legal services to the Authority. Eventually, however, on November 17, 2004, Gold submitted its resignation as general counsel to the Authority, effective November 30, 2004. The firm continued to seek payment of the outstanding bills; when its attempts in this regard were unsuccessful, this litigation resulted. In October 2005, after duly filing a notice of claim and notifying the Authority pursuant to Rule 1:20A-6, Gold filed its complaint, seeking to be paid the $162,551.53 it said was due and owing for legal services it had performed for the Authority.
The matter was submitted to the trial court on cross-motions for summary judgment. The firm argued that the Authority had to at least place the question of payment on a regular agenda and take some action, either approval or rejection, with respect to these bills. During the argument there was an implication that the Authority's inaction was the result of a change in administration and a consequent decision to switch counsel. The Authority, on the other hand, contended that to permit Gold to recover would run afoul of the Local Public Contracts Law, N.J.S.A. 40A:11-1 to -49.
The trial court granted the Authority's motion for summary judgment, finding that the Gold firm was not entitled to be paid beyond the $115,000 authorized in the June 24, 2004, resolution. It rejected the firm's argument that it was entitled to be paid under the principles of promissory estoppel and implied contract. The trial court reasoned that under the public contract law, the firm was restricted to the amount approved in the authorizing resolution and that, in the event it sought to be paid for legal services beyond that sum, it was required to return to the Authority to obtain another enabling resolution. The trial court entered a judgment for the firm for $64,213.55, representing the difference between what the firm had been paid and $115,000; the judgment also absolved the Authority of any responsibility to pay the balance of $98,337.98. The Gold firm has appealed from that judgment; the Authority did not participate in this appeal.
The trial court in its oral opinion relied primarily upon Kress v. La Villa, 335 N.J. Super. 400 (App. Div. 2000). We consider that case significantly distinguishable from the present matter, however. The plaintiffs in that case were attorneys who were retained by the mayor of Guttenberg and a member of its council who were indicted for mail fraud and corruptly soliciting political services. Id. at 404. The mayor and councilman sent letters to the town, stating they had retained counsel and, in the event of their acquittal, would seek reimbursement for their counsel fees. There was no response to these ...