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County of Hudson v. State

July 30, 2009

COUNTY OF HUDSON, PLAINTIFF-RESPONDENT,
v.
STATE OF NEW JERSEY, DEPARTMENT OF CORRECTIONS, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-4918-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted May 18, 2009

Before Judges Lisa, Sapp-Peterson and Alvarez.

Defendant, State of New Jersey, Department of Corrections (State), appeals from the trial court order finding that the additional allegations contained in plaintiff, County of Hudson's (County), amended complaint complied with the notice provisions of the Contractual Liability Act, N.J.S.A. 59:13-1 to -10 (CLA), and that defendant had breached the terms of the contract. We reverse.

The complaint arises out of plaintiff's dispute with the State concerning the housing of state prisoners in its county jail. In 1981, in response to the problem of prison overcrowding, the Governor declared a statewide emergency and authorized the Commissioner of the Department of Corrections (DOC) to house state inmates in county jails. County of Gloucester v. State, 256 N.J. Super. 143, 145-46 (App. Div. 1992), aff'd as mod., 132 N.J. 141 (1993). In 1982, the County Correctional Policy Act, N.J.S.A. 30:8-16.3 to -16.12 (CCPA), was enacted to assist counties with the construction costs of correctional facilities which would house state prisoners. N.J.S.A. 30:8-16.4. Over the years, sixteen additional emergency declarations were entered and numerous lawsuits ensued to resolve the contractual relationships between the counties and the State. Gloucester, supra, 256 N.J. Super. at 145-46.

In September 2004, plaintiff filed a complaint against defendant alleging breach of two contracts the parties had entered that provided for housing of state inmates in its county jail. Plaintiff claimed that since December 2001, the "State has failed and refused and continues to fail and refuse to pay the County the per diem rate for 100 cells in accordance with the 1987 and 1988 Contracts." In its answer, defendant raised as an affirmative defense, plaintiff's failure to comply with the CLA's notice provisions. In September 2005, plaintiff filed a second amended complaint which included new allegations. Specifically, plaintiff claimed that since September 21, 1998, the State breached its payment obligations to the County under the 1987 and 1988 Contracts by: . . . (b) failing to pay the County at the per diem rate for cells above 100 cells used by the State to house state prisoners; (c) failing to pay the County for the first fifteen days that each state prisoner was housed at the HCCC*fn1 ; and (d) failing to pay the County in full to house state parole violators at the HCCC. On remand, the motion judge determined that no notice of claim was required for the new allegations, plaintiff's new claims were not barred by laches, and that defendant had breached the terms of the contract. The court determined that defendant was required to pay plaintiff for 100 beds per day, whether or not they were used, and that defendant was required to pay the contract rate for beds used in excess of the first 100. The court awarded $8,585,220.49 in damages for the period plaintiff housed state-sentenced inmates from June 6, 2003 through October 30, 2007. The present appeal followed.

On appeal, defendant raises the following points for our consideration:

POINT I

THE TRIAL COURT ERRED IN ALLOWING THE COUNTY TO PROCEED ON CLAIMS FOR WHICH THERE WAS NO NOTICE OF CLAIM FILED PURSUANT TO THE CONTRACTUAL LIABILITY ACT.

A. THE TRIAL COURT FAILED TO DETERMINE WHEN AND WHETHER THE COUNTY GAVE NOTICE OF THE NEW CLAIMS AS DIRECTED BY THE APPELLATE DIVISION.

B. THE DISCOVERY RULE IS INAPPLICABLE. POINT II

THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO THE COUNTY BECAUSE IT WAS CONTRARY TO THE ...


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