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Francis Tedesco and Gregory Wright v. Rutgers

May 21, 2012


On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-4730-11.

Per curiam.


Argued May 1, 2012

Before Judges Payne, Reisner and Simonelli.

Plaintiffs Francis Tedesco and Gregory Wright appeal from three September 30, 2011 orders dismissing their complaint against defendants Rutgers, the State University of New Jersey (Rutgers or University) and First Transit, Inc. (First Transit), and ordering plaintiffs to pay Rutgers' counsel fees.*fn1

To briefly summarize, the underlying dispute concerns a contract to provide student bus service on the Rutgers New Brunswick campuses. After Academy Express, LLC (Academy) and First Transit submitted bids, Rutgers awarded the 2011 contract to First Transit. Academy, which had previously been providing the campus bus service, filed a multi-count complaint challenging the bid award and seeking other relief. Assignment Judge Travis Francis dismissed the pertinent counts of the complaint. Immediately thereafter, Tedesco, Academy's chief executive officer, and Wright, its general manager, filed a separate declaratory judgment action in their capacity as "taxpayers," again seeking to nullify the award of the contract to First Transit (the Tedesco complaint). Judge Garruto dismissed the Tedesco complaint and granted Rutgers' motion for counsel fees for the filing of frivolous litigation. For the reasons that follow, we affirm.


On June 9, 2010, the Rutgers Purchasing Department issued a Request for Proposal (RFP) for transportation companies to install, manage and operate the Campus Bus System at the University. Only two companies, First Transit and Academy, submitted proposals in response to the RFP. Academy, the incumbent, had provided the bus service to the University since 2000.

On October 21, 2010, Natalie Calleja, the Associate Director of the Purchasing Department at Rutgers, notified First Transit that the University had decided to award it the bus service contract. On the same day, Academy was notified that it had lost the bid. According to the contract, First Transit was to commence providing the bus services beginning July 1, 2011, for a period of five years.

On December 10, 2010, Academy filed a complaint against Rutgers and First Transit. The thrust of Academy's complaint was that in mid-June 2010 Rutgers in general, and Calleja in particular, decided to "secretly exclude Academy" from consideration in the RFP process. The complaint stated that Calleja, in an "unfair," "improper," and "unconscionable" manner, favored First Transit during the RFP process. Academy alleged that "private and undisclosed contacts" between June and October 2010, were in violation of Rutgers' rules governing procurement contracts. The complaint also alleged that First Transit was given "numerous opportunities" to amend/improve aspects of its bid while other vendors were not afforded the same opportunities. This included expansion of the services to be contracted for, and capitalization of the buses over a fifteen-year term.

The complaint contained ten counts, but only counts nine and ten are relevant to this appeal. In count nine, Academy sought a "Declaratory judgment that First Transit's 'Final Proposal' and its Bid are each void ab initio owing to a failure to meet mandatory and non-waivable requirements, legal impossibility, illegality and violations of public policy and breach of fiduciary obligations." Under count ten, Academy alleged that defendants committed a "[v]violation of the New Jersey Public Contracts law and/or Local Public Schools Law, the [State Comptroller's] 'Best Practices' rules and Defendants' statutory and common law duties of fairness, openness and competition."

Around March 22, 2011, defendants filed a motion for judgment on the pleadings pursuant to Rule 4:6-2(e). On May 6, 2011, Judge Francis granted the motion on counts 4, 9, and 10. Judge Francis rejected Academy's claims under count nine because the:

New Jersey Declaratory Act . . . , is procedural in nature and a party must demonstrate that it has a legal right to the declaration it seeks. . . .

Academy's non-compliance theory fails, because Rutgers was not required to select any bid and, therefore, standing is not created as a result of this theory. In addition, case law holds that merely submitting a bid does not ...

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