Band's Refuse Removal, Inc. v. Borough of Fair Lawn

• Decision Date: 27 July 1960
• Docket Number: No. A--207,A--207
• Citation: 163 A.2d 465,62 N.J.Super. 522
• Parties: BAND'S REFUSE REMOVAL, INC., a corporation of the State of New Jersey, Plaintiff-Respondent, v. BOROUGH OF FAIR LAWN, Bergen County, New Jersey, a municipality of the State of New Jersey, et al., Defendants-Respondents, and Frank Capasso and Gerald F. Capasso, trading, etc., Intervenors-Defendants-Appellants.
• Court: New Jersey Superior Court — Appellate Division

Page 522

62 N.J.Super. 522

163 A.2d 465

BAND'S REFUSE REMOVAL, INC., a corporation of the State of New Jersey, Plaintiff-Respondent, v. BOROUGH OF FAIR LAWN, Bergen County, New Jersey, a municipality of the State of New Jersey, et al Defendants-Respondents and Frank Capasso and Gerald F. Capasso, trading, etc Intervenors-Defendants-Appellants.

No. A--207.

Superior Court of New Jersey Appellate Division.

Argued June 7, 1960.

Decided July 27, 1960.

Samuel A. Larner, Newark, for intervenors-defendants-appellants (Budd, Larner & Kent, Newark, attorneys).

Heyman Zimel, Paterson, for plaintiff-respondent.

Walter H. Jones, Newark, for defendants-respondents (Morris Dobrin, Fair Lawn, Attorney).

Before Judges GOLDMANN, FREUND and HANEMAN.

The opinion of the court was delivered by

GOLDMANN, S.J.A.D.

Defendants Capasso appeal from a Law Division judgment declaring void Ab initio and setting aside their garbage removal contract with the Borough of Fair Lawn; declaring illegal and void Ab initio all payments made to them under the contract; setting aside as illegal and void Ab initio Fair Lawn ordinance No. 688, a supplement to the borough sanitary code; and awarding $303,052.62 in favor of the borough against them.

I

In February 1957 the Borough of Fair Lawn advertised for bids on a contract for the collection of garbage, ashes, waste and other refuse in the municipality, pursuant to specifications prepared by the borough manager and approved by the council. Prospective bidders were required to complete under oath a standard form of questionaire concerning experience, equipment and financial ability, and to file it with the borough manager no later than February 26. The borough reserved the right to refuse a set of the specifications to those not qualifying on the basis of the completed questionnaire. Five contractors filed the qualification form. Of these, four were accepted by the borough manager as qualified to bid. The fifth, Thomas Viola & Son, Inc., was disqualified because it lacked the required number of trucks under the specifications.

The notice to bidders stated that bids were to be received at the regular meeting of the borough council on March 26, 1957. However, the governing body by resolution postponed the time for submitting bids until April 9, its next regular meeting, without readvertisement. The borough manager had recommended the postponement because there was then pending certain legislation regarding dumps which might affect the bids. The qualifying contractors were advised of the postponement prior to March 26. All four submitted sealed bids on April 9. These were opened, read and then referred in regular course to the borough manager for review, report and recommendation. The council members subsequently met on several occasions and reviewed the figures, analyzing costs on the basis of their own inquiry and experience. They also conferred with and sought the advice of the borough manager. Finally, the council on April 23, 1957 unanimously awarded a five-year contract for the collection and disposal of garbage in Fair Lawn to the Capassos, the lowest responsible bidder.

On May 3, 1957 the borough and the Capassos executed a written contract for the five-year period at a base price of $1,095,625. The contract, by reference to paragraph 35 of the specifications, provided that the borough was to pay $1.25 additional compensation monthly for each newly constructed unit occupied after the beginning of the contract period. Additionally, the contractor was to have the exclusive right, under paragraph 31 of the specifications, to collect all garbage, ashes and refuse in the borough and, under paragraph 32, the exclusive right to negotiate private contracts with all business and trade establishments in the borough for such service at a reasonable fee. In case of any dispute regarding the fees to be paid, the matter was to be referred to the borough manager, and his decision as to a fair charge was to be final and binding upon both the contractor and the operator of the establishment.

The Capassos began performance under the contract on May 17, 1957, and continued not only up to the time of the institution of this action, but throughout the period of the protracted trial which followed. Their performance was considered entirely satisfactory by the Fair Lawn officials. The borough made regular payments for the garbage service until the end of the trial. At no time did it rescind the contract or take any steps to do so. After judgment was entered we granted a stay; garbage and refuse collection has continued pending the appeal upon a limited payment basis.

On August 13, 1957 the borough council adopted ordinance No. 688, supplementing the ordinance establishing a sanitary code for Fair Lawn. It provided that no permit could be granted any person for the removal and disposal of garbage, ashes and refuse within the borough unless 'pursuant to a contract entered into between such person * * * and the Borough * * * in accordance with the statute in such case made and provided.' In other words, it prohibited any person other than the municipal contractor (in this case the Capassos) from collecting garbage, ashes and refuse on either a public or private basis.

Subsequent to the adoption of the ordinance plaintiff Band's Refuse Removal, Inc., applied for a license permitting it to collect garbage, ashes and refuse for the year 1958. The borough manager denied the permit because of the ordinance. Plaintiff then instituted this action.

The many unusual features of the case demand an extended consideration of the pleadings and the record.

II

On November 25, 1957, plaintiff filed a complaint in lieu of prerogative writs stating that during 1957 it had been and still was engaged in removing and disposing of garbage, ashes and refuse from the Western Electric Co. premises in Fair Lawn under a written contract with the company and pursuant to a permit duly issued by the borough permitting it to engage in the scavenger business. The company had invited plaintiff to bid for its 1958 contract. The complaint alleges that plaintiff, in order to be in a position to bid on that contract, applied to defendant borough and defendant borough manager on October 15, 1957 for a permit, which was refused because of the provisions of ordinance No. 688 adopted August 13 previous. The borough had in the meantime entered into an exclusive contract with the Capassos. Plaintiff claimed that the ordinance, the action of the borough in entering into the Capasso contract, and the borough manager's denial of the permit were arbitrary, discriminatory, unconstitutional and Ultra vires. It demanded judgment declaring ordinance No. 688 illegal and void, and ordering the borough, and specifically its manager, to renew its previous permit or issue a new one.

Fair Lawn and its officials filed an answer alleging that the borough had entered into a contract with the Capassos as the lowest responsible bidder after proper competitive bidding under the applicable statutes, which contract designated the Capassos as the sole contractor authorized to collect garbage in the borough. By way of separate defenses it was claimed that: (1) plaintiff's action was barred by reason of the limitation period in R.R. 4:88--15; (2) the ordinance constituted a reasonable exercise of the municipal police power in protecting the health and welfare of the community and its citizens; (3) plaintiff was guilty of laches; (4) plaintiff had no proper standing to prosecute the action because it was not a resident or a taxpayer of Fair Lawn; and (5) the action, if successful, would result in a breach of the Fair Lawn-Capasso contract; plaintiff was equitably estopped from seeking relief, having slept on its rights and permitted the contract to be entered into and the Capassos to begin work and expend money and lobor thereunder.

Upon motion duly made and granted the Capassos were permitted to intervene as defendants. They thereupon filed an answer which was identical with the borough's, as well as a counterclaim demanding judgment restraining the borough from issuing any permit to plaintiff during the life of the garbage contract, restraining plaintiff from collecting garbage in Fair Lawn, and adjudging ordinance No. 688 and the contract valid.

A grand jury investigation into scavenger practices and contracts in Bergen County led to a new sequence of pleadings. On May 15, 1958 plaintiff was permitted, over defendants' objection, to file an amended complaint in three counts. The first repeated the allegations of the original complaint. The second was ultimately abandoned and is therefore of no moment here. The third count charged that the Fair Lawn-Capasso contract of a year before was not the result of open and honest competitive bidding, but of 'secret agreements and understandings by and among Borough officials, Capasso Bros., and others which tainted the bidding with fraud and rendered the awarding of the contract to Capasso Bros. * * * illegal and void.' Plaintiff particularized the alleged fraud by referring to the following actions taken by the Bergen County grand jury since the commencement of suit:

(1) The grand jury had voted indictments against borough council member and former Mayor Sogorko, Mayor Matule, Health Officer Begyn and Borough Manager Williamson, some of whom had been involved in awarding the Capasso contract. It had also filed a presentment setting forth certain improper practices involving borough officials in the award of garbage contracts. The amended complaint notes that the specifications provided for granting an exclusive right to collect garbage from private firms in Fair Lawn and that any dispute as to the rates to be charged was to be settled by the borough manager, and then goes on to allege that garbage collection problems were in practice referred by the borough manager to Health Officer Begyn, so that as a...