Board of Ed. of City of Asbury Park v. Hoek

• Decision Date: 16 March 1961
• Docket Number: No. A--653,A--653
• Citation: 168 A.2d 829,66 N.J.Super. 231
• Parties: BOARD OF EDUCATION OF the CITY OF ASBURY PARK, a municipal corporation, Plaintiff-Respondent, v. Floyd G. HOEK, Defendant-Appellant, and Carroll Matthews t/a Frank Matthews Company, Defendant.
• Court: New Jersey Superior Court — Appellate Division

Page 231

66 N.J.Super. 231

168 A.2d 829

BOARD OF EDUCATION OF the CITY OF ASBURY PARK, a municipal corporation, Plaintiff-Respondent, v. Floyd G. HOEK, Defendant-Appellant and Carroll Matthews t/a Frank Matthews Company, Defendant.

No. A--653.

Superior Court of New Jersey Appellate Division.

Argued March 6, 1961.

Decided March 16, 1961.

Edward W. Currie, Matawan, for appellant.

Joseph N. Dempsey, Asbury Park, for respondent.

Before Judges GOLDMANN, FOLEY and LEWIS.

The opinion of the court was delivered by

GOLDMANN, S.J.A.D.

Plaintiff board of education sued to recover the profit made by defendant Mathews, a carpenter contractor, on certain executed contracts for work performed in Asbury Park schools from 1952 to 1958. Defendant Hoek was plaintiff's business manager during that period. The jury returned a verdict for plaintiff in the sum of $10,292.98, less the $1,750 which defendant Matthews had paid the board for his release from the case, leaving a net of $8,524.98 upon which judgment was entered.

Hoek moved for a new trial on a number of grounds, among them that the verdict was excessive and against the weight of the evidence; it was erroneous because it included damages assessed upon contracts which did not involve repairs to a schoolhouse or where the cost of repairs could not be separated from other items; the court had erroneously charged that Hoek was entitled to a credit of $1,750, whereas he should have been credited with half the amount of the verdict; the trial court denied his motion for judgment; and the court refused to charge some 18 requests, among them a definition of the word 'repair.' The motion was denied. However, the court entered an order correcting the judgment to read $10,292.98, the clerk to mark the judgment satisfied as to 50% Thereof. Hoek appeals the whole of the judgment.

The case presents areas of confusion which make appellate review extremely difficult. The pleadings and pretrial order do not clearly define the issues, but tend to becloud them. The testimony deals with many hundreds of contracts performed by Matthews over the years, and the procedures followed by plaintiff board (with its shifting membership during the period in question), its building and finance committees, and defendant Hoek, in connection with such contracts. The instructions given the jurors must have been confusing to their lay minds. The special verdict is ambiguous, and the basis for the amount of damages awarded indeterminable.

The pretrial order is imprecise, but it is possible to spell out three contentions on plaintiff's part: (1) Matthews fraudulently concealed the amount of his profit, which should have been 10% Of actual cost, so that he received 15% And 20%; and Hoek conspired with him to conceal these overcharges by his monthly submission of vouchers to plaintiff board accompanied by representations that they were approved for payment and in good order; (2) defendants conspired to split the contracts awarded Matthews into amounts of less than $1,000 so as to avoid the requirement of N.J.S.A. 18:6--25 (as it read during the period in question) that contracts 'for the repairing of an existing schoolhouse at a cost of more than $1,000.00' be let on bids after advertising; and (3) Hoek was guilty of misconduct in office under R.S. 18:6--47, N.J.S.A. (relating to a business manager's duties respecting construction and repairs of schoolhouses, plans and specifications therefor, advertising for bids, etc.) by failing to advertise for bids on the work done by Matthews, and in concealing from plaintiff board the fact that the work exceeded $1,000. (This last-mentioned claim relates to N.J.S.A. 18:6--34 which, it is alleged, required Hoek, as general accountant of the board of education, to examine and audit all accounts and demands against the board.)

Plaintiff does not contend that the work called for by the contracts was not done, or that any of it was unsatisfactory, or that Hoek personally received any part of the profits. Assessing the testimony as it developed in the course of the 18-day trial, it appears that plaintiff sought to establish its claim to damages on two theories: (1) the contracts were Illegal because of a conspiracy to avoid the bidding statute (N.J.S.A. 18:6--25), or because of Hoek's violation of his statutory duty (R.S. 18:6--47, N.J.S.A.), and therefore defendants were jointly liable for All the profits made on the contracts; and (2) even if the contracts were Legal, defendants were liable because of their conspiring to obtain for Matthews profits above the 10% Of actual cost authorized by plaintiff board.

The trial judge first read to the jury the statutes on which plaintiff relied, N.J.S.A. 18:6--25, 34 and 47. After charging that contracts for repairs to an existing schoolhouse exceeding $1,000 may not be entered into without first advertising for bids, he proceeded to state generally the law applicable in a civil action for conspiracy. The effect of this was to direct the jury's mind to plaintiff's claim of a conspiracy in splitting contracts.

The jury was next instructed to determine whether the contracts were legal or illegal. At this point the trial judge, in effect, called for the return of a special verdict:

'The Court directs you that you announce on the return of your verdict, if you should determine the contracts are illegal, whether it is by reason of the conspiracy between Hoek and Matthews, or as the result of Hoek's violation of his statutory duties.'

Although Hoek's statutory duties were not specified, the obvious reference was to his duty to advertise for all repair work over $1,000.

Special verdicts have a practical value. They enable the reviewing court to localize errors, so that the sound portions of the verdicts may be saved and a retrial of all issues obviated. Terminal Construction Corp. v. Bergen County, etc., Sewer District Authority, 18 N.J. 294, 319, 113 A.2d 787 (1955); Marchese v. Monaco, 52 N.J.Super. 474, 485, 145 A.2d 809 (App.Div.1958), certification denied 28 N.J. 565, 147 A.2d 609 (1959); and see 11 Rutgers L.Rev. 385 (1956). In this case there was a further reason for a special verdict--to determine whether the jury found Hoek individually liable for splitting the contracts, or jointly with Matthews because of a conspiracy. In the former case Hoek would not be entitled to have any judgment against him satisfied to the extent of 50% Because of plaintiff's settlement with Matthews. See Oliver v. Russo, 29 N.J. 418, 149 A.2d 213 (1959).

The use of a special verdict lies within the trial court's discretion. Middlesex Concrete, etc., Corp. v. Carteret, 35 N.J.Super. 226, 241, 113 A.2d 821 (App.Div.1955). The procedure is governed by R.R. 4:50--1:

'The court may require a jury to return only a special verdict in the form of a special written finding upon each issue of fact. In that event the court may submit to the jury written questions susceptible of categorical or other brief answer or may submit written forms of the several special findings which might properly be made under the pleadings and evidence; or it may use such other method of submitting the issues and requiring the written findings thereon as it deems most appropriate. The court shall give to the jury such explanation and instruction concerning the matter thus submitted as may be necessary to enable the jury to make its findings upon each issue. * * *'

Unfortunately, the trial judge did not follow the salutary procedure outlined by the rule. Instead, he gave the oral instruction quoted above. At that point in the charge he had as yet made no mention of plaintiff's claim of profit overcharges. The jury was therefore without instruction to bring in a special verdict with regard to the alleged conspiracy to overcharge.

Having called for a special verdict the judge charged as to the measure of damages if the jury found the contracts illegal, either because of Hoek's failure to discharge his statutory duties or a conspiracy to avoid the bidding statute. In such case, the damages were to be assessed in the amount of all profits received as a result of the illegality, less the $1,750 paid by Matthews to be released from the case. The court, of course, was in error in charging that if defendants were found jointly liable, Hoek would be entitled to only a $1,750 reduction in the verdict, rather than a full 50%. This error, as already mentioned, was later corrected when the court reformed its judgment.

The trial judge next instructed the jury as to plaintiff's theory of overcharges in profits. We find this part of the charge unclear and confusing in the light of the pleadings, pretrial order and testimony. Plaintiff had sought to recover the specific total of $6,437.75 in profit overcharges from (1) Matthews, who was charged with purposely concealing the increase in profits; or (2) Hoek, for breach of his statutory duty or concealment; or (3) both, because of their conspiracy. (Other counts sought to recover $30,000 from either or both, for the same reasons, for unauthorized profits and other overcharges.)

The instructions on this phase of the case were:

'Plaintiff on its claim for overcharges on the contracts has indicated by vouchers in the folders by fiscal years, (sic) would only be entitled to the amount of profit found by you to be charged over ten per cent on these vouchers. You would not consider the vouchers in the groups of P-28 to P-51, ^* if you have already awarded damages on the conspiracy theory.

'With regard to the claim of improper charges under the illegal contracts, if you so find, and if you find that payments resulted in overcharges, and you further find that the plaintiff directed the defendant Hoek to have Matthews charge his actual cost plus ten percent, and that Hoek so informed Matthews, any charges over and above this formula would be excessive, and here again, should these excesses be determined by you to be the result of Hoek's...