CAPASSO v. PUCILLO AND SONS, INC DILL v. TOWN OF BELLEVILLE

• Decision Date: 02 January 1974
• Citation: 334 A.2d 370,132 N.J.Super. 542
• Parties: Page 542 132 N.J.Super. 542 334 A.2d 370 Frank CAPASSO, t/a Capasso Bros. and Robert Laudati, Plaintiffs, v. L. PUCILLO AND SONS, INC., and The Town of Belleville, Defendants. Richard W. DILL and James Petrozello Company, Inc., a New Jersey corporation, Plaintiffs, v. TOWN OF BELLEVILLE et al., Defendants. Superior Court of New Jersey, Chancery and Law Divisions
• Court: New Jersey Superior Court

Page 542

132 N.J.Super. 542

334 A.2d 370

Frank CAPASSO, t/a Capasso Bros. and Robert Laudati, Plaintiffs v L. PUCILLO AND SONS, INC., and The Town of Belleville, Defendants.

Richard W. DILL and James Petrozello Company, Inc., a New

Jersey corporation, Plaintiffs v TOWN OF BELLEVILLE et al., Defendants.

Superior Court of New Jersey,

Chancery and Law Divisions.

Jan. 2, 1974.

Richard C. Cooper and Reginald Jennings, Newark, for plaintiffs Frank Capasso and Robert Laudati (McCarter & English, Newark, attorneys).

Mark D. Larner, Newark, for defendant L. Pucillo & Sons, Inc. (Budd, Larner, Kent, Gross & Picillo, Newark, attorneys).

David Samson, Newark, for plaintiffs Richard W. Dill and James Petrozello Co., Inc. (Lieb, Wolff & Samson, Newark, attorneys).

John R. Scott, Belleville, for defendant Town of Belleville.

KIMMELMAN, J.S.C.

This case poses a somewhat unique problem of statutory construction involving the interplay between the public bidding statutes and the jurisdiction of the Public Utilities Commission over certain public utilities. This formal written opinion follows up on an oral opinion delivered because of the rather urgent necessity for a determination by this court so that the parties would know where they stood--not only as to the Town of Belleville but other municipalities as well now faced with a similar problem. The oral opinion would also enable any party feeling aggrieved to promptly lodge an appeal, so that a more definitive ruling might be obtained with some dispatch.

The facts are not disputed. It appears that in 1970 L. Pucillo & Sons (Pucillo), a scavenger, garbage collector and disposer of refuse, entered into a contract with co-defendant Town of Belleville as a result of public bidding for the purpose of servicing residents of the town for the collecting and disposing of their garbage. The contract was to run for three years, 1971 through 1973. In anticipation of the expiration date the Town of Belleville on October 23, 1973 adopted a resolution authorizing the town clerk to advertise for proposals for the supplying of scavenger service for the Town, to commence January 1, 1974, under certain terms and specifications which were set forth in instructions to the bidders. The proposals were to be received and opened by the governing body on November 27, 1973 at 8:30 p.m. Apparently several prospective bidders obtained copies of the specifications and prepared for submission what they considered to be the necessary bids.

On November 27, 1973, at the meeting of the governing body--in this instance the board of commissioners--the mayor announced that the bids would not be received and that the bidding procedure would be dispensed with because the town had entered into a contract with Pucillo for supplying the scavenger services for a two-year period--that is, the years 1974 and 1975--at the same rate as charged by Pucillo in the prior contract entered into as the result of public bidding some three years earlier.

Representatives of plaintiff James Petrozello Company were in attendance at the meeting of November 27, 1973, as were representatives of plaintiff Capasso Bros., both scavenger companies, who had prepared bids and had them ready for submission. Their attendance was obviously a futile exercise.

On that same evening the board of commissioners of Belleville, pursuant to the mayor's announcement, adopted a resolution awarding the scavenger service contract to Pucillo, indicating that it was reached as the result of a negotiated agreement and that the contract was to be executed for the next two-year period without any increase in the cost theretofor charged the municipality by Pucillo.

By reason of the foregoing a proceeding in lieu of prerogative writs was instituted in the Law Division by Richard Dill and James Petrozello Company, contesting the award of the contract without public bidding. In addition, a Chancery Division action was started by Capasso Bros. and Robert Laudati, a local taxpayer, seeking to enjoin the operation of Pucillo scheduled to commence on January 1, 1974 under the new contract.

In view of the exigency of the situation and by agreement among counsel the matters were set down for final hearing this first court day of the new year.

Preliminarily, certain jurisdictional objections must be disposed of. In my view plaintiffs have sufficient standing to bring this action. There is no question with respect to the standing of taxpayer Laudati. It is assumed that Dill is also a taxpayer; he falls into the same category. And there is no question with respect to the standing of the two disappointed bidders, Capasso Bros. and James Petrozello Company. I do not know whether their bids would have been lower than the price to be charged by Pucillo. In affidavits supplied on behalf of both Capasso and Petrozello it is indicated that their bids would result in a lower cost to the town. In any event, the fact that they were potential bidders and their ability to bid was thwarted by the action of the board of commissioners in entering into a contract as a result of private negotiations gives them standing to contest the action.

Reference is made to the case of Band's Refuse Removal, Inc. v. Fair Lawn, 62 N.J.Super. 522, 539, 163 A.2d 465 (App.Div.1960). That case does not directly hold that potential bidders have standing, but by inference from the language of Judge Goldmann it appears that a bidder or potential bidder would have standing because such a person would not be a total stranger to the contractual arrangements being contemplated by the municipality.

Likewise, I do not believe that the Public Utilities Commission has jurisdiction in this matter because there is not here presented a dispute involving the Commission, or rates set or franchise areas specified by the Commission, or involving its jurisdiction. Rather, there is here a dispute simply involving the capacity of a municipality to enter into a contractual arrangement for garbage collecting services without the necessity of public bidding.

As a general proposition it is required in this State that every contract or agreement for the performance of any work or for the furnishing or hiring of materials or supplies, the cost or the contract price whereof is to be paid with or out of public funds and which will be for a sum exceeding in the aggregate $2500, shall be made or awarded only after public advertising for bids. The authority therefor is found in N.J.S.A. 40A:11--4. That section is an outgrowth of a pre-existing statute, N.J.S.A. 40:50--1, which contained, insofar as its operative features were concerned, substantially similar language. N.J.S.A. 40:50--1 was superseded and thereby repealed as a result of the enactment of the Local Public Contracts Law, N.J.S.A. 40A:11--1 et seq. (L.1971, c. 198).

These bidding statutes, both the previous repealed section and the currently operative section, each contain a pertinent exception dispensing with public bidding where the supplying of any product or the rendering of any services to a municipality is to be performed by a public utility which is subject to the jurisdiction of the Board of Public Utilities Commissioners 'in accordance with tariffs and schedules of charges made, charged or exacted, filed with said board.' See N.J.S.A. 40A:11--5(1)(h).

In 1970, when Pucillo entered into the original contract with the Town of Belleville as the result of public bidding, Pucillo was not a public utility. At that time there was operative N.J.S.A. 40:66--4 specifically dealing with street cleaning and refuse disposal services supplied to a municipality. That section generally provides as follows:

The governing body may, if it deem it more advantageous, contract with any person for the cleaning of the streets, or the collection, removal and disposal of ashes, garbage, refuse and waste matter or any portion thereof. Before making any such contract or contracts the governing body shall first adopt specifications for the doing of the work in a sanitary and inoffensive manner, and any such contract or contracts the amount of which exceeds $25,500.00 shall be entered into and made only after bids shall have been advertised therefor, and awarded in the manner provided in chapter 50 of this Title (§ 40:50--1 et seq.) * * *

Obviously, in 1970 with respect to the original Pucillo contract, the Town of Belleville followed N.J.S.A. 40:66--4. With the enactment of the Solid Waste Utility Control Act of 1970 (L.1970, c. 40), effective December 6, 1970, companies engaged in solid waste collection and solid waste disposal were for the first time added to the definition of companies considered public utilities and were placed under the general supervision, regulations, jurisdiction and control of the Board of Public Utility Commissioners. N.J.S.A. 48:2--13.

It is argued, therefore, that as a result of this amendment to the general public utility laws Pucillo (or any other scavenger for that matter), now considered a public utility, need no longer adhere to the public bidding procedure before it may enter into a contractual relationship with a municipality. The argument is made in reliance upon the public utility exception contained in...