Interstate Wrecking Co. v. Palisades Interstate Park Commission

• Decision Date: 25 January 1971
• Citation: 57 N.J. 342,273 A.2d 10
• Parties: INTERSTATE WRECKING CO., Inc., Plaintiff-Respondent, v. PALISADES INTERSTATE PARK COMMISSION, Defendant-Appellant, and Clarke & Rapuano, Inc., Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 342

57 N.J. 342

273 A.2d 10

INTERSTATE WRECKING CO., Inc., Plaintiff-Respondent, v. PALISADES INTERSTATE PARK COMMISSION, Defendant-Appellant and Clarke & Rapuano, Inc., Defendant-Respondent.

Supreme Court of New Jersey.

Argued Nov. 10, 1970.

Decided Jan. 25, 1971.

Julius L. Sackman, Asst. Atty. Gen. of New York, for defendant-appellant (George F. Kugler, Atty. Gen. of New Jersey, and Louis J. Lefkowitz, Atty. Gen. of New York, attorneys; Stephen Skillman, Deputy Atty. Gen. of New Jersey, Ruth Kessler Toch, Sol. Gen. of New York, and J. Joseph Murphy, Asst. Atty. Gen. of New York, of counsel and on the brief).

Richard D. Catenacci, Newark, for plaintiff-respondent (Hughes, McElroy, Connell, Foley & Geiser, Theodore W. Geiser, Newark, of counsel).

Clifford J. Sheehan, Elizabeth, for defendant-respondent (Hueston & Hueston, Elizabeth, attorneys).

The opinion of the Court was delivered by

JACOBS, J.

The Appellate Division affirmed (109 N.J.Super. 152, 262 A.2d 710 (1970)) the Law Division's denial (103 N.J.Super. 394, 247 A.2d 364 (1968)) of the Palisades Interstate Park Commission's motion to set aside service and dismiss the complaint against it which had been filed by the Interstate Wrecking Co. in the Superior Court of New Jersey. We granted certification on the Commission's application. 56 N.J. 241, 265 A.2d 698 (1970).

Certain buildings on Iona Island in Rockland County, New York, were to be demolished preparatory to the development of the Island for recreational purposes. The Commission advertised for bids in New York and the successful bidder was the plaintiff Wrecking Company, a New Jersey corporation. The contract for the demolition was executed by the Commission and the Wrecking Company in the State of New York on February 10, 1967 and all of the work was to be done in the State of New York. The contract provided that the work would be done in compliance 'with all of the laws of the State of New York' and 'with the lawful directions of the officers, agents or representatives of the State.' The contract set forth that the Commission was 'acting for and in behalf of the State of New York' and contained additional references to New York but none to New Jersey.

The Wrecking Company completed its work in New York and has apparently been paid the full contract price from appropriations made by the New York Legislature. However, claims for extras which were submitted by the Wrecking Company to the Commission were rejected as without justification. Thereafter the Wrecking Company filed its complaint in the Superior Court of New Jersey against the Commission and Clarke & Rapuano, Inc., a New York corporation, which was the firm of consulting engineers and architects employed by the Commission to supervise the Iona Island project. The complaint contained five counts. In the first three counts the plaintiff sought recovery from the Commission for the extra work done and damages for alleged misrepresentations in the pre-bid information. In the last two counts the plaintiff sought damages from Clarke & Rapuano, Inc. for alleged negligence in the preparation of the pre-bid information and deviations from standard engineering practice.

In due course the Commission moved to set aside service and dismiss the complaint on the ground that the courts of New Jersey had no jurisdiction over the subject matter of the action or the person of the defendant, Palisades Interstate Park Commission. In a supporting affidavit, primary reference was made to the terms of the interstate compact which created the Commission in accordance with New York (L.1937, c. 170) and New Jersey (L.1937, c. 148) legislation and congressional approval (Res. Aug. 19, 1937, c. 706, 50 Stat. 719) and to the administrative separations between New York and New Jersey insofar as park financing, personnel and operations were concerned. 103 N.J.Super. at 398--399, 247 A.2d 364; 109 N.J.Super. at 158--159, 262 A.2d 710.

Prior to 1937 New York and New Jersey cooperated through separate commissions in the maintenance of the park along the Palisades. In that year the Palisades Interstate Park Commission was established by the compact as the 'joint corporate municipal instrumentality of the States of New Jersey and New York' with appropriate provision for the transfer to it of the preexisting functions and properties of the separate commissions. See L.1937, c. 148; N.J.S.A. 32:17--1 et seq. The compact expressly provided that the newly created Commission 'shall have power to sue and be sued, to use a common seal and to make and adopt suitable by-laws.' N.J.S.A. 32:17--4. It further provided that '(f)or the purpose of doing business the members of the commission shall constitute a board.' N.J.S.A. 32:17--4. Both the Law Division and the Appellate Division held that the quoted sue and be sued clause amounted to a consent by New York that the Commission could be sued in our courts and that consequently the motion to dismiss for lack of jurisdiction over the subject matter and the person of the Commission must fail. 103 N.J.Super. at 405, 247 A.2d 364; 109 N.J.Super. at 158--159, 262 A.2d 710. Before us, the Commission asserts that the State of New York has authorized suits, such as that sought to be maintained here by the plaintiff against the Commission, in the New York Court of Claims but only in that court. See Breen v. Mortgage Commission of State of New York, 285 N.Y. 425, 35 N.E.2d 25 (1941); Cf. Easley v. New York State Thruway Authority, 1 N.Y.2d 374, 153 N.Y.S.2d 28, 135 N.E.2d 572 (1956); Conklin v. Palisades Interstate Park Commission, 282 App.Div. 728, 122 N.Y.S.2d 403 (1953). It contends that the sue and be sued clause of the compact may not properly be construed as constituting a waiver by New York of its sovereign immunity or consent by it to suit outside the New York Court of Claims and that consequently the New Jersey courts may not entertain the suit sought to be maintained here by the plaintiff against the Commission.

There is little reason to doubt that when the New Jersey Legislature approved the sue and be sued clause in the compact it meant to waive sovereign immunity and to authorize suits against the Commission generally. See Storbel Steel, & c., Co. v. State Highway Com., 120 N.J.L. 298, 303, 198 A. 774 (E. & A. 1938); Karp v. High Point Park Commission, 131 N.J.Eq. 249, 250--251, 24 A.2d 860 (Ch.), aff'd, 132 N.J.Eq. 351, 28 A.2d 118 (E. & A. 1942); Taylor v. N.J. Highway Authority, 22 N.J. 454, 466--471, 126 A.2d 313 (1956); McCabe v. N.J. Turnpike Auth., 35 N.J. 26, 32--34, 170 A.2d 810 (1961); See also S. J. Groves & Sons Co. v. New Jersey Turnpike Authority, 268 F.Supp. 568, 573 (D.N.J.1967); State v. Murphy, 36 N.J. 172, 185, 175 A.2d 622 (1961); Sayreville v. N.J. Highway Authority, 67 N.J.Super. 271, 273--275, 170 A.2d 523 (Law Div. 1961); Cf. P, T & L Const. Co. v. Comm'r Dept. of Trans., 55 N.J. 341, 262 A.2d 195 (1970); Willis et al. v. Dept. of Cons. and Ec. Dev., 55 N.J. 534, 264 A.2d 34 (1970); N.J.S.A. 32:17--9. In Taylor we sustained a tort action against the New Jersey Highway Authority, rejecting its claim of immunity from suit; we relied directly on the sue and be sued clause and stressed not only our earlier New Jersey decisions but also the Supreme Court's decisions in Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784 (1939), Federal Housing Administration v. Burr, 309 U.S. 242, 60 S.Ct. 488, 84 L.Ed. 724 (1940), and Reconstruction F. Corp. v. J. G. Menihan Corp., 312 U.S. 81, 61 S.Ct. 485, 85 L.Ed. 595 (1941). In those decisions the Supreme Court held that sue and be sued clauses in various congressional enactments creating independent federal agencies amounted to waivers of governmental immunity and consents to suit in actions sounding in tort ad well as contract.

The Commission suggests that the sue and be sued clause, though broad in terms, must be viewed as restricted by other provisions in the compact which allow each state, without the concurrence of the other, to alter the delegated functions and duties within its territorial limits (N.J.S.A. 32:17--5) and to regulate the portions of the park within its territorial limits, prescribing penalties for violations of the regulations and procedures for their enforcement in the courts which it may provide for seeking such enforcement. N.J.S.A. 32:17--6(4). While these provisions clearly support the administrative separations between the states in the Commission's operations they hardly serve to narrow the breadth of the sue and be sued clause. Cf. 109 N.J.Super. at 158--159, 262 A.2d 710. However, as to such clauses, the Commission points out that, unlike the New Jersey courts, the New York courts have taken a confining view and have indicated that they do not authorize suits against the State of New York or its governmental commissions in forums other than the New York Court of Claims. See Breen v. Mortgage Commission of State of New York, Supra, 285 N.Y. 425, 35 N.E.2d 25.

In Breen the New York Legislature created a Mortgage Commission with power to sue and be sued. An action was brought against the Commission, along with a private company, in the New York Supreme Court, a trial court having general jurisdiction. On the Commission's motion, the action was dismissed but this was reversed by the Appellate Division. 260 App.Div. 753, 23 N.Y.S.2d 948 (1940). In turn, the Appellate Division's judgment was reversed by the Court of Appeals which held that the Commission was suable only in the Court of Claims. Judge Finch, speaking for all of the participating members of the Court, held that the legislative grant of the right to sue the Commission did not mean that the state had 'consented to be sued for a claim against it in the Supreme Court of the State rather than in the Court of Claims.' 35 N.E.2d at 27. Later New York cases proceed along the same lines, namely, that consent to sue and be sued...