Manning Engineering, Inc. v. Hudson County Park Commission

• Court: New Jersey Supreme Court
• Writing for the Court: PASHMAN
• Citation: Manning Engineering, Inc. v. Hudson County Park Commission, 376 A.2d 1194, 74 N.J. 113 (N.J. 1977)
• Decision Date: 26 July 1977
• Parties: MANNING ENGINEERING, INC., Plaintiff-Respondent, v. HUDSON COUNTY PARK COMMISSION and County of Hudson, Defendant-Appellant.

Page 113

74 N.J. 113

376 A.2d 1194

MANNING ENGINEERING, INC., Plaintiff-Respondent, v. HUDSON COUNTY PARK COMMISSION and County of Hudson Defendant-Appellant.

Supreme Court of New Jersey.

Argued March 22, 1977.

Decided July 26, 1977.

Francis P. Morley, Jersey City, for defendant-appellant (Harold J. Ruvoldt, Jr., Jersey City, attorney).

Michael F. X. Manning, Bradley Beach, for plaintiff-respondent (Keith & Winters, Bradley Beach, attorneys).

The opinion of the court was delivered by

PASHMAN, J.

Plaintiff commenced this lawsuit to collect the balance of a fee allegedly due for engineering services performed under a contract with the defendants, the Hudson County Park Commission ("Park Commission") and the County of Hudson ("County"). Following this Court's decision affirming and modifying in part the judgment in favor of plaintiff, Manning Engineering, Inc. v. Hudson Cty. Park Comm'n and County of Hudson, 71 N.J. 145, 364 A.2d 1 (1976), the defendants petitioned to reopen the judgment on the ground that the contract had been awarded to plaintiff in return for certain illegal activities of the president, director and 25% shareholder of that corporation, Frank G. Manning.

Apart from the alleged illegality in the procurement of the contract, the facts surrounding the contract negotiations are fully set forth in our prior decision. As we noted there, the contract in question stemmed from a proposed park development on the Hackensack River in Jersey City. The Park Commission, which was responsible for planning the project, passed a resolution in June 1965 authorizing plaintiff to prepare various plans and specifications and to make surveys for the project. The engineering firm began work immediately. On October 13, 1965, the parties executed a formal contract under which plaintiff agreed to perform such services. The agreement was ratified by a resolution of the County Board of Freeholders on the next day.

Plaintiff received $138,365.00 in payments for services rendered in connection with the project. However, in August 1968 Manning learned that another engineer had been hired to continue work on the development. As a result, he submitted a bill to the Park Commission, demanding payment of the remainder due his firm under the contract, $251,894.10. After instituting suit for this amount, plaintiff recovered a judgment for $134,522.37, plus 6% interest from the date when plaintiff filed his bill with the County. The Appellate Division affirmed and the decision was presented to this Court on petitions for certification by the defendants and cross-petition of the plaintiff. 69 N.J. 75, 351 A.2d 3 (1975). We affirmed the award of payments under the contract, but modified the lower courts' judgments to delete the award of pre-judgment interest. 71 N.J. at 159, 364 A.2d 1.

Our decision was announced on September 16, 1976. We were first advised on October 5, 1976 of the illegality in the procurement of the contract. At that time defendants filed a motion seeking to have the prior judgment set aside on the ground that Manning had been awarded the contract in question in return for his role as a conduit for illegal "kickbacks." Counsel for the County argued that defendants first became aware of Manning's role in this illegal scheme upon learning that Manning had revealed his activities in collecting "kickbacks" for John V. Kenny while testifying at the federal "Hudson Eight" trial in 1971. ¹ Counsel explained that, although Manning had testified in 1971, the attorney for the County was supplied with a transcript of these proceedings on June 4, 1976, and that this "testimony was not in the possession of the County prior to June (4,) 1976 nor was the defense attorney aware that Frank Manning had testified . . . at any time prior to (that) date."

Since neither this Court nor the lower courts had previously dealt with the question raised in the petition for reopening the judgment, we remanded the case to the trial court to receive evidence and make findings of fact concerning the relationship, if any, between Manning's illegal activities and the award of the contract. ² The trial court conducted a hearing on this issue and found that Manning's role as a "conduit between the extorters and extortees" was a "significant element" of the consideration for awarding the contract to his engineering firm. As a result, we ordered that the matter be reopened.

I. AUTHORITY FOR REOPENING THE JUDGMENT

A. Application of R. 4:50-1

We are satisfied that authority exists under R. 4:50-1 for reopening the judgment in this case. ³ Although defendants applied for this relief two years and seven months after the trial court rendered a judgment in favor of plaintiff, the interests at stake and the truly extraordinary nature of the circumstances presented convince us that relief under the rule is appropriate.

R. 4:50-1 allows a court to "relieve a party or his legal representative from a final judgment, order or proceeding" whenever necessary to prevent a manifest denial of justice. The rule is designed to reconcile the strong interests in finality of judgments and judicial efficiency with the equitable notion that courts should have authority to avoid an unjust result in any given case. Hodgson v. Applegate, 31 N.J. 29, 43, 155 A.2d 97 (1959); Scheck v. Houdaille Construction Materials, Inc., 121 N.J.Super. 335, 345, 297 A.2d 17 (Law Div. 1972).

Specifically, subdivision (b) of the rule provides for relief whenever there is "newly discovered evidence which would probably alter the judgment, order or proceeding and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49"; ⁴ subdivision (f) applies where there is "any other reason justifying relief from the operation of the judgment or order." The only limitation under the rule is expressed in R. 4:50-2, which states that a motion for such relief "shall be made within a reasonable time, and for reasons (a), (b) and (c) of R. 4:50-1 not more than one year after the judgment, order or proceeding was entered or taken." Thus, the one-year limitation applicable to subsection (b) of the rule does not apply to subsection (f), and relief pursuant to that section need only be made " within a reasonable time." Palko v. Palko, 73 N.J. 395, 401, 375 A.2d 625.

It is clear that subdivision (b), standing alone, does not provide a sufficient basis for reopening the judgment in this case. While that section is addressed to the situation where newly discovered evidence is presented after a judgment has been rendered, it is limited by the one-year limitation embodied in R. 4:50-2. It also requires that the evidence upon which reopening is sought be such that it could not have been discovered "by due diligence" in time to move for a new trial under R. 4:49. In the instant case, we entertain serious doubts as to whether defense counsel's conduct satisfied the demands of this section. Counsel readily admitted at oral argument that Manning's testimony at the 1971 Hudson Eight trial was widely publicized. He even commented that he didn't "think anybody could have existed in Hudson County in 1971 and not known from headlines in the paper that Manning was testifying before the federal court at that time." While conceding his general awareness of Manning's role in collecting money for various Jersey City officials, counsel insisted he did not know until June 1976 that Manning had been awarded the contract in question in return for this illegal activity. He asserted that Manning's testimony had been brought to his attention for the first time by a member of the Attorney General's office with whom he had been working for some time. When asked why he failed to come forward with this information in June while the matter was still pending before this Court, he responded that he was prevented from doing so by his heavy case load at that time.

Nevertheless, we conclude that relief should be available under subsection (f) of the rule. This section is considerably broader in scope than the former provision. We have repeatedly noted the broad parameters of a court's discretion under subsection (f), and that a court should have authority under it to reopen a judgment where such relief is necessary to achieve a fair and just result. As we stated in Court Invest. Co. v. Perillo, 48 N.J. 334, 225 A.2d 352 (1966):

Such a motion under (f) is addressed to the discretion of the trial court. That discretion is a broad one to be exercised according to equitable principles, and the decision reached by the trial court will be accepted by an appellate tribunal in the absence of an abuse of its discretion. No categorization can be made of the situations which would warrant redress under subsection (f). As Justice Proctor noted in Hodgson v. Applegate, 31 N.J. 29, 41, 155 A.2d 97 (1959), the very essence of (f) is its capacity for relief in exceptional situations. And in such exceptional cases its boundaries are as expansive as the need to achieve equity and justice. (48 N.J. at 341, 225 A.2d at 356)

See also Palko v. Palko, supra.

However, subsection (f) should not be taken as a way of circumventing the more stringent requirements of subsection (b); it should be available only where truly exceptional circumstances are present. Thus, it has been stated, both under R. 4:50-1(f) and the identical federal rule, F.R. 60(b)- (6), that relief may be granted only where the court is presented with a reason not included among any of the reasons subject to the one-year limitation, including "newly discovered evidence." See Doyle v. Chase Manhattan Bank, 80 N.J.Super. 105, 125, 193 A.2d 151 (App.Div.), certif. den. 40 N.J. 508, 193 A.2d 141 (1963) (R. 4:50-1); Ackermann v. United States, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207 (1950) (F.R. 60(b)).

We are convinced that the circumstances in this case warrant relief under subsection (f): the importance of preventing a fraud upon the...