Manning Engineering, Inc. v. Hudson County Park Commission

• Court: New Jersey Supreme Court
• Citation: Manning Engineering, Inc. v. Hudson County Park Commission, 71 N.J. 145, 364 A.2d 1 (N.J. 1976)
• Decision Date: 16 September 1976
• Parties: MANNING ENGINEERING, INC., Plaintiff-Respondent and Cross-Appellant, v. HUDSON COUNTY PARK COMMISSION and County of Hudson, Defendants-Appellants and Cross-Respondents.

Page 145

71 N.J. 145

364 A.2d 1

MANNING ENGINEERING, INC., Plaintiff-Respondent and Cross-Appellant, v. HUDSON COUNTY PARK COMMISSION and County of Hudson Defendants-Appellants and Cross-Respondents.

Supreme Court of New Jersey.

Argued April 5, 1976.

Decided Sept. 16, 1976.

Frank P. Morley, Jersey City, for defendant County of Hudson (Harold J. Ruvoldt, Jr., Jersey City, attorney).

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

The opinion of the Court was delivered by

CONFORD, P.J.A.D., Temporarily Assigned.

Plaintiff brought this action on a contract for engineering services rendered the defendants and had a recovery of damages in the Superior Court, Law Division. On appeal by defendant County of Hudson and cross-appeal (as to damages) by plaintiff the Appellate Division affirmed on the Law Division opinion. We granted petition for certification by defendant and cross-petition by plaintiff. 69 N.J. 75, 351 A.2d 3 (1975).

For more than a year prior to October 1965 the Hudson County Park Commission ('Commission') had been planning a proposed park development on the Hackensack River in Jersey City, with the expectation of federal financial aid. A report on the matter and an application to a federal agency for the purpose had been prepared by Hugh C. Clarke, consulting engineer to the Commission. The expenses and obligations of the Commission are defrayable by the county. N.J.S.A. 40:37--231, 233. In early 1965 the federal agency approved the application, and by resolution of May 26, 1965 the Park Commission approved the agreement therefor and recommended its approval by the county board of freeholders. Clarke's report reflected an estimated cost range of $3,700,000 to $4,009,800 for the entire project of which $3,486,000 was the proposed cost of construction.

In June 1965 the Commission adopted a resolution authorizing plaintiff to prepare preliminary plans and specifications and survey work for the project. Plaintiff immediately began work on the project. On October 13, 1965, the parties formally agreed by a detailed 12-page contract that plaintiff would perform services for the park project which were to 'include engineering design and supervision of construction of the Project as well as the preparation of preliminary and final plans required by the Housing and Home Finance Agency and the Park Commission in connection with the referenced Housing and Home Finance Agency Project P--NJ--3269.' The contract was approved by a resolution of the Board of Chosen Freeholders of the County of Hudson on the same date, and the contract was signed on behalf of the board of freeholders by its director. Paragraph 3 of the resolution recites: 'The cost for the work and services in connection with the aforesaid Project are (sic) to be defrayed out of Federal funds.'

The work to be performed by the plaintiff as engineer was set forth in Part III of the contract and was divided under five basic headings entitled: A. 'In General'; B. 'Engineering Design'; C. 'Nominal Supervision'; D. 'Supervision of Construction'; and E. 'Additional Work and Services'. The specific duties subsumed under 'Engineering Design' included the following: preparation of plans, specifications and cost estimates, the activities in connection with bidding (preparation of bidding documents, performance of professional consulting services related to advertising for and obtaining bids, provision of sets of specifications for bidding construction and record purposes, and having a representative attend and advise at bid openings); performance of all engineering services required for financing of the project; establishing boring locations; having representatives attend meetings of the Park Commission, assistance in obtaining field surveys; and preparation and revision of schedules of expenditures. 'Nominal Supervision' included a variety of supervisory duties which were to be performed weekly or from time to time, such as submission of reports on request, approval of shop drawings and equipment, and periodic visitation to the site for checks on progress. 'Supervision of Construction' involved daily coordination of construction work and on-site inspection. ¹

Provision for compensation under the contract was set forth in three separate parts: (1) Engineering Design and Nominal Supervision; (2) Supervision of Construction; and (3) Additional Work and Services, the latter covering any work and services not otherwise provided for or contemplated by the agreement 'as ordered * * * by the Park Commission'. 'Engineering Design and Nominal Supervision' were to be computed on the basis of 7% Of the 'As-Built' cost of construction. 'Supervision of Construction' was to be computed on the basis of an additional 3% Of the 'As-Built' cost of construction.

The contract also provided in respect of payment of fees for engineering design and supervision:

Part VB(1) * * *

(a) A total of 7% Of 80% Of the Engineer's Estimate of the probable cost of each construction contract will be due in 3 stages as follows: (1) In an amount equal to the funds received from the Federal Government payable when and as said funds are received for the Preliminary Plans for Project P--NJ--3269; (2) In an amount equal to the funds received from the Federal Government of final plans of Project P--NJ--3269; (3) The final balance of 7% Of 80% Of the Engineer's Estimate of the probable cost of each construction contract when such funds are appropriated by the County.

(b) Seven (7%) of eighty (80%) of the amount of the bid of the successful bidders at the time of the award of each construction contract, less amounts previously paid.

(c) The balance necessary to bring the payments to a full seven (7%) of the As-Built cost of construction in a series of payments based on Contractor's actual performance. Final payment, seven (7%) per cent of the As-Built cost of construction, shall be paid to the Engineer within thirty (30) days after completion of the work under the contract as certified by the Engineer.

The 3% Of construction cost was to be paid in a series of monthly installments based upon the cost of the contractor's actual performance.

Frank G. Manning, head of the plaintiff corporation, testified that between October 13, 1965, the date of the contract, and the end of January 1966, he performed 'the major part of the work on the preliminary plans' and also some work on the final plans and specifications. These were submitted to the Board of Chosen Freeholders and the Park Commission on March 4, 1966. Along with the preliminary plans and specifications plaintiff submitted a bill in the amount of $46,122. On the face of the bill, it is stated: '(For p)rofessional services in preparation of preliminary report and plans for Project P--NJ--3269, Lincoln Park, Jersey City, N.J.'

Plaintiff's report presenting the preliminary plans and specifications also contained an upgraded project cost estimate of $5,569,130, which was reflected in a letter dated February 17, 1966 from the Board of Freeholders to the federal government. In explanation of the discrepancy between this figure and Clarke's original estimate, Manning stated that Clarke had been able to give only a 'ball park figure' because he did not have borings, surveys or an accurate design before him until he received plaintiff's comprehensive design.

At the time of the Manning-Hudson contract in October 1965 there was no county capital budget provision for the park project. In September 1966, however, a capital budget for 1967 was introduced and adopted at a meeting of the Board of Freeholders projecting anticipated capital expenditures through the year 1972 and including the item 'Park Development and Improvement', $6,404,500. The project was to be financed by capital improvement funds of $154,500, grants and aids in the sum of $3,200,000, and general loans of $3,050,000. No actual capital appropriation appears to have been made, however, for 1966, 1967 or 1968. Manning was not aware, at the date of the contract, that neither the Park Commission nor the Board of Freeholders had budgeted or appropriated any money for the planned project.

Final plans and specifications were completed on December 26, 1967, and these were also submitted to the Park Commission and the federal government. Plaintiff did not perform some of the categories of work listed under 'B. Engineering Design' in the contract. Manning testified that he did not perform consulting services in connection with advertising for bids, and, since there was no bidding, he obviously did not furnish a representative to attend bid openings. He did, however, prepare the bid documents. Plaintiff performed none of the services listed either under 'C. Nominal Supervision' or 'D. Supervision of Construction.' Manning stated, rather, that he did all the work up to the point of getting ready to bid.

With the final plans and specifications, plaintiff submitted a voucher for $92,243. This voucher states: '(For c)omplete construction plans and specifications for developing * * * approximately 150 acres park lands * * * pursuant to agreement for advance for public works planning, Federal Housing and Home Financing Agency, Project P--NJ--3269, Lincoln Park, Jersey City, New Jersey.' After some delay, both this and the $46,122 bill for preliminary plans were paid, so that plaintiff received a total of $138,365.

The total amount of the two bills submitted by plaintiff was exactly the same as the amount allowed by the federal government. Manning testified that the discrepancy between the amount of $138,365 and the amount due under the contract for the same work (see below) was the result of various factors: that the 'scope' of his work was a 'different grade' from that called for by the federal project, including preparation of an alternate plain for a golf course required by the Commission but not part of the federal project; that the federal...