P, T & L Const. Co. v. Commissioner, Dept. of Transp.

• Decision Date: 02 March 1970
• Citation: 55 N.J. 341,262 A.2d 195
• Parties: P, T & L CONSTRUCTION CO., a corporation of the State of New Jersey, Plaintiff-Appellant, v. COMMISSIONER, DEPARTMENT OF TRANSPORTATION, State of New Jersey, Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 341

55 N.J. 341

262 A.2d 195

P, T & L CONSTRUCTION CO., a corporation of the State of New Jersey, Plaintiff-Appellant, v. COMMISSIONER, DEPARTMENT OF TRANSPORTATION, State of New Jersey, Defendant-Respondent.

Supreme Court of New Jersey.

Argued Oct. 6, 1969.

Decided March 2, 1970.

Theodore W. Geiser, Newark, for appellant (Pindar, McElroy, Connell, Foley & Geiser, Newark, attorneys).

Stephen Skillman, Deputy Atty. Gen., for respondent (Arthur J. Sills, Atty. Gen., attorney).

The opinion of the court was delivered by

WEINTRAUB, C.J.

Plaintiff sues the State on a written contract for public construction. The meritorious issue is whether plaintiff is entitled to the balance of $110,360.64 which the State withheld as damages for alleged delay in completion of the job. The merits were never reached because the trial court sustained the State's defense of immunity from suit. We certified plaintiff's appeal before argument in the Appellate Division.

The Legislature has expressly dealt with this specific claim. After judgment went against it in the present case, plaintiff presented the claim to a subcommittee of the Joint Legislative Appropriations Committee. The subcommittee found for plaintiff in full, and the award was included in a supplemental appropriations bill (S. 813 (1969)). The Governor however vetoed that item, saying (message of June 27, 1969):

'I have decided, for the reasons stated herein, to delete entirely the contested claims from Senate Bill No. 813, which I have signed today. I wish to make it absolutely clear that my action is in no way a determination of the merits of these claims. From the record presented to me, it would have been absolutely impossible to make such a determination. Indeed, it is my desire that no prejudice whatsoever should attach to the rights of the claimants to present their claims again, either before a new forum or once again to appropriations subcommittee.'

After restating specific recommendations he had theretofore made with respect to proceedings before a claims committee, the Governor said:

'Since the Legislature has not seen fit to act on my suggestions for reform in its own procedure, I am prepared to recommend and support a new approach, namely, that the Legislature consider eliminating the doctrine of sovereign immunity as a bar to claims against the State based on contractual liability. It seems to me that removal of these contractual claims to the courts would guarantee a fair adjudication to both parties and, most importantly, to the citizens of the State.'

He added his willingness to support, with a few minor changes, a pending bill (A. 821) which would have committed such controversies to the judiciary.

Having thus failed, plaintiff continues to press the present action. Plaintiff agrees that Strobel Steel Construction Co. v. State Highway Commission, 120 N.J.L. 298, 198 A. 774 (E. & A.1938), stands in the way, but says, and we think correctly, that it should be overruled.

Strobel also involved a construction contract for a public improvement. The court applied a flat rule that the State could not be sued without its consent. Plaintiff there conceded such a rule, but sought, unsuccessfully, to infer a statutory consent to be sued (pp. 301--302, 198 A. 774).

Strobel overstated the rule of immunity, for sundry actions had succeeded against the State. See East Orange v. Palmer, 47 N.J. 307, 328--329, 220 A.2d 679 (1966). Strobel did not discuss the thesis of Haycock v. Jannarone, 99 N.J.L. 183, 122 A. 805 (E. & A.1923). That was a suit for trespass brought by the owner of real property against a construction contractor. The contractor denied encroaching on plaintiff's property but asserted that if there were an encroachment, he nonetheless was performing a contract with the State Highway Commission which had the right to enter under its power to condemn. This defense was sustained. The court pointed out that under a statute the State Highway Commission could take possession before condemnation and said that if in fact there was a taking, plaintiff could Mandamus the highway commission to institute condemnation proceedings. But the question remained as to how a money judgment could be collected under those circumstances. As to this, the court said (p. 185, 122 A. 806):

'When the damages have been thus ascertained it is not to be presumed that the legislature has not, or would not, make provisions to pay for the land which it had taken in advance of compensation for the benefit of the state. The creation of such an agency with the power to condemn implies that the legislature will make provision to pay the award, otherwise we would have to assume that the state intended to violate the constitution by taking land without compensation, a thought not to be tolerated.'

The point of immediate significance is that Haycock expressed a willingness to find and declare the State's dollar liability even if no moneys had been appropriated and payment would depend upon the Legislature's acquiescence. So also in Amantia v. Cantwell, 89 N.J.Super. 7, 213 A.2d 251 (App.Div.1965), the court declared the claimants' entitlement to a pay differential under a statute notwithstanding that 'Whether or not petitioners receive the money to which they are clearly entitled rests exclusively with the Legislature' (at p. 13, 213 A.2d at 254).

That a constitutional guarantee was involved in Haycock or a statute in Amantia cannot be the decisive fact, for whatever the basis of the asserted claim, the critical question must be whether the judiciary should declare the dollar obligation of the State even though payment will depend upon whether the Legislature will abide by the court's judgment and pay it. In Fitzgerald v. Palmer, 47 N.J. 106, 219 A.2d 512 (1966), we declined to say whether the courts should entertain negligence actions against the State. We did not put the issue in terms of the power of the judicial branch to decide for the State what in justice it should do. Rather we said that since payment of such judgments would depend upon the willingness of the other branches to provide for it, the critical question was whether the judiciary should exert its power in advance of some indication that the other branches of government would abide by the judgment:

'The State's immunity from suit does not rest upon the notion that the State can do no wrong. Indeed the State can do wrong, so much so that it can expend public moneys to compensate for the wrong it does. In sustaining the legislative power to pay, we explain the State thereby merely recognizes a 'moral' obligation, by which we mean only that the obligation is 'moral' rather than 'legal' because there is no machinery to compel the State to do what in justice it ought to do. Thus the State's 'immunity' involves ultimately the question, which branch of government shall decide for the State when it shall pay? In the abstract, a question of that kind would seem 'judicial' enough, in the absence of a controlling policy expression by the Legislature. But the judiciary could not enforce a judgment if it gave one. No money may be drawn from the State treasury but for appropriations made by law. Const., Art. VIII, § II, 2...