Passaic Val. Sewerage Com'rs v. Geo. M. Brewster & Son, Inc.

• Decision Date: 06 June 1960
• Docket Number: No. A--106,A--106
• Citation: 32 N.J. 595,161 A.2d 503
• Parties: PASSAIC VALLEY SEWERAGE COMMISSIONERS, a body politic and corporate, Plaintiff-Appellant, v. GEO. M. BREWSTER & SON, INC., a corporation of New Jersey, Kuchar Brothers, a corporation of New Jersey, Terminal Construction Corp., a corporation of New Jersey, Joseph Miele Construction Co., Inc., a corporation of New Jersey, Philip R. Salvatore, t/a C. Salvatore and Sons, and LaFera Contracting Co., Inc., a corporation of New Jersey, Defendants-Respondents.
• Court: New Jersey Supreme Court

Page 595

32 N.J. 595

161 A.2d 503

PASSAIC VALLEY SEWERAGE COMMISSIONERS, a body politic and corporate, Plaintiff-Appellant, v. GEO. M. BREWSTER & SON, INC., a corporation of New Jersey,

Kuchar Brothers, a corporation of New Jersey, Terminal

Construction Corp., a corporation of New Jersey, Joseph

Miele Construction Co., Inc., a corporation of New Jersey,

Philip R. Salvatore, t/a C. Salvatore and Sons, and LaFera

Contracting Co., Inc., a corporation of New Jersey,

Defendants-Respondents.

No. A--106.

Supreme Court of New Jersey.

Argued April 25, 1960.

Decided June 6, 1960.

Thomas E. Durkin, Jr., Newark, argued the cause for plaintiff-appellant.

William A. Wachenfeld, Newark, argued the cause fot all defendants-respondents (William A. Wachenfeld, attorney for defendant-respondent LaFera Contracting Co., Inc.).

John J. Breslin, Jr., Hackensack, also argued the cause for defendant-respondent Geo. M. Brewster & Son, Inc. (Breslin & Breslin, Hackensack, attorneys).

Joseph A. Hayden, Newark, also argued the cause for defendant-respondent Kuchar Brothers (Clancy & Hayden, Newark, attorneys).

Walter D. Van Riper, Newark, also argued the cause for defendant-respondent Terminal Const. Corp. (Van Riper & Belmont, Newark, attorneys).

Joseph Harrison, Newark, also argued the cause for defendant-respondent Joseph Miele Const. Co., Inc.

Albert G. Besser, So. Orange, also argued the cause for defendant-respondent Philip R. Salvatore.

The opinion of the court was delivered by

HALL, J.

The question before us is whether the trial court, under the circumstances present, properly dismissed the complaint following plaintiff's opening statement to the jury and then denied an application to reopen.

Geo. M. Brewster & Son, Inc. ('Brewster') was the low bidder, at $4,998,450, for certain construction work at plaintiff's Newark Bay pumping station and was awarded the contract in the fall of 1956. The other bidders were Kuchar Brothers ('Kuchar') at $5,092,650 and Terminal Construction Corp. ('Terminal') at $5,125,180. Two weeks after the formal contract was executed Brewster subcontracted about 40% Of the work to Kuchar. Some 20 days later Brewster entered into a joint venture for the remainder with LaFera Contracting Co., Inc. ('LaFera'), Joseph Miele Construction Co., Inc. ('Miele'), and Salvatore, in which Brewster and LaFera each had a one-quarter interest and Salvatore and Miele together, one-half. Two days thereafter a further agreement was entered into whereby Terminal received a 30% Interest in the joint venture.

Brewster was not paid the two final monthly installments under the contract, including the retained percentage on the entire job, amounting to some $589,000, and sued plaintiff therefor in the Law Division, Bergen County. By the pretrial order in that suit made in June 1959, plaintiff's answer was amended to allege that Brewster and the other five contractors named above had conspired and colluded 'to adversely influence the bids submitted' and 'to cause improper receipt of open bids' and that Brewster was consequently not entitled to any profit on the job. The order contained no statement of factual contentions in support of this conclusion.

Within a week plaintiff instituted the instant action with an Essex County venue. Beyond setting forth the chronology of contractual events just summarized, the complaint alleged that the Kuchar subcontract was in the amount of $2,196,000 for work which Kuchar's bid had priced at $3,214,000 and for which Brewster was to receive $3,249,000 pursuant to its successful bid and that plaintiff's consulting engineers had, some time prior to the receipt of the bids, estimated the approximate cost of the whole job at $2,000,000. The pleading charged that all six defendants conspired, colluded and arranged before the submission of bids that the bids 'were to be not unknown, one to the other,' in advance of submission and arranged by improper and unlawful means that they would not be competitive, that the subsequent subcontract and joint venture were in fulfillment of the pre-arranged design and that the profit derived as a result of the scheme 'was an illegal, improper, and unconscionable profit, grossly excessive * * * and the result of the arrangement arrived upon by the collusion as aforesaid * * *'. Damages of $2,500,000 were sought against all defendants, apparently on the theory of recovery of the alleged illegal profit.

The answers filed amounted to a general denial of any wrongdoing and also affirmatively asserted that the complaint failed sufficiently to particularize a claim of fraud and to set forth facts sufficient to constitute a cause of action. Shortly thereafter, Brewster's motion to consolidate this suit with the contract action, for trial in Bergen County, was granted.

Obviously the gravamen of the tort complaint deeply involved the public interest and at the same time was a most serious charge to make. If it was supportable by proof, from the civil aspect alone, the taxpayers of the municipalities served by the Commission had been badly mulcted. And, from the defendants' point of view, the accusation made was equally important. If there was no basis for it, they were entitled to complete exculpation. From all standpoints, and especially that of plaintiff, which had the burden and represented the public interest, the case called for thorough preparation, both on the facts and law, including appropriate use of our discovery, motion and other procedures before trial. But the litigation did not take that course. Plaintiff sought no discovery of any kind. Although plaintiff's answers to interrogatories propounded by defendants produced nothing in amplification of the general charge of collusion and defendants' answers to the complaint had asserted it did not set forth a cause of action, no motion of any kind was made. More important, no pretrial conference was held, but instead, a few days before the trial (which came on in October 1959, a little more than two months after the last answer was filed), a consent order was entered reciting 'the purpose of the parties to avoid' such a conference. The order then proceeded to amend the pretrial order in the contract suit by setting up an additional defense of improper performance by Brewster in certain particulars (with which we are not concerned) and stating plaintiff's and defendants' contentions in the tort action by nothing more than a parroting of the broad allegations of the complaint and answers.

The failure of the court to hold a pretrial conference (R.R. 4:29--1(a)), the wishes of counsel to the contrary notwithstanding--and this case called for a particularly comprehensive one--cannot be overlooked. At this late date, it should be unnecessary to reiterate the vital importance and compulsory nature of the conference procedure, its purposes, benefits and effects. Cf. Schlossberg v. Jersey City Sewerage Authority, 15 N.J. 360, 369--371, 374, 104 A.2d 662 (1954). Thorough exploration of the detailed contentions of the parties and proper framing and explicit expression of the factual and legal issues, with appropriate amendment of the pleadings if necessary, and the possibility of determination of some of the issues in advance of trial by motion, at the direction of the court if need be, might well have avoided the situation now before us for review and enabled a just and expeditious determination of the controversy long since.

Plaintiff admitted in the opening to the jury that it had no direct proof of the claimed collusive agreement and that it must rely entirely on circumstantial evidence and inferences claimed to be legitimately deducible therefrom. The complaint is ambiguous. One cannot tell whether the recitals of the closeness of the bids and the details of the subsequent subcontract and joint venture are intended as mere background or, either standing alone or in conjunction with other facts, are relied on as evidence of collusion. If the latter, questions of relevancy arise. The relevance of the prior estimate of cost made by the consulting engineers is also involved. (Material furnished us by way of consent supplement to the record casts doubts, but it is matter of defense and in any event we can be concerned only with the state of the record at the conclusion of the matter in the trial court.) It is also not clear whether the allegations of excessive and unlawful profit were set forth only to establish a Quantum of damages or also as a basis for an inference of a collusive agreement if coupled with proper proof that the job could fairly have been done for a very considerably lower figure. The basis of the general charge of conspiracy or arrangement to suppress competitive bidding seems not necessarily, on the face of the complaint, to be limited to the allegations just referred to. The opening statement of plaintiff's counsel did not in any way expand upon the complaint and our own interrogation at the oral argument leaves us still uncertain as to just what facts or events he relied on and expected to prove as giving rise to legitimate inferences to make out a Prima facie case. However, in the light of the view we take of the precise question before us--and we look at it as a procedural one--it is unnecessary and indeed impossible, under the particular circumstances to be later noted, for us to consider further, as we ordinarily would in a situation of this type, whether plaintiff did or can make out a case and we intimate no opinion thereon.

At the consolidated trial, counsel for Brewster addressed the jury first on its contract claim. The opening is not printed in the appendix so we do not know whether he adverted at all to the defense of collusive bidding asserted in that suit. Plaintiff's counsel then proceeded to open both in defense of the contract suit and as to the tort action. Consideration of the trial judge's challenged ruling cannot be had apart from what transpired during the...