Sinclair Refining Co. v. Bergen County

• Decision Date: 07 November 1968
• Docket Number: No. A--1266,A--1266
• Citation: 103 N.J.Super. 426,247 A.2d 484
• Parties: SINCLAIR REFINING COMPANY, Plaintiff-Respondent, v. The COUNTY OF BERGEN, a Municipal Corporation of the State of New Jersey, Defendant-Appellant, and Ronald Zweig, etc., et al., Defendants.
• Court: New Jersey Superior Court — Appellate Division

Page 426

103 N.J.Super. 426

247 A.2d 484

SINCLAIR REFINING COMPANY, Plaintiff-Respondent, v. The COUNTY OF BERGEN, a Municipal Corporation of the State

of New Jersey, Defendant-Appellant,

and

Ronald Zweig, etc., et al., Defendants.

No. A--1266.

Superior Court of New Jersey, Appellate Division.

Argued Oct. 14, 1968.

Decided Nov. 7, 1968.

Lawrence Wolfberg, Union City, for appellant (Frank J. Cuccio, Hackensack, attorney).

James A. Major, Hackensack, for respondent (Major & Major, Hackensack, attorneys).

Before Judges CONFORD, KILKENNY and LEONARD.

The opinion of the court was delivered by

LEONARD, J.A.D.

In this breach of contract action defendant County of Bergen (county) appeals from a judgment entered against it by the court, without jury, in the sum of $9,339. The only issue here involved is that of liability, the parties having agreed upon the amount of damages.

The basic facts are not disputed. On January 10, 1967 the county, through its board of chosen freeholders (board), caused to be advertised a 'Notice to Bidders' to submit sealed bids for, among other things, the furnishing and delivery of 'High Octane 100 Plus Gasoline, Various County Departments & Municipalities' (emphasis added). The notice advised that 'Proposal Forms and Specifications' might be obtained from the county's purchasing agent and that 'no bid will be considered unless made upon the 'Proposal Form' supplied by the County.'

This 'Proposal Form' required the bidder to submit a separate bid for the county's gasoline requirements and eight other separate bids for the requirements of each of eight designated municipalities located in Bergen County. The bidder was requested to state a 'Firm Price Per Gallon' and a 'Lump Sum Price' for the county and for each of the eight municipalities. There was no indication on the form that the same 'price per gallon' be submitted for the county and the municipalities.

Of importance are the following three provisions contained in the county's 'Proposal Form.'

'The County of Bergen is responsible only for its own requirements as outlined in the bid. In the case of the municipalities included in this bid, the successful bidder will enter into a separate contract. The County will not be responsible for any municipal obligations, either for payment or otherwise.'

'Deliveries cannot be made by the successful Bidder to any Municipality until said municipality enters into an agreement with the County by Ordinance permitting the said County to bid on its requirements.'

'If, in the opinion of any Municipality participating in this bid, the prices quoted are not acceptable, as to the entire bid or any portion thereof, said municipality has the right to reject same.'

On February 7, 1967 plaintiff and two other bidders submitted bids, all on the county's 'Proposal Form.' Plaintiff offered to supply the required gasoline for the county and for seven of the municipalities (it made no bid for the Borough of Northvale) for a total price of $92,153.85. Plaintiff offered to supply 466,950 gallons to the county for $0.1348 per gallon, a total lump sum bid of $62,944.86, and to supply the requirements of the respective municipalities at various, but higher, prices per gallon.

Each of the other two bidders offered to supply the needs of the county and each of the eight designated municipalities at a uniform price per gallon. One bid $0.1379 and the other $0.1597. The former's lump sum bid to the county was $64,392.41 and the latter's $74,571.92.

On March 3, 1967 the executive administrator of the board of the county wrote to plaintiff and advised it that

'(A)t a meeting of the Board * * * held March 1, 1967, contract was awarded to your firm (sic) for furnishing and delivering gasoline to the above locations ('County of Bergen and Various Municipalities.') for the year 1967.' * * * '(Y)our contract will be prepared by our County Counsel from whom you will hear directly.'

However, it is to be noted that although this letter referred to both the county and the 'various municipalities,' the resolution of the board awarded plaintiff a contract for only the county's requirements--466,950 gallons at $0.1348 per gallon, or a total of $62,944.86.

On March 28, 1967 the county counsel informed plaintiff by letter that he had advised the county's executive administrator to rescind the March 1 resolution awarding plaintiff a contract for furnishing gasoline to the county. The basis for his action was the 'conclusion that the specifications were so ambiguous as to have prevented the bidders from being on an equal basis and this ambiguity resulted in prejudice or probable prejudice not only to the bidders but also to the County and the municipalities on whose behalf the County acted as an agent on the receiving of bids.' It appears that this action resulted from complaints by the affected municipalities when they were deprived by the county's action of the benefit of unit prices on a par with those afforded the county.

Although the appropriate resolution is not set forth in the appendix, both sides agree that the county did subsequently rescind the March 1 resolution. In any event, the county readvertised for bids upon revised specifications and on April 19, 1967 a new resolution was adopted by the board 'awarding the 1967 requirements contract to Mobil Oil Corporation.' The latter agreed to supply the needed gasoline to the county and the eight municipalities for the uniform price of $0.1357 per gallon, or alternatively to the county alone for $0.1346 per gallon. At this latter price the lump bid for the county alone was $62,851.15.

It should be noted that a similar invitation for bids for gasoline in 1966 resulted in bids on a uniform unit price basis for the county and the designated municipalities, by all bidders, including plaintiff, which was the successful bidder that year. The county contends that uniform unit prices for the county and the municipalities were intended by the invitations for both years, as the only purpose of cooperative bidding was to afford the municipalities the benefit of the lower unit prices available through the county's larger requirements.

On April 24, 1967 plaintiff filed a complaint in lieu of prerogative writs which was thereafter amended to read merely as a complaint for damages for breach of contract. The matter was submitted to the trial court, without a jury, upon stipulated facts, affidavits and briefs. Following oral argument the court found that the county breached its contract with plaintiff and entered a judgment in the amount of $9,339. This sum was stipulated as plaintiff's loss of profit of two cents per gallon on 466,950 gallons.

At oral argument before us counsel for both parties agreed that the county was authorized to advertise jointly for its own gasoline requirements and for those of the eight municipalities by reason of an existing statute. Although this statute was not cited in the brief of either party we were, upon our request, subsequently advised by both that it was N.J.S.A. 40:23--6.26. Immediately upon receipt of this citation we informed counsel that we questioned the applicability of the cited statute to the instant situation and we raised the question whether, if it were not applicable, the bidding procedures pursuant to which the contract was awarded to Sinclair were illegal and Ultra vires. We requested counsel to file supplemental briefs directed to these questions and upon the additional issue of the...