Opinion
CIVIL NO. 01-1992 (JBS)
June 12, 2002
Thomas H. Ward, Esquire, Alison Rizzi Cieslik, Esquire, Albertson Ward, Woodbury, NJ, for Plaintiffs
John J. Armano, Jr., Esquire, Morrison Trimble, LLC., Turnersville, NJ, for Defendant Washington Township Municipal Utilities Authority
Gene R. Mariano, Esquire, Parker McCay Criscuolo, P.A., Marlton, NJ, for Defendant Bowman Company, LLP
OPINION
This matter comes before the Court upon motion by plaintiffs William H. Buckley and Ball Buckley (collectively "Plaintiff") for partial summary judgment of liability against defendant Washington Township Municipal Utilities Authority ("WTMUA") pursuant to Rule 56(a), Fed.R.Civ.P. On April 26, 2001, plaintiff filed the underlying action against defendants WTMUA and Bowman Company, LLP ("Bowman"), alleging civil rights violations and breach of contract arising out of defendants' termination of plaintiff in 2001 as Auditor of the WTMUA, in violation of the five-year contract which plaintiff had signed with defendant for the period January 31, 1999, to January 31, 2004. The termination of plaintiff allegedly occurred as a result of the annual reorganization of the WTMUA in February 2001, whereby three of the five WTMUA members were replaced.
Plaintiff moves for partial summary judgment only as to the breach of contract claim (Count III), arguing that N.J.S.A. 40:14B-18 specifically controls and authorizes a five-year term for plaintiff's services. The principal issue presented is whether, under New Jersey statutory law, the five-year contract for auditing services between plaintiff and the defendant municipal utilities authority, which the defendant terminated after two years, was void under the general statutory provision of the Local Public Contracts Law, N.J.S.A. 40A:11-15 (which limits the term of a contract for professional services to one year), or valid under the specific statutory provision of the municipal utilities organizing statute, N.J.S.A. 40:14B-18 (which permits contracts for professional services for a term not exceeding five years). For the reasons discussed herein, plaintiff's motion for partial summary judgment will be granted.
BACKGROUND
Plaintiff William Buckley, a Certified Public Accountant of Ball Buckley, served as the Auditor of the WTMUA since its establishment in or about 1970, with the exception of one or two years. (Buckley Aff. ¶ 1.) On February 8, 1999, plaintiff and the WTMUA, as represented by Frank A. Altamuro, Jr., Secretary, and Val Orsimarsi, Chairman, signed Resolution No. 99-004, which appointed plaintiff as Auditor for the WTMUA. (Resolution, 2/8/99, Pl.'s Br. Ex. A.) Resolution No. 99-004 provided that plaintiff was appointed Auditor "for a five (5) year term effective immediately through January 31, 2004," and authorized the Chairman and Secretary to execute a contract for plaintiff's services. (Id.)
Plaintiff signed a Contract for Employment with the WTMUA, as represented by Val Orsimarsi, Chairman, and Frank M. Altamuro, Jr., Secretary, which contracted plaintiff "as its Certified Public Accountants for the fiscal years ending January 31, 1999 through January 31, 2004." (Contract, Pl.'s Br. Ex. C.) Defendant admits that the appointment of plaintiff as Auditor "was to be for a term of five (5) years." (Def.'s Statement of Material Facts, ¶ 2.) Defendant also admits that "the appointment of Auditor was purported to be made pursuant to the authority of N.J.S.A. 40:14B-18." (Id. ¶ 3.) Defendant "denie[s] that it was a five (5) year contract but . . . it is defendant['s] position . . . that it was a year-to-year contract." (Id. ¶ 4.) Prior to the WTMUA's annual reorganization meeting on February 12, 2001, members Val Orsimarsi, Joseph J. Bannis, Jr., and Michael Petta, were replaced by newly appointed members John Kosylo, Raymond MacDowell, and Harold Adams. (Pl.'s Statement of Material Facts, ¶ 6; WTMUA Minutes, 2/12/01, Pl.'s Br. Ex. F.) The two members who remained were Donald D'Andrea and Frank Altamura, Jr. (Id.) At the closed session portion of the annual meeting on February 12, 2001, the members of the WTMUA terminated plaintiff's contract by Resolution #2001-012, which authorized the solicitor "to notify Ball Buckley that their contract may be rescinded upon further review of the applicable law by the Solicitor and to cease and desist all work and continue with year 2000 work." (Pl.'s Statement of Material Facts; WTMUA Minutes, 2/12/01, Pl.'s Br. Ex. F.) Plaintiff had been given no notice that his position or contract was an issue being considered at the meeting on February 12, 2001. (Pl.'s Statement of Material Facts.) At that same meeting, the members also approved Resolution #2001-013 to appoint defendant Bowman Associates as the succeeding Auditor for the WTMUA. (WTMUA Minutes, 2/12/01, Pl.'s Br. Ex. F.)
By letter dated February 23, 2001, the WTMUA's Solicitor informed plaintiff of the Resolution authorizing the Solicitor to direct plaintiff not to perform any services as Auditor of the WTMUA. (Armano Letter, 2/23/01, Pl.'s Br. Ex. G.) The Solicitor stated, "It has been determined that the contract that your firm entered into to represent and advise the [WTMUA] for the fiscal years ending January 31, 1999 through January 31, 2004 as Auditor was invalid." (Id.) The Solicitor sent another letter dated February 28, 2001, citing to N.J.S.A. 40A:11-15 and Township of Lawrence v. Ewing-Lawrence Sewerage Auth., 233 N.J. Super. 253 (Law Div. 1989), as support for the WTMUA's position. (Armano Letter, 2/28/01, Pl.'s Br. Ex. H.)
Plaintiff filed this motion for partial summary judgment against defendant WTMUA as to the breach of contract claim on October 15, 2001. Defendant auditor Bowman submitted a letter dated October 10, 2001, concurring with, adopting, and joining in the opposition filed by defendant WTMUA. (Mariano Letter, 10/10/01.)
DISCUSSION
I. Plaintiff's Motion for Partial Summary Judgment
A. Summary Judgment Standard
Plaintiff moves for partial summary judgment pursuant to Rule 56(a), Fed.R.Civ.P. Rule 56(a) provides:
A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment may, at any time afer the expiration of 20 days from the commencement of the action or after service of a motion for summary judgment by the adverse party, move with or without supporting affidavits for a summary judgment in the party's favor upon all or any part thereof.
Fed.R.Civ.P. 56(a). A court may grant summary judgment when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see Lang v. New York Life Ins. Co., 721 F.2d 118, 119 (3d Cir. 1983). A dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment. Id.
In deciding whether there is a disputed issue of material fact, the court must view the evidence in favor of the non-moving party by extending any reasonable favorable inference to that party. See Aman v. Cort Furniture Rental Corp., 85 F.3d 1074, 1080-81 (3d Cir. 1996); Meyer v. Riegel Prods. Corp., 720 F.2d 303, 307 n. 2 (3d Cir. 1983), cert. dismissed, 465 U.S. 1091 (1984). The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Brewer v. Quaker State Oil Refining Corp., 72 F.3d 326, 329-30 (3d Cir. 1995) (citing Liberty Lobby, 477 U.S. at 248).
The moving party always bears the initial burden of showing that no genuine issue of material fact exists, regardless of which party ultimately would have the burden of persuasion at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Jalil v. Avdel Corp., 873 F.2d 701, 706 (3d Cir. 1989), cert. denied, 493 U.S. 1023 (1990). Once the moving party has carried its burden of establishing the absence of a genuine issue of material fact, the non-moving party must do more than rely only "upon bare assertions, conclusory allegations or suspicions." Gans v. Mundy, 762 F.2d 338, 341 (3d Cir. 1985), cert. denied, 474 U.S. 1010 (1985) (citation omitted). If the non-movant's evidence is merely "colorable" or is "not significantly probative," the court may grant summary judgment. Liberty Lobby, 477 U.S. at 249-50.
B. Plaintiff's Breach of Contract Claim
Plaintiff moves for partial summary judgment against defendant only as to his breach of contract claim (Count III). Plaintiff contends that the contract for plaintiff's professional services for the five-year period was valid under N.J.S.A. 40:14B-18, which it claims controls appointments and terms of professionals to a municipal utility authority, and that defendant breached the contract by terminating plaintiff on February 12, 2001. Defendant argues that plaintiff's termination was valid under the general Local Public Contracts Law N.J.S.A. 40A:11-15, which, it claims, controls and limits the terms of professionals to one year.
Defendant also argues in its moving papers that plaintiff had no "protectionable property interest in his position as auditor of the [WTMUA]." Def.'s Br. at 4. Because plaintiff has based this motion on its breach of contract claim (Count III), not its civil rights claims (Counts I II), this argument will not be addressed here.
It is not disputed that the WTMUA is a public body created pursuant to N.J.S.A. 40:14B-4. N.J.S.A. 40:14B-18, governing the election of officers and appointment of employees of counties and municipalities, provides in relevant part:
This statute, entitled "Establishment of authority or reorganization; members; terms; vacancies," provides that "[a]ny governing body may . . . create a public body corporate and politic under the name and style of `the municipal utilities authority,' . . . with the name of said count or municipality inserted." N.J.S.A. 40:14B-4.
Every municipal authority may also appoint and employ, full-or part-time, a secretary, an executive director, managerial personnel, technical advisors and experts, professional employees, and persons who shall render professional services as set forth in section 5 of P.L. 1971, c. 198 (C. 40A:11-5), as the authority may determine necessary for its efficient operations, and it shall determine their qualifications, terms of office, for periods not to exceed five years, duties and compensation and enter into contracts therefor, for periods not to exceed five years, as it deems necessary.
N.J.S.A. 40:14B-18 (emphasis added).
Defendant contends that plaintiff was validly terminated after two years because the authority under which plaintiff's contract was entered was the Local Public Contracts Law, and N.J.S.A. 40A:11-15 of that law limits the terms of professionals to one year. The Local Public Contracts Law provides that all contracts for the performance of work or services must be advertised for and awarded to the lowest responsible bidder. See Baylinson v. Bd. of Comm'rs of Hous. Auth. of City of Atlantic City, 282 N.J. Super. 132, 135 (Law Div. 1995). N.J.S.A. 40A:11-4 to-5 lists exceptions, of which one is a contract for "professional services." N.J.S.A. 40A:11-5. Whether such services are medical, legal, or otherwise, "professional services are not to be secured by public bidding because there is something inherent in the process which would nullify or detract from the professional quality of the services being sought." Baylinson, 282 N.J. Super. at 135 (citingCapasso v. Pucillo, 132 N.J. Super. 542 (Ch. Law Div.), aff'd, 132 N.J. Super. 473 (App.Div. 1974)).
Resolution No. 99-004, which appointed plaintiff as Auditor, states:
This Contract is awarded without competitive bidding as a `Professional Service' in accordance with N.J.S.A. 40:11-5 of the Local Public Contracts Law because aforesaid Agreement encompasses professional services recognized, licensed and regulated by law and is of the nature where it is not possible to obtain competitive bids.Resolution No. 99-004, Pl.'s Br. Ex. A.
N.J.S.A. 40A:11-15 of the Local Public Contracts Law provides for a one-or two-year limit for certain professional services contracts:
All contracts for the provision or performance of goods or services shall be awarded for a period not to exceed 24 consecutive months, except that contracts for professional services pursuant to subparagraph (i) of paragraph (a) of subsection (1) of section 5 of P.L. 1971, c. 198 (C.40A:11-5) shall be awarded for a period not to exceed 12 consecutive months.
N.J.S.A. 40A:11-15.
This Court seeks to determine whether N.J.S.A. 40:14B-18 or N.J.S.A. 40A:11-15 governs a contract for professional services entered into by a municipal utilities authority. A New Jersey Appellate Division case is instructive on the issue. In Fried v. Lakewood Township Mun. Utils. Auth., the Appellate Division examined an earlier version of N.J.S.A. 40:14B-18 that listed only the three positions of secretary, executive director, and chief engineer. See Fried, 171 N.J. Super. 414 (App.Div. 1979). The Appellate Division held that the Veterans' Tenure Act, N.J.S.A. 38:16-1 et seq., which gives tenure to veterans in all state, county, and municipal offices except those offices excluded by the limitations in that law, was inapplicable to the terminated executive director, an honorably discharged veteran, who had been retained by the municipal authority on a part-time basis without specifying any period of service. The municipal utilities authority in that case sought the protection of N.J.S.A. 40:14B-18, in arguing that appellant could not be granted tenure and that his termination was valid. The court interpreted N.J.S.A. 40:14B-18 "to mean that the Legislature directed that the Authority shall fix terms for the three specified offices," Fried, 171 N.J. Super. at 416, and relied on previous New Jersey Supreme Court holdings that the Veterans' Tenure Act applied only in "the absence of a delegation of authority to the municipal agency from the Legislature to fix a term" for appointment. Id. at 416-17 (citing Talty v. Hoboken Bd. of Ed., 10 N.J. 69 (1952); De Vita v. Paterson Hous. Auth., 17 N.J. 350 (1955)). Thus, the court ruled that appellant could not challenge his termination.
The Fried case persuades this Court that the subsequent amendment reflects the Legislature's intent to direct the municipal authority to fix terms for the offices specified in the statute, of which plaintiff's position as an auditor is included. N.J.S.A. 40:14B-18 of the Municipal and County Utilities Authorities Law, enacted in 1957, was amended in 1981 to include managerial personnel and professional employees, to place a five year limit on terms, to authorize full or part time employment, and to provide that the section shall not apply to terms of office for general counsel or consulting engineer. N.J.S.A. 40:14B-18. The Legislature's specific inclusion of professional employees by subsequent amendment and its specific delegation to fix the terms of employment for professional services, such as plaintiff's auditing services, not to exceed five years, indicates that the New Jersey Legislature intended for municipal utilities authorities to fix terms for these offices.
The statute was amended further in 1985 to provide that municipal authorities which prior to January 21, 1986, had accepted jurisdiction of the Department of Civil Service, other than under a court order, would continue to be subject to Title 11, Civil Service. SeeN.J.S.A. 40:14B-18.
Furthermore, Graziano v. Mayor Township Comm. of Township of Montville provides authority that the specific provisions contained in the Municipal and County Utilities Authorities Law controls this issue to the exclusion of general provisions in Title 40A. Graziano, 162 N.J. Super. 552, 564 (App.Div.), certif. denied, 79 N.J. 462 (1978). In Graziano, the Appellate Division examined the legality of a contract entered into by a municipal utilities authority ("MUA") and township whereby the MUA agreed to construct and operate parts of a water sanitation system. The court specifically held that, although general statutes such as N.J.S.A. 40A:11-15 control the fiscal affairs of municipalities, the specific statute of N.J.S.A. 40:14B-49, which provides that contracts between municipalities and an MUA may be made for a "specified or unlimited time" as agreed to by the parties, "controls this subject to the exclusion of general provisions in Title 40A governing debt limitations and contract requirements." Graziano, 162 N.J. Super. at 564. The court upheld the validity of the service contract as not violative of the general statutes limiting duration of contracts, stating that "[a] specific statute prevails over a general statute on the same subject." Id.
Here, the WTMUA entered into a contract with plaintiff auditor for a term of five years, and after two years terminated plaintiff from the position. Under Graziano, it therefore follows that the contract in this case is governed by the more specific statute of N.J.S.A. 40:14B-18, which allows municipal utilities authorities to enter into contracts for professional services not exceeding five years, rather than the general statute of N.J.S.A. 40A:11-15 which generally prohibits contracts exceeding 12 months. This Court finds that plaintiff's contract was therefore valid at the time of defendant's termination of plaintiff's services.
Defendant cites to Harms Excavating Co. v. Monroe Township Mun. Utils. Auth., 118 N.J. Super. 496 (Law Div. 1972), for its contention that the general statute of N.J.S.A. 40A:11-15 governs the issue. In Harms, plaintiff, who had contracted with defendant municipal utilities authority to install a water distribution system and storage facility, claimed that certain bidding requirements of the contract violated the Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq. Defendant argued that N.J.S.A. 40:14B-68 was intended to exempt the municipal authority from the operation of the Local Public Contracts Law. N.J.S.A. 40:14B-68 provides:
[A] municipal authority shall not be subject to, or constitute a municipality or agency or component of a municipality subject to, the provisions of chapter 50 or any other provisions of Title 40 of the Revised Statutes, or be subject to regulation as to its service charges by any officer, board, agency, commission or other office of the State.
N.J.S.A. 40:14B-68, cited in Harms, 118 N.J. Super. at 499. The court held that the exemptions found in N.J.S.A. 40:14B-68 did not apply to defendant because the relevant provisions of chapter 50 had been repealed, and no provision of Title 40 dealt with public contracts. Thus, the court held that the municipal utilities authority was subject to the Local Public Contracts Law and that any provisions of the contract that were in conflict with such law were invalid.
This statute was subsequently amended in 1975.
While the Harms court stated that the Local Public Contracts Law "was meant to have broad application," Id. at 499, the Harms case holds no instruction for the instant matter because it fails to address N.J.S.A. 40:14B-18, or the interplay between general and more specific provisions regarding municipal contracts. Plaintiff here is not claiming that it is entitled to the exceptions found within N.J.S.A. 40:14B-68, which were indeed repealed or irrelevant in Harms, but argues instead that the more specific statute regarding election of officers and appointment of employees under N.J.S.A. 40:14B-18, amended in 1981, governs the contract in this case. This Court will therefore not extrapolate from the alleged "spirit of the meaning of the statute," Def.'s Br. at 3, that the N.J.S.A. 40A:11-15 of the Local Public Contracts Law takes precedence over N.J.S.A. 40:14B-18 of the Municipal and County Utilities Authority Law.
Defendant also cites Township of Lawrence v. Ewing-Lawrence Sewerage Authority, 233 N.J. Super. 253 (Law Div. 1989) as further support that N.J.S.A. 40A:11-15 of the Local Public Contracts Law governs the issue. In that case, the defendant sewerage authority, a public agency organized pursuant to the Sewerage Authority Law, N.J.S.A. 40:14A-1, entered into contracts with professionals for their services "for a period of one year or until a successor is appointed." Lawrence, 233 N.J. Super. at 255. N.J.S.A. 40:14A-7(13) authorized the sewerage authority to make a contract in furtherance of the purposes of the sewerage authority, specifically limiting this authority as "subject to Local Public Contracts Law." N.J.S.A. 40:14A-7(13). Thus, the court held that, because N.J.S.A. 40A:11-15 of the Local Public Contracts Law provides that such agreements are "not to exceed 12 consecutive months," all contracts made for professional services expired as a matter of law one year after inception.
N.J.S.A. 40:14A-7 provides that every sewerage authority shall have the power:
To enter into any and all contracts, execute any and all instruments, and do and perform any and all acts or things necessary, convenient or desirable for the purposes of the sewerage authority or to carry out any power expressly given in this act subject to "Local Public Contracts Law," P.L. 1971, c. 198 (C. 40A:11-1 et seq.).N.J.S.A. 40:14A-7(13).
Unlike Lawrence, the statute at issue here, providing for municipal authorities to enter into contracts for professional employees, does not specifically subject its provision to the terms of the Local Public Contracts Law. Had it done so, the resolution of this issue would undoubtedly turn on that fact. For these reasons, Lawrence provides little instruction for this case.
Because the New Jersey Legislature specifically delegated authority to municipal utilities authorities to fix the terms of contract for those providing professional services, and because the New Jersey courts hold that specific statutes operate to the exclusion of general provisions, this Court finds that the contract entered into by plaintiff and defendant was fully valid when the WTMUA terminated plaintiff as its Auditor. Accordingly, defendant WTMUA breached the contract for plaintiff's professional services, and plaintiff's motion for partial summary judgment will be granted.
CONCLUSION
For the reasons discussed above, plaintiff's motion for partial summary judgment will be granted, and summary judgment will be entered against defendant WTMUA as to plaintiff's breach of contract claim. The accompanying Order will be entered.
ORDER
THIS MATTER having come before the Court upon motion by plaintiffs William H. Buckley and Ball Buckley (collectively "Plaintiff") for partial summary judgment as to the breach of contract claim (Count III) against defendant Washington Township Municipal Utilities Authority ("WTMUA"); and the Court having considered the parties' submissions; and for the reasons discussed in the Opinion of today's date; and for good cause shown;
IT IS on this day of June, 2002, hereby
ORDERED that plaintiff's motion for partial summary judgment [Docket Item 16-1] shall be, and hereby is, GRANTED; and summary judgment is hereby entered against defendant WTMUA as to plaintiff's breach of contract claim.