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ORDER PREPARED Bf THE COURT
EQUIPMENT RENTAL SERV1Cl!:,
LLC,
Plaintiff
V.
THE BOROUGH OF ROSELLE
PARK,
Defetldant.
FILED
JUN 12 2014
KAREN M. CASSIDY
A.J.S.C.
SUPERIOR COURT OF NEW JERSEY
LAW DIVISION UNION COUNTY
DOCKET NO: UNN-L-2903-13
Civil Action
ORDER
PAGE 02/13
THIS MATTER having been opened to the court by David H.E. Bursik, Esq. attorney
for Jl'laintiff, Equipment Rental Service, LLC, by a complaint in lieu of prerogative writs filed on
August 15, ?013; and an answer having been filed by Richard D. Huxford, Esq., of Triarsi,
Ben:tancourt, & Wukovi.tz, LLC, as attorney for the defendant, the Borough of Roselle Park; and
a ht:aring having been held on February 7, 2014, February 19, 2014, February 21, 2014 and
March 4, ?014 and. the court having considered the testimony of various witnesses, evidence and
leg1tl arguments submitted by counsel and for the reasons set forth in the attached opinion;
It is on thi:; 12th day of .Turte hereby ORDERED:
1. Roselle Park is hereby foul1d to be in breach of its contract with the Plaintiff. Equipment
Rental Services;
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2. Equipment Rtmtal Services' eontract shall be reinstated effective July 1, 2014 with the
parties obligated to specifically perform pursuant to the terms of said contract;
A copy of this order and opinion has been sent to both counsel this date
/ ,,
),.._. (
KAREN M. CASSIDY, A.J.S.C.
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Eguipment Rental Services, LLC v. The Borough of Roselle Park
UNN-L-2903-13
PAGE 04/13
Tins matter was tried before this court on February 7, 19, 21 and March 4, 2014, Plaintiff
presen:.ed testimony of Anthony Quarant, the principal of Equipment Rental Services, while
defend ants produced the Borough Clerk, Doreen Cali, the acting Superintendent of Public
Work1;, Mark Pasquali, and the assistant Superintendent of Public Works, Richard Graves. After
considering their testimony as well as the other evidence submitted to the court, I make the
follovdng findings of fact and of law.
On May 31, 2013, Equipment Rental Services (ERS) submitted a bid to Roselle Park
outlir1ing their proposal for recycling services for the Borough. Thereafter, on June 20, 2013,
ERS .,vas awarded a three year contract with Roselle Park to begin on July 1, 2013. The terms of
the including the procedures for collecting recycling, the collection hours, and what
should happen if the contract was breached . were all included in the bid specifica.tions.
Duri.ng a portion of July, ERS concedes that it was unable to provide recycling services to
Park in a timely fashion, and advised Roselle Park on two occasions, July 3 and July 17,
that ts lateness in Froviding services was due to the residents' failure to conform their recycling
to Borough's requi.rements. Mr. Quarant testi.fied that the reason for the delay was that the
defe.ldant failed to advise the residents of Roselle Park of the Borough's new recycHng
prior to commencement of the contract. As one example, he alleges the residents
werl': unaware of the new recycling schedule (east and west side of town) which began for the
first time in July 2013. Prior to that date the Borough'$ recycling was picked-up only on
Tue.lday every oth<:r week. Additionally, the residents were only advised of the requirements to
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separat1: their recyclable materials shortly before the conunencement of this contract.
Previously, the recycling was comingl<;Jd, but now their material was required to be separated and
placed at the curb in :a specific type t)f container, or in the case of paper/cardboard, it had to be
bundle::!.
Though the Borough always required separation of materials, the previous recycling
contra,.:tor used a "single stream" method of recycling pick-up in that all materials were placed in
one 1:1: u.ck. After p:ck-up the prior contractor separated the material at an offsite facility.
Th.ere: 'ore, that contr:lctor di.d not enforce the existing specifications as it did not matter for their
co)Jec:.tion purposes. As testified to by Mr. Quarant, since the Borough would now reinforce their
speciflcations to residents requiring them to separate their materials, this would facilitate pick up
by the plaintiff as they used separate trucks for paper/cardboard and bottles/cans/plastics.
Plain! iff's bid was based upon their understanding of how the material would be placed curbside
as w ~ l1 as the locations and times for pick-up.
Quarant indicated that the first week was difficult as the materials were not separated,
improper .materials were put out and th.e apartment complexes needed to be cleaned out. Since
he w:;s required to complete the borough he stayed longer than was permitted by the contract.
Quru:mt wrote to the Borough Clerk on July 3 describing with specificity the reason for th.e
del ~ 's, His company was summoned back on July 5 to complete unfinished work, though it was
Quarant's position that materials bad been put out in many areas after they had already
con1 lleted their pick up due to confusion regarding dates and times.
Despite the fliers generated by the town to the residents, Quarant testified that there were
still a large numb<:r of non-compliant households during the next pickup. In his letter to the
Borough of July 17 he once again outlined the difficulty he was faced with and that, combined
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with e:1:cessively hot weather, was the reason for continued delays. After July 17, ERS was
warned again about the lateness in providing recycling services to the residents. The Borough,
apparntly acknowledging the failures of their citizens to comply with the n.ew regulations,
the plaintiff via a conference call on July 18 that during his next scheduled pick up
days, be was permitted to skip that did not comply with the Borough Code.
The Borough became aware of problems with the recycling pick-ups shortly after the
plaintiff's work bega:J.. Therefore, d1.1ring their regularly scheduled meeting on July 18, the issue
was ndsed. The Borough did not provide an agenda to this court. However, the minutes of that
meetiltg reflect that a Councilman made a motion to have Council authorize a termination of the
recycling contract in the event that tite contractor failed to meet the requirements of the contract
at the: end of the month. Notably, plaintiff was not apprised that this action was taking place at
the tr]eeting that evening and did not attend. Even though an agenda for the night's meeting was
not 1: roduced, the Borough Clerk, Ms. Cali, testified that the issue of the recycling was not
cont!l ined therein. The minutes reflect that the counsel went into closed session for a discussion
of th: recycling contract and potential litigation regarding same. Because it was a closed session
the c:)urt was not provided with any specifics concerning what transpired and whether or not the
position of the:: plaintiff was conununicated to the governing body.
After this closed session the public meeting resumed and Councilman Casais made the
afonmentioned motion.. All the present council members voted in favor. Mayor Accardi did not
vote: Thereafter, the minutes reflected that if the contractor "doesn't meet the requirements for
the :1ext pick up which would be July 30th and 31st we will terminate effective August 1."
Concained in the minutes, after the reflection of the vote, was a reference to "Report and
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Recomnendations of Mayor" which stated, "[h]opefully in two weeks' time, we will have
recycliag picked up correctly or will tc:n:ninate 1he contract."
Ms. Cali, the Borough Clerk, confirmed that there was no resolution made with regard to
this ikm. She explained that there was a difference between a motion and resolution in that a
motior, could be made from the floor but a resolution was on 1he agenda. Of note is that there
appean to have been no resolution C(lncerning this matter on any agenda.
After 1he malier came to a vote the publjc an.d Mayor weighed in on the issue. The
Mayor commented that the Borough IJOW instituted a "dual stream" meiliod of recycling and two
s had gone ou; to the town concerning bulk waste, vegetative waste and recycling. The
publi1: comments were made after this motion had already passed. Multiple residents
camp l.ained about the "lack of communication" conc.erning the recycling and that "many
resid<nts did not rec,dve the recycling flyer.'' Another resident asked why the contractor was not
prese: .Jt at the meeti11g and asked whether the owner was invited to speak. Ms. Cali testified at
trial 1 hat the plaintiff was not present at the meeting and was not invited to appear. However,
even if the Borough was considering terminating their contract, she stated the governing body
was not required to their position.
The two other defense witnesses were from the Department of Public Works, Mark
Pasq:Jali, Acting Superintendent and Assistant Supervisor, Richard Graves. Both described 1he
defi1: iencies by the plaintiff in the actual pick-ups of material as well as 1he delays in confonning
to tl1 e schedule. Voluminous were introduced which depicted materials at the curb and
per I heir testimony placed out appr()priately for pick up. Both criticized the manner in which 1he
pickups were made: (type of vehicle and use of personnel), as well as the length of time it took
1hem to canvas the town. The voluminous pictures presented provided little of value to the court.
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It does appear that some materials W(!re placed out improperly, and therefore could have been
skipped, others show proper disposal procedure. It was argned, by the plaintiff, that confusion
regarding pick up days could have in homeowners putting out their recycling late, due to
the fa(:t that they nncertain of tbe actual pick-up day. No one disputes, however, that if the
materid was deemed not to be in compliance, the plaintiff was authorized, by Ms. Cali, to skip
that sidence. The :!pecifications also permitted a residence to be skipped for this reason. To
add to the confusion, Mr. Pasqualli admitted that the prior contractor picked up materials that did
not m let the criteria, hence contributing to the confusion by the residents.
When the p'.ck-ups of July 30 and 31 took place, Roselle Park was committed to
moni1 oring their performance based on the previous meeting of the Mayor and Council. Plaintiff
stated that they met the criteria by picking up the materials in a time.Jy fashion, while Roselle
Park contends they did not. On August 2, 2013, a meeting was held which included a
repn: sentative of th: plaintiff, Mr. Quarant. The issu.e discussed at that time did not affect the
operations by plaintiff, as a decision had already been made, namely that the contract would be
teunmated. This was done due to findings of the Department of Public Works, not an official
finding of the Mayor and CounciL Roselle Park contends that they made the appropriate finding
on Jl u.Jy 18 at their meeting, and this was merely an implementation of their decision. On the
othE: r hand, plaintiff contends that there was a need for a second meeting before the governing
bod:,r so an official determination and could be made.
The specifications in the bid, and relied upon by the plaintiff set forth the
par;ilmeters for the pick-up of materials. It did not provide for the use of any particular type of
vehicle, though the Borough was critical of same when they observed plaintiff's method of
picking up the recycling. The bid did contain however, parameters for time, dates and materials
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for pick-up. Plaintiff, by submitting their proposal, took this into account in preparing their bid
for the
Section 18 of the specifications set forth what would constitute a breach of the contract
and tln mechanism for termination. Specifically, Sec.tion 18 of the bid specifications titled
"Brea<: b of Contract" states that only the Mayor and Council can determine whether the
"conta:;tor has failed to act in compliance with the specifications and other contract documents."
In the event of a brea,;h 18(c) of the bid specifications states,
Should the Mayor and [C]m.mcil find the contractor to be in breach of contract for
any reason whatsoever, the contact may, at the option of the Mayor and Council[,]
be[] terminat,)d by resolution. A copy of said resolution shall be sent by certified
mail return receipt requested to the address listed in the proposal form at the
contractor's principal place of business. Receipt of said resolution shall be
considered sufficient notice to the contractor that the contract is terminated and
that he is to cease work immediately.
On August 7, 2013, Roselle Park sent a letter to ERS terminating the contract between
the two parties. The reasons outlined in the letter were that the contractor "failed to meet the
requi ements of the Recycling Removal Specifications for the third time." The letter then
speci.liics the dates and actions at issue, but does not specifically reference any resolution passed
by tl: e Borough. The Borough admits that there were no findings of fact or a hearing by the
Mayor and Council after July 18 to determine whether ERS violated the tcnns of the contract.
As l( stifled to by Ms. Cali -the findings that ERS was not in compliance were made by the two
individuals from the departm.ent of Public Works - not the Mayor and Council on or about
Aug 1st 1.
Leg:tl Analysis:
The defendant argues that the motion passed on July 18 "authorized the Borough to
tern: inatc the contract with the Plaintiff if ERS did not meet the requirements of the recyclable
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bid sp1: cifications at the next recyclable pick-up." Therefore, they contend the termination was
valid.
The plaintiff argues that the July 18 meeting only provided for a potential future meeting
where the Mayor and Council were going to make a finding of whether ERS was in breach of the
recycling contract based on its performance of its services on July 30 and 31 and that was never
done. In addition, defendant's failure to adopt a resolution where plaintiff would have an
QJ;1J:tQII:unitv to be heard violated its due process rights under both the federal and New Jersey
Constitutions.
"The Fourteenth Amendment guarantees that no person will be deprived of life, liberty or
without due process of Jaw." Errichetti v. Merlino, 188 N.J. Super. 309, 335 (1982).
"Fun,lamentally, process requires an opportunity to be heard at a meaningful time and in a
mear1ingful manner." Doe v. Poritz, 142 N.J. I, 106 (1995) (citing Kalm v. U.S., 753 F. 2d 1208,
1218 (3d. Cir. 1985)). New Jersey affords even more protection than the minimum due process
requirements under the Fourteenth Amendment. Errichetti, supra, 188 N.J. Super. at 336. "It is
bask . . . in our oncept of government that an individual who has a legitimate claim of
entit,ement may not lose it through arbitrary governmental action." Ibid. "Our courts have long
held that such property rights cannot be terminated without a hearing on notice and adequate
opp:,rtunity to be heard[.]" Weiner v. County of Essex, 262 N.J. Super. 270, 287 (Law Div.
199::).
In Weiner, the County of Essex attempted to terminate post retirement medical benefits
promised to former employees thrcugh resolution of the County. ld. at 275. The Weiner Court
he!<: that the bendi.ts were "property rights of employees employed at the time, which the
Cot nty cannot unilaterally terminate." Ibid. The court. reasoned, "obligations incurred pursuant
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to lawllul authority by the governing hody of a municipality or a county will 'bind the hands of
future dty and county officers.'" Id. at 283 (quoting Tcnninal Ent:ernrises, Inc. v. City of Jersey
City, 5 568, 57'; (1969)). Ultimately, the court found the termination ofthe property rights
of plai:1tiffs in Weine[ illegal, the unilateral termination of the property rights "failed to
compl1 w:ith the basi<l requirements of due process(,]" !4. at 288.
Here, the BorJugh of Roselle Park contracted with ERS to provide services for recycling
cleamp. In the term!: of the agreement withERS, the Borough stated,
Should the Mayor and [C]otmcil find the contractor to be in breach of contract for
any reason whatsoever, the contact may, at the option of the Mayor and Council[,]
be[) terminat1ld by resolution. A copy of said resolution shall be sent by certified
mail return receipt requested to the address listed in the proposal form at the
contractor's principal place of business. Receipt of said resolution shall be
considered sufficient notice to the contractor that the contract is terminated and
that he is to cease work immediately.
Counsel for the defendant argues that the word "may" modifies the phrase "terminated by
reso uti on," thereby permitting the Borough to terminate iD a different fashion, Dam ely as was
dono here. They cite to v. Allstate Ins. Co., 162 :t:LL 318, 325 (2000) for the
proJ: osition that the use of this specific language permitted the govemi.ng body to terminate the
conlract in various ways.
Although tl:.e first portion of the statute uses the prefatory phrase "shall be
commenced' before setting forth the applicable limitations period, the second
portion of the statute uses the phrase "may be commenced." Settled principles of
statutory constntction guide us in our interpretation of the legislature's use of the
words "may" and "shall" in the same statutory sentence. Under the "plain
meaning" n1le of statutory construction, the word "may" ordinarily is permissive
and the word "shall" generally is mandatory. Seg, Harvey v. Board of
Chosen Freeholders of County, 30 N.J. 381, 391, 153 A2d 10 (1959).
Where a statutory provision contains both the words ''may" and "shall," it is
presumed that the lawmaker intended to distinguish between them, "shall" being
construed a:; mandatory and "may" as permissive.
[(Citing :&Jl v. We.stem Ew_ployer's Compan.y, 173 N.J. Super. 60, 65
(App.Div. J 980))]
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A reasonable interpretation of this provision shows that the term "may" modifies the
ability of the Mayor and Council to decide to terminate the contract. The rest of the provision
speaks in terms of the resolution and how the termination of the c.ontract "shall" be implemented
(at the sole discretion and the Mayor an.d Council, be sent by certified mail, and be considered
sufficknt notice). The fact that the words "shall" and "resolution" are used three times in the
paragriph referring to the method of termination clearly means that it was only the method to be
used f; )f the termination 0f this agreement.
It is admitted that a copy of a resolution terminating the contract was not provided to ERS
m adrance of the July meeting. [nstead of the Mayor or the Council reaching a formal
resolution, the Borough Council went into closed session, discussed the matter without any
appa:r,mt input from plaintiff and returned to open session to pass a motion that terminated the
agree: nent if they did not comply with their contract in the future. No opportunity was given to
ERS co be heard before its contract was terminated, Plaintiff held this contract for a period of
one month. The evidence showed that there was confusion in the town as to the manner in which
recyding was to be left curbside, and also when the pick-ups were to occur, Since the prior
did not rJ,eed to collect material in a separate fashion, there appeared to be a lack of
enfo:t cement of the separation of various recycling materials. Hence, the town, through two
distributed publications, reinforced their own requirements for separation of the materials.
Appm:ently, not on:ty was there a learning curve for the plaintiff in terms of the town and its
oblifation to pick up recycling, but for. the members of the community as well. The Council,
after being apprised. by their resideJJts' of their concerns, dec.ided to take action after plaintiff had
only tvvo time peri()ds to perform. Testimony showed that by the last time period (July 30 and
31) >ignificant progress had been made. But no matter what the facts in dispute show, namely
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confusion on behalf of residents or failure to properly collect material by the plaintiff, one
undisp11ted fact remains; plaintiff was not able to present its position to the decision makers. As
in Section 18 of the specifications, the Mayor and Council were the finders of fact. Had
a resolution been on an agenda, arguably, the plaintiff would have had notice to appear and
presenl: its position to the governing body. Ms. Cali concedes that resolutions are normally on an
agendii as they are items that the Council wishes to address and put the public on .notice.
Motio 11s, on the other hand, are addressed as issues come before them that evening.
As noted in the cases cited above, not only should the defendant be bound by "obligations
pursuant to lawful authority of the governing body of a municipality," by complying
with 1 he terms of the contract it e.ntered into with the plaintiff, but also the defetldant should
affon: the plaintiff the opportunity tl1 be heard so as to co1np!y with their guaranteed due process
right11.
!!lli! lusiou:
For the reasons set forth, court finds that defendant bas breached th.e agreement with
the plaintiff and orders specific performance of the contract. An order providing this relief is
attached.
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