author: Per Curiam. Collester, P.J.A.D.

text:
    D. H. M. INDUSTRIES, INC., A NEW JERSEY CORPORATION, PLAINTIFF-RESPONDENT, v. CENTRAL PORT WAREHOUSES, INC., A NEW JERSEY CORPORATION, AND CORBIN-BAY REALTY CORP., A NEW JERSEY CORPORATION, DEFENDANTS-THIRD-PARTY PLAINTIFFS-RESPONDENTS, v. D. H. OVERMYER CO., INC., A NEW JERSEY CORPORATION, AND D. H. OVERMYER CO., INC., AN OHIO CORPORATION, THIRD-PARTY DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued February 5, 3973—
    Decided May 4, 1973.

      Before Judges Collester, Leonard and Halpern.

      Mr. Burton T. Cohen argued the cause for appellant D. H. Overmyer Co., Inc. (Mr. Walter Henry Jones, attorney).

      Mr. David J. Goldberg argued the cause for respondent D. H. M. Industries, Inc. (Messrs. Warren, Goldberg & Berman, attorneys).

      Mr. Sanford Silverman filed a statement in lieu of brief on behalf of respondent Corbin-Bay Realty Corp.
   Per Curiam.

The instant case is one in a series of suits stemming from a lease entered into between plaintiff and Central Port Warehouses, Inc. (Central) on February 4, 196-9. In brief, the relevant terms of the lease required plaintiff to erect a 500,000 square foot warehouse in Elizabeth, New Jersey, to be leased to Central for a 20 year term commencing on the date plaintiff notified Central that a Certificate of Occupancy had been issued. The rental for the term was $10,500,000, payable in equal monthly installments of $43,750. Central posted as security the sum of $126,525. Subsequent to the making of the lease, but prior to- occupancy, Central with plaintiff’s consent assigned its rights under the lease to Corbin-Bay Realty Corp. (Corbin-Bay). Corbin-Bay subleased to appellant D. H. Overmyer, Inc. (Overmyer), who in turn _ agreed to indemnify and hold Central and CorbinBay 'harmless from liability to- plaintiff under the lease.

1 Without detailing the issues tried in the various law suits between the parties, it will suffice to say that Overmyer was held to have wrongfully refused to take possession when the building was completed. Ultimately, the instant suit was brought by plaintiff to recover for the wrongful anticipatory breach.

Judgment was entered for plaintiff against Central and Corbin-Bay for $126,525, the amount of security deposit, which the court found to be liquidated damages under the terms of the lease. It also entered judgment for Central and Corbin-Bay against Overmyer, on its indemnity agreement, for $131,250. Uo appeal is taken from the latter judgment, but Overmyer appeals from the judgment for plaintiff against Central and Corbin-Bay for $126,525. We will not pass upon Overmyer’s. standing to- appeal the judgment in question, because we prefer to dispose of the appeal on the merits since the judgments are interrelated.

The narrow issue on appeal is whether the court erred in holding that the sum of $126,525 had been agreed upon as liquidated damages. Overmyer contends it was a penalty, and that plaintiff’s damages “are greatly less than the security deposit retained.”

The lease provisions which relate to a breach by the tenant and its effect upon the security deposits are:

Anything to the contrary contained herein notwithstanding, it is specifically understood and agreed by and between the Lessor and Lessee, that, in the event this Lease shall terminate pursuant to the provisions of Paragraph 23 hereof, or in the event Lessor shall elect to re-enter the premises pursuant to the provisions of said paragraph, then and in either of such events, upon five (5) days’ notice in- writing by certified mail, return receipt requested, addressed to Lessee, Lessor shall retain all of the unapplied hereinabove referred to security together with accrued interest [Emphasis added]. (Par. 4(c)).
Terminate this Lease on three days’ notice to Lessee, in which event Lessee agrees to immediately surrender possession of said premises and to pay Lessor all damages Lessee may incur by reason of Lessee’s default, including the cost of recovering possession of said, premises and including the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to the rent reserved in this Lease for the remainder of the stated term over the then reasonable rental value of said premises for the remainder of said term [Emphasis addedj. (Par. 23(c)).

We are mindful of the fact that this is a large commercial lease entered into by knowledgeable businessmen after arms length negotiations from positions of bargaining equality. In ascertaining whether the security deposit provision in the lease was intended to serve as liquidated damages in the event of a breach by the tenant, we must determine (1) the intent of the parties; (2) if a breach occurred would the extent of damage be difficult to evaluate; and (3) whether the amount posted as security represented a good faith effort to estimate in advance the foreseeable and probable loss which might ensue from a breach. Barr and Sons, Inc. v. Cherry Hill Center, Inc., 90 N. J. Super. 358 (App. Div. 1966); Westmount Country Club v. Kameny, 82 N. J. Super. 200 (App. Div. 1964) ; In re Plywood Company of Pennsylvania, 425 F. 2d 151 (3 Cir. 1970) ; 49 Am. Jur. 2d, Landlord and Tenant, § 1055 (1970); McCormick on Damages, § 146-153 (1935). The modern tendency of the courts has been to look with favor upon provisions in agreements which fix specified amounts as damages in the event of a breach, preferring to consider them as liquidated damage clauses rather than penalties. 22 Am. Jur. 2d, Damages, § 214, p. 301 (1965) ; Williston, Contracts, 3d ed. § 214. As indicated in Priebe & Sons v. United States, 332 U. S. 407, 68 S. Ct. 123, 92 L. Ed. 32, 109 Ct. Cl. 870 (1947)

Today the law does not look with disfavor upon ‘liquidated damages’ provisions in contracts. When they are fair and reasonable attempts to fix just compensation for anticipated loss caused by breach of contract, they are enforced, (citations omitted) They serve a particularly useful function when damages are uncertain in nature or amount or are unmeasurable, as is the case in many government contracts, (citations omitted) And the fact that the damages suffered are shown to be less than the damages contracted for is not fatal. These provisions are to be judged as of the time of making the contract, (at pp. 411-412, 68 S. Ct. at 126)

Tested by these standards, the facts existing when the original contract was made clearly make Par. 4(c) of the lease an honest attempt to fix just compensation for anticipated losses resulting from a breach by the tenant because (1) there was involved a 20 year lease of a specially constructed building with a gross rental of $10,500,000; (2) the security posted of $126,525 represented about 1% of the gross rental, or approximately two months rental; (3) if a breach occurred, the ability to obtain another suitable tenant for this building within a short time at a comparable rental and term was questionable; (4) the expense necessary to put a new tenant in possession by way of repairs, legal fees, etc., would be difficult to estimate; and (5) as it turned out, the actual damages suffered by plaintiff were not disproportionate with the security posted.

Nor does the fact that Par. 23(c) of the contract gave plaintiff the additional right to seek general damages in the event of a breach by the tenant turn Par. 4(c) into a penalty clause. In the first place, the plaintiff at the time of trial elected to proceed under Par. 4(c) and the case was tried by the parties on that basis. Secondly, the two clauses express the intent and agreement between the parties in the event of a breach — namely, they recognized that some damages in the event of a breach could not be readily estimated, while other damages could. This was the situation in J. E. Hathaway & Co. v. United States, 249 U. S. 460, 39 S. Ct. 346, 63 L. Ed. 707 (1919) wherein Justice Brandéis stated:

* * * There is no reason why parties competent to contract may not agree that certain elements of damage difficult to estimate shall be covered by a provision for liquidated damages, and that other elements shall be ascertained in the usual manner. Provisions of a contract clearly expressed do not cease to be binding upon the parties, because they relate to the measure of damages.

Considering the nature of this lease and the circumstances surrounding its making, and construing the lease as an integrated whole, Par. 4(c) was properly construed by the trial judge to be an enforceable liquidated damage clause.

Affirmed.

Collester, P.J.A.D.

(dissenting). I cannot agree that Paragraph 4(c) of the lease, which provides that the lessor shall retain the security deposit upon termination of the lease due to the lessee’s default, is a liquidated damage clause.

Liquidated damages are a sum which a party to a contract agrees to pay or a deposit which he agrees to forfeit, if he breaks some promise, and which, having been arrived at by a good-faith effort to estimate in advance the actual damage which would probably ensue from the breach, are legally recoverable or retainable as agreed damages if the breach occurs. McCormick, Damages, § 146, p. 599 (1935) ; West-mount Country Club v. Kameny, 82 N. J. Super. 200, 205 (App. Div. 1964).

In the determination of whether a clause in a contract is one for liquidated damages or an unenforceable penalty, the construction to be placed on the clause is to be decided by considering all the terms of the contract. And if it is doubtful on the whole agreement whether the sum is intended as a penalty or as liquidated damages, it will be construed as a penalty, because the law favors mere indemnity. Ibid, at 206, and see Monmouth Park Asso. v. Wallis Iron Works, 55 N. J. L. 132, 141 (E. & A. 1892)

I believe that a doubt exists in this case whether Paragraph 4(c) is a liquidated damage clause. While not necessarily decisive it will be noted that the descriptive words “liquidated damages” are not contained in the lease. Moreover, there is no statement that the damages arising from the broach of the lease would be difficult of determination and therefore the security deposit was agreed upon as liquidated damages.

In my opinion when the parties entered into the lease they never intended that the security deposit would be the only damages recoverable upon breach of the lease. If they so intended they would not have provided for the recovery of damages by the lessor.in Paragraph 23. That paragraph provides, in pertinent part, that upon the lessee’s breach the lessor at its option (1) may sue to collect unpaid rent as it becomes due or (2) terminate the lease and recover damages for the cost of repossession and the difference between the amount of the rent reserved and the reasonable rental value of the premises for the remainder of the term of the lease or (3) without terminating the lease, the lessor could re-let the premises for the account of the lessee and hold the lessee accountable for losses sustained.

I do not agree that under the terms of the lease the lessor had an option or right to elect to retain the security deposit as liquidated damages for breach of the covenants of the lease. If the 'lease were so construed it would be inconsistent with the view that the parties adjusted in advance the damages which might arise by any breach of the contract and would be an additional factor tending to show that the sum deposited was not intended as liquidated damages. See Advance Amusement Co. v. Franke, 268 Ill. 579, 109 N. F. 471, 472 (Ill. Sup. Ct. 1915); Annotation, “Lease-Termination-Liquidated Damages,” 106 A. L. R. 292, 300 (1937).

In support of their opinion the majority cites J. E. Hathaway & Co. v. United, States, 249 U. S. 460, 39 S. Ct. 346, 63 L. Ed. 707 (1919). In that case a construction contract provided that in case of failure to complete the work within the time specified, the contractor would pay in addition to liquidated damages ($100 per day for each day of delay), “all expenses for inspection and superintendence.” The court held there was no reason why the parties could not agree that certain elements of damage difficult to estimate should be covered by liquidated damages and other elements [of damage] should be ascertained “in the usual manner.” It seems clear that Hathaway is factually distinguishable and I believe establishes no guideline for determination of the instant case.

Since it appears that the parties did not intend that retention of the security deposit would constitute the sole damages recoverable by the lessor, Paragraph 4(c) cannot bo construed as a liquidated damage clause.

I would reverse and remand the cause for a trial on the issue of damages sustained by the lessor.


source: Caselaw Access Project

author: Matthews, J. A. D.

license: Public Domain

text:
    BARRY ROSSNAGLE, PETITIONER-APPELLANT, v. BOB CAPRA AND SHELL OIL COMPANY, RESPONDENTS-APPELLEES. BARRY ROSSNAGLE, PETITIONER-APPELLANT, v. SHELL OIL COMPANY, RESPONDENT-APPELLEE.
    Superior Court of New Jersey Appellate Division
    Argued April 24, 3973—
    Decided July 18, 1973—
    Rehearing- Denied September 4, 1973.

      Before Judges Kolovsky, Matthews and Crahay.

      Mr. Joseph D. Haggerty argued the cause for appellant.

      Mr. Verling C. Enteman argued the cause for appellee Shell Oil Company.

      Messrs. Lawrie, Jennings and Buggeln, attorneys for appellee Bob Capra (Mr. Leigh E. Buggeln, of counsel).
   The opinion of the court was delivered by

Matthews, J. A. D.

In this Workmen’s Compensation appeal there is no dispute as to the facts surrounding the happening of the two accidents which occurred while petitioner was repairing motor vehicles. The sole issue at trial involved the question of whether petitioner was an employee of respondents Shell Oil Company (Shell) and Bob Capra (Capra) at the time of the first accident, and of Shell alone at the time of the second accident, rather than an independent contractor on both occasions. Petitioner sought to prove that he was merely the manager of the service station where the accidents occurred, while the respondents attempted to show that he was an independent dealer-operator of the station which he leased for specified definite terms from Shell.

In February 1969, petitioner, a 26 year old with an eighth grade education, had been employed as a service station attendant by respondent Capra at his service station in Easton, Pa. While there employed he met and engaged in a conversation with Michael Barnes, a representative of Shell, who petitioner claimed, after several conversations, offered him a job as the “manager” of a Shell station in Phillips-burg, H. J. for which he would earn $150 per week plus commissions. Subsequent meetings were held at which Barnes, Capra and petitioner’s brother, a “manager” of another Shell station, were all present and at which the arrangements for petitioner to work as a manager were confirmed. He was enrolled in and attended a Shell, service station training school in Wayne for four weeks and was paid $80 per week plus 10 cents per mile travelling expenses.

Following completion of the training course, petitioner arrived on April 28, 1969 at the station in Phillipsburg to begin work. Capra, Barfi.es and one Roland Harris,' who was associated with the E. K. Williams accounting firm, came to the station and began discussing operations with him. He was instructed to sign several papers and was told that the station “had to go in his name” because Capra would not be permitted to have two Shell stations in his name. He acknowledged that the papers included among them a promissory note for stock and inventory, a lease and a dealership agreement. However, he claimed that he did not understand any of them and stated that he “just signed them to get it over with.” Capra also signed some papers. However, petitioner stated that he did not “put up any money” for the station.

Petitioner then commenced operation of the service station. A representative of Shell came to the station for a couple of days to show him how to run the business. Barnes also came there every day for at least two weeks and gave certain directions as to the operation of the station, such as what type of uniform he was required to wear, and how the various Shell products were to be displayed. Petitioner operated the station for three weeks prior to the occurrence of the first accident but admitted that he never received the weekly salary of $150 plus commissions that he claimed he was promised.

The first accident occurred on May 16, 1969 when a motorcycle which petitioner was attempting to repair jammed its throttle and carried him out into the street where he was struck by a truck. While he was recuperating in the hospital after this accident, Barnes visited him there and told him that “everything was in his name” and that the station was his.

He returned to the station in November of 1969 and continued to work, although only to a very limited extent due to his injuries, until July 1, 1970 when the second accident occurred. On this occasion he fractured his hands when a tire which he had been repairing exploded. After his return to work following the first accident he “drew” a salary of $75 per week and he continued to earn that figure after the second accident.

In describing his operation of the station, petitioner stated that the price of gasoline was set at a retail price determined by Shell and that Shell initiated promotional advertising campaigns to draw customers. He admitted that a sign had been made for the station which read “Barry’s Shell” (petitioner’s first name) which Barnes had ordered for him and for which Shell had paid. He stated that Barnes set the hours of operation for the station but that he had the right to hire and -fire employees and also the right to order inventory. He admitted that he had the right to and actually did run the station as he desired except as noted and that he had complete control of the premises and equipment at the station. If a customer wanted to have repairs done on a car, he decided whether or not the customer would be allowed to “charge” the costs of the repairs. Further, he procured a gasoline dealer’s license and sales tax certificate in his name which were handled by E. K. Williams, the accounting firm that Barnes had suggested to him. He maintained the daily books and records which were occasionally checked by Capra. He maintained a bank account in the name of Barry’s Shell, on which only he and his brother were authorized to draw checks. A personal income tax return listing his income from the business, and other documents such as sales tax forms and unincorporated business tax returns were all filed on his behalf by the accountants. He had also taken out a workmen’s compensation insurance policy which covered his employees and which had been in effect ever since he commenced work in April 1969. Finally, petitioner stated that he paid the lease rental on the station out of his gas collections. He admitted that he was never paid any salary by Shell.

Capra gave a somewhat different version of the business arrangement among the parties. Although he admitted that in February 1969 he discussed with petitioner and Barnes the possibility of petitioner “managing” a second service station which he intended to lease, he claimed that at a subsequent meeting he informed Barnes and petitioner that he would not be able to take over another service station because of family problems. Capra further stated that they then discussed the possibility of petitioner operating the station on his own. The specifics of the potential arrangement were that petitioner was to be the dealer of the station and that he would act as guarantor of petitioner’s financial obligations to Shell arising out of the dealership. Capra stated that he had agreed to be guarantor for petitioner because he owed an “obligation” to petitioner’s brother.

It was Capra’s position that, other than serving as a guarantor, he never had any connection with the dealership arrangement between Shell and petitioner. He said he never participated in the profits of the business nor did he advance any cash for setting up the operation. He never ordered any inventory for the station or had any authority with respect to the hiring and firing of employees. He further claimed that although he occasionally visited the station to make sure that the “paper work” was being done, in order to protect himself from liability as a guarantor, petitioner did not report his weekly receipts to him.

Finally, Capra stated that at the time petitioner took over operations of the service station he knew of no agreement under which petitioner would be paid $150 per week plus commissions for managing the station.

Michael Barnes, who no longer is associated with Shell, was called as a witness in behalf of respondent Capra. He stated that at the time of the business arrangement in question he was a dealer representative for Shell. He too agreed that in February of 1969 a conversation took place wherein the possibility of petitioner becoming a manager of the Phillips-burg service station was discussed, but stated that an agreement to that effect was never consummated. After Capra advised him that he wouldn’t be able to take over another Shell station because of family problems, a dinner meeting was held sometime subsequent to discuss the possibility of petitioner operating the station on his own. In addition to Barnes, the persons in attendance at that meeting were petitioner and his brother, Capra and Boland Harris from the E. K. Williams accounting firm. It is not clear whether any definite agreement resulted from the meeting. However, a short time thereafter petitioner, with Barnes’ assistance, filed an application for a Shell dealership. During either the first or second week of April 1969 Shell “favorably passed” on petitioner’s application and it was thereby determined that he would take over the Phillipsburg station as a Shell dealer. The agreement was solely between petitioner and Shell; Capra was not involved. Barnes admitted that he “suggested” that petitioner retain the services of E. K. Williams as his accountants, but stated that petitioner was free to engage anyone he chose.

Among several documents admitted into evidence during the proceedings were: a “dealer lease” between Shell and petitioner for a term beginning May 1, 1969 and ending April 30, 1970; a promissory note in favor of Shell for $4,575 signed by petitioner and co-signed by Capra; a guaranty signed by Capra; a “dealer agreement” between petitioner and Shell dated April 28, 1969; a “dealer agreement” between petitioner and Shell dated May 1, 1970; and a “dealer lease” between petitioner and Shell covering a term from May 1, 1970 to April 30, 1973.

Both leases contain the following provision:

11. LESSEE’S BUSINESS. Nothing in this Lease shall be construed as reserving to Shell any right to exercise any control over or to direct in any respect the conduct or management of, the business or operations of Lessee on the Premises; but the entire control and direction of such business and operations shall be and remain in Lessee, subject only to Lessee’s performance of the obligations of this Lease. Neither Lessee nor any person performing any duties or engaged in any work on the Premises at the request of Lessee shall be deemed an employee or agent of Shell.

The lease of April 28, 1969' provided:

2. TERM. The term of this Lease shall be a primary period beginning on May 1, 1969, and ending on April 30, 1970, and from year to year thereafter, but may be terminated by Lessee at any time by giving Shell at least 90 days’ notice, and by Shell at the end of the primary period or of any such subsequent year by giving Lessee at least 30 days’ notice.

and that of May 1, 1970 :

2. TERM. This Lease shall be in effect for the term beginning on May 1, 1970 and ending on April 30, 1973, but (a) may be terminated by Lessee at any time by giving Shell at least 90 days’ notice, and (b) may be terminated by Shell by giving Lessee at least 30 days’ notice, effective on the date when Lessee shall have been Shell’s tenant of the Premises for twelve successive months (whether or not all under this Lease). In this Lease “month” always means calendar month.

Further, each lease provided, in paragraph 9, that Shell as lessor might terminate the lease in the event of specified defaults, the paragraph reading:

9. REMEDIES. If Lessee (a) defaults in payment of rent or any other indebtedness hereunder, or (b) defaults under article 8 or this article 9, or (e) defaults under any other provision of this Lease, and fails to remedy same within 15 days after Shell gives Lessee notice thereof (except that Lessee shall not be entitled to such notice and remedial period as to any default after the first one under any provision of article 5), or (d) enters bankruptcy or insolvency proceedings (voluntarily or otherwise) or makes an assignment for the benefit of creditors, or (e) dies, or (f) abandons the Premises or permits the service station to be closed for more than 72 successive hours: Shell may, at its option and without notice, terminate this Lease and reenter and repossess the Premises without prejudice to any other rights or remedies hereunder or by law. At any termination of this Lease, Lessee shall peaceably surrender possession of the Premises to Shell. As to any of Lessee’s property which Lessee fails to remove from the Premises at termination of this Lease, Shell shall have the right to sell all or any part of same for Lessee’s account on such terms as Shell may desire, but with the rights in Shell to apply the proceeds of such sale to the payment of any indebtedness of Lessee to Shell, whether under this Lease or otherwise, and to purchase any or all such personal property. All sums charged to Lessee by Shell under the provisions of this Lease shall be payable by Lessee to Shell on demand and shall bear interest therefrom at the rate of 6% per annum until paid. Lessee shall reimburse Shell on demand for all reasonable costs (including attorneys’ fees) incurred by Shell in enforcing any of its rights or remedies hereunder. Both Shell and Lessee waive the right to trial by jury in any action or proceedings (including any counterclaim therein) by either against the other arising out of or in connection with this Lease. Shell’s right to require strict performance of Lessee’s obligations hereunder shall not be affected by any previous waiver, forbearance or course of dealing.

Both dealer agreements (these were documents under which Shell agreed to provide its motor vehicle fuels and automotive lubricants to petitioner for resale, and petitioner agreed to purchase such products) contain, provisions for their duration.

The agreement of April 28, 1969 provided:

2. PERIOD. This Agreement shall be in effect for a primary period beginning on May 1, 1969 and ending on April 30, 1970, and from year to year thereafter, but may be terminated by either Dealer or Shell at any time by giving the other at least 10 days’ notice.

and that of May 1, 1970:

2. PERIOD. This Agreement shall be in effect for the period beginning on May 1, 1970 and ending on April 30, 1973, but (a) may be terminated by Dealer at any time by giving Shell at least 90 days’ notice, and (b) may be terminated by Shell by giving Dealer at least.30 days’ notice, effective on the date when Dealer shall have been Shell’s tenant of Dealer’s Station premises for twelve successive calendar months (whether ’ or not all under Shell’s present Lease thereof to Dealer).

The Judge of Compensation dismissed the petitions against both respondents finding that Capra lhad never entered into any agreement with either petitioner or Shell with respect to the Phillipsburg station, and that there was no evidence under which he could find that Shell was the employer of petitioner on either of the two days on which he suffered accidental injury.

Petitioner, in order to succeed in his claim, was required to prove by a preponderance of the evidence, among other things, that the accident arose “out of and in the course of his employment” with respondents. N. J. S. A. 34 :15-7. The findings made below, that petitioner was not an employee of Capra and Shell at the time of the first accident and not an employee of Shell at the time of the second accident, must be sustained by this court if they could reasonably have been reached on sufficient credible evidence present in the whole of the record. Close v. Kordulak Bros., 44- N. J. 589 (1965); DeAngelo v. Alsan Masons, Inc., 122 N. J. Super. 88, 89 (App. Div. 1973), aff’d 62 N. J. 581 (1973).

Two basic tssts have been employed by our courts in resolving whether an injured petitioner is an “employee” entitled to compensation or an “independent contractor” not so entitled. Generally, where a respondent has the right to exercise control over the means and methods by which the petitioner is to accomplish his work, an employer-employee relationship will be found. See Tofani v. Lo Biondo Brothers Motor Express, Inc., 83 N. J. Super. 480, 486-487 (App. Div. 1964), aff’d o. b. 43 N. J. 494 (1964). Where the “relative nature of the work” test is applied, the court will inquire into whether the work done by the petitioner was an integral part of the regular business of the respondent. If such is found then the court will determine that an employment relationship existed. See the dissenting opinion in Marcus v. Eastern Agricultural Assn, Inc., 58 N. J. Super. 584, 596 (App. Div. 1959) which the Supreme Court adopted in 32 N. J. 460 (1960). Cf. Caicco v. Toto Brothers, Inc., 62 N. J. 305 (1973).

We are satisfied from our review of the record that there is no evidence to demonstrate that Capra exercised any control over the operation of the station or that he in any way participated in the profits. His only business relation to petitioner was that of a guarantor for his financial obligations to Shell. Beyond occasionally stopping at the station to make such that the “paper work” was being done, Capra had no connection with the operation of the dealership. Although he admitted that at one time he had considered leasing the station and setting up petitioner as the “manager” thereof, this arrangement had to be abandoned because of certain family problems which he faced. It was hardly proven that petitioner was Capra’s “manager” at the time that he “took over” the station in April of 1969 or at the times of the separate accidents.

Resolution of the question of petitioner’s relationship with respondent Shell is not without difficulty. Some guidance may be found in' 1A Larson, Workmen's Compensation Law, § 44.35, p. 686:

[A]lthough the filling-station cases are among the most complex and evenly balanced, an analysis will show that the most reliable test that recurs in the decisions is the distinction between operators who have no lease and are subject to being “fired” on short notice, and operators who either have a lease or are secure in their contractual right to continue in the business for a specified time.

Professor Larson further states at p. 685-686:

In the filling-station cases, a close tie may be observed between the termination test and the furnishing-of-equipment test. If the operator occupies the premises only as a licensee from day to day, subject to cancellation of the arrangement on brief notice, he is like the truck driver to whom an expensive truck belonging to the employer has been entrusted, * * * On the other hand, if he occupies the premises under a bona fide lease of substantial length, and (which is the normal corollary) if the agreement cannot be cancelled at will, the premises, in the possessory sense, become his own. His duty to maintain them becomes that of a lessee rather than an employee, and the certainty that the contract will run a definite time enables the lessee to build up a business of his own with some assurance!

Although it is undisputed that petitioner and Shell entered into “dealer leases” for the operation of the Phillips-burg station, we question whether these leases can actually be regarded as “bona fide leases of substantial length.” The first lease between petitioner and Shell, during the term of which petitioner incurred his first injury, ostensibly was for a period of one year commencing on May 1, 1969 and ending on April 30, 1970. The termination provision quoted above seems to provide that Shell could only terminate for cause under paragraph nine (quoted above) until the end of the initial term. However, it must be noted that the dealer agreement under which petitioner was to receive his “stock in trade” and which ostensibly was also fox a one year term, could have been terminated by Shell (or petitioner) at any time by the giving of 10 days notice. Conversely, the second lease, during the term of which petitioner sustained his second injury, which provided for a three year term, was terminable by Shell at any time on 30 days notice. The dealer agreement which accompanied the second lease which was also for a three year term could also be terminated by Shell on 30 days notice.

It is not difficult to see that petitioner had at best under his first “lease” a certain term of 10 days, and under his second “lease” a certain term of 30 days. With respect to the first lease, although Shell seems not to have had a right of termination (except for cause under paragraph nine), Shell could cut off petitioner from any supply of its products and leave him in a position of having a leased service station without anything to sell. Termination under clause nine would certainly follow quickly.

While a great deal of testimony was produced during the proceeding below which tended to show that petitioner had control over the leased premises, that same testimony demonstrated quite strongly that petitioner had reasonable control as long as Shell permitted him to have it. Shell always had the absolute right to terminate the flow of gasoline and oil to the station, under the first lease, on 10 days’ notice and under the second lease, on 30 days’ notice. Under those circumstances other elements of control delegated to petitioner could quickly become meaningless. As Judge Conford pointed out in his dissenting opinion in Marcus v. Eastern Agricultural Ass’n, Inc., 58 N. J. Super. 584 (App. Div. 1959), which was adopted by the Supreme Court as its opinion in 32 N. J. 460 (1960), since the purpose of workmen’s compensation legislation is that the cost of all industrial accidents should be borne by the consumer as a part of the cost of the product (see 1A Larson, Workmen’s Compensation Law, § 43.51, p. 633) :

It follows that any workers whose services form a regular and continuing part of the cost of that product, and whose method of operation is not such an independent business that it forms in itself a separate route through which his own costs of industrial accident can be channelled, is within the area of intended protection. [58 N. J. Super., at 603]

Finally, we find it to-be of no significance that the injuries which petitioner sustained in each of the accidents occurred while he was doing repair work rather than pumping Shell gasoline or dispensing Shell oil products. The good will created through the service of repair work by a service station operator and those working under him benefit, at least indirectly, the supplier of the gasoline and oil products. See Bieluczyk v. Crown Petroleum Corporation, 134 Conn. 461, 58 A. 2d 380 (1948).

We conclude from our review of the record for the reasons just expressed that the Judge of Compensation erred in determining that petitioner was an independent contractor and not an employee of respondent Shell.

The judgment of the Division of Workmen’s Compensation is affirmed with respect to respondent Capra but is reversed with respect to respondent Shell and remanded for further proceedings to determine the quantum of the awards to be given petitioner.

The petition of respondent, Shell Oil Company (Shell), for rehearing is denied.

It is uncontradicted from the record in this case that, at all times pertinent to the litigation before us, both the petitioner, Rossnagle, and respondent, Shell, were of the view that, and acted on the assumption that, the petitioner’s rights under the written dealer lease and dealer agreement were limited to those set forth in the writings.

Our conclusion that petitioner was an employee of Shell and not an independent contractor is not affected by the fact that on July 11, 1973, years after the accidents suffered by petitioner, the Supreme Court in two decisions, Shell Oil Company v. Marinello, 63 N. J. 402, and Texaco Co. v. Appleget, 63 N. J. 411, ruled that, under a lease and dealer agreement similar to those here involved, the rights of the lessee-dealer extend beyond what appears on the face of the writings.


author: Conford, P. J. A. D. Meanor, J. A. D.

text:
    NATIONAL ORGANIZATION FOR WOMEN, ESSEX COUNTY CHAPTER, JUDITH S. WEISS, PRESIDENT; GILBERT H. FRANCIS, DIRECTOR, DIVISION ON CIVIL RIGHTS, COMPLAINANTS-RESPONDENTS, v. LITTLE LEAGUE BASEBALL, INC., RESPONDENT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued March 25, 1974—
    Decided March 29, 1974.

      Before Judges Conford, Handler and Meanor.

      Mr. Michael D. Loprete argued the cause for appellant (Messrs. Mattson, Madden, Polito & Loprete, attorneys).

      Mr. Bertram P. Goltz, Jr., Deputy Attorney General, argued the cause for Director, Division on Civil Rights (Mr. William F. Hyland, Attorney General of New Jersey [Mr. George F. Kugler, Jr., former Attorney General of New Jersey], attorney).

      Ms. Nadine Taub filed a brief on behalf of amici curiae Women’s Rights in Tenafly and eight named girls aged 8 to 12 (Ms. Phoebe Seham, attorney).
   The opinion of the court was delivered by

Conford, P. J. A. D.

This is an appeal from an order and an amended order of the Division on Civil Rights, entered on a report, findings and recommendations by Sylvia B. Pressler, hearing officer, adopted by the Director of the Division, ordering Little League Baseball, Inc. (“Little League”) and all local baseball leagues chartered by it in this State to admit girls aged 8 to 12 to participation in their baseball programs conducted in this State. These programs have heretofore been maintained solely for boys. The Division acted on a complaint of violation of the Law Against Discrimination, N. J. S. A. 10:5-l et seq., and particularly section 10:5-12(f). That provision prohibits the denial by the operator of any “place of public accommodation” of any of its “accommodations, advantages, facilities or privileges” on account of “race, creed, color, national origin, ancestry, marital status or sex” (emphasis added), except, in the case of sex, where the place of public accommodation “is in its nature reasonably restricted exclusively to individuals of one sex” (with a specification of a number of nonexclusive examples, discussed later in this opinion).

The gist of the defense by Little League of the sex requirement at the hearing in the Division was that because of physical differences between the sexes girls as a class were more likely to be injured in the game, which is played with a hard ball, than boys. Much expert evidence was introduced on both sides of this question. The hearing officer held that “by a heavy preponderance of the evidence” Little League had not borne its burden of establishing that girls of 8 to 12 are so physiologically inferior to boys of the same age group as to preclude them as a class from competing as safely and successfully as boys in the game.

In their objections to the hearing officer’s report and findings and on this appeal Little League has made the additional contentions: (1) the Supremacy Clause of the Federal Constitution and principles of federal preemption preclude the action of the Division because Little League is chartered under an act of Congress which restricts its activities to boys; (2) Little League is not a “place of public accommodation,” and (3) Little League in its nature is reasonably restricted to boys (aside from the matter of susceptibility to injury), within the intent of N. J. S. A. 10 :5-12(f).

I

Dr. Creighton J. Hale, executive vice-president of Little League and its director of research, a qualified physiologist, gave testimony that in respect of comparative bone strength, muscle strength and reaction time girls were inferior to boys and that therefore their potentiality for injury during a baseball game with boys was enhanced above the hazard of injury of boys. The evidence as to strength of bones was based upon extrapolation from Japanese studies of cadaver bones of persons between 18 and 80 years of age. The State’s expert witness, Dr. Torg, a specialist in pediatric orthopedies, rejected Dr. Hale’s conclusions with regard to bone strength as based on unwarranted data. He also noted that between the ages of 8 and 10 the weight and height of the sexes is about the same and that girls from 10 to 12 generally surpass boys in these respects.

While expert witnesses on both sides agreed that boys’ “reaction time” is slightly faster than that of girls, the State’s expert, Dr. Hohmuth, felt that the more relevant interval in relation to safety was “choice reaction time” — the period between stimulus and exercise of judgment as to a course of action. He testified that standard studies in the field showed no consistent differences in this regard prior to adolescence. However, he was dubious whether laboratory experiments on these subjects had much weight in predicting results in actual play.

Dr. Hale testified that boys are stronger than girls because their muscles have more fibers. Dr. Torg agreed, but concluded that other factors were more important than strength in playing the game safely — “general systemic physiologic maturation” (in which girls 8 to 12 are ahead) and training, experience, motivation, nutrition and home environment.

Dr. Hale acknowledged that some girls would have the skill to play baseball with boys, and he testified that Little League has various leagues graded according to the ability of the player, so that girls could be rated to play with their peers of either sex. He was nevertheless concerned that the less-skilled girls would be more apt to suffer injury even when playing with less-skilled boys. Dr. Torg, on the other hand, concluded that there was a significant proportion of girls from 8 to 12 capable from a physical standpoint of participating in Little League baseball and that there were some children of both sexes who should be excluded for physiological reasons. He also was of the opinion that a female who demonstrated skills comparable to a male on the Little League tryouts should be allowed to participate. He cautioned, however, that at the age of 13 the situation and his opinion begin to change.

Dr. Hale asserted that a blow to the breast of a female, as by a batted or thrown ball, can canse cancer, and Dr. Torg took the opposite position; however, neither was able to establish a firm basis for his conclusion.

There was opposing psychological testimony. A Little League expert testified that children of each sex need occasional “islands of privateness” during which they can be alone with others of their own sex, and that Little League can serve this purpose for boys, and softball competition for girls. (It appears to be agreed there is no organized hardball competition available for girls alone). The State’s psychiatric expert disagreed with the need for sex-segregated activities at the age level of 8-12. He thought that sex-integrated baseball would contribute to the mental health of children of both sexes.

The hearing officer’s detailed findings of fact were consistently in accord with the conclusions of the State’s experts on all material points of disagreement on the issues of safety and skill. She was dubious as to the relevance of the psychological testimony. If material, she expressed accord with the view of the state expert.

We conclude there was substantial credible evidence in the record to permit the Division to find as a fact that girls of ages 8-12 are not as a class subject to a materially greater hazard of injury while playing baseball than boys of that age group. We will therefore not disturb that finding of the administrative agency. Close v. Kordulak Bros., 44 N. J. 589, 599 (1965). Thus the factor of safety does not militate for a determination that the nature of Little League baseball reasonably restricts participation in it at the 8-12 age level to boys. We regard the psychological testimony on both sides as too speculative to' rest any fact-finding on it. In any case, we are clear that there is no substantial psychological basis in the record to warrant a conclusion that the game is reasonably restricted to boys in this age bracket, as against the evident statutory policy against sex discrimination in places of public accommodation.

II

Little League asserts it is not a “place of public accommodation” within the meaning of the statute, primarily because it is a membership organization- which does not operate from any fixed parcel of real estate in Yew Jersey of which it had exclusive possession by ownership or lease. The hearing officer, in arriving at a contrary conclusion, held that the hallmark of a place of public accommodation was that “the public at large is invited,” and she found that Little League issued an invitation to all boys in communities having local leagues. She found, further, that membership organizations, although not having a “specific pinpointable geographic area,” are nevertheless places of public accommodation if, as Little League does, they offer advantages and facilities on the basis of a general, public invitation to join.

We are satisfied that the determination of the Division on this issue is correct. The law is remedial and should be read with an approach sympathetic to its objectives. See Levitt & Sons, Inc. v. Div. Against Discrimination, etc., 31 N. J. 514, 524 (1960); Zahorian v. Russell Fitt Real Estate Agency, 62 N. J. 399, 409 (1973). Moreover, we are “warranted in placing considerable weight on the construction of the statute * * * by the administrative agency charged by the statute with the responsibility of making it work.” Passaic Daily News v. Blair, 63 N. J. 474, 484 (1973). If this organization were not deemed a place of public accommodation it would be free to discriminate on the basis of race or religion as well as sex.

The statutory noun “place” (of public accommodation) is a term, of convenience, not of limitation. It is employed to reflect the fact that public accommodations are commonly provided at fixed “places”, e. g., hotels, restaurants, swimming pools, etc. But a public conveyance, like a train, is a “place” of public accommodation although it has a moving situs. See N. J. S. A. 10 :5-5(l), (“public conveyance”). The “place” of public accommodation in the case of Little League is obviously the ball field at which tryouts are arranged, instructions given, practices held and games played. The statutory “accommodations, advantages, facilities and privileges” at the place of public accommodation, N. J. S. A. 10 :5-12(f), is the entire agglomeration of the arrangements which Little League and its local chartered leagues make and the facilities they provide for the playing of baseball by the children. In Fraser v. Robin Dee Day Camp, 44 N. J. 480 (1965), the court held that day camps were places of public accommodation even before the statute listed them as such. The court noted that many of the specifically listed types of public accommodation were “educational or recreational” in nature (Id. at 487), as were day camps. The same, of course, is true of Little League baseball. As to the educational nature of competitive athletics, see Brenden v. Independent School District 742, 477 F. 2d 1292, 1298 (8 Cir. 1973).

Little League is a public accommodation because the invitation is open to children in the community at large, with no restriction (other than sex) whatever. See Clover Hill Swimming Club v. Goldsboro, 47 N. J. 25, 33 (1966). It is public in the added sense that local governmental bodies characteristically make the playing areas available to the local leagues, ordinarily without charge.

Finally, we discern nothing in the statute or its underlying purposes to persuade us that what would otherwise be a place of public accommodation is any less so because its management and sponsorship is by a nonprofit or membership organization rather than a commercial enterprise;, or because it does not have exclusive use or possession of the site of its operations. Note the many "nonprofit” types of institutions specified as places of public accommodation in N. J. S. A. 10 :5-5 (l).

Ill

The issue which constitutes the most substantial question before us is whether Little League has shown that it comes within the statutory exclusion for a place of public accommodation "which is in its nature reasonably restricted exclusively to individuals of one sex.” Appellant points to the statutory language quoted and to the accompanying specific exemptions: "and which shall include but not be limited to any summer camp, day camp or resort camp, bathhouse, dressing room, swimming pool, gymnasium, comfort station, dispensary, clinic or hospital, or school or educational institution which is restricted exclusively to individuals of one sex.” N. J. S. A. 10:5-12(f). It argues that five of these specific exceptions involve athletics, and thus illuminate a legislative intent that any place of public accommodation related to athletic activities is intended to be permitted to be restricted to one sex.

The contention is not at all persuasive. Practically all of the 13 types of facility mentioned have the common characteristic of requiring, or being related to occasions for, a changing or doffing of clothing, or performance of bodily functions, thus involving an exposure of the body. We thereby infer a legislative intent that facilities or activities which may to a significant degree involve at times an occasion for breach of bodily privacy may reasonably be eonfined to one sex, even though in other respects classifiable as a place of public accommodation. It is apparent that this criterion does not apply to Little League, since, as we understand it, changing of clothing for play or after play invariably takes place at home. We perceive no significant hazard of breach of bodily privacy in the context of bisexual Little League baseball, and none has been argued by Little League in its brief or in the Division. The suggestion that such a hazard is presented when a male coach gives first aid to an injured girl player appears to border on the frivolous.

We do not, however, imply any present view that only in the area of bodily privacy does the statute contemplate that the "nature” of the place of public accommodation may reasonably justify its restriction to one sex. We have no occasion here to appraise the full reach of the exception. But we find none of the other bases for such a restriction advanced by Little League in this case to be persuasive.

It is first argued that after puberty girls cannot successfully compete with boys at baseball and, in fact, do not noticeably engage in it. Boys, on the other hand, frequently continue with baseball into adolescence and maturity. Therefore, it is argued, it is reasonable for Little League to expend its resources solely on children (boys) who will use the training to develop permanent baseball skills as against those who will not. The criterion of reasonableness in this regard, it seems to us, must be sought in the underlying purposes of sex discrimination legislation as a current social phenomenon. As we see it, these are mainly to emancipate the female sex from stereotyped conceptions as to its limitations embedded in our mores but discordant with current rational views as to the needs, capabilities and aspirations of the female, child or woman. Cf. Passaic Dally News v. Blair, supra, 63 N. J. at 483; see Brenden, v. Independent School District 742, supra, 477 F. 2d at 1296-1297.

In the foregoing light we think it is not reasonable to deprive girls of 8 to 12 who, with the permission of their parents, can and want to play hard-ball baseball, of access to the only large-scale, generally available means for enjoyment of the activity by children of that age, merely because they may not have the occasion to play the game after age 12. Moreover, there is nothing of substance in the record to justify any finding that the baseball training of the boys will suffer from admission to the competition of girls.

Little League also points to the vaunted aims of the organization, mentioned in its federal charter, of development in children of “qualities of citizenship, sportsmanship, and manhood,” and it implies these objectives- will be impaired, in the case of the boys, by admission of girls to the activity. We are quite unable to understand how these conclusions are arrived at. Moreover, assuming “manhood” in the sense of the charter, means basically maturity of character, just as does “womanhood,” we fail to discern how and why little girls are not as appropriate prospects for learning citizenship and sportsmanship, and developing character, as are boys.

In sum, we find no basis in anything argued by Little League to support a determination that, consistent with the underlying purpose of the statutory prohibition against denial of the facilities of places of public accommodation on account of sex, Little League by virtue of its nature may reasonably be permitted to be restricted to boys in the age category under consideration.

In so holding we note the justified characterization by the hearing officer of Little League as a “piece of public Americana.” It has become synonymous with children’s baseball —a sport which the Little League handbook proudly proclaims as America’s national game. The record evidences the fact that- substantial numbers of young girls want to partake in it and are qualified to do so competitively with boys of the same age. The logic of the statutory support for their aspirations is compelling.

IY

Little League argues that the Division’s order and its federal charter of incorporation- are in direct conflict and that Congress has articulated a national policy that “non-adult males can voluntarily associate , in exclusive organizations” — a policy which preempts the order at issue here.

The first phase of the argument rests on the premise that Congress, in granting the federal charter of incorporation, specifically intended that the participants in Little League baseball would be boys only. The purpose clause of this charter and the relevant statutory history do show that Congress contemplated participation only by boys; however, they do not show that a limitation exclusively to boys was an avowed congressional objective.

The second argument — that Congress has articulated a national policy preempting the Division’s order — rests on the fact that Congress has granted, in addition to the Little League charter, charters of incorporation to three other national organizations each of which state that the objective is to assist boys in one way or another. These organizations are Boy Scouts of America, 36 U. S. C. A. §§ 21-29 (1916), § 23; Boys’ Club of America, 36 U. S. C. A. §§ 691-707 (1956), § 693; and Big Brothers of America, 36 U. S. C. A. §§ 881-898 (1958), § 883. The argument is that all these charters represent a “consistent course of legislation adhering to the basic tenet that rewards in character development can be realized by boys belonging to well-defined, limited activity associations for boys [which] establishes a national policy to permit such associations” (emphasis added). It is of interest that Title 36 of the United States Code is entitled, “Patriotic Societies and Observances.”

Perez v. Campbell, 402 U. S. 637, 644, 91 S. Ct. 1704, 1708, 29 L. Ed. 2d 233 (1971), explains that “[deciding whether a state statute is in conflict with a federal statute and hence invalid under the Supremacy Clause is essentially a two-step process of first ascertaining the construction of the two statutes and then determining the constitutional question whether they are in conflict.” As noted above, however, the purpose clause of the Little League charter does not signify a congressional policy decision that only boys should play baseball. The statute rather represents only a determination that Little League Baseball, Inc., such as it is, should have a national charter. The Senate Report on the charter bill indicates that the incorporation was for the limited purpose of constituting “an appropriate recognition of the national stature which Little League has attained” (see note 3). Moreover, the ascription of any purpose or policy beyond the mere grant of a federal charter would be incompatible with Congress’ limited power to create corporations.

These being our views as to the intent and purpose of the chartering act, it remains to determine whether the Law Against Discrimination, as applied in the Division, conflicts with it. The test is whether the latter “stands as an obstacle to the accomplishment and execution of the fall purposes and objectives of Congress,” Hines v. Davidowitz, 312 U. S. 52, 67-68, 61 S. Ct. 399, 85 L. Ed. 581 (1941), quoted with approval in Perez v. Campbell, supra, 402 U. 8. at 649-650, 91 S. Ct. at 1711; Florida Avocado Growers v. Paul, 373 U. S. 132, 141 (opinion of the court), 165 (dissenting opinion), 83 S. Ct. 1210, 10 L. Ed. 2d 248 (1963).

When the federal statute is seen as simply bestowing a national charter and not as embodying any substantive policy the asserted conflict becomes illusory. The New Jersey statute as applied does not vitiate the charter of incorporation; it merely regulates how Little League shall conduct its activities in the State of New Jersey in respect of exclusion of participants on the basis of sex. In this regard it may be noted that the charter’s objects are required to be pursued “in all lawful ways.” Note 2, supra.

The claim of preemption is also without merit. Where the state statute or regulation is an exercise of the state’s police power, the settled rnle is not to decree a federal displacement “in the absence of an unambiguous congressional mandate to that effect.” Florida Avocado Growers v. Paul, supra, 373 U. S. at 146-147. 83 S. Ct. at 1219. Here, as seen above, the four federal charters mentioned by Little League cannot, for the reasons already stated, be said to be evidence of any particular substantive congressional policy (except, perhaps, encouraging patriotism and good citizenship). The enactment of these charters consequently does not reflect any national policy on the merits of limitation of membership in any organization to boys, and so there is absent any evidence of an unambiguous congressional intent to displace New Jersey laws and policies respecting discrimination as to places of public accommodation on account of sex, either generally, or as applied to Little League.

We conclude that the order oí the Division on Civil Rights is not invalid under the Supremacy Clause or principles of federal preemption.

V

Appellant contends that in any event the orders of the Division are too broad and restrictive. We think not. Understood, as they must be, solely with reference to Little League’s activities in or affecting New Jersey and its residents, we do not find the orders broader than reasonably necessary to effectuate the admission of girls aged 8 to 12 to Little League activity. Neither Little League nor its chartered leagues in New Jersey need conduct baseball in this State. But if they do, on an invitation to the general public to participate, girls in the mentioned age bracket must be invited and admitted as freely and as unreservedly as are boys.

The provisions for enforcement embodied in the orders are within the permissible range of discretion of the Division and are designed to assure effectuation of the stated objectives. We do not find them unreasonable or arbitrarily burdensome. See Jackson v. Concord Co., 54 N. J. 113 (1969); Polk v. Cherry Hill Apartments, Inc., 62 N. J. 55 (1972).

Affirmed.

Meanor, J. A. D.

(dissenting). It might be well to restate the issue. The question is not whether girls age 8 to 12 may be permitted to play hardball with boys of the same age group. Of course they can.

The issue is whether our Law Against Discrimination, N. J. S. A. 10 :5-l et seq., compels Little League to open its membership to girls age 8 to 12 over its vehement objection.

I agree with the majority in affirming the conclusion below that differences in athletic prowess between the sexes in this age group are either nonexistent or minimal. Thus, the argument that girls of this age are more susceptible to injury in baseball than hoys must be rejected, and with that rejection falls the conclusipn that differences in the physical capacities of the sexes, at these age levels, provide a reasonable basis for sex segregation in Little League.

I need not discuss the preemption issue, nor struggle with the conceptual difficulties encountered in attempting to rationalize the Little League as a place of public accommodation as defined in N. J. S. A. 10:5-5(l). While I have substantial doubt that Little League is a “place of public accommodation” as defined in the statute, I will accept arguendo the majority’s determination that it is.

Where the majority and I must differ concerns what T believe to be its misconstruction of the exceptions to the general bar of discrimination based on sex that are set forth in N. J. S. A. 10 :5-12(f). Those exceptions axe:

* * * provided, however, that nothing contained herein shall be construed to bar any place of public accommodation which is in its nature reasonably restricted exclusively to individuals of one sex, and which shall include but not be limited to any summer camp, day camp or resort camp, bathhouse, dressing room, swimming pool, gymnasium, comfort station, dispensary, clinic or hospital, or school or educational institution which is restricted exclusively to individuals of one sex, from refusing, withholding from or denying to any individual of the opposite sex any of the accommodations, advantages, facilities or privileges thereof on the basis of sex * * !i\

If the Legislature meant to say that sexual discrimination can exist only where necessary to preserve privacy of the body, it could have said just that and did uot need to list the string of exceptions to the general ban on sex discrimination that are set forth. I read the statute as (1) permitting any reasonable sex discrimination, and (2) providing, in addition, that in the listed categories sex discrimination may exist as a matter of right.

With respect to the exceptions, I see more than the one common theme of bodily privacy. There are at least two others: (1) athletic competition, and (2) educational endeavors. Little League falls within both classes.

It is apparent that the congressional purpose in chartering Little League was to foster nonacademic education through the acquisition of skill at baseball. Undoubtedly it had in mind things such as physical fitness, the strength of character to be built from team competitive endeavor, and the self-discipline inevitably generated in developing the proper emotional attitudes about winning and losing.

The statute in question permits sexual but no other kind of discrimination at the places enumerated in the exceptions. See N. J. S. A. 10:5-5 (l). Schools and camps, excepted categories, are most likely places for childhood athletic competition. It seems to me that Little League’s activities are quite like the exceptions in which sexual discrimination is permitted and that it is more reasonable to place Little League within the exceptions than outside them. I do not mean to imply any doubt about tibe power of the Legislature to compel Little League to accept girls; it is simply that I do not believe that that power has been exercised. In fact, I •doubt that sexual integration of athletic competition was considered at the time of enactment of the amendments •which dealt with sex discrimination.

Eurthermore, I think restriction of Little League to boys has a reasonable basis apart from any impact of the statutory exceptions to sex discrimination. There is virtual concession in this record that from puberty females cannot successfully compete with males in this contact sport. There may be a few isolated females of exceptional athletic ability who can, but for classification purposes they safely may be ignored. Generally, then, it will be true that females, after reaching adolescence, will be unable to capitalize upon baseball skills acquired during childhood unless they do so in all-female competition which is not now available. Males, on the other ¡hand, may continue in the sport until the approach of middle age and perhaps thereafter. There is nothing unreasonable in the position of Little League in desiring not to teach girls a skill that is only temporarily useful. And although there is no evidence on the point in this record, prima facie one may consider the impact upon the girl who devotes several years to baseball only to find that upon the onset of puberty she can no longer play. In short, it seems to me to be reasonable to have a policy which, considering today’s available athletic resources, tends to channel female childhood sports into areas that will provide recreational skills susceptible of long-term enjoyment.

This case appears to be unique. There are several academic comments dealing with sex discrimination in athletics which discuss the available decided cases. Both the comments and the cases deal with equal protection issues which are not projected here. See, e. g., Stroud, “Sex Discrimination in High School Athletics”, 6 Ind. L. Rev. 661 (1973); Note, “The Case For Equality in Athletics,” 22 Cleveland St. L. Rev. 570 (1973); Note, “Sex Discrimination in High School Athletics,” 57 Minn. L. Rev. 339 (1972), and the cases discussed therein. It appears that there is no other case involving, as does this one, the reasonableness of sexual discrimination in a body contact sport. But the inherent reasonableness of such segregation for those past puberty should not be obscured because of the lack of physical discrepancy at the immature ages here involved. Plainly, the Legislature did not mean to say that Little League is unreasonable in refusing to teach a skill only transiently useful. Accordingly, I would reverse the order of the Division on Civil Bights under review.

      Dr. Torg cited a study by Marlene Andrian, “Sex Differences in Biomechanics,” which concluded that coeducational physical education and athletic programs are feasible for elementary age and prepubic adolescent children. Morehouse, “The Scientific Basis of Athletic Training” (which was also cited by Dr. Hale) was read into the record for the proposition that physical performance of girls up to about 13 years of age is equal to that of boys and that thereafter the difference in athletic ability widens sharply.

      “See. 3. The objects and purposes of the corporation shall be —
      (1) To promote, develop, supervise, and voluntarily assist in all lawful ways the interest of boys who will participate in Little League baseball.
      (2) To help and voluntarily assist boys in developing qualities of citizenship, sportsmanship, and manhood.
      (3) Using the disciplines of the native American game of baseball, to teach spirit and competitive will to win, physical fitness through individual sacrifice, the values of teamplay and wholesome well-being through healthful and social association with other youngsters under proper leadership.’’ 78 Stat. 325 (1964) ; emphasis added.

      See, e.g., S. Rep. No. 1154, 88th Cong. (2d Sess. 1964).
      “Over a period of years, the Little League Baseball organization has done a great deal to achieve widespread participation by American youth in the traditional game of baseball. Its program has done much to encourage physical fitness, to teach the value of team play, and to instill the spirit of sportsmanship.
      Today, it is estimated that 1.25 million boys participate annually in Little League baseball. Little League has approximately 0,000 chartered local leagues all over the United States, with about 400 of these outside the United States. There are now almost 200 in Canada and there are leagues in Japan and in Australia.
      The committee believes that the granting of a Federal charter would be an appropriate recognition of the national stature which Little League has attained and will encourage its further development, and accordingly recommends favorable consideration of this bill, H. R. 9234, without amendment.”

      Congress has no explicit power to create corporations. The power exists only as a means, under the necessary and proper clause, to effectuate the powers expressly conferred upon the national government. M’Culloch v. Maryland, 4 Wheat. 316, 4 L. Ed. 579 (1819) ; see Fletcher, Cyclopedia Corporations, § 121 (1983). Since it is difficult to conceive of any express power underlying the congressional charter of incorporation for Little League Baseball, the charter is itself a tenuous exercise of federal power. Moreover, there being no underlying express power, the charter cannot be deemed intended to effectuate any substantive policy or purpose.


author: Michels, J. S. C.,

text:
    NATHANIEL P. JONES, PLAINTIFF, v. RONALD M. HEYMANN, DIRECTOR OF MOTOR VEHICLES OF THE STATE OF NEW JERSEY, DEFENDANT-APPELLANT, AND CAMDEN FIRE INSURANCE ASSOCIATION, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued January 7, 1974—Submitted for Determination March 18, 1974—
    Decided April 8, 1974.

      Before Judges Collester, Lynch and Michels.

      Mr. F. Herbert Owens, III, argued the cause for appellant (Messrs. Kisselman, Deighan, Montano & Summers, attorneys; Mr. Carl Ahrens Price on the brief).

      Mr. William R. Powers, Jr., argued the cause for respondent (Messrs. Moss & Powell, attorneys).
   The opinion of the court was delivered by

Michels, J. S. C.,

Temporarily Assigned. Defendant Director of Motor Vehicles pursuant to leave of this court appeals from a denial of his motion for summary judgment in an action instituted against him under the provisions of N. J. S. A. 39 :6—78.

The complaint initially filed against the Director sought recovery for damages sustained as the result of a “no contact” hit-and-run accident under the Unsatisfied Claim and Judgment Fund Law. Plaintiff alleged in the complaint that he was injured in an accident as a result of being forced off the road by an unknown driver of an unidentified motor vehicle. The Director moved for summary judgment on the ground that plaintiff was covered under the uninsured motorist endorsement to his policy of insurance and therefore was not a “qualified person” within the meaning of N. J. S. A. 39 :6-62 and was barred from recovery under the provisions of N. J. S. A. 39 :6—78. The motion was granted, but without prejudice and subject to being reopened pending the outcome of an arbitration proceeding on the issue of coverage.

The arbitrators ruled that plaintiff was not entitled to coverage under the uninsured motorist endorsement because the accident giving rise to the injury was a “no contact” accident, and there was no corroboration of plaintiff’s testimony, as required by the policy. Following that decision plaintiff moved to set aside the prior order for summary judgment which was granted and the complaint was reinstated.

Plaintiff thereupon filed an amended complaint adding as a party defendant his insurance carrier, Camden Fire Insurance Association (Camden). Following the filing of answers by both defendants in which liability was denied by each, the Director again moved for summary judgment on the ground that the requirement of corroboration in a “no contact” hit-and-run accident as set forth in the uninsured motorist endorsement to the Camden policy was void as against public policy since the coverage afforded under such endorsement must be interpreted as broadly as the protection afforded by the Unsatisfied Claim and Judgment Fund Law. The trial judge denied the motion for summary judgment on the ground that there was insufficient evidence before it upon which to decide the issue.

We are of the view that the court was in error in this regard. The salient facts concerning the happening of the accident were uncontroverted, the Camden policy of insurance and the uninsured motorist endorsement issued thereto were before the court by agreement, and both counsel for the Director and for Camden conceded at oral argument that the uninsured motorist endorsement had been approved by the Commissioner of Insurance. Thus, there was no genuine issue as to the material facts involved, and the matter was ripe for a decision on the merits.

The pertinent provisions of the uninsured motorist endorsement are as follows:

The company will pay all sums which the insured * * * shall be legally entitled to recover as damages from the owner or operator of an uninsured highway vehicle because of bodily injury or property damage caused by accident and arising out of the ownership, maintenance or use of such uninsured highway vehicle * *
“hit-and-run vehicle” means (i) a highway vehicle which causes an accident resulting in bodily injury to an insured arising out of physical contact of such vehicle with the insured or with a vehicle which the insured is occupying at the time of the accident, or (ii) a highway vehicle which without physical contact with the insured or with a vehicle which the insured is occupying at the time of the accident causes bodily injury to an insured arising out of an accident in New Jersey, provided:
t'r * * * * i* *
(d) with respect to subdivision (ii) the facts of such accident can be corroborated by competent evidence other than the testimony of any person having a claim under this or any other similar insurance as the result of such accident.

The Director contends that it is the legislative intent that the hit-and-run coverage, which N. J. S. A. 17 :28-1.1 requires that every automobile liability policy include, must be interpreted as broadly as the coverage provided by the Fund under N. J. S. A. 39 :6-78. We disagree.

N. J. S. A. 17 :28-l.l provides in pertinent part:

No automobile liability policy or renewal of such policy, of insurance insuring against loss resulting from liability imposed by law for bodily injury or death, sustained by any person arising out of the ownership, maintenance or use of a motor vehicle shall be issued in this State with respect to any motor vehicle registered or principally garaged in this State unless it includes coverage * * * under provisions approved by the Commissioner of Insurance, for payment of all or part of the sums which the insured or his legal representative shall be legally entitled to recover as damages from the operator or owner of an uninsured automobile, or hit and run automobile as defined in seetion IS of chapter 174 of the latos of 1952 (C. 39:6-78), because of bodily injury, sickness or disease, including death resulting therefrom, sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured or hit and run automobile anywhere within the United States or Canada. * *' * [Emphasis supplied]

Thus, it is required that every liability policy include coverage for hit-and-run accidents as defined in N. J. S. A. 39 :6—78 under provisions approved by the Commissioner of Insurance. N. J. S. A. 39 :6-78, entitled “Hit-and-run cases,” defines hit-and-run accidents as follows:

When the death of, or personal injury to, any person arises out of the ownership, maintenance or use of a motor vehicle in this State on or after April 1, 1955, but the identity of the motor vehicle and of the operator and owner thereof cannot be ascertained or it is established that the motor vehicle was at the time said accident occurred, in the possession of some person other than the owner without the owner’s consent and that the identity of such person cannot be ascertained, any qualified person who would have a cause of action against the operator or owner or both in respect to such death or personal injury may bring an action therefor against the director in any court of competent jurisdiction. * * *

The provisions of the uninsured motorist endorsement, while requiring police notification and corroboration of an accident, do not conflict with the above statutory definition of a hit-and-run accident, that is, an accident which “arises out of the ownership, maintenance or use of a motor vehicle * * * the identity of [which] and of the operator and owner thereof cannot be ascertained. * * *”

The legislative purpose of N. J. S. A. 17:28-1.1 has been set forth in Exum v. Marrow, 112 N. J. Super. 570 (Law Div. 1970), as follows:

It appears to have been the plain intendment of the amendments of N. J. S. A. 39 :G-62 and N. J. S. A. 17:28-l to relieve the Fund of some of the financial burdens relating to- claims against uninsured motorists. The device chosen was to permit the issuance of uninsured motorists coverage endorsements of the kind encountered in this ease, [at 574]

The basic differences between the coverage afforded by an uninsured motorist endorsement issued pursuant to N. J. S. A. 17:28-l.l on. the one hand, and the protection afforded under the Unsatisfied Claim and Judgment Fund Law on the other, are readily discernible upon a review of the pertinent statutes. These differences have been aptly set forth in Obst v. State Farm Mut. Auto. Ins. Co., 123 N. J. Super. 60, 66-67 (Ch. Div. 1973), aff’d per curiam 127 N. J. Super. 458 (App. Div. 1974). In the Obst case the very argument asserted here was raised and rejected, the court commenting:

These noted differences suffice to indicate the impossibility of attempting' to interpret the language of the uninsured motorist endorsement as broadly as the Fund law. Any attempt to do so would require the court to rewrite the endorsement. This is the responsibility vested by the Legislature in the Commissioner of Insurance, [at 67-68]

Furthermore, the parties conceded below that the uninsured motorist endorsement here under review was approved by the Commissioner of Insurance. The approval of the rate and the form of the endorsement was made effective by the Commissioner on April 2, 1969. To date the Commissioner has not made any change in that endorsement nor withdrawn his approval thereof. It must be presumed, therefore, that he did not consider the uninsured motorist endorsement unfair or inequitable, or that it was against public policy. Cf. Smith v. Motor Club of America Ins. Co., 54 N. J. Super. 37, 43-44 (Ch. Div. 1959), aff’d per curiam 56 N. J. Super. 203 (App. Div. 1959), certif. den. 30 N. J. 563 (1959); Busch v. Home Ins. Co., 97 N. J. Super. 54, 57 (App. Div. 1967).

While there does not appear to be any case directly on point, numerous courts have upheld policy provisions excluding non-contact hit-and-run accidents from coverage in jurisdictions where there is no statutory requirement that there be physical contact with the unidentified vehicle. See, e. g., Prosk v. Allstate Ins. Co., 82 Ill. App. 2d 457, 226 N. E. 2d 498 (App. Ct. 1967); Amidzich v. Charter Oak Fire Ins. Co., 44 Wis. 2d 45, 170 N. W. 2d 813 (Sup. Ct. 1969); Hendricks v. United States Fid. & Guar. Co., 5 N. C. App. 181, 167 S. E. 2d 876 (App. Ct. 1969); Lawrence v Beneficial Fire & Cas. Ins. Co., 8 Ariz. App. 155, 444 P. 2d 446 (App. Ct. 1968).

See also Annotation: “Hit-and-Run Vehicle — Physical Contact,” 25 A. L. R.3d 1299, 1302 (1969), where it is stated:

In jurisdictions where there is no statutory authorization for a requirement that there be contact with the unidentified vehicle, the courts have generally recognized this type of provision inserted in an uninsured motorist endorsement as a valid limitation on the insurer’s liability, being a proper attempt to protect against fraud in cases where the insured is injured through his own negligence and merely alleges the presence of another vehicle. *■ * *

In Smith v. Allstate Ins. Co., 224 Tenn. 423, 456 S. W. 2d 654 (Sup. Ct. 1970), the court held that a policy requirement of contact did not conflict with the Uninsured Motorist Act, which made no mention of such a requirement, particularly in view of the fact that the Commissioner of Insurance had approved the endorsement as required by the statute. The court stated that when there was no apparent conflict between the provisions of the Uninsured Motorist Act and the endorsement, the endorsement, when filed and approved by the Commissioner, became a part of the laws of the State.

Similarly, in Ely v. State Farm Mut. Auto. Ins. Co., 148 Ind. App. 586, 268 N. E. 2d 316 (Ind. App. Ct. 1971), the court ruled that a policy provision requiring contact did not conflict with the statute requiring all insurers to issue uninsured motorist coverage, noting that the endorsement had been approved by the Commissioner of Insurance although it had been within his province to reject the endorsement. The court stated:

The policy requirement of ‘physical contact’ is not unreasonable .and does not unduly restrict the statute. See Prosk v. Allstate Ins. Co. (1967), 82 Ill. App. 2d 457, 226 N. E. 2d 498. It attempts to prevent fraudulent claims by requiring of the claimant tangible proof of collision with the vehicle of an uninsured motorist. Thus, its function is to define the risk underwritten by the insurers in this state so that the fulfillment of the liberal aims of the law is not incompatible with the economic realities of insurance coverage, [at 319]

Insurance provisions which impose a certain quantum of proof such as “eyewitness clauses” are generally upheld by the courts. See 10 Couch on Insurance 2d, § 41:758 at 607 (1962), which states that:

It is generally held that a provision in an accident policy requiring the accidental nature of an injury to be established by an eyewitness before liability attaches is valid and not against public policy.
By the majority view, the provision is merely a limitation of liability for which the parties have a right to contract, rather than a condition which calls for proof of facts relating to other matters. Nor is the provision invalid as an attempt to modify or control the procedure of courts of justice, or to prescribe rules of evidence, or a denial to the insured of the right to a trial by jury on the issue of the cause of loss.

We are therefore of the view that the uninsured motorist endorsement is not to he construed or interpreted as broadly as the protection afforded by the Unsatisfied Claim and Judgment Fund Law, and the provision thereof requiring corroboration in “no contact hit-and-run accidents” is not void as against public policy. This policy provision is valid and enforceable, and plaintiff is entitled to pursue his rights against the Director under the Fund law. For the foregoing reasons, the denial of the Director’s motion for summary judgment is affirmed.


author: Bischoff, J. A. D.

text:
    AVANT INDUSTRIES LTD., A NEW JERSEY CORPORATION, PLAINTIFF-APPELLANT, v. DAVID B. KELLY, SUPERTENDENT OF THE DIVISION OF STATE POLICE OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Submitted March 19, 1974—
    Decided April 5, 1974.

      Before Judges Halpern, Matthews and Bischoff.

      Mr. Joseph F. Krupsky, attorney for appellant.

      Mr. William F. Hyland, Attorney General of New Jersey, attorney for respondent (Mr. L. Steven Pessin, Deputy Attorney General, of counsel and on the brief).
   The opinion of the court was delivered by

Bischoff, J. A. D.

Plaintiff appeals pursuant to N. J. S. A. 2A:151-21 from a denial by defendant Superintendent of State Police of his application to be registered as a manufacturer of firearms under N. J. S. A. 2A:151-19.

On June 14, 1973 plaintiff filed an application with defendant seeking to be registered as a manufacturer of firearms.

His application was denied by letter dated November 15, 1973, reading in pertinent part as follows:

This letter is to inform you that your application to be registered as a Manufacturer or Wholesale Dealer of Firearms has been denied by the Superintendent of State Police.
Based upon tests by the State Police and an independent firearms testing laboratory, the Superintendent is satisfied that the firearm you wish to manufacturer [sic], would be detrimental to the protection of the public safety, health and welfare * *.

Plaintiff was never advised that tests on the proposed firearm were being conducted, the nature of the tests or the results thereof. It first received information concerning the results of the tests when the reports were annexed to the brief filed by defendant in this appeal.

While plaintiff does not attack the constitutionality of the statute in question, it contends that the failure of defendant to promulgate rules and regulations as prescribed by the statute and to afford it a hearing constitutes arbitrary and unreasonable conduct resulting in a deprivation of due process of law.

The form which the applicant must submit for registration appears to seek information relating only to his character, as distinguished from information concerning the nature and quality of the firearm he proposes to manufacture. While the statute provides that “the Superintendent shall prescribe standards * * * for registration of manufacturers * * * of firearms,” the only standards or regulations which have been promulgated to which the parties refer us or which our own research has uncovered are those contained in N. J. A. C. 13:54-4.1 ei seq. These rules and regulations and the forms required thereunder do not contain any standards pertaining to the registration of manufacturers of firearms. In fact, defendant concedes that regulations concerning the nature of the weapons and the standards pertaining to their manufacture have not been promulgated. Further, he argues that while the statutory language appears mandatory, it should be construed merely directory.

While the statute in question vests in defendant the authority to register applicants to manufacture firearms, his authority is not an unbridled discretion.

Present-day concepts of due process require that a person affected by administrative action be given a full opportunity to be heard before any official action is taken. The hearing must be “at a meaningful time and in a meaningful manner.” Goldberg v. Kelly, 397 U. S. 254, 267, 90 S. Ct. 1011, 1020, 25 L. Ed. 2d 287 (1970) ; Kelly v. Sterr, 119 N. J. Super. 272 (App. Div. 1972), aff’d 62 N. J. 105 (1973). When one considers the wide range of subjects and uses which are today affected by administrative conduct, it is obvious that no one form of hearing will necessarily cover all situations. Examination of the large body of case law involving the requirements of administrative due process have not, as yet, produced any universal applicable statement of even minimum standards. 1 Davis, Administrative Law Treatise, § 8.01. Judicial decisions have made clear that what constitutes minimum compliance with due process in the way of administrative hearings presumably “will vary to a considerable extent with the nature of the substantive right, the character and complexity of the issues, the kinds of evidence and factual material, the particular body or official and the administrative functions involved in the hearing * * National Broadcasting Co., Inc. v. Federal Communications Comm’n, 76 U. S. App. D. C. 238, 132 F. 2d 545, 560 (D. C. Cir.), aff’d 319 U. S. 239, 63 S. Ct. 1035, 87 L. Ed. 1374 (1942); Lopez v. N. J. Bell, 51 N. J. 362, 373 (1968).

It is clear that plaintiff has been denied even the minimum requirements of due process. The total absence of any hearing makes appellate review impossible, for there is no record for us to consider. See Kelly v. Sterr, supra, 119 N. J. at 275, where this court held that the hearing afforded a policeman by this defendant complied with the requirements of “procedural due process, in its fullest sense.” and provided a basis for appellate review.

It necessarily follows that there must be a remand to defendant for the conduct of proceedings consistent with due process. We refrain from suggesting the form that this hearing should take. The Legislature has placed in defendant the discretion and authority to determine the type of hearing to which an applicant is entitled under appropriate rules and regulations.' We defer to defendant’s expertise in this field. Presumably, upon this remand, defendant will again consider the statutory mandate concerning his duty to promulgate the necessary rules, regulations and standards so that an applicant may be informed and guided accordingly.

Reversed and remanded for proceedings consistent herewith. We do not retain jurisdiction.

         N. J. S. A. 2A: 151-19 provides:
      No person shall manufacture or sell at wholesale any firearm until he has registered with the superintendent and has furnished him with such particulars as may be prescribed by law and by rules and regulations promulgated by the superintendent for registration. The application for registration shall be accompanied by a fee of $150.00 and shall be valid for a period of 3 years from the date of issuance. In addition, every wholesale dealer shall pay a fee of $5.00 for each employee actively engaged in the sale or purchase of firearms. The superintendent shall issue a license for each employee for whom said fee has been paid, which license shall be valid for so long as the employee remains in the employ of said wholesale dealer.
      The superintendent shall prescribe standards and qualifications for registration of manufacturers and wholesalers of firearms, for the protection .of the public safety, health and welfare. If the superintendent is satisfied that an applicant for registration cannot be permitted to carry on business as a manufacturer or wholesale dealer in firearms without danger to the public health, safety or welfare, he may refuse to register the applicant.
      The superintendent shall furnish a certificate of registration to every person registered under this section.


author: Crane, J. A. D.

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. FRED CAPPADONA, DEFENDANT-APPELLANT. STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. CHARLES FISHER, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued December 11, 1973—
    Decided March 5, 1974.

      Before Judges Kolovsky, Fritz and Crane.

      Mr. Seymour Gelzer argued the cause for appellant Cappadona (Messrs. I aria & Gelzer, attorneys).

      Mr. Robert A. Coogan, designated counsel, argued the cause for appellant Fisher (Mr. Slanley C. Van Ness, Public Defender, attorney; Mr. Donald W. Peppler, Jr., on the brief).

      Mr. Lewis N. White, III, Assistant Prosecutor, argued the cause for respondent (Mr. John S. Kuhlthau, Middlesex County Prosecutor, attorney).
   The opinion of the court was delivered by

Crane, J. A. D.

Defendants Ered Cappadona and Charles Eisher were found guilty of robbery, in violation of N. J. S. A. 2A :141—1, and being armed while committing the robbery, in violation of N. J. S. A. 2A:151-5, after a jury trial in the Superior Court of Middlesex County. The indictment returned by the state grand jury also named Alex Birnbaum, George Lattimore and Joan Janiszewski as defendants. Joan Janiszewski testified for the State. The State’s main witness, however, was Jerome McKenney, a confessed accomplice to the present crimes who avoided prosecution by entering into a bargain with the Attorney General by pleading guilty to other offenses.

Each defendant raises several separate issues.

[There follows a discussion of the testimony at the trial and the various issues raised by defendant Cappadona, decided adversely to him on this appeal.]

Defendant Eisher presents four reasons for reversal. lie first contends that he has been deprived of Ms right to a speedy trial as guaranteed by the Sixth and Fourteenth Amendments to the United States Constitution. The issue was previously presented in a pretrial motion to dismiss, and denied. Thereafter defendant was granted leave to appeal and this court affirmed the denial of his motion to dismiss in an unpublished opinion. State v. Fisher (A-1967-71, decided April 21, 1972). Subsequently, the United States Supreme Court decided Barker v. Wingo, 407 U. S. 514, 92 S. Ct. 2182, 33 L. Ed. 2d 101 (1972), in which it was held, among other things, that the requirement that a demand for a specified trial date be made as a prerequisite to a motion to dismiss for failure to accord defendant a speedy trial was inconsistent with due process. In the opinion it was suggested that trial courts consider four factors in determining whether an indictment should be dismissed for delay in prosecution:- (1) the length of the delay, (2) the reason for the delay, (3) defendant’s assertion of his right, and (4) prejudice to defendant.

Pisher urges that we reexamine our prior deter-mination in the light of Barker v. Wingo, supra. We are convinced that Barker should not be applied retrospectively. See Stovall v. Denno, 388 U. S. 293, 297, 87 S. Ct. 1967, 18 L. Ed. 2d 1199 (1967). Nevertheless, even under the standards set forth in Barker, denial of the motion to dismiss was not improper. The length of time from filing of the indictment to the time of trial was approximately two years; the reason for the delay was the inability of the prosecutor to produce the essential witness McKenney who was incarcerated in a federal institution and who was engaged-in giving testimony in many courts. As we noted in the prior opinion filed April 21, 1972, Pisher did not demand a specified trial date. There is nothing in the record to show that Pisher suffered any prejudice by way of inability to produce witnesses or otherwise. In fact, one of the strategies employed by his trial counsel was that the memory of the State’s witnesses was blurred by the passage of time. Weighing all the factors, we find that the motion to dismiss was properly denied.

Pisher next argues that the trial judge committed reversible error when he refused to allow the jury to take two letters written by McKenney to Joan Janiszewski into the jury room during deliberation. Had McKenney denied or qualified the contents of the letters, their introduction would have been appropriate. State v. Smith, 101 N. J. Super. 10 (App. Div. 1968), certif. den. 53 N. J. 577 (1969). But the letters were disclosed to the jury on cross-examination and their content was admitted by McKenney.

Fisher’s next argument concerns the trial judge’s refusal to allow him to cross-examine McKenney as to psychiatric care which McKenney received in 1968. We find no error. McKenney’s psychological state of mind in 1968 was not logically relevant to his credibility while testifying in 1972; State v. Vigliano, 50 N. J. 51 (1967) is inapposite. That decision rested upon the prosecutor’s concealment of the fact that the State’s primary witness had been committed to a hospital during trial and found by two examining physicians to be “confused and disoriented and suffering from senility, chronic brain syndrome associated with cerebral arteriosclerosis.” Id. at 57-58.

Fisher’s final argument concerns the propriety of the prosecutor’s remarks during summation that the robbery was an inside job based on a tip from the switchboard operator, and his characterization of the defendants as “bums.” There was testimony by McKenney that a tip had been given to Fisher by ah employee of Great Eastern. Thus, the prosecutor’s comment that the robbery was an “inside job” finds support in the evidence adduced.

The comment that the inside tip came from a switchboard operator, while not supported by the record, was harmless. We fail to see any prejudice resulting to Fisher from the prosecutor’s comment.

The reference to defendants as iCbums” during the prosecutor’s summation was immediately objected to by Fisher. The court instructed the jury to disregard the comment. Under these circumstances we find no reversible error.

Prior to oral argument defendant Cappadona presented a motion for a new trial based upon allegedly newly discovered evidence to the effect that the State’s principal witness, McKenney, had lied when he implicated Cappadona. We initially reserved decision on the motion pending oral argument. However, we have not considered the merits of the motion since, pursuant to the provisions of B. 3 :20-2, it should be presented to the trial court in the first instance. Our decision on the issues presented on the appeal is without prejudice to defendant’s right to -present such a motion to the trial court.

The judgments of conviction are affirmed.