author: Fritz, J. A. D.

text:
    FRED S. BOYD, JR., PLAINTIFF-RESPONDENT AND CROSS-APPELLANT, v. RAPHAEL MARINI, DIRECTOR OF MOTOR VEHICLES, DEFENDANT-APPELLANT AND CROSS-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued September 24, 1974
    Decided January 29, 1975.

      Before Judges Matthews, Fritz and Botter.

      Mr. Franlc P. Addas argued the cause for appellant and cross-respondent (Messrs. James & Addas, attorneys).

      Mr. Jerry M. Finn argued the cause for respondent and cross-appellant (Messrs. Goldberger, Siegel & Firm, attorneys).
   The opinion of the court was delivered by

Fritz, J. A. D.

The only issues involved in this appeal by the Director of the Division of Motor Vehicles (Director) in a 'hit and run” case and a subsequent application for payment from the Unsatisfied Claim and Judgment Fund (Fund), are (a) whether the amendment to N. J. S. A. 39 :6-84, raising the limit of one person payment to $15,000 from the previous $10,000 limit (L. 1972, c. 198, § 5 at 761) applies to all judgments entered after the amendment, irrespective of the fact that the accident producing the judgment — in this ease October 23, 1971 — may have occurred prior to the amendment date, and (b) whether prejudgment interest should attach pursuant to R. 4:42—11(b) (and see R. 4:58). The judge below answered these inquiries in the affirmative.

Subsequent legislative consideration of the problem satisfies us, as will appear, that without the benefit of that legislative action the judge below erred in regard to the first issue. We agree with his determination of the latter issue.

The problem with respect to whether the 1972 amendment was to be applied to accidents occurring prior to its effective date in cases where a judgment was entered subsequent to that date arose from the failure of the Legislature to specify a “cut-off date” in that legislation as it had in prior enactments (L. 1952, c. 174, § 18 at 585; L. 1958, c. 99, § 9 at 563). The question became one of whether the omission was inadvertent or whether it was intentionally designed in order to provide for retroactive benefits. This question could be answered only by an ascertainment of legislative intent. Rothman v. Rothman, 65 N. J. 219 (1974). The history of the enactment offered little light on the path in this quest except for the difference from prior enactments. This difference served more to confuse than enlighten, since either of the two contradictory interpretations might easily be inferred.

Then, as a direct result of the judgment in this suit the Legislature told us precisely what it did mean and explained to us precisely what its intent was. We take judicial notice (Evict. R. 9) of the fact that, without a single negative vote, both houses passed and sent to the Governor for his signature a bill filling in the gap and, similarly to its predecessors, setting a “cut-off date.” Assembly Bill 81, 196th New Jersey Legislature. The statement appended to the bill recited its motivation by the judgment of “[a] recent court decision interpret [ing] the new limits to apply to accidents occurring before [the effective date of the enactment].”

Now we can with certainty declare what the intent of the Legislature was when it enacted L. 1972, c. 198, § 5. We need not guess; they have told us.

We see no reason why this subsequent legislative advice should not be acceptable as a convincing extrinsic aid to an interpretation of the earlier law. It is difficult to conceive a source to which more thoughtful consideration should be given than the collective (and undissenting) author of the legislation speaking to the precise problem. As is pointed out in 2A Sutherland on Statutory Construction (4 ed.) § 49.01, 228:

The extxúnsie aids of statutory construction include information about circumstances existing and events occurring at or after the time when a statute goes into efEect. Use of legislative intent as the governing criterion for interpretation has a tendency, in general, to focxxs attentioxx oxx circumstances and events of the time when a bill was enacted. But circumstances and situations developing after the enactmexxt of a statute may be of great or even conclusive significance in determining what meaning was conveyed. * * *■ [Footnote omitted]

The same text specifically reports that “where * * * a doubtful meaning of a former statute [is] rendered certain by subsequent legislation a number of courts have held that such * * * subsequent legislation is strong evidence of what the legislature intended by the first statute.” Id., § 49.11, at 265.

We do not hold that such an extrinsic aid is controlling. The circumstances of a given case may impose the serious consideration of other extrinsic aids, or indeed commend the rejection of consideration of the subsequent legislation. But this presents no problem here, for we are entirely satisfied that the circumstances of this case do warrant controlling application.

It is to be noted, as well, that the result here is consistent with prior interpretations holding time and place of the accident determinative of rights under the act. Rudnick v. Bentler, 66 N. J. Super. 224 (App. Div. 1961); Brown v. Unsatisfied Claim and Judgment Fund Bd., 96 N. J. Super. 91 (Law Div. 3967), aff'd 101 N. J. Super. 299 (App. Div. 1968), certif. den. 53 N. J. 77 (1968).

With respect to the interest question, Crudup v. Marrero, 57 N. J. 353 (1971), is ample authority to justify the application of the prejudgment interest rule, R. 4:42-11(b), against the Fund in this ease. Beyond the force of rules of court in this respect (see Busik v. Levine, 63 N. J. 351 (1973), app. dism. 414 U. S. 1106, 94 S. Ct. 831, 38 L. Ed. 2d 733 (1973)), the legislative intent in such regard is quite clear by virtue of the specific exclusion of interest and costs from the limits imposed by the statute. Thus we resolve the conflict between Lynch v. Heymann, 119 N. J. Super. 151 (Law Div. 1972), and Bellino v. Strelecki, 121 N. J. Super. 331 (Law Div. 1972), in favor of the latter and expressly disapprove the holding in Lynch.

Nonetheless, the application of the rnle against the Fund in any given case remains a matter of the sound exercise of judicial discretion in the circumstances of the case. Crudup v. Marrero, supra, 57 N. J. at 362. Here, where the only offer from the Fund was belatedly made at the outset of the damages trial and after the adjudication of liability, we do not fault the discretion of the trial judge in imposing interest.

The suggestion of plaintiff, the subject of his cross-appeal here, that interest should have been imposed against the Fund on the total amount of the damage judgment, 8125,000, is frivolous. That interest should he available on a principal sum for which the interest payor has no responsibility is so illogical, unfair and alien to the purposes for which interest is imposed (see Busik v. Levine, supra, 63 N. J. at 358) that it unquestionably cannot be said to have been within legislative intendment in the statute in question. As Judge Foley, then a County Court judge, so aptly noted in Pistoria v. Buchowski, 46 N. J. Super. 495, 496 (Law Div. 1957), “[W]hen interest was mentioned [in the statute] in connection with the sum payable, it was intended that the Fund should be charged with the benefit of the use of the money to which the plaintiffs became entitled to payment.”

We note the entry of a consent order below providing for the payment of $10,000 from the Fund, and we presume that has been paid. Judgment in this court is entered consistent with all the foregoing. The matter is remanded for the entry of an order directing payment from the Fund by the State Treasurer, pursuant to statute, of prejudgment interest on $10,000 from April 23, 1972 until the date of payment as aforesaid, and taxed costs in this court.


source: Caselaw Access Project

author: Michels, J. A. D.

license: Public Domain

text:
    ANGEL ACEVEDO GONZALEZ, APPELLANT-APPELLANT, v. BELL LABORATORIES AND BOARD OF REVIEW, DEPARTMENT OF LABOR AND INDUSTRY, STATE OF NEW JERSEY, RESPONDENTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Submitted January 20, 1975
    Decided January 29, 1975.

      Before Judges Michels, Cbane and Moegax.
    Mr. Angel Acevedo González, appellant, pro se.

      Mr. William F. Hyland, Attorney General of New Jersey, attorney for respondent Board of Eeview, Department of Labor and Industry, State of New Jersey (Mr. Michael 8. Bolear, Deputy Attorney General, of counsel and on the brief).

      Mr. Godfrey K. Preiser, Jr., filed a statement in lieu of brief in behalf of respondent Bell Laboratories.
   The opinion of the court was delivered by

Michels, J. A. D.

Angel Acevedo Gonzalez (claimant) appeals from a decision of the Board of Review, in the Division of Employment Security, Department of Labor and Industry, affirming a decision of the Appeal Tribunal holding claimant ineligible for unemployment compensation benefits.

Claimant was employed by Bell Laboratories in Hanover Township, Morris County, New Jersey, until November 18, 1972, when his employment was terminated. Sometime thereafter he left Morris County and returned to his home in Aguada, Puerto Rico. He filed a claim for benefits under the New Jersey Unemployment Compensation Law through the Interstate Claims Ofiice in Puerto Rico, in accordance with the uniform interstate procedure for processing out-of-state claims. According to an official report submitted by the Bureau of Employment Security of the Puerto Rican Commonwealth Department of Labor to the United States Department of Labor, the unemplojonent rate in Aguada, Puerto Rico, at the time claimant moved there in November 1972, was 30.5%. The unemployment rate for Morris County at the same time was only 4.9%. The Interstate Claims Section in the New Jersey Division of Unemployment and Disability Insurance denied the claim on the ground that claimant rendered himself unavailable for work under the Unemployment Compensation Law. Claimant appealed that determination to the Appeal Tribunal.

The Appeal Tribunal, after a de novo hearing, affirmed the determination of the Interstate Claims Section, holding that “Claimant moved from an area where he had been employed and earned his wage credits to another area of consideraba higher unemployment where his prospects of obtaining work were greatly reduced. By doing so he, in effect, made himself unavailable for work. Therefore, he is ineligible for unemployment compensation benefits * * Claimant appealed to the Board of Review, which affirmed the decision of the Appeal Tribunal on the record below. Claimant then appealed to this court. He contends that the Unemployment Compensation Law is being applied in a discriminatory manner against him and all those persons similarly situated who move to Puerto 'Rico, and, as so applied, is unconstitutional and violative of his civil rights.

The Division of Employment Security adopted a policy regarding the eligibility of interstate claimants, effective July 1, 1972, of denying unemployment benefits to claimants who move to an area of persistently high unemployment, on the ground that such claimants had voluntarily reduced their prospects of finding employment by restricting their availability to an extremely limited number of job opportunities. The Division, in an effort to provide some concrete guidelines in the administration of this policy, issued an adminstrative instrnction (UMI-415) to the Interstate Claims Section, directing it to apply the policy “to any interstate claimant who moves to or near a major labor market area designated by the U. S. Department of Labor as an area of persistent unemployment which had had an unemployment rate of 12% or more for three or more consecutive months.” See Vasquez v. Bd. of Review, 127 N. J. Super. 431, 433-434 (App. Div. 1974).

Claimant merely cites Galvan v. Levine, 345 F. Supp. 67 (S. D. N. Y. 1972), aff’d 490 F. 2d 1255 (2 Cir. 1973), cert. den. 417 U. S. 936, 94 S. Ct. 2652, 41 L. Ed. 2d 240 (1974), to support his bare charge of discrimination in tho application of the New Jersey Unemployment Compensation Law. Our reading of the decisions in this case as well as the companion case of Galvan v. Catherwood, 324 F. Supp. 1016 (S. D. N. Y. 1971), aff’d sub nom. Galvan v. Levine, 490 F. 2d 1255, supra, convinces us that his reliance thereon is unfounded and does not support his attack upon the Law,

In the Galvan cases, supra, claimants challenged the constitutionality of New York Labor Law §591 subd. 2, McKinney’s Consol. Laws, c. 31. denying unemployment benefits to a person “not ready, willing and able to work in his usual employment or in any other for which he is reasonably fitted by training and experience” as applied by the Industrial Commissioner of New York. The Commissioner had adopted a policy of denying benefits to a claimant who had left the labor market area in which he was last employed and had moved his residence to another labor market area lacking reasonable employment opportunities for one with his training and experience. Later the Commissioner implemented the policy by ruling that except for persons with occupational skills for which there was a particular demand at their destination, removal to an area of “high persistent unemployment” would establish ineligibility as a matter of law. The Commissioner defined an area of “high persistent unemployment” as one 'having a current unemployment rate of 12% or more. The claimants argued, among other things, the so-called “Twelve Percent Rule” (1) violated their constitutionally guaranteed right to travel; (2) was arbitrary and vague and thus violative of the Due Process Clause of the United States Constitution and (3) was applied in an arbitrary manner by the Commissioner to Puerto Rico, in violation of the United States Constitution. The Commissioner moved to dismiss the complaint. The three-judge United States District Court for the Southern District of New York found no basic constitutional infirmity in the Twelve Percent Rule. The court was concerned, however, with the claim that the rule had been applied by the Commissioner only to persons who moved to Puerto Rico. Accordingly, it granted the Commissioner’s motion “in all respects save for plaintiffs’ claim of discriminator}’- application of New York policy * * and set a hearing on this limited question.

In disposing in part of claimants’ constitutional challenge the court, in Galvan v. Catherwood, 324 F. Supp. 1016, at 1019, held:

Turning first to their contention that the policy in question violates their constitutionally guaranteed right to travel, plaintiffs understandably rely upon Shapiro v. Thompson, 394 U. S. 618, 89 S. Ct. 1322, 22 L. Ed. 2d 600 (1969) wherein the Supreme Court condemned Connecticut’s one-year residence requirement for public assistance. We do not deem it clear in the context of this case, however, that the unlimited right to travel out of the state as asserted by plaintiffs falls within the ambit of constitutional protection. The Court in Shapiro relied heavily on the fact that the restriction involved created an “invidious distinction” between residents of the state. In this case, plaintiffs concededly have left the state from time to time to take up residence in Puerto Rico; conceivably, the benefits or obligations owed by the State of New York to its former residents are not co-equal with those owed to its present residents. Indeed, it may be that New York is not constitutionally required to provide unemployment benefits for anyone who leaves the state.
In any event, the right to travel freely throughout the several states is not an absolute right. American citizens are “free to travel * * * uninhibited by statutes, rules, or regulations which unreasonably burden or restrict this movement.” Shapiro at 629, 89 S. Ct. at 1329. In the case before us, the resti'iction involved is a minor one; claimants forfeit their rights only if they go to an area of such “high persistent unemployment” that they are deemed to have effectively isolated themselves from any possibility of reemployment. Furthermore, at least on the record before us, this limitation is reasonably and directly related to the long-standing and valid policy of the unemployment insurance provisions of New York law — e. g. that a claimant be “ready, willing and able to work”. New York Labor Law § 591 (2). rat 1019]
Plaintiffs’ second contention, that the standard is arbitrary and vague and thus violative of the due process clause of the Constitufion, is without merit. The previously mentioned federal standard from Area Trends defines “persistent unemployment” with adequate precision; defendant’s use of the higher figure, cutting off only those claimants who move to an area where the unemployment rate is over twelve percent, is likewise sufficiently precise, [at 1019]

Thereafter the parties stipulated that the three-judge court could decide the ease on the cross-motions for summary judgment on the record, including documents and depositions. In addition to claiming that the Twelve Percent Buie was applied and administered in a discriminatory manner, claimant attacked the rule under Title VI of the Civil Rights Act of 1964, 42 U. S. C. A. § 2000d et seq. The court found that the Twelve Percent Buie had an effect clearly adverse to Puerto Rican Americans who traveled from New York to Puerto Rico seeking employment, and that it had not been applied consistently or even substantially to claimants who had traveled from New York to other areas of the continental United States which might be regarded as areas of persistent high unemplojunent. In this regard the court found that while the Twelve Percent Rule was used in Puerto Rico, the “reasonable opportunity for work” standard was used in the continental United States. Accordingly, it held that the Twelve Percent Rule, as applied by the Commissioner to implement section 591 of the New York Labor Law, violated Title VI of the Civil Rights Act of 1968 and the Fourteenth Amendment of the United States Constitution. Galvan v. Levine, 345 F. Supp., supra. The court expressly held that a nondiscriminatory application of the rule would not violate the Civil Rights Act of 1968 or the Fourteenth Amendment, stating:

* * * We emphasize, however that our holding does not forbid the state from implementing the twelve percent rule so long as it applies that policy evenly to claimants from each of the 50 states, the Commonwealth and the territories. * * * [345 F. Supp. at 74],

See also, Wadlington v. Mindes, 45 Ill. 2d 447, 259 N. E. 2d 257 (Sup. Ct. 1970), app. dism. 400 U. S. 935, 91 S. Ct. 252, 27 L. Ed. 2d 242 (1970).

Here, claimant failed to offer any evidence to support his charge of discrimination in the application of our law. In fact, there is nothing in the record below even suggesting discriminatory application of Administrative Instruction UIM-415, the so-called Twelve Percent Rule, with respect to claimant or others similarly situated who move to Puerto Rico. 'To the contrary, the Appeal Examiner observed below that The Interstate Unit in the Bureau of Unemployment Benefits has applied this “official policy” uniformly to claimants from each of the fifty states, commonwealth and territories. (BR-80665).

Furthermore, there was ample evidence in the record below to support the findings and conclusions of the Appeal Examiner that when claimant moved from Morris County, -New Jersey (where the employment rate was 4.9%), to Aguada, Puerto Eico (where the employment rate was 30.5%), he rendered himself unavailable for work within the meaning of our Unemployment Compensation Law. N. J. S. A. 43:21-4 in pertinent part provides:

An unemployed individual shall be eligible to receive benefits with respect to any week only if it appears that:
(c) He is able to work, is available for work, and has demonstrated that he is actively seeking- work s-' * *

The statutory requirement that the claimant be “available for work” is met if it appears that the claimant “is willing, able and ready to accept suitable work which he does not have good cause to refuse, that is when he is genuinel}’ attached to the labor market.” Krauss v. A. & M. Karagheusian, 13 N. J. 447, 457-458 (1953); Vasquez v. Bd. of Review, supra 127 N. J. Super, at 434; Valenti v. Board of Review, 4 N. J. 287, 290 (1950). Our Supreme Court in Krauss v. A. & M. Karagheusian, supra, commented further on this requirement:

However genuine the claimant’s desire to be attached to the labor market, the availability test is not met unless there exists a labor market to which he may be attached, that is, it must appear that there is a substantial amount of work in the area for the skills he has to offer. Valenti v. Board of Review, supra. This does not mean that job vacancies must exist. “It means only that the type of services which an individual is offering is generally performed in the geographical area in which he is offering them.” 55 Yale L. J., p. 124; Valenti v. Board of Review, supra. [13 N. J. at 460]

See also, Campbell Soup Co. v. Bd. of Review, 13 N. J. 431, 437-439 (1953); Worsnop Bd. of Review, 92 N. J. Super. 260, 264-265 (App. Div. 1966); Tung-Sol Electric v. Bd. of Review, 34 N. J. Super. 349, 351-53 (App. Div. 1955).

In Vasquez v. Bd. of Review, supra, we held that claimants were not available for work within the meaning of N. J. S. A. 43:21-4(c) when they moved from New Jersey (where the unemployment rate for the area at the time was 6.8%) to areas in Puerto Rico (where the unemployment rate was 19% or in excess thereof), stating:

Krauss speaks of the need for a substantial amount of work in the area for the skills the claimant has to offer. Obviously, if heavy unemployment exists in an area of persistent unemployment, a substantial amount of work cannot be available. Consequently, if a claimant moves from an area in which a job market exists to one in which there is a great deal of unemployment, he is not available for work within the meaning of the statute, and hence is ineligible for benefits. Here, the record establishes the claimants effectively removed themselves from the labor market and as a consequence thereof they were properly denied unemployment benefits. [127 N. J. Super, at 435]

Here, too, claimant effectively removed himself from the labor market when he returned to his home in Puerto Rico and was, therefore, properly denied unemployment compensation benefits.

Affirmed.

      Administrative Instruction UJM 115 was rescinded as of May 1, 1974 by the Commissioner of Labor and Industry by a memorandum to the Director of the Division of Unemployment and Disability Insurance.


text:
    PROFESSIONAL ASSOCIATION, STATE DEPARTMENT OF EDUCATION, JOSEPH F. KELLY, ROBERT H. ARENTS, GEORGE A. SNOW AND PAUL HILLAIRE, APPELLANTS, v. THE COMMISSIONER OF EDUCATION AND THE SALARY ADJUSTMENT COMMITTEE, RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued November 11, 1974
    Decided February 7, 1975.

      Before Judges Michels, Morgan and Kentz.

      Mr. Michael J. Herbert argued the cause for appellants (Messrs. Sterns é Greenberg, attorneys; Mr. William S. Greenberg, of counsel).

      Mrs. Erminie L. Conley, Deputy Attorney General, argued the cause for respondents (Mr. William F. Hyland, Attorney General of New Jersey, attorney; Mr. Stephen Slcillman, Assistant Attorney General, of counsel).
   The opinion of the court was delivered by

Michels, J. A. D.

Plaintiffs appeal from an action taken by the Salary Adjustment Committee (the Committee) on January 14, 1974 which approved lump-sum sick leave payments to unclassified employees in the Department of Education (Department) pursuant to N. J. S. A. 11:14-9 (L. 1973, c. 130, § 1), provided said employees follow the standard method for the use, earning and accumulation of sick leave and vacation leave followed by classified employees, and from an action taken by the Acting Commissioner of Education (Commissioner) the same day which changed the vacation policy for unclassified employees in the Department from 22 vacation days a year to the same vacation schedule applicable to classified employees in the Department. See N. J. S. A. 11:14-1.1 and 1.2; N. J. A. C. 4: 1-17.11.

A brief review of the context in which this appeal arises is helpful to its resolution. In 1973 our Legislature passed “An Act concerning supplemental compensation payments for public employees in certain cases” (L. 1973, c. 130, § 1 ;N. J. S. A. 11:14-9 et seq.). The act, which was approved on May 16, 1973, became effective on July 1, 1973, and provided in § 1 (N. J. S. A. 11:14-9) :

Each employee in the classified service of the State and each State employee not in the classified service who has been granted sick leave under terms and conditions similar to classified employees shall be entitled upon retirement from a State-administered retirement system to receive a lump sum payment as supplemental compensation for each full day of earned and unused accumulated sick leave which is credited to him on the effective date of his retirement in the manner prescribed by section 4 of P. L. 1947, c. 201 (C. 11:14-5).

Ill order to implement the act § 9 (N. J. S. A. 11:14— 17) declared that

The President of the Civil Service Commission, the State Treasurer and the Director of the Division of Budget and Accounting shall jointly prepare and promulgate rules and regulations to implement this act, including but not limited to the procedure for application for, and payment of, such supplemental compensation and reasonable ■standards for determining which State employees are eligible for the supplemental compensation payment provided herein.

Pursuant to this grant of administrative power the President of the Civil Service Commission, the State Treasurer and the Director of the Division of Budget and Accounting (who comprise the Committee) promulgated Joint Regulations on July 12, 1973 for administering the payment of supplemental compensation for earned and unused sick leave. These Joint Regulations provided, among other things, that “'State employees not in the classified service who have been granted sick leave under terms and conditions similar to classified employees” were eligible for supplemental compensation under the act, and established a procedure for determining the eligibility of class titles of state employees not in the classified service. In addition, they established guidelines by which the eligibility of nonclassified titles for such compensation would be determined, providing in pertinent part:

The eligibility of an employee will be determined by such class title held at any time during his State employment. Eligibility of class title will not be approved by the Salary Adjustment Committee unless the following standards and guidelines have been adhered to:
1. Sick leave days were earned by all employees within that class title on the basis of one working day per month during the remainder of the first calendar year of employment after initial appointment and fifteen working days per calendar year thereafter.

Thereafter, at its meeting of December 10, 1973 the Committee made the following determination with respect to requests for said lump-sum payments:

Any sick leave payment to a non-classified employee in the Department of Education shall take into account as an offset the additional leave authorized for such person during his employment. This is in accordance with the Deputy Attorney General [sic] opinion rendered in letter to Commissioner James A. Alloway, dated July 13, 1973.

The State Board of Education (Board of Education) challenged this determination, and requested that it be reconsidered by the Committee. The Board of Education argued that L. 1973, c. 130, is applicable to all employees, whether classified or unclassified, who receive the same sick leave benefits, and that this condition has been met since both classes of employees in the Department receive the same sick leave allowances. Subsequently an agreement was reached between the Committee and the Commissioner whereby the Commissioner agreed to change the vacation benefits of the Department’s unclassified employees to conform to those provided for classified employees, and the Committee agreed to rescind its determination of December 10, 1973.

In order to implement this agreement the Committee, on January 14, 1974, adopted the following policy:

The Salary Adjustment Committee approves the following lump sum sick leave policy for non-classified employees in the Department of Education:
Lump sum sick leave payments for non-classified employees in the Department of Education shall be considered in accordance with the statutes and regulations in the same manner as for classified State employees; provided, however, that effective January 1, 1974 all present and new non-classified employees in the Department of Education follow the standard (12, 15 or 20 days of vacation predicated on years of service; and 15 days of annual sick leave) method for the use, earning and accumulating of sick leave and vacation leave.
With the implementation of the above procedure, the Salary Adjustment Committee approves: (a) credit for accumulated sick leave balances as recorded to January 1, 1974 (with no reduction or offset for the additional amount of vacation leave which was received over and above classified employees), (b) credit for 1973 vacation leave balances up to a maximum of 22 days carried over into calendar year 1974 and (c) administrative leave for the employees indicated herein.

The Commissioner, in turn, issued a memorandum that same day to all unclassified employees in the Department, the following part of which is also challenged by plaintiffs on this appeal:

4. Effective January 1, 1974 unclassified twelve-month employees may carry forward 1973 earned unused vacation credits to a maximum of twenty-two days.
5. Effective January 1, 1974, unclassified twelve-month employees will earn vacation credits at the same rate as classified twelvemonth employees.
(a) From date of employment to end of the calendar year in which employment occurs-one full day for each full month worked.
(b) Twelve working days per calendar year up to ten years.
(c) Fifteen working days per calendar year after the completion of ten years and up to 20 years of service.
(d) Twenty working days per calendar year after completion of 20 years of service.
(e) The maximum number of days that may be carried forward under this schedule may not be in excess of the number of days earned in the preceding year.

After plaintiffs filed their notice of appeal challenging the above actions the Committee on June 11, 1974 supplemented the Joint Regulations relating to the administration of payments for itnused sick leave, granting all unclassified state employees not previously covered by said regulations (including unclassified employees in the Department of Higher Education) an option to either retain their existing vacation schedule or place themselves under the same vacation provisions as classified employees. If the unclassified employees chose the latter, they would be eligible for lump-sum payments as supplemental compensation for earned and unused accumulated sick leave pursuant to L. 1973, c. 130. If they did not so elect, they would be ineligible for such supplemental compensation benefits. Thereafter, on June 26, 1974, the Committee, on the recommendation of the Attorney General, further supplemented the Joint Regulations, providing the same option to unclassified employees of the Department. See Supplement #6, dated July 8, 1974. This action superseded the Committee’s action on January 14, 1974. Finally, on June 27, 1974 the Commissioner issued a “memorandum to Division Heads and County Superintendents”, rescinding his action of January 14, 1974 and notifying tire unclassified employees in the Department of the option granted to them by the Committee at its meeting on June 26, 1974.

On this appeal plaintiffs challenge the actions taken on January 14, 1974 by the Committee and the Commissioner, contending that such actions were (1) beyund the scope of authority delegated to them and therefore null and void; (2) arbitrary and capricious, and (3) promulgated in violation of the Administrative Procedure Act, N. J. S. A. 52:14B-” 1 et seq. While these actions have either been rescinded or superseded, the action taken by the Committee at its June 26, 1974 meeting still leaves open for our determination the fundamental question of whether the Committee had the authority to consider vacation leave in determining whether sick leave was granted to unclassified employees under terms and conditions similar to classified employees, and require the former to place themselves under the same vacation benefits as classified employees to be eligible for supplemental compensation payments'under L. of 1973, c. 130.

The thrust of the Committee’s argument is that unclassified employees have not been granted sick leave under terms and conditions similar to classified employees because unclassified employees, whose vacations are determined solely by the appointing authority, receive more vacation time than do classified employees, whose vacation benefits are set by the Civil Service Act and Civil Service Rules. See N. J. S. A. 11:14-1.1 and 1.2; N. J. A. C. 4:1-17.11. They argue that when the unclassified employees’ 22 vacation days a year (which may be used for sick leave) are added to their sick leave, the total “sick leave” available to them is greater than the total sick leave available to classified employees, and the unclassified employees “would be given an inequitable advantage over classified employees in accumulating sick leave if the amount of vacation leave was not to be considered.”

N. J. S. A. 11:14-17 expressly grants the Committee the power to promulgate rules and regulations to implement the act, including the power to establish reasonable standards for determining which state employees are eligible for supplemental compensation payments. This express grant of power is attended by such incidental authority as may fairly and reasonably be considered necessary or appropriate to make it effective, and should be construed so as to permit the fullest accomplishment of the legislative intent. See Cammarata v. Essex County Park Comm’n, 26 N. J. 404, 411 (1958). However, the exercise of such power is necessarily restrained by the declared policy and spirit of the statute and the criteria and standards set forth therein. As is so aptly pointed out in Abelson’s, Inc. v. N. J. State Bd. of Optometrists, 5 N. J. 412 (1950) :

* * * This a grant of administrative power for the execution of the statutory policy; and its exercise is of necessity restrained by the declared policy and spirit of the statute and the criteria and standards therein laid down, for a grant not thus confined would constitute a delegation of essential legislative power in contravention of constitutional limitations. The distinction is between the making and the execution of the law. The authority to make rules and regulations for the effectuation of the statutory policy is administrative and not legislative, if its exercise is confined by certain and definite standards of action, even though the regulations be given the force and effect of law. It is a corollary of this principle that the rules and regulations and administrative action cannot subvert or enlarge upon the statutory policy or the rules and regulations therein set down. Administrative implementation cannot deviate from the principle and policy of the statute, [at 423-424]

The act is clear and unambiguous. It provides a lump-sum payment, as supplemental compensation for earned and unused accumulated sick leave to each employee in the classified service of the State and each state employee in the unclassified service “who has been granted sick leave under terms and conditions similar to classified employees.” N. J. S. A. 11:14-9. The act does not expressly empower the Committee, in establishing standards for determining eligibilitjr, to consider vacation leave and to require the unclassified employees to give up their regular vacation benefits and place themselves under the same vacation schedule as classified employees in order to qualify for supplemental compensation. We do not find that the power to impose such a condition or qualification is either incidental to the power expressly granted or reasonably necessary or appropriate to accomplish the legislative intent.

These two classes of state service have long existed in Hew Jersey, and it is well-recognized that the benefits and advantages of the one are not necessarily extended to the other. For example, in the unclassified service, unlike the classified service, appointment can be made without competitive examination, and upon appointment tenure is not conferred. See Perella v. Bd. of Education, Jersey City, 51 N. J. 323, 333 (1968); State Troopers Fraternal Ass’n. v. State, 115 N. J. Super. 503, 507-508 (Ch. Div. 1971), aff’d 119 N. J. Super. 375, 376 (App. Div. 1972), aff’d 62 N. J. 302 (1973). Obviously, our Legislature was cognizant of this and other fundamental differences in the two classes of the state service, including the differences in vacation benefits afforded to unclassified employees at the discretion of the appointing authority and to classified employees pursuant to our Civil Service Act and Administrative Code. Vacation benefits may be greater tor unclassified employees in the Department, than for classified employees, and to that extent the lump-sum payment for earned and unused sick leave to both classes may appear inequitable. However, the clear language of the act (N. J. S. A. 11:14-9) does not authorize or even suggest that the Committee may consider vacation leave in determining whether sick leave was granted to unclassified employees under terms and conditions similar to classified employees.

The standards and guidelines for payment of supplemental compensation to unclassified employees originally promulgated by the Committee required that sick leave be earned by them on a basis similar to that required for classified employees by the Civil service Act and Civil Service Rules. See N. J. S. A. 11:14—2; N. J. A. C. 4:1-17.16. The qualification or condition for eligibility subsequently imposed by the Committee thwarted the expressed policy of the act and transcended the legitimate rule-making power delegated to the Committee. See Frigiola v. State Bd. of Ed., 25 N. J. Super. 75, 81 (App. Div. 1953).

Accordingly, the action of the Committee taken at the meeting of June 26, 1974 (incorporated in Supplement #2, dated July 8, 1974) requiring unclassified employees to elect the same vacation benefits provided to classified employees as a condition for the payment of supplemental compensation under L. 1973, c. 130, is hereby declared void and set aside. Similarly, the prior action of the Committee taken on January 14, 1974, which conditioned eligibility for such statutory benefits on unclassified employees following the standard method for the use, earning and accumulation of sick and vacation leave followed by classified employees is also declared void and set aside. In view of our holding it is unnecessary for us to determine whether actions taken by the Committee were subject to the Administrative Procedure Act and, if so, whether there had been compliance therewith.


author: Gelmabt, J. S. C.

text:
    JAMES THOMPSON AND MELVIN EVANS, ET AL., REPRESENTING THE RETIRED WORKERS OF SHEET METAL WORKERS LOCAL UNION #13, PLAINTIFFS, v. SHEET METAL WORKERS LOCAL UNION #13, THE PENSION FUND OF SHEET METAL WORKERS UNION #13, AND THE TRUSTEES OF THE PENSION FUND, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided January 30, 1975.

      Mr. Paul J. Giblin for plaintiffs.

      Mr. David Priedland for defendants (Messrs. Priedland £ FHedland, attorneys).
   Gelmabt, J. S. C.

This matter is before the court on defendants’ motion for summary judgment. Plaintiffs are retired members of defendant Sheet Metal Workers Local Union #13 (union), who are currently receiving benefits from a Pension Fund (Fund) created in 1953 as a result of a collective bargaining agreement entered into between the union and an employers’ association. The Fund is administered pursuant to an agreement and declaration of trust (the agreement) Which provides that the employers are to make contributions to the Fund on behalf of their employees. The Fund is governed by an equal number of union and employer trustees according to rules and regulations formulated by them.

Article III of the agreement states that the pension fund created thereby is “for the exclusive benefit of the emplojrees and their dependents” and outlines the trustees’ duties and powers as including:

* * * the formulation and establishment of provisions re: eligibility, qualifications for payment of benefits, the retirement age and the amount and computation of benefits, the method of providing pensions

Under the 1953 collective bargaining agreement the rate of employers’ contribution to the Fund was fixed at 3% of the wages paid to union members. This rate remained in effect through the end of 1972. In 1973 the union negotiated an increase in the employers’ contributions from 3% to 5%. Thereafter, the trustees adopted a new schedule of retirement benefits for union members who retire after January 1, 1973. The maximum benefit payable to such retirees is $240 a month, whereas the maximum benefits payable to members who retired prior to January 1, 1973 remained at $127.50 a month. The pre-1973 retirees, on whose behalf this action has been brought, wore granted a temporary benefit of $20 a month to be paid for one year.

Plaintiffs commenced this action to compel the trustees to equalize 'the pension benefits payable to all classes of retirees and to declare the action of the trustees establishing a differential in retirement benefits to be improper. They contend that the distribution of benefits in this manner is arbitrary and capricious in that

(1) the trustees’ action was contrary to past practices wherein increases in retirement benefits were granted to all eligible retireés, regardless of their date of retirement;

(2) the trustees’ action was inconsistent with the purpose of the Fund to benefit all eligible retirees;

(3) the trustees had not shown any rational basis for increasing the benefits for post-1973 retirees only.

A hearing in the nature of a discover proceeding took place in the presence of the court at which Harold W. Hauser, the Fund’s consulting actuary since 1965, testified as to the past practices of the trustees with respect to increases in pension benefits. When the plan began, the maximum monthly pension was fixed at $40 a month. On March 1, 1958 the maximum monthly pension was increased to $48 for future retirees and no increase was given to those who had already retired. Two years later the benefits were increased to $62 a month for future retirees, and no increase was given to past retirees. In 1963 the pattern was repeated and future retirees received $66 a month, while those already retired received no increase.

In August 1965 all retirees received an increase in benefits. Members retiring after that date were granted pensions at the maximum rate of $100 a month, while those who had already retired received an increase up to 78% of the new rate, or a maximum of $78. For those who had retired prior to 1958 and were thus receiving $40 a month, it meant an increase of $38; those who had retired after 1963 received an increase of only $12 a month.

Prior to 1965 John Hancock Life Insurance Co. was the Fund’s investment adviser, and the contributions to the Pund were used to purchase insurance policies from which the benefits were paid to the retirees. In 1965 Chase Manhattan Bank was substituted as the investment adviser, and the Pund became self-insured. Thereafter, benefits for future retirees and increases in benefits for past retirees were paid from contributions and investment income, as well as from policies purchased prior to 1965.

This new investment policy yielded, in 1969, an increase for future pensioners up to a maximum $12J.50, and for those already retired a 25% increase of that portion of their pension which came directly from the Pund itself. Por example, X, who retired in 1966 at $100 a month, now received $125. Mr. Y, who retired in 1954 with a pension of $40 a month and who received a $38 increase from the Pund in 1965, received an additional increase of 25% of $38, or $9.50, for a total of $87.50 a month.

Prom the foregoing recital of the history of benefit payments by this Pund it is apparent that benefit levels were never equalized by the trustees as a matter of policy or practice but were determined by the date of retirement and the resources available to the Pund.

The principal issue raised by plaintiffs is the nature and extent of the duty owed by the union trustees to those members of their union who have now retired and are beneficiaries of the Pund. It is said that the xxnion trustees owed them a duty to raise their pension benefits oxxt of the increased contributions to the Pund resulting from the 1973 collective bargaining agreement. Before examining this contention it is necessary to explore briefly the nature of union pension plans and the manner in which they are financed.

Most pension funds such as that involved here were instituted after World War II. As is customary at the beginning of the operation of such a pension fund, many retirees received pension “credit” for their work prior to the time that contributions were actually made to the fund in order to make them eligible for benefits when they reached the age of retirement. The cost of retirement benefits, which are based on the employee’s years of service before the inception of the pension plan, is known as the “prior service cost.”

Under the Metal Workers’ pension plan ten years’ service credit is required to malee a union member eligible to receive a pension at age 65, and 30 years’ service is required for the maximum benefit allowance. Since the Bund is only a little more than 20 years old, it has a large unfunded prior service cost. Future employer contributions must be large enough to fund the benefits payable to future retirees, plus enough to amortize the unfunded prior service costs.

At the last evaluation of the Fund on January 1, 1973 the assets of the Fund were $2,441,535 and the liabilities $4,776,480. The Fund had an unfunded prior service cost of $2,334,945, some portion of which is attributable to the retired employees who are the plaintiffs here. Nevertheless, plaintiffs have received and will continue to receive benefits at a level which is actuarily in excess of the contributions made on their behalf while they were actively employed. Current contributions being made on behalf of active union members have been and are now being used to pay those benefits. The Fund must continue to receive these contributions in order to pay the present level of benefits to plaintiffs.

Pension plans such as Local #13’s are established under § 302(c) (5) of the Taft-Hartley Act. They must be maintained as separate trusts whose funds cannot be used for any purpose other than the payment of pensions or annuities. 29 U. S. C. § 186(c) (5). They are also subject to regulation by the Internal Eevenue Service, which requires that whenever plan benefits change, IRS approval must be obtained (Revenue Ruling 70-357). To comply with the IRS requirements, actuarial calculation must verify that the benefits have been set at a level sudh that the assets and liabilities of the fund are in balance.

In theory this balance could have been maintained if the trustees had allocated the increase in employer contributions under the 1973 agreement to raise and to equalize benefits for all participants, both active members and retirees. Hauser testified that had this course been followed, the 3% increase would have yielded a uniform benefit level of approximately $175 a month. Once the trustees made the choice to allot the increase in employer contributions to fund greater benefits for post-1973 retirees, the 3% increase made possible a benefit level of $340 a month for that group.

At the time of the negotiations which led to the 1973 agreement the active union members were also considering alternative pension schemes, such as a retirement savings plan or participation in the International Union’s pension fund, neither of which would have yielded an increase in benefits for the retirees. In their decision to allocate increased pension benefits only to active members the trustees were influenced by the possible loss of future contributions required to support present levels of vested pension benefits. Employer contributions at an increased level were essential to the liquidity of the Fund, and without a prospective substantial increase in benefit levels for active members they would not approve a collective bargaining contract which took current dollars from their pockets to increase benefits for retirees.

It is true that the union trustees play a dual role. The union trustees are also the business agents and officers of the union and in the latter capacity serve as the collective bargaining representatives of the active union membership. As bargaining agents they are accountable to the active members, whose interest lies in their own current and future financial welfare rather than in that of the retirees. Agreements hammered out at the bargaining table when they servo as bargaining agents provide the funds for the pension plan, and these same trustees must then administer the Eund for the benefit of all participants, both the active union members and the retirees. As the Supreme Court noted in Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U. S. 157, 92 S. Ct. 383, 30 L. Ed. 2d 341 (1971) :

* * * the union’s role in the administration of the fund is a far different order from its duties as collective-bargaining agent, [at 170, 92 S. Ct. at 373]

Both the federal case law and the law of our oivn State establish that the standard of care by which the union trustees’ conduct must be judged in this setting is that of a fiduciary administering a trust. There is nothing in any federal labor statutes or in their history which can be said to alleviate the otherwise strict common-law fiduciary responsibilities of trustees appointed to administer employee welfare or pension funds developed as a result of collective bargaining. The legislation enacted by Congress was designed not to alter but to reinforce “the most fundamental duty” owed by the trustee: the duty of undivided loyalty to the beneficiaries. 2 Scott on Trusts (3d ed. 1967), § 170. This is the duty to which defendant trustees must be held. Blankeship v. Boyle, 329 F. Supp. 1089, 1094-1095 (D. C. 1971) ; Lee v. Nesbitt, 453 F. 2d 1309 (9 Cir. 1972); Roark v. Lewis, 130 U. S. App. D. C. 360, 401 F. 2d 425 (D. C. Cir. 1968), adhered to sub nom. Roark v. Boyle, 141 U. S. App. D. C. 390, 439 F. 2d 497 (D. C. Cir. 1970). See also, Welch and Wilson, "Application of Trust Law to Representatives in Taft-Hartley Trust Funds,” 28 Arbitration Journal 81 (1973).

In Judge v. Kortenhaus, 79 N. J. Super. 574 (Ch. Div. 1963), members of one local of the teamsters union invoked the court’s equity power to adjudicate their rights under a pension fund established in accordance with a similar Agreement and declaration of trust. There, as here, the trustees were given broad powers to administer the trust. After acknowledging the inherent jurisdiction of equity to supervise the management of trusts, the court described the interest of each member of the fund as being that of a beneficiary of the trust, albeit an equitable one only. Each newly vested participant is possessed of an interest in the fund which is equal to that of the oldest participant. To this extent the principle exemplifies the spirit of trade unionism as expressed in Del Veccio v. Hood, 4 N. J. Super. 254 (App. Div. 1949) which declared that,

* * * A union works for the benefit of the group; * * * who are members at any time, an ever changing group. The man who ceases to be a member, loses all title to the assets of the union and loses all benefits of membership while the member elected today comes into all the benefits and advantages that others have won in years gone by. [at 258]

When an eligible member retires from his employment and ceases to be an active member of the union, his vested rights in the Fund cannot be diminished or destroyed. Cantor v. Berkshire Life Ins. Co., 171 Ohio St. 405, 171 N. E. 2d 518 (Ohio Sup. Ct. 1960); Stopford v. Boonton Molding Co., 56 N. J. 169, 185 (1970). By the same token, such pension rights as are vested at the date of retirement constitute the full measure of any member’s entitlement. In the absence of any specific provision either in a collective bargaining agreement or the trust agreement itself creating a right to an increase in benefits, those members of Local #13 who retired prior to January 1, 1973 are entitled to reeeive only those benefits which had previously vested in them and no more.

Given the economic structure of this Fund and the choices available to the trustees, it cannot be said that they had a duty to equalize plaintiffs’ pension benefits with those of the active membership, or that the choice they made was either arbitrary or capricious.

With respect to defendant union, clearly it had no duty to bargain with the employers’ association on behalf of the retired members of the union. In Allied Chemical & Alkali Workers v. Pittsburgh Plate Class Co., supra, the court was called upon to decide whether "employee” as used in § 9 (a) of the Taft-Hartley Act included retirees for purposes of membership in a collective bargaining unit. The union was engaged in negotiations with an employer over an employee health insurance plan in which retired employees participated. Reasoning that a collective bargaining unit must advocate the needs of its membership, the court held that active and retired employees, while having a common concern in assuring that later benefits remain adequate, did not "share a community of interests broad enough to justify inclusion of the retirees in the bargaining unit.” In fact, the court observed:

* * * the risk cannot be overlooked that union representatives on occasion might see fit to bargain for improved wages or other conditions favoring active employees at the expense of retirees’ benefits. [404 U. S. at .173, 92 S. Ct. at 394.]

Even if, as in the case before us, having once found it advantageous to bargain for improvements in retired pensioners’ benefits, the representatives of the active workers were not thereafter bound'or obliged to negotiate on behalf of the retirees. Id., 404 U. S. at 181, 92 S. Ct. 383. There is, as defendants correctly argue, no duty on the part of the union to represent the interest of retired members when negotiating with employers or other third parties.

For the foregoing reasons defendant’s motion for summary judgment is granted.

      The unfunded prior service costs of this Fund also derive from increases in benefits granted by the Trustees during the years the Fund has been in existence.

      The liabilities are made up of the present value of future benefits for those employees already retired plus those who will retire in the future.

       Although not applicable to the instant ease, the recently enacted Pension Reform Act of 1974, (P. L. 93-406, 1974, 29 U. S. C. § 1001 et seq.), leaves little doubt that administrators and trustees of the plan are fiduciaries. The act defines “fiduciary” in broad terms, including those named and those who can exercise control over the funds. See §§ 402(a), 405(d) (2), 412. Penalties for a breach of fiduciary duty are severe and include personal liability for making good any loss to the fund. See §§ 409, 411.

      Representatives designated . . . shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment.” 49 Stat. 453, as amended, 29 U. S. C. § 159(a).


author: McKenzie, J. C. C.,

text:
    JAMES M. ELLAM, PLAINTIFF, v. ANN L. ELLAM, DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided January 10, 1975.

      Mr. William, Dodd for plaintiff.

      Mr. Monroe Acherman for defendant.
   McKenzie, J. C. C.,

Temporarily Assigned. Plaintiff instituted suit March 1, 1974, seeking a divorce on the grounds of separation. Defendant’s amended counterclaim for divorce charges plaintiff with desertion.

The parties, who are childless, purchased a house in Elizabeth and commenced moving into their home in June 1972. They were experiencing severe matrimonial difficulties at the time and, according to plaintiff, he moved to his mother’s home in nearby Roselle on or about July 5 and did not thereafter live with defendant.

Although his testimony that the parties thereafter never had sexual relations was not challenged, on cross-examination it developed that the parties nevertheless maintained many aspects of their relationship until May 1973.

On weekday mornings plaintiff’s mother would drive him in her car from her home to the corner of his street in Elizabeth. He would walk to his house, let himself in, pet his dog, occasionally kiss bis wife “good morning” and, as he put it, “make sure everything was O.K.” He would then leave the house, take his car out of the garage and proceed to work. When he finished work, or the night classes he was attending, he returned to the matrimonial home. He would play with his dog, converse with defendant and, after she retired, watched television until approximately 12 :30 a.m. At that time his mother would arrive to pick him up in her ear and take him to her house to sleep, leaving his car in the garage at the marital home. Plaintiff would spend weekends at the marital home doing housecleaning, cutting the lawn, and performing similar household chores. He occasionally ate his meals there, bringing the food with him. On other occasions the parties ate together at plaintiff’s mother’s home. During this period of time the parties as a couple continued to accept social engagements and once she accompanied him out-of-state to attend a convention lasting several days. They shared a hotel room, but still did not engage in sexual relations.

Plaintiff, in explaining his continued presence in the matrimonial home, stated that he loved his wife, loved his dog even more, felt obliged to maintain the premises, and, as he stressed, did not want the neighbors to know that he and defendant had separated.

The question presented is whether the foregoing constitutes living “separate and apart in different habitations” within the meaning of N. J. S. A. 2A:3A-2(d).

In DeRienzo v. DeRienzo, 119 N. J. Super. 192 (Ch. Div. 1972), it was held that the words “in different habitations” precluded the granting of a divorce where the parties occupied the same house, although plaintiff slept alone in a locked bedroom for which only he had the key. This language in our statute was the basis for the- court distinguishing the holding in that case from cases holding to the contrary in jurisdictions which also recognize separation as grounds for divorce. Thus in Delaware, where the statute requires that the parties live “separate and apart without any cohabitation” (13 Del. C. § 1522 (11)), it was held that a divorce could be granted where the parties occupied the same residence, there being no provision in that statute mandating separate dwellings. Heckman v. Heckman, 245 A. 2d 550 (Del. Sup. Ct. 1968). A similar holding was reached under the District of Columbia statute which stated the grounds to be a “voluntary separation from bed and board for five consecutive years without cohabitation” (D. C. Code (1940) § 16-403, 49 Stat. 539.) Hawkins v. Hawkins, 89 U. S. App. D. C. 147, 191 F. 2d 344 (D. C. App. 1951). In those jurisdictions the test is not separate roofs, but separate lives. See Hurd v. Hurd, 86 U. S. App. D. C. 62, 179 F. 2d 68 (D. C. Cir. 1949). Since every word and clause of our statute should be given effect, and a construction which renders any part superfluous must be avoided, Hoffman v. Hock, 8 N. J. 397 (1952), our statute clearly requires both. That is, the parties must occupy “different habitations” and must live “separate and apart.”

Here plaintiff arguably resided with his mother, since he slept, took some meals and kept his clothes, all at her home. But with the additional exception of sexual intercourse, the parties continued their relationship substantially the same as prior to his moving. When he was not working or attending classes, basically all of plaintiff’s waking hours were spent with defendant. His plea that their social intercourse was strained and rife with arguments goes to the quality of their association, not its substance. Generally speaking, the policy of our present divorce law is to terminate dead marriages. Brittner v. Brittner, 124 N. J. Super. 259 (Ch. Div. 1973). But the Legislature, following the recommendation of the Divorce Law Study Commission in requiring objective proof of the lack of viability in the relationship, has laid down specific criteria in determining what marriages are eligible for dissolution. See Final Report of the Divorce Law Study Commission 73 (1970). Thus, if the parties were not in fact living separate and apart as required by the statute, a mere finding that their relationship was bereft of positive qualities is insufficient.

In other jurisdictions, where the parties have continued some degree of relationship after they have ceased sexual cohabitation, divorces have been granted on grounds of separation, provided that it is nevertheless manifest to the community that the parties are in fact living separate lives and are not attempting to induce others to regard them as living together. Young v. Young, 225 N. C. 340; 34 S. E. 2d 154 (Sup. Ct. 1945); Christiansen v. Christiansen, 68 R. I. 438, 28 A. 2d 745 (Sup. Ct. 1942); Hava v. Chavigny, 147 La. 330, 84 So. 892 (Sup. Ct. 1920); Brimson v. Brimson, 227 Ark. 1045, 304 S. W. 2d 935 (Sup. Ct. 1957). Compare Adams v. Adams, 89 Idaho 84, 403 P. 2d 593 (Sup. Ct. 1965). See Annotation, 35 A. L. R. 3d 1238.

It lias been said that what the law makes a ground for divorce is the living separately and apart of the husband and wife continuously for a certain number of years. This separation implies something more than a discontinuance of sexual relations whether the discontinuance is occasioned by the refusal of the wife to continue them or not. It implies the living apart for such period in such a manner that those in neighborhood may see that the husband and wife are not living together. [17 Am. Jur., § 162 at 232, cited in Dudley v. Dudley, 225 N. C. 83, 33 S. E. 2d 489 (Sup. Ct. 1945) ; emphasis supplied]

Where, as here, it is apparent that the associations and dealings of the parties with each other after the alleged separation continue to include a substantial number of the many elements and ties which go into and make up the marital relationship and bind the parties together, it cannot be said they are living “separate and apart” within the meaning of our divorce statute.

The court therefore holds that although' plaintiff and defendant may have been residing in different habitations for more than 18 months, they were not living separate and apart.

A motion to dismiss the complaint at the conclusion of plaintiff’s proofs is granted.


author: Doan, J. S. C.

text:
    FREDERICK W. HARSEN AND GEORGE R. A. JOHNS, PARTNERS DOING BUSINESS AS AND TRADING UNDER THE FIRM NAME AND STYLE OF HARSEN & JOHNS, PLAINTIFFS, v. THE BOARD OF EDUCATION OF THE TOWNSHIP OF WEST MILFORD IN THE COUNTY OF PASSAIC, A SCHOOL DISTRICT, DEFENDANT.
    Superior Court of New Jersey Law Division
    Decided January 31, 1975.

      Mr. Emanuel Eschwege for plaintiffs.

      Mr. Irving G. Evers for defendant (Messrs. Parisi, Evers & Greenfield, attorneys).
   Doan, J. S. C.

Plaintiffs sue for entry'- of judgment on an arbitration award handed down June 12, 1974 in the amount of $42,015.04 plus foes totaling $197.27 to reimburse plaintiffs for sums previously advanced to the American Arbitration Association.

The following facts are uncontested. The parties on June 10, 1971 entered into a contract for architectural services to be rendered by plaintiffs to defendant regarding construction of a new school. Dispute arose between the parties over billings submitted by plaintiffs, and on March 26, 1973 plaintiffs instituted proceedings before the American Arbitration Association pursuant to Article 10 of the June 10, 1971 contract. That the hoard of education had specific statutory authority to enter into an agreement containing a provision for the submission of disputes and controversies for determination by arbitration is not disputed. N. J. S. A. 18A: 11-2(a). Defendant submitted to the jurisdiction of the association, appeared, answered and counterclaimed.

A series of hearings, totaling seven full days, was held before a tribunal of arbitrators duly appointed by the association between October 30, 1973 and April 23, 1974, at which both sides had opportunity to present evidence, cross-examine parties and witnesses, and argue such legal matters as they deemed fit. There is no contention made by defendant that it was not given ample opportunity to be heard or that the arbitrators had no jurisdiction.

On June 12, 1974 the above-mentioned award in plaintiffs’ favor, in the amount of $42,015.04, was handed down. This was $10,208.49 less than had been demanded by plaintiffs. It was also $23,546.62 greater than the $18,468.92, the admitted remainder of the funds authorized for the project by the school district’s voters, creating, as will be seen, the prime issue to be resolved. Defendant’s cross-demands were denied in toto. The award omitted to detail the reasoning supporting the decisions reached. No part of the award has been paid by defendant, despite its admission at the argument of being indebted to plaintiffs for said $18,468.92.

Plaintiffs filed this action July 23, 1974 within the statutory limitation period, and answer and counterclaim were filed August 21, 1974. The counterclaim seeks a declaration of the invalidity of the award and to have it set aside. Plaintiffs presently seek entry of summary judgment confirming the arbitrators’ main award and entering judgment thereon plus interest from June 13, 1974, and the same as to the award for reimbursement of fees plus interest from June 15, 1974.

A few prefatory comments concerning the nature of arbitration and the role of the court therein are appropriate.

The ancient practice of arbitration [i]n its broad sense, * * * is a substitution, by consent of the parties, of another tribunal for the tribunal provided by the ordinary processes of law. The object of arbitration is the final disposition, in a speedy, inexpensive, expeditious, and perhaps less formal manner, of the controversial differences between the parties. “The submission * * * is the. commission of the arbitrator. By force of it be becomes a judge, with absolute power over the things submitted to his judgment.” (citations omitted) [Carpenter v. Bloomer, 54 N. J. Super. 157, 162 (App. Div. 1959) citations omitted]

Cf. Local Union 560 v. Eazor Express, Inc., 95 N. J. Super. 219, 227 (App. Div. 1967). Submission to arbitration is contractual, the parties being bound by the arbitration only to the extent they have so agreed. Wm. J. Burns, Inc. v. N. J. Guards Union, 64 N. J. Super. 301, 307 (App. Div. 1960). Likewise, the scope of the arbitrators’ jurisdiction and authority is delineated by the terms of the parties’ agreement, Wm. J. Burns, supra, and the arbitrator may not rewrite contract terms for the parties. Cf. Belardinelli v. Werner Continental, Inc., 128 N. J. Super: 1, 6— 7, 11 (App. Div. 1974).

Where properly functioning within the agreement terms, however, “the essence of arbitration is, of course, that the arbitrators decide both the facts and the law ” Daly v. Komline-Sanderson Engineering Corp., 40 N. J. 175, 178 (1963); Carpenter v. Bloomer, supra. The forum chosen by the parties operates as a trial court, and judicial review of the awards rendered by it is extremely narrow and restricted to ascertaining whether one of the situations set forth in N. J. S. A. 2A :24-8 exists. Daly v. Komline-Sanderson Engineering Corp., supra; Local Union 560 v. Eazor Express, Inc., supra.

N. J. S. A. 2A :24—8 pertinently reads:

The court shall vacate the award in any of the following cases:
a. Where the award was procured by corruption, fraud or undue means;
b. Where there was either evident partiality or corruption in the arbitrators, or any thereof * * -;
d. Where the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award upon the subject matter was not made.

Clearly, the arbitrators’ factual determinations concerning the merits of the controversy are not reviewahlo as such by the court. Further, only issues of fact hearing on a statutory criteria will suffice for withholding of summary judgment.

The term “undue means” in N. J. S. A. 2A :24-8(a) has been defined by decisional law to include

* * * where the arbitrator meant to decide according to law, and clearly had mistaken the legal rule and the mistake appears on the face of the award or by the statement of the arbitrator. * * [Held v. Comfort Bus Lines, Inc., 136 N. J. L. 640, 641 (Sup. Ct. 1948)]

Previous case law triggered this rule only where the arbitrator made clear he intended to decide the case according to the law, rather than exercise his right to ignore it and decide the matter on his own view of the equities, cf. Anco Products v. T. V. Products Corp., 23 N. J. Super. 116, 123 (App. Div. 1952), and exempted from its coverage situations where “the applicable rule of law is doubtful,” Collingswood Hosiery Mills v. Amer., etc., Workers, 31 N. J. Super. 466, 471 (App. Div. 1954). The recent case of Brooks v. Pa. Mfrs. Ass’n Ins. Co., 121 N. J. Super. 51, 54-55 (App. Div. 1972), mod. on other grounds 62 N. J. 583 (1973), has, however, worked changes therein. The Appellate Division there found an intention, on the part of the arbitrator to decide the case in accordance with applicable law merely because “there is nothing in the record below to suggest otherwise,” creating a presumption in favor of such intent’s existence absent affirmative indication to the contrary. Furthermore, the question of law was a novel one in this State, no^ prior ease on it previously having been reported. The court unhesitatingly undertook review of the award’s propriety:

Thus, the issue to be considered is whether the arbitrator as a matter of law, mistakenly allowed a credit for the present value of a prospective future award in a pending workman’s compensation action. 121 N. J. Super., at 55.

The Supreme Court’s failure to even mention the issue of reviewability leads one to the conclusion that where no affirmative indication exists that the arbitrator was not utilizing the applicable law, or attempting to, and the legal question is res nova in this State, the court reviewing the award is to entertain and decide the merits of the legal question involved and evaluate the award’s legitimacy against the resolution thereof.

In determining the validity of an award when challenged, however, it must be home in mind that “once an award is made, there should be much reluctance at interfering with it. So far as may be, an arbitration should be an end to litigation, not the beginning of it,” Collingswood Hosiery Mills v. Amer., etc., Workers, supra, 31 N. J. Super, at 473. “In line with the design of the parties to have their disputes speedily, economically, and finally settled, every intendment is indulged in favor of the award and it is subject to impeachment only in a clear case”, Carpenter v. Bloomer, supra, 54 N. J. Super, at 168.

Turning to the case at bar, defendant’s pleadings, supporting papers and oral argument reveal four grounds which allegedly require noneonfirmation and vacation of the award. These arc : (a) evident partiality on the part of the arbitrators; (b) the failure of the arbitrators to state the reasoning behind the award; (c) the arbitrators exceeded their power by rewriting the contract, and (d) the award is contrary to law in that it will result in defendant making payments on account of the project, which is the subject matter of the disputed contract, in excess of the funds authorized for it by the district’s voters. These will be considered in the above sequence.

j.

The partiality question is easily disposed of since it is presented as a “mere sworn conclusion of ultimate facts without basis or supporting affidavits,” and thus insufficient to withstand a motion for summary judgment. James Talcott, Inc. v. Shulman, 82 N. J. Super. 438, 443 (App. Div. 1964). This is especially so in light of the arbitrators trimming plaintiffs’ demands by over $10,000 and the rule that “every intendment favors the validity of the award and the impartiality of the arbitrators.” Central Co. v. Uvalde Co., 82 N. J. Eq. 246, 268 (Ch. 1913).

II

Defendant’s position regarding tire absence of a reasoned opinion by the arbitrators also lacks merit. In Tave Construction Co., Inc. v. Wiesenfeld, 82 N. J. Super. 562 (Ch. 1964), aff’d o. b. 90 N. J. Super. 244 (App. Div. 1966), it was held (at 566) that "the mere fact that the arbitrators gave no details in the award does not justify the vacation thereof.” That the court there had the transcripts of the arbitration ¡hearings and the court ordered depositions of the arbitrators is immaterial. N. J. S. A. 2A:24-1, covering the form of the award, requires only that “the award must be in writing and acknowledged or proved in like manner as a deed for the conveyance of real estate and delivered to one of the parties or his attorney.” This was done here, and defendant does not claim otherwise. The arbitration statute, N. J. S. A. 2A :24-1 et seq., contains no requirement that the arbitrators issue a written opinion detailing their reasoning, and counsel nor the court have uncovered a case so holding. The award is not to be nullified for absence thereof.

III

Defendant’s allegations, that the arbitrators rewrote the contract, is also without substance. A contract may provide an arbitrator with the power and duty to interpret its terms. As was said in a slightly different context:

Where the arbitrator of disputes over the application or interpretation of a collective bargaining is provided, the court must determine whether a bonafide dispute exists and this is a question of law. [Mach. Printers, etc., United States v. Merrill, etc., Works, Inc., 12 N. J. Super. 26, 31 (App. Div. 1951)].

Where the contract provides for arbitration of disputes over contractual language and a debatable question exists, the court is bound by the arbitrators’ decision. As stated in Standard Oil, etc., Union v. Esso Research Co., 38 N. J. Super. 106, 119 (App. Div. 1955), deciding a suit seeking compulsion of arbitration:

It is no part of our function to decide the merits of the controversy. We are limited to a determination of whether or not the interpretation of the contractual language contended for by the party seeking arbitration is reasonably debatable in the minds of ordinary laymen. If it is frivolous in the legal sense, that is opposed to the manifest meaning of the compact then arbitration must be denied. But if it is fairly arguable, we are bound by the consent of the parties to employ another forum for the adjudication of their dispute and we must grant an order to proceed to arbitration.

The clause in the contract here under consideration provides for "arbitration of all questions under this agreement” and clearly includes disputes as to the meaning of its language. Defendant’s claim of rewriting centers on the arbitrators awarding plaintiff a fee for providing a project representative in paragraph 5(c) of the contract. That paragraph provides that "the architect shall be compensated therefor as mutually agreed upon between the owner and the architect as set forth in another section of this agreement.”

Defendant contends that par. 11 was the other section referred to there. It provides that "the architect’s fee shall he at a rate stated below: the basic rate will apply to the separate contracts required * * * for (1) General Construction of Structure, (2) Plumbing, (3) Heating and Ventilating, (4) Electrical Work, and (5) Structural Steel and Ornamental Iron Work. * * * The base fee is to be 6%.” Plaintiff contends that this was not to be applied to the project inspector’s compensation and that the added clause mentioned in 5(e) was inadvertently omitted in the writing’s drafting. Plaintiff points to paragraph 7, which states that the construction costs "shall not include any architect’s * * * fees or reimbursements or the cost of a project inspector,” as indicative of the parties’ realization of the distinctiveness of the architect’s basic fee and compensation for the project representative. The matter was fully presented before the arbitrators.

It is plain that interpretation of the contractual language pertinent to this dispute is "reasonably debatable in the minds of ordinary laymen,” Standard Oil, etc., Union v. Esso Research Co., supra, particularly when there is no contract involved in project representation to which to apply the 6% base rate. Applying it to plaintiffs’ billings, as defendant suggests, seems somewhat baseless. There being a debatable issue and that issue being within the scope of the arbitrators’ powers under the contract, this court is bound by the adjudication of the forum selected by the parties. Id.

That no clause expressing the mutually agreed rate of compensation for suppling the project representative found its way into the writing, does not transform the arbiters’ award from contractual construction to contract rewriting :

* * * under general contract law terms may be implied in a contract not because they are reasonable, but because they are necessarily involved in the contractual relationship so that the parties must have intended them and have only failed to specifically express them because of sheer inadvertence or because the term was too obvious to need expression. * * Where fairness and justice require, even though the parties to a contract have not expressed an intention in specific language the court may impose a constructive condition to accomplish such a result when it is apparent that it is necessarily involved in the contractual relationship. [Palisades Properties, Inc. v. Brunetti, 44 N. J. 117, 130 (1965)]

Terms may be implied when it appears that the parties must have intended them and have only failed to express them, or because they are necessary to give business efficacy to the contract as written. Marini v. Ireland, 56 N. J. 130, 143 (1970). Such a situation was presented the arbitrators once the contract had been interpreted to read that paragraph 11 is not applicable to paragraph 5(c), an interpretation the arbitrators had the authority to, and clearly from the award did, make. Their action was within the canons of construction enunciated above and constitute no ground for vacation of their award.

Likewise, the dispute between the parties over plaintiffs’ entitlement to fees for design work either rendered unusable or necessitated by the conversion of the project from modular engineering to a conventional masonry-brick structure also involved matter of fact and contract interpretation allocated to the arbitrators’ domain.

Plaintiffs claimed the original system engineered design and cost estimate submitted by them was at defendant’s instigation and, in part, merely a revision of estimates made by XT. S. Steel and Imperial Equipment Corp. with whom defendant had had prior dealings. When bids thereon failed to fall within the authorized funding, plaintiffs advised that defendant could switch to conventional construction and bring the project in within budget. This was done, resulting in added design work on plaintiffs’ part and coordination of the two sets of plans throughout the project’s life.

Plaintiffs demanded $14,817.60 for these labors under the “Extra Services and Special Cases” clause of the contract. It pertinently reads:

If the architect is caused extra drafting or other expense due to changes ordered by the owner * * he shall be equitably paid for such extra expense and the service involved. * * *
* * * If aiiy work designed or specified by the architect is abandoned or suspended, in whole or in part, the architect is to he paid for the service rendered on account of it.

The arbitrators awarded $13,336.63.

Defendant contended that it was plaintiffs who proposed a system engineered building and represented that it could be built within the bond issue limits. Upon failure of the bids to so fall, plaintiffs suggested the change to conventional construction, and they were authorized to do so with the understanding that there would be no additional charge for architectural fees. There was no abandonment of any work in defendant’s version. Further, a question was raised as to the good faith of plaintiffs in making these billings some nine months after the conversion authorization and, subsequently, raising the demand to the final $.14,817.60 figure during the arbitration proceedings, defendant claiming they were retaliation for its refusal to pay plaintiffs’ base fee in monthly increments of $1,000.

Plainly, resolution of this dispute involved fact finding and contractual interpretation of a kind for which the parties included the arbitration clause in their agreement. Defendant does not contend, nor does the award’s face reveal, any of the situations described in N. J. S. A. 2A :24-8. What is argued is that the arbitrators misfound the facts and/or misinterpreted the contract. Such findings and interpretation, however, are uniquely within the province of the arbitrators, Daly v. Komline-Sanderson Engineering Corp., supra; Standard Oil, etc., Union v. Esso Research Co., supra, and not reviewable by the judiciary; Local Union 560 v. Eazor Express, Inc., supra, the meaning of the contract provision in this situation being “reasonably, debatable in the minds of ordinary laymen”, Standard Oil, etc., Union v. Esso Research Co., supra. Allegations of this type constitute no refuge- from the award.

IY

Defendant’s final point, the limiting effect of the bond issue on its right to contract, requires a more searching examination. It is unclear whether defendant contends that such a limitation was expressly agreed upon between the parties or is mandated by law. The arbitrators clearly found no such express agreement within the contract, and since “the essence of arbitration is * * * that the arbitrators decide the * * * facts * * Daly v. Komline-Sanderson Engineering. Corp., supra, their award is not to be overturned on grounds of factual error unless “the mistake is apparent on the face of the award itself or is admitted by the arbitrator himself”, Held v. Comfort Bus Lines, Inc., supra, 136 N. J. L. at 641. No such error appears evident from the face of the award, nor is there any such admission. Nor does the contract clearly indicate it. The only possible auguiy thereof is found in Article 12:

It is understood and agreed between the owner and the architect that this entire contract is conditioned upon the voters’ approval authorizing- the Board to issue bonds for this project and if the voters fail to vote their approval of such authorization in two referendums, neither party shall be under any obligation to the other on this contract, except as hereinafter stated *' * ®.

Manifestly, this phraseology is equally, if not more so, amenable to being construed merely as expressing the fact that the bond issues were to constitute the prime source of the financing “for this project,” absent which the project would fail and conditioning the contract between the parties here on the voters’ approval thereof as against the construction that the bond funds were to be the only money source and limiting costs and fees thereby. The arbitrators’ factual determination of no such understanding is, consequentially, unassailable.

Since the authority of the arbitrators arises from and is limited by the terms of the contract between the parties, Wm. J. Burns, etc., Inc. v. N. J. Guards Union, supra, and the contract here has been conclusively interpreted as permitting charges above the bond appropriations earmarked for this particular school project, defendant’s claim that the arbitrators’ award was illegal is, at its base, a claim that a school board possesses no authority to enter into a contract whose terms allow the possibility of billings in excess of funds specifically appropriated to the particular project involved. No New Jersey case has been found passing on this precise question. Under Brooks v. Pa. Mfrs. Ass’n Ins. Co., supra, the court must entertain it.

While there is nothing inherent in the nature of a school board creating such a limitation once the power to incur indebtedness and make expenditures has been conveyed it by the Legislature, undisputed here, “the amount of indebtedness or expenditures which a school organization may contract ordinarily is limited by statutory provision”, 79 C. J. S. Schools and School Districts § 325 at 11, and where statutory or constitutional provisions limit the amount which can be expended for a particular purpose “to the amount budgeted or appropriated for the particular purpose,” contracts requiring excess of that sum have been declared unlawfully made. 79 C. J. S., sufra, § 325b (4); cf. Yanke v. School Dist. # 65 of Maricopa Cty., 56 Ariz. 93, 105 P. 2d 966 (Sup. Ct. 1940); Glines v. Bain, 157 Or. 358, 72 P. 2d 33 (Sup. Ct. 1937).

Counsel has not cited, nor has the court’s own research uncovered, such a limiting statute or constitutional provision governing defendant board. On the contrary, Title 18 of the Revised Statutes provides for the raising of additional funds when it becomes apparent that previously appropriated monies are insufficient. N. J. S. A. 18A:22-40, applicable to Type II, non-city, school districts, of which defendant is one, states:

Whenever a board of education shall determine that it is necessary to raise additional sums of money, over and above the amount fixed and determined in the last annual school budget, by special district taxes, for:
(e) Any capital project, the cost whereof is to be paid directly from such taxes;
it shall estimate the amount so deemed necessary to be raised, levied and collected.

There is no requirement that this be done before rather than after the amount needed is fixed. Where the district has a board of school estimate, the final estimate is delivered to the required municipal and county officials stated in N. J. S. A. 18A:22-26, “and such amount shall be assessed, levied and raised under the procedure and in the manner provided by law for the levying and raising of special school taxes * * *” (the last clause apparently referring to N. J. S. A. 18A :22-34). N. J. S. A. 18A :22-41 provides that in school districts where amounts to be collected by taxes for school purposes “are determined by the voters of the district” (Type II districts without boards of school estimate) the matter of special taxes to raise additional monies must be submitted to them “at a special school election.”

■ The Legislature thus foresaw a situation, as here, in which a school board undertook.a project, .appropriated money for it according to law, entered into contracts and, with the passage of time, discovered the original appropriation was not enough. The solution advanced by the lawmakers was to permit the school board to raise additional funds to meet the added expenditure required rather than allow the project to lie unfinished, unused and the contractors unpaid.

That West Milford does not have a board of school estimate and that additional taxes require voter approval is of no matter. The question is whether the Legislature intended that a school board not have the power to enter into contracts which possibly could bring the total project expenditure above originally allotted funds. That the voters must approve does little, if any, damage to the inference from N. J. S. A. 18A:22-40’s conveyance of the power to seek additional funds that the Legislature did not so intend. Added support for this position, that a school district’s financing of a project is not limited to the specific appropriation made therefor, is found in N. J. S. A. 18A:21-4 dealing with the use which may be made of the capital reserve fund the district may set up. It pertinently reads:

A board of education way in any school year draw against tho capital reserve fund, up to the amount of the balance therein, to the extent such withdrawal is anticipated as a revenue in the school budget for the then current sehool year * * *.

It is clear that this statute permits a district to establish within the school year a contingency fund, financed by the withdrawal of capital reserve funds, providing for occurrences which make original cost estimates and appropriated funding based thereon insufficient. The Legislature having provided avenues by which overruns could be lawfully paid, it follows that the fact that a contract may lead to billings bringing the project’s total expense above the original appropriation was not intended by the Legislature to be invalid as excessive of the district’s authority to contract.

Significant to the inquiry of legislative intention in this area is the absence in Title 18, the education statute, of a provision similar to that contained in N. J. S. A. 40:50-6. There it is stated:

No municipality shall enter into any contract, the cost of which is to be met by funds not included in the budget of appropriations for the year, unless prior thereto there shall have been regularly adopted by the governing body an ordinance authorizing an appropriation sufficient to meet the cost of carrying out the provisions of the contract.
“A court should not write in an additional qualification which the Legislature pointedly omitted in drafting its own enactment. Craster v. Board of Commissioners of City of Newark, 9 N. J. 225 (1952). In construction of a statute, words should never be supplied or changed, unless to do so will effect a meaning clearly shown by the other parts of the statute, or to carry out an intent somewhere expressed, Lane v. Schomp, 20 N. J. Eq. 82 (Ch. 1869),” [Bd. of Ed. of Voc. School v. Finne, 88 N. J. Super. 91, 111 (Law Div. 1965)]

There the court held that a contract involving the expenditure of capital funds antedating the appropriation of the funds for the project was not, therefor, invalid.

Though the question of the effect that the subsequent insufficiency of the funds would have on the contract’s validity was not reached in Finnte, the principles of statutory construction followed there are applicable to this case. A holding that a contract’s potentiality for exceeding the voter approved funding results in the school district’s obligation being invalid and nonenforceable would render N. J. S. A. 18A :22-40 a nullity or impute to the Legislature the intent to allow school districts the arbitrary power to determine which of such contracts to honor via the added appropriations technique and which to avoid as illegal. Courts are not to “impute to the legislature an intent to enact useless legislation”, State v. Wean, 86 N. J. Super. 283, 288-289 (App. Div. 1965). The alternate result would violate “the moral principle that a government which would encourage fair dealing in private transactions should insist upon nothing less of its own agencies”, 405 Monroe Co. v. Asbury Park, 40 N. J. 457, 462 (1963).

The positive inferences dedueeable from the enactment of N. J. S. A. 18A:22-40 and N. J. S. A. 18A:21-4, plus the negative consequences of a contrary holding, convince the court that a school district may enter into contracts whose terms carry the seed potential of bringing the project’s total expenditures above the original specified funding therefor. The statutes cited by defendant, N. J. S. A. 18A:24-10(c), 12(b), 47, 51 and 53, do not require a different conclusion. These govern the mechanics of bond authorization, Issuance and the use of funds garnered thereby, and do not limit a school board’s authority to seek additional funds when a project overruns its authorized funding. Whether such ought be the rule where the contract necessarily will breach the allotted funding is, of course, not before the court or decided in this case. The school district having the power to enter into the contract with plaintiffs, the arbitrator had the power to grant an award on its terms. Wm. J. Burns, etc., Inc. v. N. J. Guards Union, supra.

Even were recovery deemed barred under the express terms of the contract, long established precepts of equity and fairness in our law would entitle plaintiffs to recovery. As noted in Hudson City, etc., Co. v. Jersey City Incinerator Auth., 17 N. J. 297(1955):

“The basic rule * * * is that there can be no recovery under an express municipal contract entered into without observing the mandatory legal requirements specifically regulating the mode by which a municipal power is to be exercised. Where express contracts must be preceded by certain steps or made in a certain way there is ‘considerable authority, however, to support the rule that a recovery may be had on a quantum meruit * i" upon the theory that it is not justice where a contract is entered into between a municipality and another, in good faith, and the corporation has received benefits thereunder to permit the municipality to retain the benefits without paying the reasonable value therefor !h * *’.” [at 305; citations omitted; emphasis in original!

The court there concluded:

In summary, we find * * * that where the contract was not within the corporate power no recovery may be had by the contractor either on express or implied contract; where the Legislature expressly prohibits the incurring of liability on contract or otherwise no recovery may be had either on express or implied contract; but where the power to contract lies within the competence of the municipal corporation and there has been an irregular exercise of that power in good faith, recovery on the quantum meruit may be had although the express contract is void, [at 309; emphasis supplied]

The principle was reaffirmed in 405 Monroe Co. v. Asbury Park, supra, where the court stated.

*’ 41 * if the difficulty is an irregularity in the exercise of a power the municipality does have and the Legislature had not decreed the consequences of the irregularity, our cases seek a just result. In such circumstances one who deals with the municipality in good faith may be permitted to invoke the concept of ratification, or estoppel, or if in the public interest the agreement itself ought not to be enforced, still relief may be granted to the extent of the benefit conferred upon and knowingly accepted by the municipality. [40 N. J. at 463]

There is no question here that the defendant benefited from the contract with plaintiffs. The school was occupied in September of 1973 and utilized since. Any controversy concerning the adequacy and valuation of the services rendered by plaintiffs presented factual matters within the domain of the arbitrators, Daly v. Komline-Sanderson Engineering Corp., supra; Carpenter v. Bloomer, supra. So also did any dispute as to the good faith of the parties in their dealings with one another. There is no contention by defendant that it has no power to enter into contracts necessary to the erection of a school and, in fact, it admits its liability to plaintiffs for the $18,468.42 balance of the authorized monies. In view of these circumstances a court, hearing the matter as the initial tribunal and making the fact findings of good faith and service valuation which the arbitrators plainly made, would be permitted under the above-stated law to enter a quantum meruit judgment in plaintiffs’ favor even were the contract void and unenforceable. The facts reveal, at worst, a good faith "irregular exercise” of an admitted power to contract by defendant. Fo reason presents itself for denying the parties’ chosen tribunal the use of this legal principle, particularly in the face of an arbitrator’s right to ignore the law entirely. Cf. Anco Products v. T. V. Products, supra. It follows that an award grounded therein would be valid and confirmable, absent the conditions of N. J. S. A. 2 A :24-8.

Plaintiff's, then, are entitled to summary judgment on the award. As to interest, no precedent in this jurisdiction has been found.

In the absence of a controlling precedent, when a court of equity determines that one party is chargeable with a fixed amount as of a prior date, the court is free to determine whether interest should be allowed in addition to the principal sum, and if so the rate thereof according to the plainest and simplest considerations of justice and fair dealing in the given case. [East Ridgelawn Cemetery v. Winne, 19 N. J. Super. 413, 422 (App. Div. 1952), mod. 11 N. J. 459 (1953)]

The general rule is that an arbitration award for a certain sum of money carries interest from the time it is due and payable. 6 C. J. S. Arbitration and Award § 80 b(3) (j) at 224. R. 4:42-11 (a) provides that “Judgments, awards and orders for the payment of money and taxed costs shall bear interest at 6% per annum from date of entry, except as otherwise ordered by the court.” It is the conclusion of the court that the circumstances of this case justify interest at 6% from the dates of the main and reimbursement awards.