author: Walsh, J. C. C.

text:
    UNION COUNCIL NO. 8, NEW JERSEY CIVIL SERVICE ASSOCIATION, A CORPORATION OF NEW JERSEY, PLAINTIFF, v. HOUSING AUTHORITY OF THE CITY OF ELIZABETH, JOSEPH AREK AS TREASURER OF THE HOUSING AUTHORITY OF THE CITY OF ELIZABETH, FRANK E. SOVINEE, CARLOS FERRER, ABE ROSENSWEIG, CHARLES F. SCHEUERMAN AND EDWARD A. SMOLEN, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided July 3, 1973.

      Mr. David Fox for plaintiff (Messrs. Fox & Fox, attorneys)

      Mr. Semour S. Lichtenstein for defendants Housing Authority of the City of Elizabeth, Joseph Arek, Frank E. Sovinne, Carlos Ferrer, Abe Rosensweig, Charles F. Scheuerman and Edward A. Smolen.
   Walsh, J. C. C.

(temporarily assigned). Union Council #8, New Jersey Civil Service Association, Inc. (hereinafter Council 8) is a bonafide employee organization. The members of the Council include permanent, full-time public employees who are covered by the New Jersey Civil Service Act (Revised Statutes, Title 11), as well as other employees. The Council has been certified in accordance with the New Jersey Employer-Employee Relations Act, N. J. 8. A. 34:13A-1 et seq., as the exclusive representative for collective bargaining negotiations on behalf of certain nonsupervisory employees employed by various governmental bodies in Union County.

The Housing Authority of the City of Elizabeth (hereinafter Authority) is a body corporate and politic operating under the provisions of N. J. 8. A. 55:14A-1 et seq. Defendant Joseph Arek is the Assistant Director of the Housing Authority. The remaining individual defendants are commissioners in whom the powers of the Authority are vested.

When employees request the Authority, in writing, to make certain deductions from their salaries fox the purpose of paying dues to their respective employee organizations, N. J. S. A. 52:14-15.9e requires the Authority to make such deductions and to transmit them to the specified employee organizations.

Between January 15 and March 8, 1971 eight employees requested the Authority, in writing, to deduct their dues and to transmit them to the Council. The deductions were made by the Authority through November 19, 1971, a portion of which were transmitted to the Council.

On November 19, 1971 the chairman of the Authority directed that no further dues deductions be made, and that any deductions then held by the Authority be returned to the respective employees. On July 5, 1972 the Council submitted to the Authority dues deduction requests from four additional employees of the Authority. The Council has requested that the Authority honor all of the 12 dues deduction requests, but the Authority has refused to do so.

This matter is somewhat complicated in that, on May 4, 1970, a petition was submitted to the Housing Authority by 19 of its employees requesting that the Council be authorized to represent them in collective bargaining negotiations with the Authority. Many of the emploj^ees presently requesting that their dues be deducted by the Authority and transmitted to the Council are among those employees who petitioned for representation by the Council in 1970. The Authority further points to the fact that 10 ont of the 12 employees now requesting dues deductions hold supervisory positions with the Authority. Defendants argue that these supervisory personnel cannot join the Council because it also represents nonsupervisory employees. Hence, the Authority contends that it should not be required to make the requested deductions.

The Authority bases its argument on N. J. 8. A. 34:13A-5.3 of the New Jersey Employer-Employee Relation Act, which provides in part:

* <• * except where established practice, prior agreement or special circumstances, dictate the contrary, shall any supervisor having the power to hire, discharge, discipline, or to effectively recommend the same, have, the right to be represented in collective negotiations by an employee organization that admits nonsupervisory personnel to membership, * *■ *

Plaintiff Council now seeks summary judgment ordering that the Authority honor the aforesaid dues deduction requests. In addition, the Council seeks an accounting from the Authority for all dues which the Authority has failed to deduct and pay to plaintiff.

The precise issues involved herein are novel, and apparently have not heretofore been considered by our state courts. N. J. 8. A. 52:14-lo.9e, enacted in 1967, became effective on February 27, 1968. It states as follows:

Whenever any person holding employment, whose compensation is paid by this State or by any county, municipality, board of education or authority in this State, or by any hoard, body, agency or commission thereof shall indicate in writing to the proper disbursing officer bis desire to have any deductions made from his compensation, for the purpose of paying the employee’s dues to a bona fide employee organization, designated by the employee in such request, and of which said employee is a member, such disbursing officer shall make such deduction from the compensation of such person and such disbursing officer shall transmit the sum so deducted to the employee organization designated by the employee in such request.
Any such written authorization may be withdrawn by such person holding employment at any time by the filing of notice of such withdrawal with the above-mentioned disbursing officer. The filing of notice of withdrawal shall be effective to halt deductions as of January 1 or July 1 nest succeeding the date on which notice or withdrawal is filed.

This statute confirms that the written requests for dues deductions submitted by the employees of the Authority are proper. Since the statute sets forth no qualifications as to whether the members are supervisory or nonsupervisory personnel, we must look elsewhere to determine if there is substance to the Authority’s position that supervisory personnel are not allowed in the same organization as nonsupervisory personnel, and that such a duality of membership violates state law.

The New Jersey Employer-Employee Relations Act authorized the establishment of a Public Employees Relations Commission (PERO) in New Jersey and provided for certification of employees representatives as exclusive representatives for purposes of collective bargaining negotiations and for other purposes.

N. J. S. A. 34:13A-5.3 of the act states, in pertinent part, the following concerning supervisory employees:

Nor * 11 * shall any supervisor * * * have the right to be represented in collective negotiations by an employee organization that admits non supervisory personnel to membership, * *■ * the fact that any organization has such supervisory employees as members shall not deny the right of that organization to represent the appropriate unit in collective negotiations.

It is apparent from a review of this statute that there is nothing which, as defendant Authority contends, prohibits a labor organization from having both supervisory and nonsupervisory personnel among its membership. The statute specifically states that even if an organization has both types of members, it nevertheless may still represent nonsupervisory employees for purposes of collective bargaining negotiations. The court in Bowman v. Hackensack Hospital Ass’n, 116 N. J. Super. 260 (Ch. Div. 1971), in discussing the statute stated:

It would appear that our policy, as set forth by the New Jersey Legislature, is not to disqualify an organization from functioning as the collective bargaining representative of nonsupervisory employees because of the fact that there might be supervisors included within its membership. Rather, it would appear that the only prohibition under the New Jersey act is that supervisors not be included within the same unit as nonsupervisors, [at 273]

The Authority has cited Bowman for the proposition that should a community of interest exist between supervisory and nonsupervisory personnel, then the supervisors would be ineligible for membership in plaintiff organization. This interpretation of Bowman is erroneous in two respects. First, Bowman stands for the proposition that if a “community of interest” does exist among employees seeking recognition of a negotiating unit, then there is no impediment to their being represented by the chosen unit. Secondly, if the “community of interest” does not exist, then they may not be represented by the same bargaining unit but they are not precluded from membership in the same organization.

To appreciate the law discussed in Bowman it must be remembered that a bargaining unit is not synonymous with a labor organization. N. J. 8. A. 34:13-5.3 allows supervisors to be members of labor organizations which contain nonsupervisory members and only prohibits supervisors from being within the same bargaining unit as non-supers.

This court holds that membership in plaintiff organization by supervisors is not violative of state law and consequently defendant Authority should honor the dues deduction requests made by its employees pursuant to N. J. S. A. 52 :15-15.9e.

Defendants’ fear, that once the court orders the dues deducted and transferred, the Authority will be required to recognize plaintiff as the bargaining unit for all of its employees belonging to the Council, bears no merit. The Authority’s collection of the Council’s dues will not in any way entitle plaintiff to act as bargaining agent for employees of the Authority.

It is clear that the Legislature intended that disputes over the designation of an appropriate negotiating unit be handled by the Public Employees Relations Commission. See Board of Education, West Orange v. Wilton, 57 N. J. 404 (1971). Hence, recognition of plaintiff as a collective bargaining agent is not a relevant issue in the present case.

Henceforth the Authority shall collect and transmit dues to the Council pursuant to the written requests of its employees. However, no accounting shall be granted to plaintiff for past dues in this action.


source: Caselaw Access Project

author: Larner, A. J. S. C.

license: Public Domain

text:
    JOHN J. POWERS, PLAINTIFF, v. UNION CITY BOARD OF EDUCATION, DEFENDANT.
    Superior Court of New Jersey Law Division
    Decided July 5, 1973.

      Mr. Richard A. Levin for plaintiff (Messrs. Amster & Levin, P. A., attorneys).

      Mr. Stephen G. Weiss for defendant (Messrs. Greenwood, Weiss, & Shain, attorneys).
   Larner, A. J. S. C.

This action is brought to recover reasonable counsel fees and expenses incurred by plaintiff in the defense of criminal litigation against him in the Federal District Court of New Jersey. The action is bottomed upon a claim of indemnity by plaintiff, as a member of the Board of Education of Union City, pursuant to the provisions of N. J. S. A. 18A:12-20, which in pertinent part provides:

Whenever - * * a criminal action has been brought against any person for any act or omission arising out of and in the course of tile performance of his duties as a member of a board of education, and in the case of a criminal action such action results in final disposition in favor of such person, the cost of defending such action, including reasonable counsel fees and expenses, * * * shall be borne by the board of education.

See similar provisions for officers and employees of a board of education, N. J. S. A. 18A:16 — 6 and 6.1, and for employees of state educational institutions, N. J. S. A. 18A: 60-4 and 5.

Plaintiff was indicted under several counts, along with four codefendants, charging them with violations of 18 U. 8. C. A. § 1951 in that, through “the wrongful use of fear of financial injury,” they extorted moneys from several contractors who did business with the Union City Board of Education, and, further, conspired to commit such wrongs. The essence of the proofs offered by the government at the criminal trial was that all the defendants participated in a pattern or practice which required most business concerns furnishing products or services to the board to pay kickbacks for their use and benefit, in return for the privilege of doing business and assuring prompt payment of invoices.

The most damaging inculpatory evidence against Powers came from the mouth of an unindicted coconspirator, Dr. Philip P. Castorino, who testified that Powers participated with him each month in counting the funds from the kickbacks and dividing them among the board members, including Powers. Castorino also testified that Powers had advised him of a 10% kickback due on two particular contracts. These allegations of Castorino were categorically denied by Powers, and testimony was offered in defense affecting the credibility of Castorino.

Por present purposes it is not essential to review all the testimony at the criminal trial except to note that the litigation involved allegations of unlawful acts occurring which Powers was a member of the board of education and stemming from the business relationship between the board and its suppliers. The allegations were denied by Powers. The jury acquitted him on all counts of the indictment, while two of his co-defendants were convicted.

The acquittal is conclusive for the purpose of determining the right of indemnity under the statute. Hence, the court is not called upon to make a finding of guilt or innocence as a precondition for application of the statute.

Powers commenced his service as a board member on October 27, 1968 and is still serving in that capacity. He has served on several committees, including the maintenance committee which has the responsibility of recommending the award of contracts to the board as an entity, whether on bid or sales solicitation. In addition, he had some degree of responsibility for communication with Anthony Genovese, the architect for the construction of school additions, whose contract and alleged kickbacks were part of the factual complex of the criminal charge.

The basic issue to be determined is whether the criminal charge of which defendant was acquitted was “for any act or omission arising out of and in the course of the performance of his duties as a member of a board'of education,” within the intendment of the Legislature in making such provision for indemnification.

There are no reported cases which have construed this statute as applied to a criminal action. However, it has been considered in its applicability to civil litigation.

In Errington v. Mansfield Tp. Bd. of Ed., 81 N. J. Super. 414 (App. Div. 1963), the court determined the issue on common law principles since the statute in question was not adopted until 1965. Plaintiff there brought an action in lieu of prerogative writs to restrain the expenditure of school funds for the expense of defending a libel suit brought against the individual members of the board. The court held that the board could not underwrite the expense of defending a libel suit against the members individually since the libelous writing was not in performance of a public duty of such members imposed or authorized by law, even though the subject matter which induced the writing related to a proposed site for a new school. The litigation therefore was purely personal in nature and did not advance any school purpose. As a consequence, the Appellate Division affirmed a summary judgment in favor of the plaintiff.

The Supreme Court reversed, 42 N. J. 320 (1964), and remanded the matter so that a full record could be developed in the libel actions as a basis for decision of the prerogative writ suit, finding that the meager record was inadequate to resolve the question.

The mandate of the Supreme Court was carried out, and by the time the in lieu action came up for further hearing on the complete record the Legislature had passed N. J. 8. A. 18:6-50.20 (now N. J. 8. A. 18A:12-20). The trial court again held that the expenditure of public funds for defense of the libel actions was unwarranted, by construing the statute strictly and finding that a letter and a resolution of the board which were the basis of the libel action did not strictly arise out of the performance of the “duties” of the members of the board.

On the second appeal to the Appellate Division, the judgment was modified so as to authorize payment for a portion of the expenditures allocated to the adoption of the resolution. Errington v. Mansfield Tp. Bd. of Ed., 100 N. J. Supper. 130 (App. Div. 1968). Although that case involved that case involved civil litigation and its facts are not analogous, the rationale of the court is significant:

The trial court emphasized the word “duties” in reaching its conclusion and strictly interpreted it to exclude the adoption of a resolution to authorize the defense of a board member sued for libel. We would not construe the expression “in the performance of their duties” so narrowly. Such a strict construction of “duties” would exclude all tortious conduct by a board member, because it is never a “duty” of a board member to commit a tort. It would also exclude all invalid resolutions because it is not a “duty” of a board member to pass an invalid resolution. The purpose of the new statute is to make manifest the implied power of boards of education to provide for the legal defense of a member of the board who is sued individually for some action taken by him in furtherance of his prescribed duties, [at 137]

See also, Cobb v. City of Cape May, 113 N. J. Super. 598 (Law Div. 1971), where in the context of the expenses arising ont of a civil libel action, Judge Horn noted:

* r * jje [public officer] should not be constantly apprehensive in the performance of his duties that he may be involved in litigation which might prove expensive to himself presonall'y. * * * Such concern would have a tendency to stifle debate and curtail appropriate action in matters of public concern, [at 602]

In light of the liberal construction applied in civil litigation under common law and the statute, does the defense of a criminal charge arising out of alleged illegal acts of extortion while plaintiff was a board member warrant the payment of his legal fees and expenses incurred in defense of that charge?

The federal crime upon which Powers was indicted does not necessarily require that a defendant be a public official for conviction thereunder. Nevertheless, the indictment alleges his official position as a member of the board of education, and the asserted criminal conduct under the factual context of the trial proofs did arise out of the performance of his functions as a member of the board.

It is manifest, on the other hand, that the unlawful acts as alleged in the criminal prosecution were not encompassed within the prescribed duties of Powers as a board member. They were clearly unlawful and beyond the proper good faith performance of his public functions. The fact, however, that the alleged criminal acts were obviously beyond the prescribed duties of a board member does not in itself immunize the board from the statutory liability; for such a construction would exclude all criminal conduct and frustrate the express intent of the legislature. Cf. Errington v. Mansfield Tp. Bd. of Ed., 100 N. J. Super. 130, 131 (App. Div. 1968).

Nevertheless, it must be noted that the statute not only requires that the criminal action involve an act or omission arising out of the performance of the board member’s duties but also in the course of the same.

This statutory language is identical to that employed in the Workmen’s Compensation Act as a prerequisite to a compensable accident. As construed in the context of a workmen’s compensation claim, an accident arising out of employment signifies that “it results from a risk ‘reasonably incidental’ thereto,” and arising in the course of employment connotes that “it occurs within its period at a place where the employee may properly be and while he is fulfilling the duties of his employment 'or doing something incidental to it.’ ” Tocci v. Tessler & Weiss, 28 N. J. 582, 586 (1959); Bryant, Adm’x. v. Fissell, 84 N. J. L. 72, 76 (Sup. Ct. 1913); Belyus v. Wilkinson, Gaddis & Co., 115 N.. J. L. 43, 47 (Sup. Ct. 1935); Argroe v. Marinaccio, 63 N. J. Super. 438, 442 (App. Div. 1960); Malone, “Workmen’s Compensation,” 8 Rutgers L. Rev. 97 (1953).

Although the foregoing construction of the Workmen’s Compensation Act involves a different subject matter with a different legislative purpose, the cases thereunder are helpful to demonstrate that the indemnity statute incorporates a dual requirement in. order to establish responsibility in the board of education. The two-fold criteria that the criminal charge arise out• of and in the course of the duties of the board member must be given full significance. Statutes should be accorded that construction which will give effect to every word expressed by the Legislature. Monmouth Lumber Co., v. Ocean Tp., 9 N. J. 64, 77 (1952); Behnke v. New Jersey Highway Authority, 13 N. J. 14, .24 (1953); Mahoney v. Parole Bd. of New Jersey, 10 N. J. 269, 275 (1952), app. dism. 344 U. S. 871, 73 S. Ct. 173, 97 L. Fd. 675 (1952); Lynch v. Edgewater, 8 N. J. 279, 286 (1951); Hoffman, v. Hock, 8 N. J. 397, 406 (1952); Oldfield v. New Jersey Realty Co., 1 N. J. 63, 68 (1948).

Thus, if the conduct giving rise to the charge fails to meet either the requirement that it arise out of the performance of the public duties or in the course of the performance of those duties, the obligation to pay for the legal defense remains with the individual and cannot be imposed as a public burden. Clearly, where the charge involves the criminal conduct of extortion which may originate out of the performance of the duties of the individual as a member of the board, it cannot be said to have been accomplished in the course of carrying out those duties.

Some instances come to mind in which the conduct, though criminal, arises out of and in the course of performance of the duties of a board of education member or other public official. N. J. 8. A. 18A:38 — 5.1 makes it a misdemeanor fox a member of a board ox education to vote to exclude a child from a public school because of race, creed, color, etc.; N. J. 8. A. 18A :6 — 5 proscribes a religious test for employment in a public school system and imposes a criminal penalty for any person violating the same; under N. J. 8. A. 2A.T35-1 a public officer who wilfully refuses or neglects to perform a,ny duty imposed upon him by law is guilty of a misdemeanor, and N. J. 8. A. 2A:135-5 makes it a crime for any member of a board of education to wilfully and knowingly vote for the disbursement of public money or the creation of an obligation in excess of appropriations.

Although the acts or omission in the foregoing examples may be unlawful and therefore subject to criminal sanctions, the successful defense of a prosecution for the same would invoke the indemnity under the statute because the gravamen of the litigation took place when and where the individual performed his duties and while he was fulfilling the duties of a board member. Such is not the case where the charge, as herein, involves the criminal conduct of extortion which was carried on outside the course or scope of the performance of Powers’ duties as a Board member as to time, place and subject matter.

The liberal approach in applying the statute in civil litigation so as not to inhibit a board member from freely expressing himself and acting for the public good without fear of economic loss has no relevancy in the context of the criminal conduct in this case. No member of a board of education should be encouraged to engage in acts which may constitute crimes by the assurance that an acquittal on the charge will permit him to saddle defense costs upon the taxpayers of the community.

In connection with criminal conduct the facts should be analyzed strictly rather than liberally, so that reimbursement of legal fees and expenses should only ensue when the circumstances are such as to fit clearly within the legislative limitations. The facts in this case do not qualify in that respect. Plaintiff is not entitled to reimbursement for his legal fees and expenses connected with the defense of the federal criminal charge.

Judgment will be entered in favor of defendant.


author: Polow, J. C. C.,

text:
    NEW JERSEY MANUFACTURERS INSURANCE COMPANY, PLAINTIFF, v. CONSOLIDATED MUTUAL INSURANCE CO., A CORPORATION, AND NEW JERSEY LUMBER & SUPPLY CO., INC., t/a DANNY DO-IT LUMBERAMA, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided July 9, 1973.

      Mr. Peter D. Manaban for plaintiff (Messrs. Hughes, McElroy, Connell, Foley Geiser, attorneys).

      Mr. Gerald Kaplan for defendant Consolidated Mutual Insurance Company (Messrs. Lieb, Teich & Berlin, attorneys).

      Mr. Barry F. Zothow for defendant New Jersey Lumber & Supply Company, Inc., t/a Danny Do-It Lumberama (Messrs. Hirschklau & Wasserman, attorneys).
   Polow, J. C. C.,

Temporarily Assigned. On April 5, 1973 an opinion was rendered in this court declaring that an insurance policy issued by plaintiff covered the accident in question. That decision resolved the dispute between two insurance carriers, each having contended that the other carrier covered the particular risk involved. Accordingly, the obligation was imposed upon plaintiff to defend the action for damages at its own expense on behalf of its assured.

The insured also sought to recover its expenses in defending the carrier’s' declaratory judgment suit to determine which carrier had the obligation to defend the negligence claim. This particular question was not resolved in the written opinion previousty rendered and will be dealt with here.

Prior to September 13, 1971 there was no authority in this State to support the award of counsel fees incurred by an assured in an action against his own insurance carrier to enforce his right to be defended and compel coverage, Vornado, Inc. v. Liberty Mut. Ins. Co., 106 N. J. Super. 111 (Ch. Div. 1969); McMinn v. Damurjian, 105 N. J. Super. 132 (Ch. Div. 1969), although there was clear authority to award costs of defending a claim where the insurer had improperly failed or refused to provide the defense. Gerhardt v. Continental Ins. Co., 48 N. J. 291 (1966).

B. 4:42-9, since September 13, 1971, has provided that “no fee for legal services shall be allowed * * * except * * * (6) in an action upon a liability or indemnity policy of insurance, in favor of a successful claimant.”

The present rule does not “mandate” the allowance of counsel fees in every such action. Felicetta v. Commercial Union Ins. Co., 117 N. J. Super. 524. (App. Div. 1971). It rather reposes in the trial court an area of discretion so that under circumstances where the assured may have acted in bad faith and contributed substantially to the necessity for the litigation by reason of misrepresentations, an allowance may be refused. Felicetta, supra, at 529-530.

Absent such bad faith or misrepresentations by the assured, the purposes to be served in adoption of the rule must be examined in exploring the exercise of discretion to award counsel fees against an insurance company. One purpose assuredly was to discourage groundless disclaimers by carriers. Felicetta, supra, at 528. If that were the sole reason for the rule amendment, plaintiff would be well justified in its opposition to imposition of counsel fees since the declaratory judgment in this case recognized the arguability of plaintiff’s position and the reasonableness of plaintiff’s action in seeking a judicial interpretation of its obligations under the policy.

However, against the background of concern of the bench and bar leading up to consideration and modification of this provision of the rules (See Gerhardt, supra, 48 N. J. at 301), ] find that another compelling motivation for this change was the desire of providing more equitably for the assured the benefits bargained for in his contract of insurance without unanticipated expense over and above the premiums paid for insurance protection.

Our courts have long recognized the disparity in the status of the parties to most insurance contracts, not only as to their bargaining positions but with regard to their economic ability to resist disclaimers and contentions of lack of coverage or exclusion. Commentators have long referred to the doctrine of reasonable expectation in interpreting insurance contracts and in the effort to maintain a reasonable balance between the weaker and stronger parties. Kessler, “Contracts of Adhesion,” 43 Colum. L. Rev. 629, 637 (1943); Isaacs, “The Standardizing of Contracts,” 27 Yale L. J. 34 (1917) ; Coast Mut. Building-Loan Ass’n v. Security Title Ins. & Guarantee Co., 14 Cal. App. 2d 225, 57 P. 2d 1392 (Cal. App. 1966); Gray v. Zurich Ins. Co., 65 Cal. 2d 263, 54 Cal. Rptr. 104, 419 P. 2d 168 (Cal. Sup. Ct. 1966).

There is a certain degree of inherent difficulty in determining when, in particular circumstances, the obligation to defend exists and when any particular risk is or is not covered under the terms of insurance contracts. Before our rule was amended, an insured could be put to the additional expense of prosecuting or defending an action by or against the carrier to compel the protection he claimed existed in the policy, and such expense was not recoverable even if the insured’s claim of coverage were vindicated by the courts. Gerhardt, supra. Except in a few specially designated situations, our court rules embrace the view that each litigant should bear his own expenses for counsel fees, even where successful, in the interest of “sound judicial administration”. Janovsky v. American Motorists Ins. Co., 11 N. J. 1 (1952).

With the adoption of R. 4:42-9 (a) (6), our Supreme Court has now added to those few situations those actions upon liability or indemnity policies in which the claimant is successful. Whether the insurance company had an arguably valid basis for disclaiming is of no significance hero. It has been determined that the risk is within the terms of the contract of insurance. Under the provisions of this amended rule the insured is entitled to receive the benefit of his bargain without additional expense for counsel fees to obtain the judicial determination that he, in fact, is entitled to the protection in question.

Counsel fees will be awarded to the insured, defendant New Jersey Lumber & Supply Co., Inc., the successful party against plaintiff New Jersey Manufacturers Insurance Company. An affidavit of services should be submitted accordingly.


author: Scalera, J. C. C.

text:
    STATE OF NEW JERSEY, PLAINTIFF, v. ROUMANIA EARL TRAVIS, DEFENDANT.
    Essex County Court Law Division (Criminal)
    Decided June 4, 1973.

      Mr. R. Benjamin Cohen, Assistant Prosecutor, for the State (Mr. Joseph P. Lordi, Prosecutor of Essex County, attorney; Ms. Sara A. Friedman on the brief).

      Mr. Myroslaw Smorodsky, Asst. Deputy Public Defender, for defendant (Mr. Stanley C. Van Ness, Public Defender, attorney).
   Scalera, J. C. C.

Defendant and three codefendants were indicted for violations of the gambling laws. The primary source of evidence stems from wiretaps executed pursuant to the provisions of the New Jersey Wiretapping and Electronic Surveillance Control Act, N. J. S. A. 2A :156A-1 et seq. Defendant seeks to suppress the use of the evidence so obtained. N. J. S. A. 2A :156A-21.

Joseph P. Lordi, Prosecutor of Essex County, prior to his vacation period of August 1972, specifically designated Leonard D. Eonco (Chief Trial Attorney) as “Acting Prosecutor, with all the powers and duties of the Office of Prosecutor” for that period. While the prosecutor was actually absent on vacation, the acting prosecutor authorized an application for the wiretap order in the instant case. The wiretap order was issued by a Superior Court judge empowered to sign such orders. N. J. S. A. 2A :156A-2(i).

Defendant contends that the wiretap order is invalid because the required written authorization was not executed by the county prosecutor himself but rather by an “acting” prosecutor, contrary to the provisions of N. J. S. A. 2A :156A-8. It is urged that this section, by its plain meaning, imposes a nondelegable duty upon the prosecutor to himself authorize all 'such applications, and that generally speaking a prosecutor lacks power to appoint an acting prosecutor. Moreover, she asserts that if the New Jersey statute isi construed to allow such delegation, such a provision is invalid, being in contravention of the federal wiretapping act which controls all local legislation on the subject. 18 U. S. C. A. §2516 et seq; 1968 U. S. Code Cong. & Admin. News, 2187. Defendant argues that the rationale of State v. Cocuzza, 123 N. J. Super. 14 (Cty. Ct. 1973), a case recently decided by this court, also mandates this result.

The State maintains that the full-time prosecutor, although not specifically authorized by any statutory provision, has inherent power to appoint an acting prosecutor in such a situation. Further, it is contended that the New Jersey Wiretap Statute clearly allows delegation of the wiretap authority to an acting prosecutor who has assumed the full powers of the prosecutor’s office during his actual absence as occurred here. The State also urges that State v. Cocuzza, supra, compels such a conclusion.

I

Dealing with the general problem of whether or not a prosecutor in New Jersey may appoint an acting prosecutor to act in his absence or disability, it appears that there is no statutory authority for such action. See N. J. S. A. 2A :158-1 et seq. The parties concede that there is no precedent in this State nor, indeed, in any other jurisdiction, to support the propositions advanced by either of them in this regard, absent specific legislative enactment. In contrast, the Attorney General is governed by statutory provisions concerning appointment of an Acting Attorney General. N. J. S. A. 52 :17A-3.1. It may be noted that N. J. S. A. 2A :158-5 grants to county prosecutors the “same powers’* as the Attorney General. Hence, one may argue, this includes the power to appoint an “acting” prosecutor. N. J. S. A. 52:17A-3.1; cf. State v. Winne, 12 N. J. 152, 164-166 (1953).

In Cocuzza this court noted that N. J. S. A. 2A :158-9 provides for appointment of a prosecutor by an assignment judge in the absence of both the Attorney General and a county prosecutor. The State urges, and this court agrees, that that particular section was intended to apply to long-term situations such as would result from removal of the prosecutor or physical or mental inability on the part of the prosecutor to act. Its clear language does not contemplate action by the assignment judge where the absence or disability is a temporary or transient one, as frequently occurs in the ordinary course of business of such an office.

A county prosecutor is endowed with many powers to enable him to discharge his obligations as such. N. J. S. A. 2A :158-1 et seq. Even in the absence of any specific statutory provision it seems clear that a county prosecutor has the inherent power to designate an acting prosecutor to assume the duties of his office during absences or disabilities which routinely occur in such an office. The thrust of N. J. S. A. 2A :158-18, vesting in the prosecutor’s broad powers to delegate duties to assistant prosecutors, would also seem to compel the conclusion that he has the power and discretion to appoint a qualified acting prosecutor to assume all of his duties and powers on such occasions. To hold otherwise would lead to the intolerable result that when relatively short absences or disabilities occur, the prosecutor’s office would be left without someone filling its chief position. The desirability of continuity of the administration of prosecutorial business in a county requires that a prosecutor be so empowered.

In the instant case Prosecutor Lordi thus acted lawfully and properly in appointing Leonard D. Ronco as acting prosecutor during his vacation period. (The qualifications and ability of the appointee are not challenged.)

II

This court in State v. Cocuzza, supra, recently had occasion to review the history of the New Jersey Wiretap Act, born of the Federal Wiretap Act, 18 U. S. C. A. § 2510 et seq., following the decisions of the United States Supreme Court in Berger v. New York, 388 U. S. 41, 87 S. Ct. 1873, 18 L. Ed. 2d 1040 (1967), and Katz v. United States, 389 U. S. 347, 88 S. Ct. 507, 19 L. Ed. 2d 576 (1967). It was therein observed that the New Jersey act was specifically designed to meet the federal requirements. State v. Cocuzza, supra, 123 N. J. Super. at 18.

The Cocuzza decision dealt specifically with an instance where the prosecutor had attempted to delegate authority to an assistant prosecutor to initiate a particular wiretap application without the prosecutor himself having fully reviewed and evaluated the necessity and desirability of invoking the wiretap procedure in that instance. This court, in denying that defendant’s motion to suppress on other grounds, observed that the Xew Jersey Wiretap Act, “as a matter of policy,” cannot be construed to allow delegation of such authority to an assistant on an ad hoc basis. Rather, it was noted, the New Jersey act requires that such delegation be restricted to instances in which the substitute prosecutor is a person empowered to exercise all of the duties of the prosecutor in and during the latter’s actual absence or disability. N. J. S. A. 2A:156A-8. State v. Cocuzza, supra, at 21-22.

This court is now called upon to re-examine its previous construction of the last cited section of the New Jersey Wiretap Act and, more specifically, delineate under what circumstances a county prosecutor may lawfully delegate power to authorize wiretap applications.

The underlying objectives of the federal act and the abuses there sought to be avoided were set forth in the authorities cited in the Cocuzza decision and need no repeating here.

The federal wiretap act provides as follows:

(1) The Attorney General or any Assistant Attorney General specially designated by the Attorney General, may authorize an application to a Federal Judge * * *
(2) The principal prosecuting attorney of any State, or the principal prosecuting attorney of any political subdivision thereof, if such attorney is authorized by a statute of that State to make application to a State court judge * * * may apply to such judge * * *. [18 U. S. C. A. § 2516]

Congressional intent was to “centralize areawide law enforcement policy” in this field at both the federal and local level. U. S. Code Cong. & Admin. News, supra, at 2185-2187. “States would be free to adopt more restrictive legislation . . . but not less restrictive legislation.” Ibid. at 2187.

New Jersey’s Wiretap Act thus provides in this area that

The Attorney General, a county prosecutor or the chairman of the State Commission of Investigation when authorized by a majority of the members of that commission or a person designated to act for such an official and to perform his duties in and during his actual absence or disability may authorize, in writing, an ex parte application to a judge designated to receive the same * * *. [N. J. S. A. 2 A :156A-8]

Defendant’s suggestion that the federal legislation prohibits any delegation of that authority to a substitute at the local level is without merit. Obviously the federal provision regulating local implementation, like any statute, must he construed reasonably to achieve the aims intended by that enactment. State v. Gill, 47 N. J. 441, 444 (1966). A legislative grant of power is necessarily attended by incidental authority fairly and reasonably necessary or appropriate to make it workable and effective. Juzek v. Hackensack Water Co., 48 N. J. 302, 314 (1966). Thus viewed, Congress simply could not have intended that local wiretap activity would be completely suspended during the absence or disability of the officials specifically named. Indeed, the legislative history clearly indicates that “the issue of delegation by that officer would be a question of State law.” U. S. Code Cong. & Admin. News, supra, at 2187.

Both the State and defendant cite numerous federal cases which, it is urged, are dispositive of this issue of “delegation” of authority to initiate wiretap applications. As noted in Cocuzza the federal decisions have reached “different and sometimes conflicting interpretations” of the federal provisions. See the many cases cited in United States v. Robinson, 468 F. 2d 189, on rehearing en banc, 472 F. 2d 973, 974, fn. 1, and at 975, dissent, fn. 1 (5 Cir. 1973). The effect of those cases are, in my judgment, circumscribed by the specific provisions of the federal act under consideration and the unique factual situation involved in the hierarchy of the nationwide office of the Attorney General of the United States. Additionally, since “the results have been legally as well as factually divergent at the circuit and district [court] level” (Ibid. at 976), they are not determinative in construction of our local wiretap statute.

N. J. S. A. 2A :156A-8, by its plain language, properly permits some delegation of authority to apply for wiretaps. To what extent and under what circumstances may such power be delegated and when may such substitute properly act?

In order that the New Jersey Wiretap Act may be fully and reasonably implemented to achieve its purposes a county prosecutor may, in circumstances hereinafter set forth, appoint a qualified person as acting prosecutor with full powers of his office, who may invoke and authorize wiretap applications under the New Jersey Wiretap Act.

However, where the prosecutor has not himself reviewed and signed the authorization for the wiretap application, the State, when challenged on a motion to suppress, will be required to come forward to demonstrate that such failure to do so was necessary and justified in the situation presented. It should demonstrate what attempts were made to have the prosecutor himself approve the wiretap application and that the exercise by his substitute was otherwise proper and necessary in the circumstances then presented. This is not unlike a warrantless search where the State has the burden to justify its failure to secure a warrant. State v. Allen, 113 N. J. Super. 245, 249 (App. Div. 1970); State v. Gaudiosi, 97 N. J. Super. 565, 571-572 (App. Div. 1967). Only by imposing such, a burden upon the State will there be prevented the unfettered diffusion or dilution of authority with which the Legislature and the United States Congress were so concerned. U. S. Code Cong. & Admin. News, supra, at 2185. Only by adherence to such a standard of conduct will there be fostered the restraint in the use of wiretaps sought by those bodies, reflecting the United States Supreme Court’s treatment of the subject in Berger and Katz. Ibid. at 2185-2187; State v. Cocuzza, supra. The Legislature did not and could not have intended that a prosecutor could cavalierly parcel out this power on a case-by-case basis or empower an acting prosecutor to act merely for convenience or to relieve some of the burdens of his office.

Obviously no hard and fast rule can be formulated to cover all circumstances and each case must rest on its own facts. Broadly stated, an acting prosecutor may only utilize the provisions of the wiretap act in those specific cases where the permanent prosecutor is actually absent or disabled or is otherwise prevented from himself authorizing the application. (I do not now deal with the situation where the prosecutor has fully reviewed a particular application but someone else merely signs the authorization for him). Eor example, a temporary absence of the prosecutor without a showing of emergent or exigent circumstances would not warrant exercise of the prosecutor’s power, under this statute, even by a duly appointed and qualified acting prosecutor.

In such instances i't will be the burden of the State to establish that the exercise of the power by a surrogate was necessary and warranted when tested against the aims and purposes of the legislation permitting wiretap intrusions. A trial court will thus be in a position to evaluate each case on its own merits, and invoke the suppression sanction where it finds a disregard of the legislative mandate. N. J. S. A. 2A :156A-21.

The State further urges that this court should renounce the limited principle enunciated in State v. Cocuzza, supra, and hold that the prosecutor may also delegate his power under the wiretap statute to specially designated assistant prosecutors who would be highly trained in those special areas of the law in order to assure uniformity of wiretap uses. Note, “New Jersey Electronic Surveillance Act,” 26 Rutg. L. Rev. 617, 623 (1973). Such an approach misconstrues the important underlying purposes of Congress and of the New Jerey Legislature. The “uniformity” intended was that of “law enforcement policy” in restricting the use of wiretaps except in the clearest and most necessary of cases. U. S. Code Cong. & Admin. News, supra. “Few threats to liberty exist which are greater than that posed by use of eavesdropping devices.” Berger v. New York, supra, 388 U. S. at 63, 87 S. Ct. at 1885, 18 L. Ed. 2d at 1054-1055. This requires that in each case the prosecutor or his alter ego exercise a mature judgment involving a consideration of fundamental individual rights to determine whether those rights should be subjugated in the name of law enforcement. A.B.A. Standards Relating to Electronic Surveillance, 131-133 (approved draft 1971); State v. Sidoti, 120 N. J. Super. 208, 214 (App. Div. 1972). Such a decision cannot and should not be equated to mere compliance with the technical requirements of “probable cause” under the wiretap statute. No wiretap intrusion should be initiated on so casual a basis.

In support of its position the State cites United States v. Ceraso, 467 F. 2d 647 (3 Cir. 1972); United States v. Becker, 461 F. 2d 230 (2 Cir. 1972); United States v. Pisacano, 459 F. 2d 259 (2 Cir. 1972), and United States v. Fiorella, 468 F. 2d 688 (2 Cir. 1972). The State suggests that this “line” of cases stand for the proposition that once “a designated assistant * * * authorizes an application, it should be upheld.”

This court does not agree. Aside from the difference in procedural requirement of the federal act, those cases, with the exception of Pisacano and Becker, clearly relied upon the fact that, somewhere along the line, the Attorney General had “personally” approved the request. United States v. Ceraso, supra, 467 F. 2d at 651-652. It was the personal evaluation by the Attorney General that was deemed controlling, and not the form of the written approval by a subordinate. (The federal act does not require written approval as does the New Jersey act.) The issue of delegation in the Pisacano ease arose indirectly when the lower court refused to permit defendant to withdraw pleas of guilty. A reading of Pisacano will reveal that only one of three wiretaps did not receive the Attorney General’s personal attention. That court, in refusing defendant’s request to withdraw his guilty plea, indicated only that they were “not convinced” that they would have reversed a trial court’s refusal to suppress evidence thus obtained—hardly a hard and fast pronouncement in the area. United States v. Pisacano, supra, 459 F. 2d at 264. The Becker court begrudgingly adopted the Pisacano approach only because it felt “bound” to follow the “law of the [second] circuit.” United States v. Becker, supra, 461 F. 2d at 235-236.

Moreover, had the New Jersey Legislature intended to permit such delegation it could easily have indicated so in plain and simple language. Compare the New York Wiretap Act, which, as amended on May 24, 1972, allows such special delegation, but only to a special State Deputy Attorney in charge of the organized crime task force,” but when speaking of “district attorneys” generally permits delegation only to “that person designated to act for him and perform his official function in and during his actual absence or disability.” McKinney's Consol. Laws, c. 11-A, CPL 700.05(5).

In the light of the foregoing principles this court finds that the wiretap authorization in the instant case was properly and legally exercised by the acting prosecutor. The permanent prosecutor was unavailable since he was actually absent and out of the county during the entire month of August. He could not have personally evaluated this application under the circumstances. A qualified acting prosecutor was properly appointed to exercise all of the duties of the office of prosecutor, and within the scope of those duties properly initiated this wiretap application. The situation thus warranted his exercise of power under the wiretap statute. The legislative mandate was satisfied.

Accordingly, the motion is denied.


author: Fritz, J. A. D.

text:
    SCHWERMAN TRUCKING COMPANY, A CORPORATION, PLAINTIFF-APPELLANT, v. THE DEPARTMENT OF ENVIRONMENTAL PROTECTION OF THE STATE OF NEW JERSEY AND THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued January 15, 1973
    Decided July 11, 1973.

      Before Judges Fritz, Lynch, and Martino.

      Mr. Joseph S. Seidel argued the cause for appellant (Messrs. Paul Appel and Joseph S. Seidel, on the brief).

      Mr. Lawrence E. Stanley, Deputy Attorney General, argued the cause for respondents (Mr. George F. Kugler, Jr., Attorney General of New Jersey, attorney).

      Mr. Thomas F. X. Foley argued the cause for intervenor New Jersey Motor Truck Association.
   The opinion of the court was delivered by

Fritz, J. A. D.

Wé will not tarry over the questionable procedure employed in achieving this review. Respondents complain mildly about the procedure and in particular the untimeliness of the appeal. Regardless of whether the procedure employed is vulnerable, we would consider it unfortunate if all who wanted to mount a constitutional attack on a statute of such broad reach as that with which we are here concerned went about it this way. But the question is before us, and all concerned, including the court, recognize the importance of and necessity for an appellate adjudication. We will decide the merits.

Appellant challenges section 2.1 of chapter 14 of the New Jersey Air Pollution Code, promulgated by the Department of Environmental Protection (Department) pursuant to the authority of N. J. S. A. 26:20-8 and more particularly N. J. S. A. 26:2C-8.4, implemented by N. J. S. A. 13:1D-7 and N. J. S. A. 13:1D-9(n), and by N. J. S. A. 39:3-70.2. That section reads as follows:

PUBLIC HIGHWAY STANDARD
No person shall operate any diesel-powered motor vehicle or permit any diesel-powered motor vehicle which he owns to be operated upon the public highways of the State if the vehicle, when in motion, emits visible smoke in the exhaust emissions within the proximity of the exhaust outlet, for a period of more than five seconds. [N. J. A. C. 7:27-14.2; emphasis added]

Appellant argues that (a) this regulation contravenes N. J. S. A. 26 :2C-8.4 in that a "no visible smoke” standard is unattainable without modification to the equipment; (b) the "no visible smoke1” standard is unreasonable and confiscatory and therefore arbitrary, capricious, and unconstitutional, in that it bears no real and substantial relation to the desired end, there is no reasonable way to avoid its violation, and it is inconsistent with other standards, and (c) the standard imposes an unreasonable burden on interstate commerce. The intervening New Jersey Motor Truck Association forwards essentially the same arguments, with perhaps more emphasis on an alleged conflict with a national standard and the suggestion of federal preemption.

At the outset, we are completely satisfied that the Department has been properly and competently empowered by the statutes cited above to regulate smoke emissions from motor vehicles and to enforce sanctions for violations of those regulations. We are equally satisfied that if such regulations are: properly promulgated, reasonable in the sense of being nonarbitrary and designed to accomplish a permissible end, and nondiscriminatory against interstate commerce as well as unlikely to disrupt required uniformity, then there is no constitutional problem arising from the Commerce Clause. Huron Portland Cement Co. v. Detroit, 362 U. S. 440, 448, 80 S. Ct. 813, 4 L. Ed. 2d 852 (1960); cf. In re Complaint of Brotherhood of R. R. Trainmen 49 N. J. 174, 183 (1967). Finally, we are content that not only has there been no. federal preemption here, but the federal government has specifically authorized and encouraged the adoption of state and local laws designed to control pollution. 42 U. S. C. A. 1857a(a). As is pointed out in In re Complaint of Brotherhood of R. R. Trainmen, supra:

In Florida Lime & Avocado Growers v. Paul, supra [373 U. S. 132, 83 S. Ct. 1210, 10 L. Ed. 2d 248 (1963)], the Supreme Court pointed out that federal regulation of a field in commerce should not be deemed preemptive of state power in the absence of persuasive reason — “either that the nature of the regulated subject matter permits no other conclusion, or that the Congress has unmistakably so ordained. [Citations omitted.]” 373 U. S., at p. 142, 83 S. Ct. 1210 * * * * * * Indeed, it may be said that state regulatory provisions having local safety as their objective are the least likely to be held preempted. [49 N. J. at 182-183]

We conclude that there is no legal impediment to control by the Department of motor vehicle smoke emission. We turn to the particular section here challenged. Initially we note that a hearing was held in advance of the promulgation, on proper notice. Copies of the proposed regulation were distributed in advance. The regulations as eventually promulgated differed in some respects from those proposed in advance.

A review of fundamental propositions will be helpful. An opponent who assails an administrative regulation must overcome the presumption of reasonableness which attaches to such enactments. Consolidation Coal Co. v. Kandle, 105 N. J. Super. 104, 114-115 (App. Div. 1969), aff’d o. b. 54 N. J. 11 (1969). This effort cannot depend for success solely on the absence of administrative findings, Id. at 118, although arbitrary action may be demonstrated by absence of support in the record for findings made. See Campbell Foundry Co. v. Sullivan, 119 N. J. Super. 51, 54 (App. Div. 1972). In this respect, however, consistent with the presumption of validity, facts sufficient to justify the regulation will be presumed. Consolidation Coal Co. v. Kandle, supra. If a reasonable difference of opinion from the facts, real or presumed, exists, the administrative decision will not be disturbed, although the wisdom of the action is doubted by the court. Flanagan v. Civil Service Department, 29 N. J. 1 (1959). In a word, we look for support in the credible evidence in the whole record, and by the employment of reasonable presumptions (to avoid specious, frivolous, or parochial attack), allow the administrative agency the benefit of the doubt in this search.

The generosity of this: approach, in the interest of administrative accomplishment and an acknowledgment of expertise in the agency, will not suffice, however, to supply missing record support in a. situation where the challenge is substantial and the regulation far-reaching, as here.

Without regard for such problems here presented as an apparent inconsistency between the inspection standard (N. J. A. C. 7 :27-14.3 — 20% opacity) and the public highway standard here under attack (N. J. A. C. 7 :27-14.2 — visible smoke), or the subjectivity of the visible smoke standard, we are troubled by the suggestion of appellant — supported by evidence here belatedly supplied by affidavit; appellant did not appear at the public hearing — that the standard is unattainable. If this allegation is so, the regulation most probably must fall. The unreasonableness of a regulation of this nature which would effectively result in the suspension of legal operation by all naturally-aspirated diesel engines, and therefore by a large segment of the- interstate commerce in trucking, seems apparent, absent a most compelling and desperate motive.

But we need not decide that, for appellant is willing to rely on a more moderate claim in its attack. It insists that to attain operation without visible smoke is impossible without modification of the engines, at least, and it points out correctly that the enabling legislation limits the delegated authority to regulation which will not require modifications, N. J. S. A. 26:2C-8.4. It is clear that where a rule of an administrative agency contravenes the statute empowering the agency to make such rule, the rule lacks legal efficacy. Kamienski v. Bd. of Mortuary Science, 80 N. J. Super. 366 (App. Div. 1963).

Factual support for these allegations is derived from the affidavits referred to above. From these it appears that diesel smoke becomes visible at about 5% opacity. (Contrast the inspection standard of 20% opacity.) We are advised that diesel engines of the natural aspiration type cannot possibly be maintained or tuned to emit smoke of less than 9% opacity without installation of turbo generators.

We might well be less inclined to credit these self-serving affidavits if we were able to find contrary allegations in the ante, litem motam record. But the hearing record provides no technical support for the proposition that the visible-emission highway standard is reasonably attainable. On the contrary, representatives of the trucking industry presented a great deal of testimony demonstrating their difficulty in understanding the subjective visible emission standard, and therefore, their concern with respect to- its attainability. Indeed, the- study prepared by Richard G. Kolb and Irmin O. Kamm at Stevens Institute for the then Department of Health, entitled “Diesel Exhaust Smoke Emission Study,” while speaking of the determinative role played by design, maintenance, adjustment and fuel chemistry in the diesel smoke situation, spoke only in terms of smoke control. Nowhere is the idea of elimination or a no-visible-smoke standard sponsored. The authors there and one of the authors in a later affidavit suggest to the contrary. In fact, a “15-percent tolerance” for visual assessment is recommended in the report. (The ultimate recommendation of this study was an initiating 30% opacity standard with a 10% tolerance, to be reduced to 20% with a 10% tolerance in two years.)

Here, as is the case in many gwasi-legislative rule promulgations by an administrative agency, matters of expertise, indigenous and acquired, far beyond the relatively narrow limits of the public hearing and the Stevens report, unquestionably and properly contributed to the rule-making decision. It is this know-how which the presumption of validity honors. Needless to say, as a practical matter the nature of this knowledge^ its broad perimeters, its sometimes intangible quality, do not permit its detailed and precise momorialization in the record or the appendices of appellate briefs supporting the same. But it is not without significance here that the only factual expression forwarded on behalf of the regulation, in the face of appellant’s attack grounded in unattainability, is the statement of “P. H. Schweitzer, a recognized authority on diesel smoke” in testimony said to have been given before the United States Senate Committee on Public Works on June 24, 1964, and made a part of the record before the New Jersey Motor Vehicle Air Pollution Control Study Commission in April 1965, as follows:

There is an almost unanimous agreement among the experts that a well designed diesel engine, in good repair, using the proper fuel, will not emit visible smoke. It is similarly accepted that when over-fueled (overloaded) any diesel engine will smoke.

We conclude that the record as presently constituted does not support a necessary finding that the standard set by N. J. A. C. 7:27-14.2 is attainable without modification of the vehicle, and that that section is therefore void and unenforceable.

Conscious of the overwhelming social desirability of pollution control, and aware that at the hearing even the trucking industry applauded and encouraged proper efforts at pollution control, we indulge ourselves in speculation relating to the manner in which the record ended up deficient in the respect we have set forth. We do this, not to justify the occurrence, but to determine where the matter should go from here. Eirst, we suspect that that which was called a "free acceleration test,” proposed in the tentative regulations but excluded from the final promulgation, was the subject of such controversy that .neither the industry nor the Department paid sufficient attention to the then lesser problem of the visible smoke standard. Second, we are convinced that in view of the fact the Department had, in prehearing literature disseminated with the proposed regulations (we are told), suggested a definition of visible emission as one of 20% opacity 12 inches from the exhaust outlet, the industry thought it might receive the. same tolerable consideration as was involved in the inspection standard, and it simply adopted a wait-and-see attitude. When enforcement began on a literal visibility basis, unrelated to an objective opacity standard measurable, say, on the Ringelmann chart, the industry belatedly recognized the problem and sought relief.

We believe the ends of justice will be served by affording an opportunity to the Department to reassess the situation and repromulgate a public highway standard. Accordingly, our determination here is without prejudice to the right of the Department to promulgate a further regulation containing a standard susceptible of record support as to reasonableness, including attainability. Uor should our decision be deemed res adjudicata as to a visible smoke standard if such, can be supported by competent evidence on a record to be made. We here say only that the record brought up on this appeal does not support the attainability of that standard within the limitations of the enabling statute. We declare the right of the Department to regulate to be established competently and effectively by the New Jersey statutes, and we declare that there has been no federal preemption of the field.

The section of the New Jersey Air Pollution Code in question, N. J. A. C. 7:27-14.2, is stricken and declared void, consistent with the foregoing.

No costs.

       We do not condone this procedure. Much difficulty and expense could have been saved by a timely presentation, in which case an earlier determination could have been had for the benefit of all concerned. In view of our power to remand for a supplemented record, R. 2 :5-5(b) (contrast R. R. 4 :88-9), we receive the affidavits said to have been appended to the notice of appeal. (Appellant did not print its notice of appeal nor these affidavits in its appendix, but furnished separate copies to the clerk; see R. 2 :6-1.) We do this mindful of fair play considerations which suggest that the State should have an opportunity beyond that available in answering briefs to contest the allegations of these affidavits, and completely aware of the impossibility of cross-examining an affidavit. See Tancredi v. Tancredi, 101 N. J. Super. 259 (App. Div. 1968). We repeat, as we nave said at the outset of the opinion, our acceptance of this controversy is for the purpose of deciding a question which cries for decision. It must not be mistaken for an easy indulgence of regrettable, if not improper, procedure.


author: Per Curiam.

text:
    MAURICE WEIR, PLAINTIFF-RESPONDENT, v. CITY TITLE INSURANCE COMPANY, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued May 14, 1973
    Decided July 17, 1973.

      Before Judges Lora, Allcorn and Handler.

      Mr. Arthur J. Sills argued the cause for the appellant (Sills, Beck, Cummis, Radin & Tischman, attorneys).

      Mr. John C. Givens argued the cause for the respondent (Parsons, Canzona, Blair & Warren, attorneys).
   Per Curiam.

Defendant appeals a judgment in favor

of plaintiff in the sum of $7,500, the loss allegedly sustained by plaintiff as a result of a defect in the title of premises insured under a policy of title insurance issued by defendant to the plaintiff.

From the evidence adduced at the trial, it appears that the premises were purchased by plaintiff for $24,000 in 1968, by deed dated August 5, 1968 and recorded August 12, 1968. Plaintiff was represented by his own attorney who-, prior to the closing, sought and obtained from defendant a back-title letter bearing date “7/23/68,” by which he was authorized to commence his search -of the title beginning April 18, 1962. The letter, addressed to the attorney, stated in pertinent part:

In reply to your request for a back title letter and provided the above numbered policy covers the property in ivhich you are now interested and you make application to us for interim binder prior to the closing of tbe transaction or, upon closing, a title policy, you may start your search, solely for the purpose of such binder or policy, as hereinafter set out. * * *

Despite the fact that the title closing must have taken place between August 5 and August 12, 1968, for reasons not apparent or disclosed by the record plaintiff’s attorney did not report and certify the results of his title examination to defendant until January of the succeeding year. By final certificate dated January 6, 1969 the attorney reported the results of his title examination as showing the fee1 title to the entire premises in plaintiff, free of any defects other than certain minor exceptions not here pertinent, and made application to defendant for an owner’s policy and a mortgage policy. The certificate was signed by plaintiff’s attorney and certified the title “down to January 6th, 1969 at •10 o’clock. a.m." Among other things, the certification contained the following representation:

So far as known to undersigned there is no dispute among attorneys or Title Companies as to validity of this title. * * *

The executed final certificate was transmitted by plaintiff’s attorney to defendant, with a, covering letter also dated January 6, 1969. The letter and certificate were received by defendant on January 9, 1969, and thereafter defendant issued its owner’s policy to plaintiff, the policy bearing the issue date of January 13, 1969 and an effective date of August 12, 1968.

There seems to be little question but that, although the deed into plaintiff purported to convey to him a tract of land described as containing approximately 147 feet adjacent to the Manasquan River, title to 47 feet (plus or minus) of said frontage was not in plaintiff’s grantors. Instead, it was owned by one Iluddy, an adjoining owner. The error seemingly originated with a survey made in connection with a mortgage loan to one of plaintiff’s predecessors in title in 1957. The surveyor in question has since died.

In any event, following the closing of title in August 1968 plaintiff ordered a topographical survey of the premises. That survey, when made, set forth the boundaries of the premises as described in plaintiff’s deed, as well as the common boundary line as claimed by Huddy, said line being designated thereon as “Survey line by Donald Smith,” the latter being the surveyor who prepared a survey of Huddy’s premises. Although the topographical survey prepared for plaintiff bears the date of December 6, 1968, the record is silent as to the date on which it was received by plaintiff or his attorney.

During the same period Huddy had filed with the local planning board an application for the subdivision of his premises, which was accompanied by a plat or map of the subdivision prepared by Donald Smith. Public notice of the filing of said application and plat for the subdivision of said premises, of a public hearing to be held thereon by the planning board on December 11, 1968, and of the availability for examination of the application and plat was published by Huddy in a local newspaper on November 29, 1968. Whether plaintiff was sent a copy of such notice by mail, as required by N. J. S. A. 40:55—1.7, does not appear from the record. Plaintiff testified he did not learn of the meeting until the first week in January.

At all events, the planning board hearing scheduled for December 11, 1968 was adjourned or carried to January 8, 1969. Both plaintiff and his attorney attended said meeting. The certified minutes of the meeting of January 8, 1969 set forth what transpired:

Case #172 — Dr. James A. Huddy, Jr. — Major Subdivision, Preliminary, Block 1385 — Lot 11, Block 1422 — Lot 15
Dr. Huddy was in attendance at this meeting', and was also represented by [Ms attorney]. Mr. * *, Attorney * * * representing Morris Weir, called the Board’s attention to the fact that his client claims that Dr. Huddy is encroaching on his property. He submitted a copy of a survey * *’ * showing the purported encroachment. * * * [He] also submitted a tracing of Dr. Huddy’s subdivision boundaries superimposed upon Ms survey to show this overlap. * * * [Dr. Huddy’s attorney] stated they have run their own surveys, and have deeds to back up their survey. He also said he has had a Title Binder prepared, as well as Title Insurance Policies. He also offered a photostatic copy of the deed with a metes and bounds description of Mr. Bisden’s [plaintiff’s] property (Mr. Bisden was predecessor in title to Mr. Weir). * * *
After additional discussion of the problem, [the attorney for Mr. Weir] said he and his client have no objection to a Preliminary Approval being granted this application. The attornies will get together with the Engineers and the principals in this matter and determine actual boundary lines prior to the filing for a final approval. * * sit

Despite the fact that, only two days earlier, he had certified the title as valid and applied for the issuance of a title policy on- the basis of such certification, and notwithstanding that he was aware that he had not yet received the title policy, plaintiff’s attorney apparently made no effort to immediately inform defendant of the serious title question which had arisen. Instead, he waited approximately one month before advising defendant, during which period the title policy was issued and delivered by defendant. The first notification to defendant was made by letter from plaintiff’s attorney, dated February 7, 1969, as follows:

A question has arisen relating to the southerly boundary line of the above-described property as to the distance along the Manasquan River which results in a difference of approximately 42 feet.
The premises to the South have recently been sold, and although I understand the title is not yet closed, the new purchaser had the premises surveyed by Donald W. Smith of Jackson, New Jersey, and he established the distance along the Manasquan River for our p. q. at approximately 100 feet in accordance with the original deed for lot 27 out of Fairbanks which calls for 100 feet more or less along the river. As a result, there appears to be a boundary dispute between the two properties. The difficulty seems to stem not only from the vagueness of the old descriptions in the chain of title, but further that the course of the line in question runs along the course of a gully, which course is also subject to differences of opinion.
I will keep you advised of the developments in this matter and if you have any questions concerning same, please advise.

The present action was commenced subsequently by plaintiff, seeking damages because his “title * * * was defective.” The separate defenses set forth in the answer filed by defendant asserted, among others, knowledge by plaintiff of the defect at the time of the issuance of the title policy. Another separate defense alleged absence of any damage, plaintiff on October 17, 1969 having sold and conveyed the property to third persons, for the sum of $30,000, without any diminution in price should the river frontage consist of 100 feet, rather than 147 feet. By counterclaim subsequently filed, defendant also sought cancellation of the policy.

Title insurance is no different from any other type of non-marine insurance and, as such, is governed by the same general rules and principles applicable to issuance, validity and interpretation of policies of insurance generally. Sandler v. N. J. Realty Title Ins. Co., 36 N. J. 471 (1962). It is well settled that, where an application for insurance has been submitted to an insurer and, before the policy is issued, a change of conditions material to the risk occurs or is discovered by the applicant, he is under an obligation to inform the insurer promptly. The knowing suppression or failure to make timely disclosure of such information constitutes a material misrepresentation. The rule and the reasons underlying it were set forth by the United States Supreme Court in the case of Stipcich v. Metropolitan Life Ins. Co., 377 U. S. 311, 48 S. Ct. 512, 72 L. Ed. 895 (1928):

Insurance policies are traditionally contracts uberrimae fidei and a failure by the insured to disclose conditions affecting the risk, of which he is aware, makes the contract voidable at the insurer’s option. * * *
Concededly, the modern practice of requiring the applicant for life insurance to answer questions prepared by the insurer has relaxed this rule to some extent, since information not asked for is presumably deemed immaterial. ** *
But the reason for the rule still obtains, and with added force, as to changes materially affecting the risk which come to the knowledge of the insured after the application and before delivery of the policy. For even the most unsophisticated person must know that in answering the questionnaire and submitting it to the insurer he is furnishing the data on the basis of which the company will decide whether, by issuing a policy, it wishes to insure him. If, while the company deliberates, he discovers facts which make portions of his application no longer true, the most elementary spirit of fair dealing would seem to require him to make a full disclosure. If he fails to do so the company may, despite its acceptance of the application, decline to issue a policy, ... or if a policy has been issued, it has a valid defense to a suit upon it. * * * [At 316-317, 48 S. Ct. at 413-418; citations omitted]

Couch states [9 Couch on Insurance 2d (1962), § 38,21 at 346-347] :

Known changes in conditions material to the risk which occur between the opening of negotiations for insurance and the issuance of the policy must be divulged. That is, there is a continuing duty on the part of an applicant to disclose newly discovered matters arising between the application for, and the confirmation of, the contract where they come to the applicant’s knowledge and render his former answers no longer true.

See generally, Johnstone, “Title Insurance,” 66 Yale L. J. 492, 496 (1957); 43 Am. Jur. 2d, Insurance, § 733; Disposable Services, Inc. v. ITT Life Ins. Co. of New York, 453 F. 2d 218 (5 Cir. 1971), cert. den. 409 U. S. 1023, 93 S. Ct. 462, 34 L. Ed. 2d 314 (1972); Metropolitan Life Ins. Co. v. Macaulay, 142 N. J. Eq. 296 (Ch. 1948). Compare, Rosenblatt v. Louisville Title Co., 218 Ky. 714, 292 S. W. 333 (Ct. App. 1927); Stewart Title Guaranty Co. v. Lunt Land Corp., 162 Tex. 435, 347 S. W. 2d 584 (Sup. Ct. 1961).

Whatever may have been the knowledge or lack of knowledge by plaintiff and his attorney at and prior to the preparation and submission of the title certification and application on January 6, .1969, it is uncontroverted that both off them were fully aware of the existence and nature of the questionable title of plaintiff to the 47-foot piece no> later than January 8, 1969. This knowledge followed by only two days the completion of the certification of title by the attorney, and while he was awaiting the processing of the application and issuance of the title policies by defendant.

In such circumstances, it was the obligation of plaintiff and his attorney to forthwith bring the matter to the attention of and make full disclosure to defendant. The defect was manifestly material to the risk that plaintiff sought to have defendant undertake, and fair dealing demanded no less. Instead, plaintiff and his attorney procrastinated for one month — whether to avoid arousing suspicion on the part of defendant of prior awareness of the defect by plaintiff and his attorney, or for some other reason, is not clear from the record. What is plain is that the delay in notification resulted in the issuance and delivery of the policy by defendant, without the slightest suspicion that the risk being assumed by it had been materially increased.

We are satisfied that, in the light of the undisputed facts, defendant was entitled to a judgment in its favor as a matter of law. Although plaintiff’s attorney was undoubtedly on defendant’s list of approved attorneys, this did not make him any the less the agent of his. client, the plaintiff, nor did it make plaintiff any the less chargeable with the knowledge of the attorney or with the attorney’s failure promptly to notify defendant of the change in circumstances. Dickerson v. Bowers, 42 N. J. Eq. 295 (Ch. 1886); Annotations, “Imputation of Attorney’s Knowledge of Facts to His Client,” 4 A. L. R. 1592 (1919), 38 A. L. R. 820 (1925). Compare, Colegrove v. Behrle 63 N. J. Super. 356 (App. Div. 1960); Farr v. Newman, 14 N. Y. 2d 183, 250 N. Y. S. 2d 272, 199 N. E. 2d 369 (Ct. App. 1964).

Accordingly, the judgment of the Law Division is reversed and the cause is remanded with directions to enter judgment in favor of defendant.


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    PUBLIC SERVICE ELECTRIC AND GAS COMPANY, PLAINTIFF-APPELLANT, v. OLDWICK FARMS, INC., DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued May 30, 1973
    Decided July 18, 1973.

      Before Judges Kolovsky, Matthews and Crahay.

      Mr. Philip R. Carlin argued the cause for appellant (Messrs. Goldberg & Carlin, attorneys).

      Mr. James J. Sheeran argued the cause for respondent.
   Per Curiam.

By its amended complaint plaintiff sought to acquire, by condemnation, “an easement to facilitate the overhead passage and maintenance, of [overhead electric] transmission lines across * * * and the right to build any temporary facilities reasonably necessary for the construction and placement of said overhead lines as a right-of-way upon, over, under, across, and along” two, parcels of land which are part of the 128.73-acre tract (exclusive of the public right-of-way), owned by defendant in Tewksbury Township, Hunterdon County.

The 128.73-acre tract, on which there is presently a dwelling house and farm buildings, is, located on the west side of Hunterdon County Eoute 517 (Oldwick-Eairmount Eoad) in Oldwick. Defendant’s title includes the land to the center of that roadway, subject however to the public easement for the use of the road.

The controlling zoning ordinance permits the use of the property for agricultural purposes and for one-family residences, with a minimum lot size of three acres. Although the land is now in farm use and has not been subdivided, it is agreed that the highest and best use is residential with a minimum lot size of.three acres.

The two parcels to be subjected to the easement each front on Route 517. One has an area of 0.003 acres, the other an area of 0.503 acres.

The easement acquired is presently used so that transmission lines pass Over the two last-mentioned parcels. Although no towers are constructed on defendant’s property, at least three large towers have been erected on lands near defendant’s land which permit electric transmission cables and shield wires to cross over defendant’s land and to run parallel to and close to a long stretch of defendant’s remaining frontage along Route 517.

After hearing testimony the commissioners, limiting their considerations to the easement taken and the damage to defendant’s remaining lands resulting from the taking of the easement, awarded defendant the sum of $3,350.

Prior to the trial of the appeal, defendant applied to the court for

* * * a ruling setting forth the proper measure of damages to be applied in order to determine the depreciation in the value of the remaining land of the defendant-appellant as a result of the taking of a portion of its lands.

The court ordered that:

the effect of the plaintiff-respondent’s entire project upon the remainder lands of the defendant-appellant is to be considered in order to determine the amount of the depreciation in the value of the remaining land of the defendant * * *.

Plaintiff sought leave to appeal from that order. We denied leave but directed that

At trial, the “consequential damages” awarded defendant and representing the effect of plaintiff’s entire project upon the remainder lands of the defendant are to be computed separately so that they are capable of severance from the condemnation award.

After the trial de novo the trial judge, sitting without a jury, found that defendant was entitled to an award of $1,500 for the actual tailing and $38,500 as “consequential damages” to the remainder of its lands, stating:

It is my feeling that the line as it approaches the defendant’s property and as it leaves it and is visible that it does have an effect on the economic value of the land.
And I think and determine that this constitutes a damage for which the plaintiff should compensate the defendant, and it is my opinion that the property is worth less for residential subdivision after the line and towers have been installed than it would have been had there been no power line or towers either on the property or visibly in front of it for some thousand feet or so, and I think that this constitutes consequential damages for which the property owner should be compensated. * * *

In limine it should be noted as a basic principle that where, as here, only part of an owner’s land is taken, the owner is entitled not only to the value of the tend actually taken but also to the amount of any diminution in the value of his remaining lands which may be attributed to the taking. Ridgewood v. Sreel Investment Corp., 28 N. J. 121, 125 (1958). The measure of damages to be employed in such a case is either the difference in the value of the lands before and after the taking, or the value of the portion taken plus diminution in the value of the remainder as a result of the taking. State v. Azzolina Land Corp., 101 N. J. Super. 103, 106 (App. Div. 1968); Sterner v. Nixon, 116 N. J. L. 418, 420 (E. & A. 1936). Courts in this State have spoken in terms of “proximate effect” as the guideline for determining whether the dimunition of the value of the remaining lands resulted from the taking of the portion of the land. Cf. State v. Birch, 115 N. J. Super. 457, 462 (App. Div. 1971); Ridgewood v. Sreel Investment Corp., above.

With Tespect to the primary issue raised on this appeal — whether a condemnee, part of whose property has been taken, is entitled to compensation for damage to the remainder of his land where such damage is attributable to the effect of the total improvement constructed by the condemnor, including portions on adjoining lands acquired by others — the general’ 'rule is -said to be that where it is possible to separate the element of damage to remaining lands due to use of the land taken from the owner, from the damage thereto flowing from the use of lands taken from others for the same • project, the measure of damage is limited to, that caused by use of the land taken from the owner. See 4A Nichols, Law of Eminent Domain, § 14.21(1) at 14-53.

The leading ease expounding the rule just stated is Campbell v. United States, 266 U. S. 368, 45 S. Ct. 115, 69 L. Ed. 328 (1924). In Campbell the government condemned a portion of Campbell’s land for the construction of a nitrate plant, and in connection therewith -it •■also acquired lands adjoining Campbell’s owned by others. The federal District Court found that the value of the land taken ■ was $750 and that as a result of the taking Campbell’s remaining property was damaged to the extent'of $3,350. The court also found that by reason of the use to be made of the adjoining lands taken from others for the same purpose Campbell’s remaining land was damaged in am amount of $5,000, but it disallowed those damages. On ■ appeal the Supreme Court stated that the damage to 'the remainder of Campbell’s land as the result -of.'the taking of the portion of his land was separable from the damage caused by the same use made of adjoining lands taken.from others, and that “the proposed use of' the lands taken from others did. not constitute a taking of his property.” 266 U. S. at 371, 45 S. Ct. at 116. The Supreme .Court-reasoned that if the adjoining property owners had put their lands to the same use as that proposed by the government, they would not have been liable to Campbell for any depreciation in the value of his' property as a result thereof, and that since “the liability of 'the United' States is not greater than would be that -of private users,” the' government as condemnor should also not be liable for such- damages.

Defendant contends, however, that where a part of a property owner’s land is taken by a condemnor for a public improvement, and the part taken “constitutes an integral and inseparable part of a single use to which the land taken and other adjoining land is put,” the land owner is entitled to recover the full damage to his remaining land which may be attributed to the whole of the public improvement, even though such portions of the improvement are located on land taken from adjacent owners. In support of this argument, defendant cites Nichols, op. cit., § 14.21 [1] at 14-54 to 14-61, including cases collected at Note 9; City of Crookston v. Erickson, 244 Minn. 321, 69 N. W. 2d 909 (Sup. Ct. 1955); Andrews v. Cox, 129 Conn. 475, 29 A. 2d 587 (Sup. Ct. Err. 1942), and State v. Bd. of Ed., Elizabeth, 116 N. J. Super. 305 (Law Div. 1971).

The trial judge did not make a determination in his oral opinion as to whether the portion of defendant’s land taken constituted an integral and inseparable part of the whole project. He merely stated that the condemnee’s remaining land was damaged, or the value thereof diminished, by the existence of the transmission towers on adjoining lands which were visible from defendant’s lands.

While it is apparent that the transmission lines which transverse defendant’s property are physically an “integral and inseparable part” of the total project, we do not find that that fact requires a departure from the rule enunciated in Campbell v. United States, above. Here, as in Campbell, the damage to defendant’s remaining lands caused by the fact that the aerial easement for the transmission lines cross a small corner of its property are readily separable from the damage to the remaining tract which may be attributed to the existence of the transmission towers on adjoining lands belonging to others. The principal distinction between the damages is that the existence of the transmission lines over a corner of defendant’s property could have very little eifeet on the value of the remaining tract as a whole, while the existence of the transmission towers on adjoining property could be regarded as having the effect of making the entire remaining land less desirable for purchase by one interested in developing.

In this respect the cases upon which Oldwick relies appear to be clearly distinguishable. In those cases, unlike here, the damages to the remaining lands resulting from the taking of a portion of the tract were inseparable from the damages to the remaining land attributable to the whole improvement. Since it is here practicable to separate the use of the land taken from that of the adjoining land, defendant is entitled to compensation only for the land taken and the use to which it will be put, and not for the use which will be made of the adjoining lands.

Plaintiff also contends that the interest payable on the net condemnation award should have been computed from the date that it actually took possession of the portion of the land in question, i. e. April 26, 1971, rather than from the date of the institution of the action on May 25, 1970. In support of this argument plaintiff points out that it, unlike public condemning authorities, is not entitled to take possession of condemned property until the filing of the commissioners’ report and the payment, either directly to the condemnee or into court, of the amount of such an award. N. J. S. A. 20 :3-33. We disagree. We read the provisions of N. J. S. A. 20 :3—31 clearly to indicate that interest is to be computed “from the date of the commencement of the action” rather than from the date the condemnor went into possession of the property. Interest, of course, should be computed only on the $1,500 award.

The judgment of the Law Division is modified to eliminate that portion which awards defendant “consequential damages” of $38,500. As modified, the judgment is affirmed.