ERS May Return As Recycler Due To Governing Body Breach Of Contract

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Published: June 29, 2014 @ 11:00 AM EDT

After the closed session of the Regular meeting of Mayor & Council on June 19th, Mayor Accardi, after initially stating there was nothing to disclose then being advised by Borough Attorney Richard Huxford, announced, “We did receive the Court’s decision and the decision was that we need to allow Equipment Rental back on the job to do their recycling pick-up again effective July 1st. We are going to request a stay. We’re going to continue negotiations with them and potentially appeal the decision but no decision has been made further than the court decision.”

Equipment Rental Service (ERS) is the company that had been awarded the recycling contract for the Borough starting in July of last year then had its contract terminated effective August 1, 2013 after complaints regarding recycling material being left behind or not picked up at all during its first month on the job. ERS, coming in at $129,000 for the complete three-year contract, was half the next highest bid of $258,000 for recycling services. By law, the municipality had to award the contract to the lowest responsible bidder for such a contract.

The Order of Judgment by Karen M. Cassidy, A.J.S.C. (Assignment Judge of Superior Court), filed on June 12th, along with her 10-page decision found the Borough in breach of its contract after four (4) trial dates having found that the municipality failed to provide a copy of an adopted resolution to ERS that their contract was terminated and that the Borough admitted there were no findings of fact or a hearing by the Mayor & Council after July 18 to determine whether ERS violated the terms of the contract.

Judge Cassidy ordered that the contract be re-instated effective July 1, 2014.

Using the testimony of Borough Clerk Doreen Cali, acting Superintendent of the Department of Public Works (DPW) Mark Pasquali, and assistant DPW Supervisor Richard Graves for the municipality as well as Anthony Quarant from ERS (whose name is listed as a principal for another company named Expert Recycling Services in Old Bridge), Judge Cassidy found that the municipality had awarded ERS the recycling contract just 11 days before it was supposed to start at the June 20th Mayor & Council meeting. Problems then began when, as testified to by Mr. Quarant, the municipality “failed to advise the residents of Roselle Park of the Borough’s new recycling procedures prior to the commencement of the program” resulting in residents not conforming with the recycling contract, specifically, the change from having all recycled material being put together (co-mingled or single-stream) to having to separate paper, cardboard, and other ‘fibrous’ material – which needed to be bundled – from plastic, glass, and aluminum (dual-stream). Also, the dates for recycling had been changed from every other Tuesday for the entire Borough to every other Tuesday for the east side of town and every other Wednesday for the west side.

After experiencing delays due to non-compliance and hot weather, Mr. Quarant stated that ERS was authorized by Ms. Cali on a July 18th conference call to skip houses that were not in compliance with having their recycling material separated.

Judge Cassidy stated that the municipality made no formal resolution regarding the possible termination of services.

During the July 18, 2013 Mayor & Council meeting, discussions were held by the governing body to terminate ERS’ contract. Mr. Quarant stated that his company was not notified that this would be taking place during his conference call earlier in the day allowing ERS to continue its services. Judge Cassidy stated that the municipality made no formal resolution regarding the possible termination of services. Even with Borough Clerk Doreen Cali explaining in testimony that “there was a difference between a motion and resolution in that a motion could be made from the floor but a resolution was on the agenda”, Judge Cassidy noted that there was “no resolution concerning this matter on any agenda”.

The judge also found that even though Mayor Accardi had publicly commented that the municipality had sent two (2) notices regarding the new dual-stream protocols, multiple residents complained about the lack of communication concerning the recycling and that “many residents did not receive the recycling flyer.”

Photographs were presented by DPW Superintendents Pasquali and Graves that depicted materials at the curb which were placed out – as per their testimony – appropriately for pick-up. Those photographs “provided little of value to the court”. Mr. Pasqualli also had admitted that the prior contractor had picked up materials that did not meet the contract criteria, hence contributing to the confusion by the residents.

ERS stated that one point of contention from the municipality, the specific trucks used to pick up recycling, was neither defined nor restricted in the bid contract put out. Added to that, the municipality admitted that there were no findings of fact or a hearing by the Mayor and Council after July 18 to determine whether ERS violated the terms of the contract and, as testified to by Ms. Cali, “the findings that ERS was not in compliance were made by the two individuals from the department of Public Works – not the Mayor and Council.”

In essence, ERS argued that the municipality’s failure to adopt a resolution where ERS would have an opportunity to be heard violated its due process rights under both the 14th Amendment and New Jersey Constitution citing Errichetti v. Merlino that claimed “It is basic . . . in our concept of government that an individual who has a legitimate claim of entitlement may not lose it through arbitrary governmental action.”

A line of the contract that read “Should the Mayor and [C]ouncil find the contractor to be in breach of contract for any reason whatsoever, the contact may, at the option of the Mayor and Council[,] be[] terminated by resolution”  was also a matter of debate between the parties.

Borough Attorney Richard Huxford held that the word ‘may’ modified the phrase “terminated by resolution,” thereby permitting the Borough to terminate in a different fashion. The judge wrote:

A reasonable interpretation of this provision shows that the term “may” modifies the ability of the Mayor and Council to decide to terminate the contract. The rest of the provision speaks in terms of the resolution and how the termination of the contract “shall” be implemented (at the sole discretion and the Mayor and Council, be sent by certified mail, and be considered sufficient notice). The fact that the words “shall” and “resolution” are used three times in the paragraph referring to the method of termination clearly means that it was only the method to be used for the termination of this agreement.

Mayor and Council were the finders of fact. Had a resolution been on an agenda, arguably, the plaintiff would have had notice to appear and present its position to the governing body.

Judge Cassidy determined that “no opportunity was given to ERS to be heard before its contract was terminated” and that evidence showed that there was confusion in the town as to the manner in which recycling was to be left curbside and also when the pick-ups were to occur.

In her conclusion, the judge found that “Mayor and Council were the finders of fact. Had a resolution been on an agenda, arguably, the plaintiff would have had notice to appear and present its position to the governing body. Ms. Cali concedes that resolutions are normally on an agenda as they are items that the Council wishes to address and put the public on notice. Motions, on the other hand, are addressed as issues [that] come before them that evening.”

When reached for comment, ERS Attorney David H. E. Bursik confirmed what was stated by Mayor Accardi that both parties are currently in negotiations to resolve the issue and ERS will not, at this time, return on July 1st as the borough’s recycler.

Below is a copy of the Order of Judgment.