Skip to main content

Edgewater Municipal Utilities Authority v. Catanzaro

A-4291-98T3 (N.J. Super. App. Div. 2000) (Unpublished)

CONTRACTS; MUNICIPALITIES; EXCULPATION—A provision in a municipal contract that exculpates an outside engineer from liability to a contractor is not void as against public policy.

A contractor made a claim against a municipal utilities authority for substantial damages, alleging that after he had commenced work on a project, he encountered subsurface and other problems in performing the work because of deficiencies in the bid specifications. In response to a suit brought against him by the municipal utilities authority, he filed a counterclaim seeking those damages from the authority and a third party complaint against the engineer who prepared the plans alleging negligence, breach of contract, and misrepresentation with respect to the bid specifications. His contract with the authority contained a provision reading as follows: “...there shall be no liability upon the appointed officials, the Engineer or their authorized representatives or assistants, either personally or as officials of the Owner ... .” The lower court held that this was a permissible “exculpatory provision,” simply saying that if the contractor had a claim, it must be advanced against the municipal utilities authority only. If the utilities authority then wished to recoup money from its engineer, it might do so, but this was not permission for the contractor to recover directly from the engineer. When the contractor settled his claim with the authority, he no longer had any other party from whom he could seek additional damages. On appeal, the contractor contended that the exculpatory provision was “void as a matter of public policy, or, at a minimum, [was] ambiguous ... .” The Court upheld the lower court, finding that there was nothing wrong with the exculpatory provision.

66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 •