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Law Offices of Gold, Albanese, Barletti & Valazquez v. Jersey City Municipal Utilities Authority

A-0875-06T1 (N.J. Super. App. Div. 2008) (Unpublished)

MUNICIPALITIES; ATTORNEYS; CONTRACTS — Even if a professional services contract includes a monetary threshold above which any additional services require approval from officials of a municipal authority, if those officials do not meet regularly and the excess services are necessary, the municipality must pay for those services because to do otherwise would be to unjustly enrich the municipality.

A law firm was retained by a municipal authority to provide legal services for the authority’s water and sewer infrastructures. There were two separate contracts for the legal services, each of which listed the hourly fee charged by the law firm. Each contract also included a monetary threshold above which any additional legal services required approval from two of the authority’s officials. As a matter of policy, the authority’s commissioners were to have final approval for legal services that were approved by the two officials. For the first three months, the commissioners met monthly, at which time they reviewed the monthly statements from the law firm and approved the services. After the first three months, the two officials for the authority continued to approve additional services provided by the law firm but the statements were not included in the agenda for commissioners’ approval and were not discussed at the following two monthly meetings of the commissioners. The amount owed to the law firm for services, but not approved by the commissioners, continued to increase. The law firm sought to terminate the relationship, and after unsuccessfully attempting to obtain payment, sued the authority for outstanding legal fees. The authority argued that public contracts statutes did not permit the law firm to recover fees for the unapproved services. The lower court found that the authority was only required to pay the law firm for services that had been approved by the commissioners. It dismissed the law firm’s claims for the unapproved services on summary judgment.

On appeal by the law firm, the Appellate Division pointed out that the purpose of public contracts statutes was to protect the public interest by ensuring that public funds were authorized and efficiently spent. It also pointed out that since the commissioners only met once a month to approve of expenses, the authority could have faced significant harm if necessary legal services had not been performed by the law firm, but noted that the trial record did not indicate whether the services not approved by the commissioners were routine or urgent. The Court found that the authority would have been unjustly enriched if it did not pay for any legal services that provided a benefit. It found questions regarding the necessity of the legal services that were not approved by the commissioners. It therefore remanded the matter for further proceedings.

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