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Ace Stone Inc. v. Township of Wayne

Decided: July 6, 1966.

ACE STONE, INC., A CORPORATION, PLAINTIFF-APPELLANT,
v.
THE TOWNSHIP OF WAYNE, ETC., DEFENDANT-RESPONDENT



For reversal -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall and Schettino. For affirmance -- None. The opinion of the court was delivered by Jacobs, J.

Jacobs

The Law Division granted the defendant's motion for summary judgment, the plaintiff appealed to the Appellate Division which affirmed (89 N.J. Super. 482 (1965)), and we granted certification on the plaintiff's application.

The defendant acknowledges that, for present purposes, the plaintiff's version of the situation, as supported by the facts set forth in its affidavit and the favorable inferences to be drawn therefrom, is to be accepted by us. See Bilotti v. Accurate Forming Corp., 39 N.J. 184, 188 (1963); Bedrock Foundations, Inc. v. Geo. H. Brewster & Son, Inc., 31 N.J. 124, 135 (1959); Shiddell v. Electro Rust-Proofing Corp., 34 N.J. Super. 278, 283 (App. Div. 1954), certif. denied 17 N.J. 408 (1955). On this approach, the following appears:

The defendant Township of Wayne advertised for bids on a sewer line project called "Pequannock and Upper Wayne Basins, Contract No. 2." The plaintiff Ace Stone, Inc., a general contractor, was the lowest responsible bidder. On July 26, 1961 the defendant's consulting engineer called the

plaintiff to a job meeting to explain the work to be performed under the contract which was to be signed by the parties in August 1961. The engineer requested that the plaintiff submit a schedule, pointing out that time was of importance to the municipality and that the contractor would be held to the 80-day completion date provided for in the specifications. He advised that the plaintiff start with separate crews with sufficient equipment to keep them busy at three separate beginning sites designated by him. He stated that there were no easement problems and that the plaintiff "could commence without any interruption since any easements which the Township required would have been completed and acquired" before the plaintiff received notice to proceed.

On August 1, 1961 the contract was signed and the plaintiff received notice to proceed. It organized its crews and equipment so as to start work at the three sites designated by the engineer and when it moved its equipment onto the sites it learned, for the first time, that it could start at only one of them because the Township had not acquired all of the necessary rights of way or easements. As a result, the plaintiff was unable to conduct its operations in an orderly, continuous and economic fashion, work stoppages ensued because of the lack of the easements, and the project had to be carried on through the winter months, being finally completed in June 1962. Throughout the progress of the work, the plaintiff complained about the unavailability of the sites and the resulting increased costs. It was told that upon completion, its claim for additional compensation would be reviewed but ultimately the claim was denied. This was followed by the filing of the plaintiff's complaint in the Law Division and the defendant's motion for summary judgment.

In granting the motion, the trial judge relied on the contract's "extension of time" clause and related clauses, and on the Appellate Division's holdings in A. Kaplen & Son, Ltd. v. Housing Authority of City of Passaic, 42 N.J. Super. 230 (App. Div. 1956), and Gherardi v. Board of Education of City of Trenton, 53 N.J. Super. 349 (App. Div. 1958).

The extension of time clause provided that the Owner (Township) would have the right to defer the beginning or suspend the whole or part of the work whenever the engineer considered it necessary or expedient to do so, and that if the contractor was delayed in the completion of the work by any act or neglect of the Township or the engineer, or by strikes, lockouts, etc., or by any cause beyond the contractor's control, or by any cause which in the opinion of the engineer justified the delay, then the contractor would be allowed additional time to complete its work. The concluding sentence directed that "No claim for damages or any claim other than for an extension of time as herein provided shall be made or asserted against the Owner by reason of the delays hereinbefore mentioned."

This type of exculpatory clause appears in varying phraseology in many reported cases throughout the country. It is often referred to as a "no-damage" clause and though it is generally construed strictly against its draftsman (cf. Terminal Const. Corp. v. Bergen County, etc., Dist. Authority, 18 N.J. 294, 302 (1955)) and special exceptions are often read into it, its underlying legality is acknowledged. See A. Kaplen & Son, Ltd. v. Housing Authority of Passaic, supra, 42 N.J. Super., at pp. 233-235; 13 Am. Jur. 2 d, Building and Construction Contracts ยง 52, at 55 (1964); Annot., "Validity, construction and application of no damage clause with respect to delay in construction contract," 10 A.L.R. 2 d 801 (1950).

In Kaplen, the Appellate Division referred to several special exceptions which, on the record now before us, may fairly be said to have no pertinence here; thus it cited instances where the clause was held inapplicable because the delay was caused by the "active interference or bad faith of the public agency" (American Bridge Co. v. State of New York, 245 App. Div. 535, 283 N.Y.S. 577 (App. Div. 1935)) or because the delay by the public agency was so extensive as ...


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