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Township of Wyckoff v. Sarna

Decided: October 23, 1975.


Carton, Crahay and Handler. The opinion of the court was delivered by Carton, P.J.A.D.


Plaintiff Township of Wyckoff brought this action against defendants Sarna and Continental Casualty Company, its surety, for breach of a performance bond executed in connection with the approval of a subdivision development map. It raises important questions as to the nature and scope of the rights and obligations which the performance bond imposes on the parties to it.

A brief description of the background against which the present action arose is necessary to place the issues in proper focus. In January 1965 Pine Cliff Homes as principal and defendant Sarna and two others as coprincipals, along with defendant Continental Casualty Company as surety, executed the bond in question. The bond recited that the principal, Pine Cliff Homes, was engaged in improving a development known as "Suburban Woods," as shown on a certain map, and that the bond was given in connection with the development of that subdivision. The bond was conditioned on the obligation of the principal "well and truly," within three years from the date thereof, to "install all improvements in [the subdivision] in accordance with the * * * preliminary and final plats * * *" and to comply with necessary subdrainage required by the board of health in accordance with specifications of the Township of Wyckoff, and "in accordance with all applicable ordinances and laws, and to the satisfaction of the Township Engineer and the Township plans * * *."

Prior to the execution of the bond plaintiff township and defendant Sarna entered into an agreement with one Reginald S. Courtney and Rosemary, his wife, in and by which the Courtneys granted an easement across their property for the purpose of constructing a storm sewer required in connection

with the development. After the storm sewer was installed, the Courtneys brought an action against the township, Cedar Croft Estates (previously Pine Cliff Homes) and Sarna, alleging negligence on their part in the installation of the sewer. They recovered a judgment in the sum of $4,030. It appears that the judgment was originally entered against Sarna, but was later amended to substitute Cedar Croft Estates for him.

When Cedar Croft Estates defaulted in the payment of its pro rata share of the judgment, plaintiff township paid the entire amount and then obtained an assignment of the judgment from the Courtneys.

Thereupon plaintiff brought the present action against Sarna and Continental Casualty Company to recover the portion of the judgment which Cedar Croft Estates had defaulted on. The trial judge, sitting without a jury, found defendants liable to plaintiff under the terms of their performance bond and entered a judgment against them in the sum of $2,015. The judge also denied defendants' motion for a new trial grounded on the fact that Sarna's name had been stricken from the judgment in the negligence action.

The basis upon which plaintiff township seeks recovery in this action against Sarna and the surety, Continental, of one-half of the judgment against Sarna and the township in the negligence action is somewhat unclear. Two theories of liability appear to be advanced. The first is grounded on a claim for pro rata contribution from a joint tortfeasor. The other is predicated on the terms of the performance bond.

With respect to the contribution theory, if such right of contribution arose because of plaintiff's tort relationship with the other defendants in the negligence action, that right arose as a matter of law and not because of any obligations existing between the parties under the agreement relating to the approval of the subdivision (N.J.S.A. 2A:53A-1 et seq.). Moreover, any such right can apply, if at all, only to Sarna since Continental is not alleged to be one of the tortfeasors and was not a party to the negligence action.

Thus, wholly apart from any rights which might exist in favor of the municipality by virtue of the agreement in the bond, if Sarna was in fact one of the judgment defendants in the negligence action, the judgment under review in this action might well stand as to him. The difficulty on this score is that the record indicates that the original negligence judgment was amended to eliminate his name as a judgment debtor and to substitute the name of another. Consequently, any basis for grounding a claim for contribution against him has been removed.

It follows that the judgment appealed from cannot be sustained as to either Sarna or Continental on this basis. This is not to say that a right of contribution may not exist in favor of the township against the other judgment tortfeasor. Any such right would have to be asserted in a separate ...

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