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Hobson Construction Co. v. Max Drill Inc.

Decided: March 27, 1978.

HOBSON CONSTRUCTION CO., INC., PLAINTIFF-APPELLANT,
v.
MAX DRILL, INC., SIGMA STEEL STRUCTURES, INC., RICHARD J. DRILL AND PHILIP S. DRILL, DEFENDANTS-RESPONDENTS



On appeal from Superior Court, Chancery Division, Essex County.

Halpern, Larner and King. The opinion of the court was delivered by Larner, J.A.D.

Larner

Hobson Construction Co. (Hobson) was a subcontractor retained by Max Drill, Inc. (Drill) on two projects known as Union Gardens and Bethany Baptist Church. On May 16, 1975 Hobson instituted an action in the Chancery Division against Drill arising out of the Union Gardens project, in response to which Drill filed a counterclaim. While this suit was pending Hobson, through its attorneys Wald and Del Vento, filed a complaint against Drill in the Law Division arising out of the Bethany Baptist Church project. No further legal steps were taken by Hobson's attorneys in that Law Division litigation.

On March 8, 1976 the Chancery Division action was resolved by the entry of a judgment in favor of Drill on its counter-claim in the sum of $245,000. Shortly thereafter Drill moved in the Chancery Division to offset the pending claim of Hobson in the sum of $133,000 against its outstanding judgment against Hobson.

The matter was heard on undisputed facts, after which the Chancery Division judge ordered that the claim of

$133,000 be set off against the judgment held by Drill on condition that Hobson's claim be codified in a judgment in the Law Division. He also ruled on the one viable issue remaining in the litigation -- that the firm of Wald and Del Vento, attorneys for Hobson, was not entitled to an attorney's lien on the judgment to be entered by way of set-off against the Chancery Division judgment in favor of Drill (order of June 9, 1976).

Thereafter two judgments were entered. On the application of Drill, a judgment was entered for Hobson in the Law Division in the sum of $133,637.30 with the provision that it be set off in partial satisfaction of the Drill Chancery Division judgment free and clear of any attorney's lien claimed by Wald and Del Vento (judgment of July 27, 1976). A parallel judgment clarifying the record and the partial satisfaction was subsequently entered in the Chancery Division proceeding on August 3, 1976.

This appeal is concerned with the right of the law firm of Wald and Del Vento to recover from Drill a legal fee based upon its asserted attorney's lien as applied to the judgment of $133,637.30 which was offset in partial satisfaction of Drill's judgment against Hobson. We note that the appeal was taken only from the Chancery Division order of June 9, 1976. Nevertheless, we shall consider the appeal as one addressed to the propriety of all the orders dealing with the same subject matter and culminating in the final judgment of August 3, 1976. Respondent's objection to the appeal as interlocutory is rejected and we shall proceed to consider the matter on its merits.

As we view the issue involved herein, the determination should be controlled by equitable principles.

There is no question that a court has the right to set off one judgment against another. See Atanasio v. Silverman , 11 N.J. Super. 116 (Law Div. 1950), aff'd 7 N.J. 278 (1951); Atanasio v. Silverman , 24 N.J. Misc. 390 (Sup. Ct. 1946); Seaman v. Mann , 114 N.J. Eq. 408 (Ch. 1933); Phillips v. MacKay , 54 N.J.L. 319 (Sup. Ct.

1892); Schautz v. Kearney , 47 N.J.L. 56 (Sup. Ct. 1885); McAdams v. Randolph , 42 N.J.L. 332 (Sup. Ct. 1880); Brown v. Hendrickson , 39 N.J.L. 239 (Sup. Ct. 1877). This power is inherent in the ability and right of the court to control its judgments in order to achieve justice and equity. Kristeller v. First Nat'l Bank, Jersey City , 119 N.J.L. 570, 572 (E. & A. 1937). Thus, ...


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