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Vinen Corp. v. Alan W. Nau Contracting Inc.

Decided As Amended June 6 1989.: May 15, 1989.


On appeal from the Superior Court, Law Division, Middlesex County.

Michels, Long and Muir, Jr. The opinion of the court was delivered by Long, J.A.D.


[232 NJSuper Page 590] The question presented on this appeal is whether plaintiff, Vinen Corporation (Vinen) is subject to damages for walking off a job it was performing under contract with defendant, Alan

W. Nau Contracting, Inc., (Nau) as a result of a dispute over payment. After the walk-off, Vinen sued Nau for breach of contract and Nau counterclaimed for damages. Vinen's suit was eventually dismissed and the case went to trial on Nau's counterclaim. The trial judge ruled that Vinen's walk-off was not justified and entered judgment in favor of Nau on its counterclaim in the amount of $50,407.06. Vinen appeals. We reverse.

These are the facts of the case: Nau entered into a contract with the McCrory Corporation to act as construction manager on a shopping center construction job in Woodbridge. Nau subcontracted with Vinen to act as the site contractor for the project. Vinen was to remove an asphalt parking lot, cut the site, fill it in where necessary and install sanitary sewer lines in preparation for the building of the stores.

Although there was nothing in the contract between Nau and Vinen indicating the method or timing of payments, it was understood that Vinen would submit a monthly invoice from which payment would be made. Settimio Nenna (Vinen's president) claimed that there was an agreement that Vinen would be paid within two weeks of the date an invoice was submitted to Nau. Alan Nau (Nau's president), on the other hand, claimed the agreement was that Vinen would get paid when McCrory paid Nau for the work.

Vinen started working on the McCrory project in late November 1984 and submitted an invoice for work done between November 20 and November 30 involving the removal of asphalt. Apparently this invoice was paid in a timely fashion. A second invoice was submitted for work done between December 1 and December 31, 1984. There was a change in the contract price because Vinen was required to bring in more expensive fill dirt. Vinen was paid for all the work done in December. With each payment, Nenna was required to sign a waiver of lien on behalf of Vinen indicating that he had received a check for the specified amount of work.

The third invoice covered the period from January 1 through January 31, 1985. By that time Vinen had removed the asphalt and done most of the excavation. Additional fill was necessary such that it raised the invoice to over $73,000 which Nau refused to pay, arguing about the price of the fill obtained by Vinen. According to Nau, the parties decided to sever the cost of the fill from this invoice and resolve the dispute at a later time. This reduced the invoice to $48,640. In addition, Nau testified that he had communicated to Nenna an intention to set-off approximately $11,000 that Vinen owed for equipment Vinen rented from Nau on an unrelated job. The idea for the set-off procedure with respect to this third invoice came from Nau's company controller, Joseph Barone, who had been hired by Nau "to straighten out the office." According to Barone, before Nenna came in to pick up his money, Barone called him and informed him of how the payment would be made in order to settle the accounts. He explained that Nenna would receive three checks: one for $37,192 which represented the $48,640 minus the approximate amount of $11,000 owed by Vinen to Nau; one for $1,957.50 made out to VSD Construction, Inc. for truck rental owed by Nau and a third check made out to Vinen Corporation for $2,610 for equipment rental on an unrelated job. According to Barone, Nenna agreed but indicated he would discuss it with Nau. According to Nenna, however, when he spoke with Barone on March 15, 1985 he agreed to accept the $48,640 but nothing was said about any other reductions in that amount.

When Nenna met Barone on March 18, 1985 to receive payment, Barone gave him the three checks. One was made out to Vinen for $37,192. Nenna protested, indicating that the check was to be for $48,640. Barone again explained the $11,000 difference. Nenna argued that the $11,000 had nothing to do with his work for Nau on McCrory's project and claimed entitlement to payment for the full $48,640. Barone proffered the other unrelated checks and a release of lien for the full amount of $48,640, which Nenna refused to sign because he did

not receive the full amount and because he believed that signing the waiver would end his claim to the disputed $11,000. Thereafter, Nenna went directly to the job site and ordered his foreman to demobilize.

Notwithstanding the ordered demobilization, Nenna met with Nau within a day. At the meeting, Nau explained to Nenna that the set-offs were an attempt to reconcile outstanding bills. Nau attempted to convince Nenna to sign a release of lien. He stated that unless Nenna signed the release he would receive none of the payment for the period from January 1 to January 31. According to Nau, without the release McCrory would not turn over the next monthly payment. Nau testified that Nenna refused to sign and said that if he did not receive a check for $48,640, he would pull his men off the job. The issue was not resolved and Nenna's men never returned to the job. Nau then hired ...

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