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P.T. & L. Construction Co. v. Madigan and Hyland Inc.

Decided: January 10, 1991.

P.T. & L. CONSTRUCTION COMPANY, INC., PLAINTIFF-RESPONDENT-CROSS-APPELLANT,
v.
MADIGAN AND HYLAND, INC., MADIGAN-PRAEGAR, INC., AND U.R.S. COMPANY, INC., DEFENDANTS-APPELLANTS-CROSS-RESPONDENTS



On appeal from Superior Court, Law Division, Bergen County.

Michels, Gruccio and D'Annunzio. The opinion of the court was delivered by Gruccio, J.A.D.

Gruccio

Following a bench trial, defendants Madigan and Hyland, Inc. (Madigan-Hyland), Madigan-Praegar, Inc. (Madigan-Praegar), and U.R.S. Company, Inc. (U.R.S.), appeal from an amended judgment of the Superior Court, Law Division, entered in favor of plaintiff P.T. & L. Construction Company, Inc. (P.T. & L.), in the amount of $818,885.74. On appeal, defendants contend that the trial judge improperly failed to apply the six-year statute of limitations to bar P.T. & L.'s claim and that P.T. & L.'s claim is barred by the doctrine of collateral estoppel.

P.T. & L. originally filed suit in 1979 against the New Jersey Department of Transportation (DOT),*fn1 alleging misrepresentation in a contract which it had been awarded, in conjunction with another company, to construct a 1.4 mile segment of Route 78 in Union Township, known as Section 5AC. Complications developed because the site plans prepared by defendant Madigan-Hyland and given to P.T. & L. by the State were based on soil conditions which differed from those actually existing. Apparently, the U.S. Army Corps of Engineers had planned a project to alleviate the drainage problems in the area. The project, however, never commenced. The design produced by

Madigan-Hyland was, nevertheless, based on the assumption that the project would be completed and that the area would drain properly. Consequently, the construction of Section 5AC was severely hampered.

P.T. & L.'s 1979 suit against the DOT alleged that the State's nondisclosure of material facts concerning working conditions on Section 5AC constituted misrepresentation. P.T. & L. prevailed at the trial court and was awarded $1,484,629. The Appellate Division reduced this award by $240,768. The reduced award was affirmed by the Supreme Court. P.T. & L. Constr. Co. v. Department of Transp., 108 N.J. 539, 531 A.2d 1330 (1987).

On March 5, 1981, P.T. & L. sued defendant Madigan-Hyland, seeking, inter alia, (1) ownership costs for equipment remaining idle during the construction delay and (2) prejudgment interest from Madigan-Hyland on the award P.T. & L. had recovered from the DOT. The prejudgment interest was evidently sought because the New Jersey Contractual Liability Act, N.J.S.A. 59:13-8, prohibits the awarding of prejudgment interest against the DOT. The court granted P.T. & L.'s motion to amend the complaint to add Madigan-Praegar and U.R.S. as defendants.

For the next six years, while P.T. & L.'s suit against the State was being appealed, the present case was placed on the inactive list in Bergen County. The court later denied Madigan-Hyland's motion for summary judgment which was made on the grounds that P.T. & L.'s claim was barred by the six-year statute of limitations and that P.T. & L., having successfully sued the State, was collaterally estopped from suing Madigan-Hyland.

Thereafter, the case was bifurcated and tried before Judge Sciuto, who, on December 23, 1988, found 100% liability against Madigan-Hyland. On May 4, 1989, the court entered judgment against Madigan-Hyland in the amount of $791,925.74 on the basis of $219,892.07 for ownership costs for idle equipment;

$51,947.00 for roadway excavation costs not recovered from the State in the earlier action; $217,471.67 for prejudgment interest on these items; and $302,615.00 for prejudgment interest on P.T. & L.'s award in its suit against the DOT. The prejudgment interest on the first two items was later amended by the trial court to $244,431.67, thereby constituting a total of $818,885.74. Madigan-Hyland now appeals, alleging, inter alia, that the trial court failed to apply the six-year statute of limitations. P.T. & L. cross-appeals, contending the trial court's award of prejudgment interest was inadequate.

The record reveals repeated problems on this project from the very beginning of construction. Work commenced November 8, 1972. Three days were allocated under the contract for "stripping" the affected area, i.e., removing surface vegetation and topsoil to a depth of 18 inches. Apparently, the three-day allocation was based on the assumption that the area was dry. However, the "wet ...


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