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Triple "R" Enterprises, Inc. v. Pezotti

September 25, 2001

TRIPLE "R" ENTERPRISES, INC., PLAINTIFF-RESPONDENT
v.
SANTO PEZOTTI T/A INTERNATIONAL CONSTRUCTION MANAGEMENT, DEFENDANTS, AND MOUNT HOLLY EQUITIES, L.L.C., DEFENDANT-APPELLANT



On appeal from Superior Court of New Jersey, Law Division, Burlington County, L-1600-97.

The opinion of the court was delivered by: Carchman, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued August 28, 2001

Before Judges Carchman and Lesemann.

This appeal requires us to interpret N.J.S.A. 2A:44A-10 of the Construction Lien Law, N.J.S.A. 2A:44A-1 to -38 (the CLL), and to determine the maximum lien liability of a property owner against whom a lien has been filed. We conclude that such exposure is limited to contract funds remaining after the receipt of such lien despite the filing of prior liens and payments made after the payment of such prior liens. We reverse and remand.

We briefly set forth the facts relevant to this narrow issue. Defendant Mt. Holly Equities, L.L.C., the owner of commercial real estate, entered into a construction contract with the general contractor, defendant International Construction Management (ICM). Plaintiff Triple "R" Enterprises, Inc. was a paving subcontractor. The total contract price between Mt. Holly and ICM was $1,281,162, and of that amount, $210,012 was allocated to the paving subcontract. Although Mt. Holly disputes the bona fides of the actual contract amounts, for purposes of the issue before us, we consider the amounts asserted by plaintiff.

The general contract was entered into on March 13, 1996, and on December 17, 1996, a roof framing contractor, Tamburri Associates, filed a lien claim under the CLL in the approximate amount of $6,000. Assured that the project was proceeding smoothly, Mt. Holly ultimately settled that claim.*fn1 Additional regular contract payments were made to ICM. Apparently, ICM was not paying subcontractors, because in March and April 1997, additional subcontractors filed liens under the CLL. Plaintiff's lien for $115,530.28 was filed on March 27, 1997, and was later amended to $110,734. Even though the project was near completion, ICM abandoned the project, and Mt. Holly started dealing directly with the subcontractors. ICM thereafter filed for bankruptcy.

In June 1997, plaintiff filed an action to enforce its lien. Because there were numerous other actions filed by subcontractors, the actions were consolidated and an order was entered in September 1998, determining that all lien claimants would be paid out of any lien fund on a pro rata basis. Following motions for summary judgment, the motion judge determined that the value of the lien fund was $195,000.03 and granted summary judgment in favor of plaintiff for the amount of its lien claim of $110,734. In concluding that the amount of the lien fund was $195,000.03, the motion judge noted that the lien fund must be determined as of the time of the filing of the Tamburri lien, not as of the filing of plaintiff's lien. Mt. Holly challenges both that determination and the quantum of plaintiff's lien. As to the latter issue, Mt. Holly claims that there are factual issues as to the quality of plaintiff's work, as well as to the amount of the claim.

We briefly dispose of the latter issue by observing that Mt. Holly did not raise these issues below, and we decline to consider or address them on appeal. See R. 2:6-2(a)(1); State v. Baluch, 341 N.J. Super. 141, 184-85 (App. Div. 2001); Lucia v. Monmouth Med. Ctr., 341 N.J. Super. 95, 102-03 (App. Div. 2001); Gilborques v. Wallace, 153 N.J. Super. 121, 143 (App. Div. 1977). We now address the statutory issue. N.J.S.A. 2A:44A-10 provides, in relevant part:

Except as set forth in sections 15 and 21 of this act, the maximum amount for which an owner will be liable or [sic] an interest in real property subject to a lien under this act for one or more lien claims filed pursuant to this act shall not be greater than:

a. In the case of a lien claim filed by a contractor, the total amount of the contract price of the contract between the owner and the contractor less the amount of payments made, if any, prior to receipt of a copy of the lien claim pursuant to section 7 of this act, by the owner to the contractor or any other claimant who has filed a lien claim or a Notice of Unpaid Balance and Right to File Lien pursuant either to a contract with the contractor and any subcontractor or supplier, or a contract between a subcontractor of the contractor and any supplier or other subcontractor; or

b. In the case of a lien claim filed by a subcontractor or supplier, the amount provided in subsection a. of this section, or the contract price of the contract between the contractor or subcontractor and the subcontractor or supplier, as applicable, pursuant to which the work, services, materials or equipment is provided by the subcontractor or supplier, less the amount of payments made, if any, prior to receipt of a copy of the lien claim pursuant to section 7 of this act, to the contractor or supplier or any other claimant who has filed a lien claim or a Notice of Unpaid Balance and Right to File Lien pursuant to a contract with such subcontractor or supplier, whichever is less. [N.J.S.A. 2A:44A-10 (emphasis added) (footnotes omitted).]

The statutory scheme applies to claims made by the contractor against the owner (subsection a), and to claims made by a subcontractor against the contractor (subsection b). The amount of the lien fund in the first instance results from subtracting the amount of monies paid to the contractor by the owner prior to receipt of "the lien claim" from the contract price. In the second circumstance, the calculation is based on the contract price between the contractor and the subcontractor. The lesser of the two resulting sums will be utilized to establish the lien fund. The issue here is whether the first filing of any lien claim freezes the consideration of the amount of payments made after receipt of the first lien claim. To restate the issue in terms of the facts presented, we consider whether the lien fund was established from the filing of plaintiff's lien in March 1997, or whether it was established from the time of the filing of Tamburri's lien in December 1996. This is particularly relevant because Mt. Holly made payments to ICM subsequent to the filing of the Tamburri lien and prior to plaintiff's filing which, if considered, would reduce the amount of the lien fund. The trial judge considered the critical filing to be the Tamburri lien.

Plaintiff's interpretation of the statute is simply stated. It argues that the lien fund is created by consideration of the amounts as of the time of filing of the Tamburri lien, rather than the filing of its own lien. It argues that the lien fund is created at the time of the filing of the "first" lien, as that filing ...


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