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JNM Holdings, Inc. v. Matrix Engineering

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


November 1, 2007

JNM HOLDINGS, INC., AND ALAIN BELILTY, PLAINTIFFS-APPELLANTS,
v.
MATRIX ENGINEERING, INC., DEFENDANT-RESPONDENT, AND PORTER'S TREE SERVICE, INC., DEFENDANT.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, L-2463-02.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted October 23, 2007

Before Judges Coburn and Fuentes.

Plaintiffs JNM Holdings, Inc. ("JNM") and Alain Belilty sued defendant Matrix Engineering, Inc. ("Matrix") for breach of contract and negligence. Matrix obtained orders for summary judgment against both plaintiffs, and this appeal ensued. We affirm.

The material facts are not disputed. In 1996, Belilty purchased a commercial building from Porter's Tree Service, Inc..*fn1 Belilty financed his purchase with the assistance of a loan from The Money Store, which insisted on an environmental assessment of the property. The Money Store retained Matrix, a professional engineering company, to perform a phase 1 assessment. The retainer agreement provided that the report was for the sole benefit of The Money Store, although Belilty had to pay for it.

Matrix provided the report, in accordance with the scope of the work as required by The Money Store. The report indicated that no remedial action was required in relation to a drain in the garage, which led to a septic system that had been covered with concrete twenty-years prior to the purchase by Belilty. However, Matrix did discuss the drain fairly extensively, indicating that it appeared to present "only a slight environmental risk."

In December 2001, Belilty sold the property to JNM. An environmental report prepared for JNM indicated that the property was contaminated with, among other things, pesticides and arsenic. Belilty and JNM agreed to share the cost of the required remediation, which was $81,555, and brought this action against Matrix. However, plaintiffs failed to provide an expert report establishing Matrix's professional negligence.

On appeal, plaintiffs offer the following arguments.

POINT ONE THE LOWER COURT ERRED BY RULING THAT ALAIN BELILTY DID NOT HAVE A CONTRACT WITH MATRIX ENGINEERING, INC.

POINT TWO MATRIX ENGINEERING INC. HAD A DUTY OF CARE TO ALAIN BELILTY AND JNM HOLDINGS, INC.

After carefully considering the record and briefs, we are satisfied that plaintiffs' arguments are without sufficient merit to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), and we affirm substantially for the reasons expressed by the motion judges. Nonetheless, we add the following comments.

JNM never had a contract with Matrix. Therefore, the only possible action JNM had was negligence. But an action for negligence can only be maintained when proximate cause is present. Olivo v. Exxon Mobile Corp., 377 N.J. Super. 286, 292 (App. Div. 2005), aff'd sub nom. Olivo v. Owens-Illinois, Inc., 186 N.J. 394 (2006). Since JNM knew of the environmental problem before it completed the purchase of the property, and could have withdrawn from the purchase contract, proximate cause is obviously missing.

Even assuming that Belilty should have been treated as an intended beneficiary of the engineering contract, which appears quite doubtful since the agreement expressly provided that the services were being provided solely for the benefit of The Money Store, Belilty has failed to identify any specific provision of the contract that was violated by Matrix.

In their second point, plaintiffs allege that Matrix owed them a duty of care. We see no basis for that assertion against JNM, which knew of the environmental problem before closing title. Belilty's case also fails because, as Judge Perri noted, Belilty did not provide an expert's report describing the applicable professional standard and explaining how Matrix had failed to meet that standard. "In a professional negligence case, the standard of care must normally be established by expert testimony." Taylor v. Delosso, 319 N.J. Super. 174, 179 (App. Div. 1999) (citation omitted). Of course, expert testimony is not needed when the matter is one of common knowledge. Kelly v. Berlin, 300 N.J. Super. 256, 265 (App. Div. 1997). But that rule is clearly inapplicable here. The record contains no evidence that a phase 1 environmental study required more than the work performed by Matrix, there was no evidence as to what the standard of care was, and there was no evidence of deviation from that standard.

Affirmed.


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