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Delam Construction Corp. v. 15 Thornton Road

December 10, 2007

DELAM CONSTRUCTION CORPORATION, PLAINTIFF-APPELLANT,
v.
15 THORNTON ROAD, L.L.C. AND GREGORY COPELAND, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Bergen County, L-3573-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued June 5, 2007

Before Judges Kestin, Weissbard and Lihotz.

Plaintiff Delam Construction Corporation (Delam) appeals from an order (1) granting summary judgment in favor of defendant Gregory Copeland and (2) granting the motion of defendant 15 Thornton Road, L.L.C. (Thornton), dismissing plaintiff's complaint against Thornton and referring the dispute to binding arbitration.

I.

A resolution of this case requires us to set forth the background in some detail.

On June 23, 2003, Thornton entered into a contract with Delam to construct a new building at 23 Thornton Road in Oakland (the project). The parties utilized a standard AIA contract form that contained the following pertinent provisions:

Par. 4.5.1: provided, "Any controversy or claim arising out of or related to the contract or the breach thereof shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association and judgment upon the award rendered by the arbiter or arbiters may be entered in any court having jurisdiction thereof . . . ."

Par. 4.5.2: provided that claims shall be arbitrated "unless the parties mutually agree otherwise."

Par. 13.4.2: provided, "No action or failure to act by the Owner, Architect or Contractor shall constitute a waiver of a right or duty afforded them under the Contract, nor shall such action or failure to act constitute approval of or acquiescence in a breach thereunder, except as may be specifically agreed in writing."

It was not disputed that Thornton owes Delam a balance of $187,368 plus interest with respect to Delam's work on the project. In response to not being paid, Delam filed a construction lien on August 9, 2004.

On May 19, 2005, Delam filed its complaint against Thornton seeking to recover monies due from its work on the project. Specifically, Delam asserted a breach of contract claim and a construction lien claim. On July 26, 2005, Thornton filed its answer. On October 18, 2005, Delam filed an amended complaint not only reasserting its claims against Thornton, but adding Copeland as a defendant. The amended complaint asserted that Copeland was "the managing member of, and controls, Thornton," and caused Thornton to violate its fiduciary duty to insure that the proceeds of a construction loan from Valley National Bank were used to satisfy Delam's claims. On November 12, 2005, Thornton and Copeland answered the amended complaint, in which Thornton asserted a counterclaim alleging damage resulting from construction deficiencies caused by Delam's work on the project. Delam answered the counterclaim on December 1, 2005. On February 17, 2006, the court entered an order extending the discovery end date to April 24, 2006.

During the discovery period Delam served written interrogatories upon Thornton. One of the questions requested an identification of proposed expert witnesses expected to be called to testify at trial. In response, Thornton certified that it had no experts at that time. Copeland, on behalf of Thornton, signed those answers on October 25, 2005.

As a result, on May 23, 2006, a month after the discovery end-date, Delam moved for partial summary judgment based on Thornton's lack of expert testimony as to the alleged construction deficiencies. The motion sought to: (1) establish an indebtedness by Thornton in the amount of $223,661.36, which included interest to date; (2) establish the amount due on the construction lien in the same amount; and (3) ...


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