March 19, 2008
PUROFIRST OF SOUTHWEST JERSEY, PLAINTIFF-RESPONDENT,
JOSEPH R. WARNER, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division-Special Civil Part, Burlington County, DC-628-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 31, 2007
Before Judges Payne and Messano.
Defendant, Joseph R. Warner, appeals from a verdict entered against him and in favor of plaintiff, Purofirst of Southwest Jersey, in the amount of $8,471.32, following a bench trial in the Law Division, Special Civil Part. On appeal, defendant makes a myriad of arguments that we distill into the following:
(1) whether the trial judge erred in finding that the original signed contract was valid; (2) whether the trial judge erred by not raising the Consumer Fraud Act (CFA) sua sponte to invalidate the signed contract; (3) whether the trial judge erred in awarding plaintiff compensation on the theory of quantum meruit, despite a violation of regulations adopted pursuant to the CFA; (4) whether the judge erred in calculating damages; (5) whether the judge erred in establishing the amount of the attorney fee award; and (6) whether the trial judge erred in denying defendant's motion to vacate the judgment based upon plaintiff's alleged perjury and defendant's discovery of "new" evidence. We affirm.
Suit in this matter was instituted by plaintiff, a restoration company that does emergency service work for properties that are damaged by fire, water or other conditions, seeking payment by defendant of $13,884.60, constituting the balance of amounts allegedly owed for plaintiff's demolition and construction services. Following entry and vacation of a default judgment, defendant filed a pro se answer and counterclaim, asserting as defenses in his answer that plaintiff had breached its contract by failing to conform to the architect's plan, and that defendant's "failure to perform" under the contract was excused by plaintiff's actions. In his counterclaim, defendant alleged: "During Plaintiff's performance of the contract alleged in the complaint, plaintiff damaged defendant's property and failed to make repairs."
Despite any reference in defendant's answer or counterclaim to the CFA, N.J.S.A. 56:8-1 to -166, or the incorporation into that counterclaim of any facts supporting a cause of action under the CFA, at trial, defendant, now represented by counsel, selectively sought, without objection from plaintiff's counsel,*fn1 to apply that Act so as to invalidate an unsigned supplement to the contract between the parties that imposed additional costs upon defendant. Defense counsel did not urge the applicability of the CFA to the signed initial contract, and while also arguing that a second unsigned supplement was void, made no objection to the recognition of credits acknowledged in that supplement that benefited defendant. To further complicate the legal basis for the matter, at the conclusion of the bench trial, the judge awarded attorney's fees to defendant pursuant to the CFA, despite the lack of any application for such fees.
As a consequence of counsel's inattention to the niceties of concepts of notice and the consistent application of law, we are left with a result that in some respects defies logical explication. However, we are mindful of the fact that no cross-appeal has been filed in this matter, and that as a result, many of the difficulties presented by the record simply are not at issue before us. We thus limit our view of the case to those issues raised by defendant in this appeal that we have identified at the commencement of this opinion.
In viewing the judge's factfinding in this matter, our role is limited to a determination of whether those findings could reasonably have been reached as the result of substantial credible evidence in the record, while giving due regard to the ability of the trial judge to gauge the credibility of the witnesses appearing before her. State v. Locurto, 157 N.J. 463, 470-71 (1999). Our review of the judge's application of the law to the facts is plenary. Manalapan Realty v. Manalapan Tp. Comm., 140 N.J. 366, 378 (1995).
The trial record establishes to our satisfaction that, as the result of the death of defendant's aunt and defendant's purchase of the property at issue from his sister, in or around 2003, defendant became the owner of a house located at 3234 South Main Street in Medford, New Jersey. The house is approximately 150 years old. A photograph in the record demonstrates that it consists of one-half of a two-family row house, built directly adjacent to the sidewalk. To the right of the house, when facing the building, is a connected one-story structure referred to in the record as a store. The store is bounded on the right by Friends Avenue, which intersects South Main Street, and thus it is situated on a corner. The building is located in a designated historical district.
In April 2001, a fire in the attached residence spread to the third, or attic, floor of 3234 South Main Street, causing significant damage to the roof and supporting beams. As a result, defendant's aunt, who was living there at the time, was forced to move out, and thereafter, the house has remained without heat and without electrical and water service. In December 2002, plaintiff was contacted by defendant, who sought to repair the building's roof and to raise its elevation to permit the third floor to be used as a room. Plaintiff provided an estimate at that time, but heard no further from defendant until December 2003. Meanwhile, the building remained unoccupied.
In December 2003, Debra Conroy, a project manager for plaintiff, visited the house, and an estimate for the demolition and construction specified by defendant was prepared. Conroy testified at trial that at the time she inspected the residence, it was uninhabitable. Leaking water was being collected in trash cans and a second-floor tarp. Extensive water damage existed, the plaster was crumbling, mold was present, and trash was everywhere. Conroy testified that the ceiling in the kitchen area was being held up by a post, and that the area was so unsafe that, when work commenced, she ordered plaintiff's workers not to enter the room.
During contract negotiations, defendant undertook to remove existing plaster to the studs to save demolition costs. Plaintiff was to raise and replace the roof to match that of the adjoining home. The parties agreed to a contract price of $17,832.76, and a contract dated December 23, 2003, specifying the work to be done by plaintiff, was executed by the parties. Defendant paid half of that amount as a deposit.
On January 8, 2004, plaintiff applied for a construction permit. However, it was informed that historical review was required, and defendant undertook to oversee that process. He filed an application with the Historical Commission in March 2004, and a construction permit was finally issued on July 20, 2004 after defendant agreed to meet conditions imposed by the Historical Commission.
The demolition work required the use of a dumpster, which defendant had initially sought to obtain, but later agreed that plaintiff should order because of its contractual relationship with a provider. However, because of bad feelings occasioned by plaintiff's suit against his uninsured neighbor for the damages caused by the fire, the neighbor barred the only access route to defendant's back yard, precluding placement of the dumpster there. A considerable amount of time was then spent in negotiating with the municipality for authorization to place the dumpster in front of the building on South Main Street. Although authorization was finally granted, for safety reasons, plaintiff was required to utilize a chute for debris extending from the third floor to the dumpster, to place safety barrels with flashing lights around the dumpster, to encircle the construction area with cautionary tape, and to escort pedestrians around the obstruction during working hours. Three twenty-yard and one ten-yard dumpsters were utilized in the project. In addition to the construction debris, defendant placed various items from the house in the dumpsters.
Because portions of the building lacked structural integrity, including the store's roof, and because access to the neighbor's roof was denied, plaintiff was also required to construct an external scaffold to perform its demolition and repair work. The unforeseen, extra costs associated with the dumpsters and the scaffold were not included in the original contract price.
While construction was ongoing, defendant placed the house on the market. In or around March 2005, a contract for the sale of the house "as is" was signed, with a purchase price of $200,000. At that point, defendant locked plaintiff out of the worksite. When the lockout occurred, demolition was complete and construction of the roof, framing, rough carpentry, and windows had taken place. In February 2005, a satisfactory status inspection of the work occurred. However, final inspections were not conducted because the work remained incomplete.
At trial, Conroy testified that no complaints were voiced about the construction by defendant while the work was in progress. However, he objected strongly to the fact that plaintiff placed a construction lien on the property prior to its sale, in order to protect its right to receipt of remaining amounts owed. In contrast, at trial defendant raised a litany of complaints, claiming that the dormers were peaked, not bowed as required; that plaintiff's workers had broken a double-hung thermopane window and four spindles on the stairs; that water damage to the house and its contents, allegedly from a November 2004 storm, was attributable to plaintiff's shoddy workmanship; that demolition of a second-floor roof was not undertaken, as specified on the plans; and that damage had occurred to antiques, among other things. At trial, plaintiff's witness, Conroy, admitted that employees had broken the window, but stated that a replacement had been purchased. When it could not be installed as the result of the lockout, plaintiff claimed to have left it in the manufacturer's packing by the back door. Conroy also testified that the company had agreed to replace the banister spindles, while not admitting that it had damaged them, but again, was unable to do so because of the lockout.
In a statement dated March 23, 2005, plaintiff added costs for removal of a second layer of roofing; upgrading of the shingles and ridge cap required by the Historical Commission; placement of a drip cap; utilization of the trash chute, along with traffic control barrels and lights; dumpster removal; rough wiring; installation of scaffolding to support the structure; and removal of materials not used because of defendant's sale of the building. In a further statement, dated March 30, 2005, plaintiff deducted the costs of drywall, insulation and trim work from the total cost of the project, because that work had not been undertaken. Neither statement was signed by defendant.
At the conclusion of the trial, the judge found that, although a change order had not been executed prior to the completion of the extra items for which plaintiff sought payment, defendant had knowledge of all of that work, including the upgrade of the shingles, construction of the scaffold, and the additional costs incurred as the result of plaintiff's procurement of the dumpsters and their placement in South Main Street. Although the judge agreed that provisions of the home improvement regulations, adopted pursuant to the CFA, prohibited the billing practices in which plaintiff had engaged, she found that defendant was utilizing the CFA as a sword, not a shield in raising the Act to defeat payment of plaintiff's bill. To prevent injustice to plaintiff, she did not void plaintiff's claim to payment in excess of the contract price, but limited the claim to the amount warranted under a theory of quantum meruit subtracting, from the total plaintiff sought, its profit, overhead and taxes and awarding $8,661.30 with respect to that aspect of the claim. The judge then subtracted the credits granted to defendant by the other unsigned contract amendment from the contract price of $17,832.76, leaving $11,726.40, of which defendant had already paid $8,916.38, resulting in a balance of $2,810.02 on the initial contract. Adding the two sums, the judge awarded a total of $11,471.32 to plaintiff, from which she subtracted a $3,000 attorney's fee award, for a judgment against defendant of $8,471.32.*fn2 The judge denied defendant's counterclaim for damages arising from the work, including diminution in the value of the property and the individual items of damage we have previously mentioned and others, finding that defendant's damages were not proven with sufficient certainty to sustain an award.
Defendant appealed, but then withdrew his appeal in order to permit a hearing on his motion for relief from judgment pursuant to R. 4:50-1 as the result of newly discovered evidence allegedly demonstrating perjury by Conroy in her trial testimony regarding the municipality's inspection of the work. Defendant claimed that Conroy testified that plaintiff had obtained final inspections, which in fact did not occur, although he acknowledged that a status inspection had occurred on February 24, 2005. Additionally, defendant claimed false statements by Conroy regarding the broken window and "thwarted" attempts to repair various items. The judge denied the motion, stating in a written opinion that it was clear from the outset of the testimony and to this court, that there was never any final inspection of this property or certificate of completion as the work by plaintiff was never completed. The defendant does not contest status inspections were completed. He does not contest or raise issues about the framing and rough carpentry, nor about the windows, nor about the rough electrical work. There was never any testimony there were final inspections.
The judge also held that the information that defendant had obtained regarding status inspections, which revealed no problems, could not qualify as newly-discovered evidence pursuant to R. 4:50-1, because it was available to him at the time of trial.
Additionally, the judge addressed a claim by defendant that plaintiff's work did not conform to plan, because it did not include removal of a second-floor roof. In this regard, the judge held that "defendant never showed removal of the roof set forth on [the plan] was contemplated by the parties when [plaintiff] executed the contract." Further, the judge found that evidence from Building Sub Code Official Uschmann, offered by defendant in support of his motion, instead supported plaintiff's position that the demolition was not within the scope of the work, because Uschmann could not conclude "the contractor violated the intent of the plans because the construction drawings were not sufficiently clear." The present appeal followed.
On appeal, defendant argues for the first time that the initial, executed, contract was void pursuant to N.J.A.C. 13:45A-16.2(1)(12)(iv) because it lacked dates or a time period on or within which the work was to be begun and completed by plaintiff. However, this issue was never raised at trial, where both parties conceded the validity of the contract and the trial judge specifically noted that fact, without objection. As a consequence, we decline to address the issue on appeal. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). We reject defendant's argument that the trial judge should have independently evaluated the contract, found it defective, and applied regulations under the CFA to void it. R. Wilson Plumbing & Heating, Inc. v. Wademan, 246 N.J. Super. 615, 617-18 (App. Div. 1991), Sattelberger v. Telep, 14 N.J. 353, 363 (1954) and R. 4:9-2 all preclude such sua sponte action, which would have violated the plaintiff's right to notice and an opportunity to defend against the claim.
Defendant argues additionally that the court erred in awarding quantum meruit damages to plaintiff for items not contemplated by the parties at the time the initial contract was executed. However, we authorized such damages in Marascio v. Campanella, 298 N.J. Super. 491, 503, 504-05 (App. Div. 1997), a case in which the defendant verbally authorized certain "extras." In the present matter, after the contract was signed, defendant authorized plaintiff to order the dumpster defendant had undertaken to procure. Defendant's actions in alienating the adjoining homeowner then led to the necessity of placing the dumpster on South Main Street and the unforeseen, additional costs incurred as a result. Indeed, the placement at that location took place at defendant's suggestion when placement in the back yard became infeasible. Further, placement around the corner on Friends Avenue, as defendant now claims should have occurred, would have been impractical, because defendant's store, with its unsound roof, intervened between the demolition site and the proposed dumpster location.
We are satisfied that the trial judge was correct in concluding that the remaining extras were likewise known to defendant and implicitly or explicitly approved by him, including the upgrading of roofing materials, which defendant, himself, chose. It would be unreasonable to expect plaintiff to bear the cost of such items in the circumstances presented. Thus, we find defendant's explicit and implicit authorization of the work to bring the matter within the reasoning of Marascio, which we adopt here. See also Scibek v. Longette, 339 N.J. Super. 72, 82 (App. Div. 2001) (noting that the CFA is aimed at promoting truth and fair dealing in the marketplace, and a mechanical approach to application of its provisions may not be appropriate where the consumer has obtained the benefit of his bargain and is using the Act as a sword, not a shield); cf. Exit A Realty v. Zuniga, 395 N.J. Super. 655, 667-68 (App. Div. 2007) (declining to void a real estate listing agreement because of a technical violation). We decline to follow the Law Division decisions upon which defendant relies, Blake Const. v. Pavlick, 236 N.J. Super. 73 (Law Div. 1989), overruled on other grounds, R. Wilson Plumbing, supra, 246 N.J. Super. at 619, and Huffmaster v. Robinson, 221 N.J. Super. 315 (Law Div. 1986), which we regard as unduly punitive, and in any event, are not precedential. Mears v. Economy Brake Serv., Inc., 78 N.J. Super. 218, 228 (App. Div.), certif. denied, 40 N.J. 216 (1963).
Where one party has benefited the other and denying relief would be unjust, measurement of damages in accordance with principles of quantum meruit is appropriate. Starkey v. Estate of Nicolaysen, 172 N.J. 60, 68 (2002); Weichert Co. Realtors v. Ryan, 128 N.J. 427, 237-38 (1992). Here, the evidence supports the trial judge's implicit finding that plaintiff performed its services in good faith, that prior to the sale of the property the services were accepted by defendant, that plaintiff expected compensation for its additional work, and that such compensation could be reasonably valued. Starkey, supra, 172 N.J. at 68. In this regard, we note that the trial judge removed from the damage award profit, overhead and taxes -- costs that were separately set forth on plaintiff's statements. Given these reductions, and the absence of any evidence that costs had been incorrectly calculated,*fn3 we find the judge's award to have been reasonable and in conformance with law.
Defendant additionally challenges the judge's damages calculation, claiming that gross construction errors and faulty construction should have been recognized and considered in reaching any award. In arguing in this fashion, defendant is in reality objecting to the judge's determination not to award damages on his counterclaim. However, we concur with the trial judge's conclusion that any damage award would have been impermissibly speculative in amount, because damages were not proven with sufficient specificity to permit an award to be calculated. Kelly v. Berlin, 300 N.J. Super. 256, 268 (App. Div. 1997). In particular, no competent evidence supported defendant's claim that the property at issue was worth $350,000, rather than the $200,000 sale price. The replacement value or repair cost of allegedly damaged items was likewise unspecified.
We also reject defendant's argument that the trial judge incorrectly calculated attorney's fees,*fn4 finding commendable compliance by the judge with legal principles in that regard. See Rendine v. Pantzer, 141 N.J. 292, 334-37 (1995); see also Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 21-23 (2004); RPC 1.5(a). And as a final matter, we reject defendant's challenge to the denial of his motion to set aside the judgment against him for the reasons set forth by the trial judge in her written opinion of January 29, 2007.