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Arlington Ridge Condominium Association v. DeCavalcante

October 6, 2008


On appeal from Superior Court, Law Division, Hudson County, Docket No. L-1774-05.

Per curiam.


Submitted September 10, 2008

Before Judges Payne and Waugh.

Third-party plaintiffs Carl DeCavalcante, Polizzi Builders, Inc., Polizzi, Inc., and Statewide Developers, Inc., appeal from the dismissal on summary judgment of their third-party complaint against third-party defendants William Roettger and his employer Kipcon, Inc., as well as subsequent denial of their motion for reconsideration. We affirm.


This action arises out of the construction of a condominium complex in Kearney, New Jersey. In 2000, plaintiff Arlington Ridge Condominium Association filed suit (HUD-L-4587-00) against Midland Estates, Inc., the builder of the condominium complex, alleging various causes of action relating to construction deficiencies at the complex. Midland filed a counterclaim, seeking further payment for work done on the project. The matter was referred for mediation and settled. The settlement called for Midland to perform certain remediation work at the complex and for Arlington Ridge to pay Midland $36,800 "in full and final settlement of the matter."

Kipcon, acting through Roettger, served as Arlington Ridge's consultant and expert during the litigation. Pursuant to the settlement agreement, Roettger was to prepare specifications for the remedial work and then to inspect the work performed by Midland.

Although there was no such requirement in the written settlement agreement, Midland took the position that the remedial work had to be performed during the summer of 2003. Roettger did not attempt to contact Midland about formulating the required specifications until August 15, 2003 because of (1) a delay in the resolution of the financial arrangements between Arlington Ridge and Kipcon; and (2) Roettger's involvement on other projects. Roettger and Midland's representative did not actually make contact until September 3, 2003. At that time, Midland took the position that the "window of opportunity" had closed and that the work would not be performed because it was then involved in other projects.

Arlington Ridge filed a motion pursuant to Rule 1:10-3, seeking to enforce the settlement agreement. According to the third-party plaintiffs, Midland opposed the motion, arguing that its failure to perform the work was caused by Roettger and Kipcon's failure to act in a timely manner.*fn1 The motion was granted and judgment was entered against Midland for $166,670.17. Midland did not appeal.

When Arlington Ridge discovered that Midland was defunct and had no assets, it filed the present action against the third-party plaintiffs. According to the amended complaint, DeCavalcante was an officer of Midland and signed the settlement agreement on its behalf. Arlington Ridge alleged that DeCavalcante engaged in fraud because, at the time the settlement agreement was negotiated and signed by him on Midland's behalf, he knew that Midland had no workforce or assets to complete its obligations under the settlement. The corporate entities, which had interlocking directorships and ownership with Midland, were alleged to have engaged in civil conspiracy, fraudulent transfers, and breach of a settlement in a related litigation, of which Arlington Ridge claimed to be the third-party beneficiary.

The third-party plaintiffs filed an answer and third-party complaint against Roettger and Kipcon. After setting forth the operative allegations of fact, the single-count third-party complaint made the following allegations:

5. As a result of settlement negotiations during the mediation sessions, Midland Estates, Inc. entered into a Settlement Agreement with the plaintiff herein on or about November 27, 2002. A written Settlement Agreement memorializing the settlement between plaintiff herein and Midland Estates, Inc. was executed on or about June 5, 2003.

6. Third party plaintiffs relied upon representations made by third party defendants with regard to certain obligations that third party defendants agreed to undertake during the settlement negotiations at the mediation sessions as consideration for entering into the Settlement Agreement. Specifically, third party plaintiffs relied upon third party defendants' representations that third party defendants would take on certain obligations as conditions precedent to Midland Estates, Inc.'s obligation to perform work pursuant to the Settlement Agreement.

7. Third party defendants breached their obligations under the Settlement Agreement.

8. As a direct and proximate result of third party defendants' breach of their obligations pursuant to the Settlement Agreement, Midland Estates, Inc. was unable to perform ...

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