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Nemco Construction Corp. v. AARK Construction Group

May 29, 2009

NEMCO CONSTRUCTION CORP., INDIVIDUALLY AND IN A REPRESENTATIVE CAPACITY UNDER ARTICLE 3-A OF THE NEW YORK STATE LIEN LAW ON BEHALF OF ALL OTHER BENEFICIARIES OF CERTAIN TRUST FUNDS, PLAINTIFF,
v.
AARK CONSTRUCTION GROUP, EDUARDO DUTRA, GLASS GARDENS INC., TERRY R. GLASS, IRVING GLASS, NEW JERSEY NATIONAL BANK, SHOP-RITE OF ROCKAWAY ASSOCIATES, INC., ROCKAWAY SHOP-RITE ASSOCIATES, INC., SHOP-RITE OF PEARL RIVER ASSOCIATES, INC., PEARL RIVER SHOP-RITE, INC., SHOP-RITE OF ENGLEWOOD ASSOCIATES, INC., AND GLF REALTY CO., INC., DEFENDANTS, AND AARK CONSTRUCTION GROUP, LTD., THIRD-PARTY PLAINTIFF-APPELLANT,
v.
GLASS GARDENS, INC., NEMCO CONSTRUCTION CORP., FRANK J. CONSOLI TRUCKING CO., INC., BLUE CIRCLE MATERIALS, INC., PROGRESSIVE BRICK COMPANY, AND THE TRANE COMPANY, A DIVISION OF AMERICAN STANDRD INC., THIRD-PARTY DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket L-3857-98.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted April 22, 2009

Before Judges Payne and Waugh.

AARK Construction Group (AARK) appeals from the Law Division's order enforcing a settlement agreement between AARK and Glass Gardens Inc. (Glass). We affirm.

I.

In 1997, Glass hired AARK as the general contractor on a grocery store construction project in Paramus. AARK thereafter hired Nemco as the site-work subcontractor. A dispute arose between Glass and AARK as to whether the original contract contemplated the removal of unsuitable soil. Eventually, Glass fell three months behind in payments and, as a result, Nemco was not paid by AARK.

On February 10, 1998, AARK terminated Nemco as a subcontractor, alleging material breaches of the terms of their contract. On April 22, 1998, Nemco brought suit against AARK for breach of contract and Glass for lien foreclosure. Nemco claimed damages for breach of contract and specifically for removal of unsuitable soil, the design of a new retaining wall, and the relocation of a storm sewer. Cross-claims and counterclaims were filed by all parties against each other. Nemco and AARK filed construction liens against Glass's property in Paramus.

AARK and Glass reached a settlement of their claims against each other, which was embodied in a settlement agreement. The interpretation of that agreement is at issue on the present appeal.

Pursuant to their September 1, 1999, settlement agreement, Glass paid AARK $125,000 "in settlement of all claims between them." Glass also released AARK as the general contractor of the project. The outstanding subcontractor claims, including the Nemco claims, were addressed as follows:

3. . . . Glass shall be responsible for the payment of all subcontractors' material men and suppliers, including retainage and change orders, from the date Glass assumed AARK's contracts and took over the Project (on or about May 12, 1998), and AARK in turn shall be liable for the payment of subcontractors, suppliers and material men, including change orders but excluding retainage, prior to the time Glass took over the Project which are not otherwise specified in the Agreement.

4. Nemco's Claims

A. Pass Through Claims

AARK agrees to be liable for any and all pass through claims due Nemco and/or any other subcontractor except as otherwise provided herein. With regard to Nemco, all claims will be considered pass through claims, including but not limited to the retaining wall and sanitary sewer, except those specifically excepted in Section 4B.

B. Unsuitable Soil

Nemco has claimed an extra for the removal of unsuitable soil. If it is determined during the Arbitration that Nemco is entitled to additional compensation for removal of unsuitable soils, then Glass has agreed to indemnify AARK for the face amount determined by the Panel to be due Nemco, unless it is determined that AARK issued a Proceed Order to Nemco other than Proceed Order 02-02. However, Glass did not agree and did not authorize any additional work to remove unsuitable soils, and if AARK directed Nemco to do work in connection with the removal of unsuitable soil, then AARK shall be solely responsible to Nemco for same. Glass has, of course, disclaimed any liability for the removal of unsuitable soil except for a limited quantity which it approved in Change Order and Proceed Order 02-02, and paid totaling $84,336.37 because Glass believes the performance of such work was part of the Prime Contract, plans and specifications. AARK agrees to waive its right against Glass for AARK's proportionate share of overhead and profit in connection with Nemco's claim for unsuitable soil.

C. Nemco's Termination Claims

AARK shall be solely responsible for the satisfaction and payment of all amounts which are finally determined to be due and owing to Nemco from AARK for the alleged ...


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