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John & Al Construction Co., LLC v. McGhee

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 22, 2009

JOHN & AL CONSTRUCTION CO., LLC, PLAINTIFF-RESPONDENT,
v.
RINNETTA MCGHEE, DEFENDANT-APPELLANT.

On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Monmouth County, DC-015901-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted April 1, 2009

Before Judges A. A. Rodríguez and Payne.

Plaintiff, John & Al Construction Co., Inc., entered into a written contract with defendant, Rinnetta McGhee, to remove an old porch and stairs and to rebuild new porches, replace a roof, and replace and enclose stairs to the porch, as well as perform other construction, at defendant's home in Asbury Park. The contract required payment of $34,600, pursuant to a specified schedule. Although the first two payments were made, the third and final payment of $10,000 was withheld on the ground that the work performed was shoddy, there were deficiencies in performance, and the work was not substantially completed. Plaintiff filed suit in the Special Civil Part for the $10,000, and a bench trial was held on March 31, 2009. At its conclusion, the judge held that the work was not complete and, after hearing plaintiff's estimate that completion would require material and services totaling $4,000, the judge found defendant liable for payment in the amount of $6,000.

Prior to entry of judgment, on April 3, 2008, the construction was inspected by an Asbury Park construction and building subcode official. In a notice of violation and order to terminate, issued on April 14, 2008, the official found that the construction was in violation of the State Uniform Construction Code Act and regulations. A prior certificate of approval was rescinded, plaintiff and defendant were ordered to correct the violations found to exist on or before July 8, 2008, and the parties were informed that no certificate of occupancy or approval would be issued unless the violations were corrected.*fn1 Defendant forwarded the inspection report to the judge, along with a letter dated April 14, 2008 that stated, in relevant part:

The "Judgment in Favor of the Plaintiff" was based on the fact that the Plaintiff passed all inspections and was granted a certificate of approval. However, the City of Asbury [Park] has revoked that pas[t] issued certificate of approval because of conditions discussed in the enclosed letter.

Therefore, I request that the "Judgment in Favor of the Plaintiff" be changed to a ruling in favor of the Defendant, and the Defendant be exempt from any judgment against the Defendant because of the conditions described in the enclosed letter and also because no certificate of approval was issued for the job.

By letter dated April 22, 2008, defendant again requested that the judgment in defendant's favor be "changed to a ruling in favor of the Defendant." However, on April 24, 2008, without responding to defendant's letters, the judge entered judgment in plaintiff's favor for $6,000. This appeal followed.

On appeal, defendant, raises the following issues for our consideration:

Point I

FINDINGS OF THE COURT BELOW, CONSIDERING THE PROOFS AS A WHOLE, WERE SO MANIFESTLY UNSUPPORTED BY OR INCONSISTENT WITH THE COMPETENT, RELEVANT AND REASONABLY CREDIBLE EVIDENCE THAT THE INTERESTS OF JUSTICE DEMANDS JUDGMENT FOR PLAINTIFF BE REVERSED AND JUDGMENT FOR DEFENDANT ENTERED.

Point II

THE COURT BELOW ERRED WHEN IT MISAPPLIED THE LAW OF SUBSTANTIAL PERFORMANCE AND INCORRECTLY DECIDED THE ISSUES BETWEEN THE PARTIES.

Point III

THE COURT BELOW ABUSED ITS DISCRETION WHEN IT FAILED TO RESPOND TO DEFENDANT'S MOTION TO AMEND THE JUDGMENT, PURSUANT TO R. 4:49-2.

Following our review of the record and applicable law, we reverse.

At trial, testimony was offered by John Tomaino, a principal of plaintiff, and by Rinnetta McGhee, the homeowner. Tomaino was represented at the proceeding by counsel; McGhee was not. In support of plaintiff's claim, Tomaino offered the construction contract and architectural plans, his assertion that the work had been completed, and his statement that $10,000 of the contract price remained due and owing.

McGhee testified concerning the defects in construction, utilizing photographs to illustrate her testimony. Among other things, the photographs and testimony revealed that the header beam had been spliced; the roof was constructed of untreated wood; the unfinished stairs had become weather-worn in less than one year and were deteriorating; the wood was of inferior quality and had cracked; the tile flooring leading to the entryway to defendant's second-floor residence did not meet the door sill; multiple rusting, exposed nails were present in the stairwell, ceiling and other areas; vinyl siding installed by plaintiff had popped off and, in another location, had a gap in it; and a two-inch crack existed in the floor of the porch, exposing the store room below it to moisture. Tomaino offered various excuses for the defective work, stating among other things that the condition of the stairs resulted from spills or from urination by defendant's dog; that no nail shafts were visible when the work was completed; the leaky roof was the fault of a subcontractor; and that the work had been approved by city inspectors.

Indeed, a certificate of approval (CA), indicating that the work had been constructed in accordance with the New Jersey Uniform Construction Code, was issued on January 22, 2008. However, defendant cast significant doubt upon its validity. In that regard, defendant testified that no CA was on file with the city in September 2007 when plaintiff filed its complaint claiming that "[t]he work passed all inspections" and, in fact, the certificate on file was dated January 22, 2008. Defendant testified further that no construction official had contacted her to request access to the construction, and that no official could have conducted an inspection in her absence because she kept an unchained large dog in her back yard where the work was located.

At the conclusion of the trial, the judge acknowledged defendant's contention that the work remained incomplete, and she agreed with defendant, as she had on many occasions throughout the course of the trial. Nonetheless, the judge awarded plaintiff $6,000 of its claim.

We must accord substantial deference to the judge's factual findings, disturbing them only if they are so wholly insupportable as to result in a denial of justice. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974). However, her "interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference. Manalapan Realty v. Manalapan Tp. Comm., 140 N.J. 366, 378 (1995).

In this matter, we concur with the judge's determination that the work performed by plaintiff was not substantially complete - a conclusion that is reinforced by the subsequent building inspection, the rescission of the CA, and the notice of building code violations. However, we cannot accept the remedy that the judge employed. While recognizing that defendant was invoking the doctrine of substantial completion, and determining that such a state had not been achieved, the judge nonetheless awarded damages to plaintiff. Such should not have occurred.

In R. Krevolin & Co., Inc. v. Brown, 20 N.J. Super. 85 (App. Div. 1952), we recognized the established principle that damages cannot be awarded to a contractor who has not substantially completed the contracted-for work. We stated:

Of course, if the evidence establishes the fact that the plaintiff substantially performed its contract, "even though he has failed in some minor particulars, he is entitled to recover the contract price less what will be a fair allowance to the owner to make good the defects in the performance of the contract." Reese v. Kline Bldg. & Const. Co., 8 N.J. Misc. 296 (Sup. Ct. 1930); Globe Home Improvement Co. v. Mishnisky, 120 N.J.L. 233 (Sup. Ct. 1938); Palmeri v. Albanese, 12 N.J. Super. 338 (App. Div. 1951). On the other hand, the law is settled that it looks to the spirit of the contract and not the letter of it and the question, therefore, is not whether the party has literally complied with the contract, but whether he has substantially done so.

"Generally speaking, partial performance of an entire and indivisible contract by one of the parties does not entitle him to performance of the contract by the other and does not warrant a recovery by the former against the latter upon the contract. Full or substantial performance of the promise of one party is a condition precedent to the right to maintain an action on the promise of the other unless the promise of the latter is independent of any performance by the former." 12 Am. Jur., Contracts, sec. 344, p. 903.

Also see 3 Williston on Contracts, (Rev. ed.), sec. 805, p. 2256, wherein, at p. 2262, it is stated:

"Where the rule of substantial performance prevails it is essential that the plaintiff's default should not have been willful; and the defects must not be so serious as to deprive the property of its value for the intended use nor so pervade the whole work that a deduction in damages will not be fair compensation."

[Krevolin, supra, 20 N.J. Super. at 90.]

See also Jardine Estates v. Donna Brook Corp., 42 N.J. Super. 332, 337 (App. Div. 1956) ("A building contractor is not entitled to recover unless he has substantially complied with the contract, but if he has, he is entitled to recover the contract price, less a fair allowance to the owner for minor defects or omissions."); Power-Matics. Inc. v. Ligotti, 79 N.J. Super. 294, 303 (App. Div. 1963); Saxon Constr. & Mgmt. Corp. v. Masterclean, Inc., 273 N.J. Super. 231, 238 (App. Div. 1994).

In this matter, the revocation of the CA provided conclusive evidence that the defects in the construction provided by plaintiff deprived the property of its value for its intended use. However, we need not consider whether defendant's somewhat informal submission of this new evidence should have been considered by the trial court pursuant to Rule 4:50-1(b), because the evidence only reinforces a conclusion that the judge had reached previously. The difficulty in this case is that, having concluded that substantial compliance with contract terms had not occurred, the judge nonetheless awarded damages in a fashion that was contrary to precedent.

As a consequence, the judgment in this case is reversed.


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