February 26, 2010
STEPHEN COSTALOS/SCAPE-ABILITIES, INC., PLAINTIFF-RESPONDENT,
RICHARD CETLIN, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Union County, Docket No. DC-009362-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 1, 2009
Before Judges Lihotz and Ashrafi.
Defendant appeals a judgment in a breach of contract lawsuit awarding plaintiff $4,389 in damages plus $57 costs. We affirm.
Plaintiff Scape-Abilities, Inc. is a landscaping contractor. Stephen Costalos is the founder, sole shareholder, and president of Scape-Abilities. Defendant Richard Cetlin and his wife own a home in Westfield, New Jersey.
Costalos and Scape-Abilities filed a complaint against Cetlin in the Law Division, Special Civil Part, alleging that Cetlin owed $4,414 for breach of a landscaping contract. Cetlin filed an answer contending that the contract was not completed and the goods and services were defective. He also filed a counterclaim against plaintiffs demanding $6,000 for his expenses in correcting the allegedly defective landscaping.
The following evidence was developed at a two-day trial heard by a judge without a jury.
On June 15, 2007, Cetlin paid plaintiffs $1,000 to prepare a landscape design plan for his home. Plaintiffs prepared a top-view drawing of Cetlin's property, designating where selected plants would be installed and other landscaping features. After discussions with Cetlin, plaintiffs made revisions and resubmitted the plan to Cetlin on September 4, 2007. Cetlin approved the revised design plan.
On September 15, 2007, plaintiffs sent a proposal to Cetlin for work totaling $66,687. Under the heading "Description," the proposal stated: "Installation of the landscape according to the plan revised September 4, 2007." In addition to installation of plants, the proposal included building a patio, walkway, steps, sitting wall, and fire pit; drainage, grading, and sod; a sprinkler system; fencing; and other items. Written on the proposal next to the heading "Plantings" was "(see attached sheet)" and the price $16,491. A separate page entitled "Plant Legend" contained a list of plants by name, size, and quantity totaling $16,491 in price. Cetlin did not accept plaintiffs' September 15 proposal and, according to his testimony at trial, did not pay attention to the plant legend.
The plant legend had three variations from the plants and quantities detailed on the September 4 design plan. First, the design plan called for English laurel to be planted along a corner of the property, but the plant legend listed Schip laurel instead. The design plan also called for three Anthony Waterer spirea, but the spirea were excluded from the plant legend. Finally, the design plan called for two purple leaf sand cherry bushes, but the plant legend listed only one.
Over the next several weeks, Cetlin and Costalos discussed by telephone the scope of the proposal and the time when the work would be done since colder weather was coming. On November 13, 2007, plaintiffs faxed a new proposal to Cetlin. Under the heading "Description," the revised proposal stated:
"Installation of plantings according to the plan revised September 4, 2007." The proposal then listed two other headings for work to be performed. The heading "Plantings" again made reference to an "attached sheet" in the same way as the previous proposal and again was priced at $16,491. Lesser amounts totaling $1,585 in price were listed under that heading for particular work described, and last, the proposal contained a heading for "Deep Root Feed 2 shade trees" at a price of $450. Subtracting a $400 discount, the priced items on the revised proposal totaled $18,126.
On November 15, 2007, Cetlin made handwritten revisions on the proposal, signed it, and faxed it back to plaintiffs. Relevant to the parties' dispute, under the heading "Terms & Conditions," the pre-printed form contract stated that "Scape-Abilities reserves the right to change a specified plant(s) due to the unavailability of a certain color or species at the nurseries. The closest match will be made at Scape-Abilities discretion." With regard to that provision, Cetlin handwrote: "Only minor changes or we should wait until Spring for better selection." Plaintiffs accepted Cetlin's revisions of the proposal and commenced work on November 16, 2007. Cetlin arranged for payment of $9,000 when work began.
Cetlin was not present while Scape-Abilities worked on the job over the next eleven days. According to Costalos, Mrs. Cetlin was present, and he discussed some of the work and changes with her. Because Cetlin had told Costalos that his wife was the one who wanted the plantings and she was present to oversee the work, Costalos believed she was "delegated to deal with" Scape-Abilities. Costalos testified that Mrs. Cetlin approved substitution of Peabody arborvitae for Leyland cypress, which were unavailable. Also, following the plant legend and signed proposal, Scape-Abilities planted Schip laurels rather than English laurels, did not plant any Anthony Waterer spirea, and planted one purple leaf sand cherry bush, not two.
Scape-Abilities also did not do "deep root feeding" of trees, as required under the contract. Costalos explained that the trees would have suffered if deep root feeding was performed during the winter, and Cetlin agreed that the feeding would be done in the spring.
Cetlin had also hired other contractors to install a sprinkler system and to lay sod. According to Costalos, the other contractors damaged some of plaintiffs' plantings by trenching into and pushing wheelbarrows over newly planted flower beds, and also by digging holes and laying pipes.
After Scape-Abilities finished its planting work in late November 2007, it billed Cetlin $8,914. Cetlin disputed the bill, but eventually made a partial payment of $4,500. In December 2007, Cetlin complained about the size and appearance of some plants. On April 24, 2008, Cetlin emailed Costalos a list of complaints with the landscaping work. Plaintiffs filed their lawsuit four days later, claiming the balance due on the contract, except the $450 for the tree feeding that was not done.
After hearing testimony of the parties over two days, the trial court stated its decision orally and entered judgment in favor of Scape-Abilities for all but $25 of its $4,414 claim. Regarding the terms of the contract and, specifically, whether the plant legend sheet was part of the contract, the judge was uncertain that it had been faxed to Cetlin on November 13 along with the revised proposal. Nevertheless, the judge concluded that, because the plant legend was provided to Cetlin with the initial September 15 proposal and it was referenced again in the revised proposal of November 13 at precisely the same price, it was part of the parties' contract. The judge also concluded that Mrs. Cetlin was an agent of her husband and her approval of substitutions was binding upon Mr. Cetlin.
With regard to Cetlin's testimony that the Schip laurels were smaller than the size required by the contract, the judge noted that Cetlin had no response to the explanation provided by Costalos that "they can come down a few inches over the winter," and she concluded that Cetlin had insufficient evidence that they were undersized when they were planted. Regarding the health of the plantings, the judge first noted that Cetlin had not presented a knowledgeable witness to say whether or not the plants were, in fact, unhealthy. Without such an expert in the field of landscaping, Cetlin could not overcome the contrary testimony of Costalos. Also, Cetlin did not present evidence to refute plaintiffs' explanation that Cetlin's other contractors trampled upon defendant's flower beds and damaged some plants. Based on these findings, the trial judge dismissed Cetlin's counterclaim and entered judgment in favor of Scape-Abilities for $4,389, plus $57 in costs. Cetlin filed a timely notice of appeal.
Our scope of appellate review is limited with respect to the trial court's findings of fact. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). We defer to the trial court and may not disturb its factual findings so long as "there is sufficient credible evidence in the record to support the findings." Brunson v. Affinity Fed. Credit Union, 199 N.J. 381, 397 (2009); accord State v. Adams, 194 N.J. 186, 203 (2008); State v. Chun, 194 N.J. 54, 88-89, cert. denied, ___ U.S. ___, 129 S.Ct. 158, 172 L.Ed. 2d 41 (2008). This court "may not 'engage in an independent assessment of the evidence as if it were the court of first instance.'" In re Taylor, 158 N.J. 644, 656 (1999) (quoting State v. Locurto, 157 N.J. 463, 471 (1999)).
The interpretation and construction of a contract, however, are matters of law for the court subject to plenary review on appeal. Kaur v. Assured Lending Corp., 405 N.J. Super. 468, 474 (App. Div. 2009); Sealed Air Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 375 (App. Div.), certif. denied, 196 N.J. 601 (2008); Spring Creek Holding Co. v. Shinnihon U.S.A. Co., 399 N.J. Super. 158, 190 (App. Div.), certif. denied, 196 N.J. 85 (2008); Fastenberg v. Prudential Ins. Co. of Am., 309 N.J. Super. 415, 420 (App. Div. 1998). "[U]nless the meaning is both unclear and dependent on conflicting testimony[,]" the court interprets the terms of a contract as a matter of law. Celanese Ltd. v. Essex Cty. Imp. Auth., 404 N.J. Super. 514, 528 (App. Div. 2009) (citations omitted).
When interpreting a contract, "we first examine the plain language of the [contract] and, if the terms are clear, they 'are to be given their plain, ordinary meaning.'" Pizzullo v. New Jersey Mfrs. Ins. Co., 196 N.J. 251, 270 (2008) (quoting Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001)). "We do not supply terms to contracts that are plain and unambiguous, nor do we make a better contract for either of the parties than the one which the parties themselves have created." Maglies v. Estate of Guy, 193 N.J. 108, 143 (2007); see Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960); Graziano v. Grant, 326 N.J. Super. 328, 342 (App. Div. 1999).
Only when the provisions of a contract are ambiguous may the court consider extrinsic evidence. "Whether a term is clear or ambiguous is . . . a question of law." Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) (citation and quotations omitted). "If the terms of the contract are susceptible to at least two reasonable alternative interpretations, an ambiguity exists. In that case, a court may look to extrinsic evidence as an aid to interpretation." Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008). Also, when the contract is the result of negotiations between parties of unequal bargaining power, the contract ambiguity is generally construed in favor of the non-drafting party. Ibid.
Cetlin argues that the trial court erroneously determined that the plant legend sheet was part of the contract. He contends that the September 4, 2007 design plan was the controlling document, not the modified plant legend. He contends further that the plant legend sheet should be disregarded because it conflicts with the "Description" in the contract providing for "[i]nstallation of the plantings according to the plan revised September 4, 2007."
Cetlin argues further that the plant legend sheet was not attached to the proposal he received by fax on November 13 and that he signed on November 15. Even if the legend was attached to the original proposal of September 15, Cetlin says he rejected that proposal, and it was "a completely independent document from the Contract."
Plaintiffs respond that "[i]t defies credibility for [Cetlin] to claim that he did not receive the plant list when reference to it appears on the same line next to the Contract plant price of $16,491, and [Cetlin] was ultra attentive to every line of the contract."
On its face, the contract is ambiguous as to whether the plantings would follow the design plan of September 4 exactly or the modifications made in the plant legend sheet. Despite the ambiguity, this is not a case where the trial court was required to resolve the ambiguity in favor of Cetlin because Scape-Abilities drafted the original proposal. Cetlin rewrote and added many provisions of the contract. The contract was negotiated and prepared by both parties. They were on equal footing in negotiating and drafting the final contract terms.
Extrinsic evidence supports the trial court's determination that the plantings were to conform to the plant legend rather than the design plan. Plaintiffs sent Cetlin the initial September 15 proposal two months before faxing the proposal that became the contract. The plant legend was included with the September 15 proposal, and it was not changed between the two proposals. Both proposals referred to an "attached sheet" under the heading "Plantings." Cetlin admitted he did not notice that provision but signed the contract anyway.
The price of $16,491 was identical in each proposal. The plant legend listed the types and quantities of plants to be purchased and installed. On the other hand, the primary purpose of the design plan was to show where the plants would be located on Cetlin's property. The design plan did not indicate a price for the plantings.
Substantial evidence in the record supports the trial court's factual finding that the plant legend sheet was included in the parties' contract. Consequently, we reject Cetlin's argument that Scape-Abilities breached the contract by planting Schip laurels instead of English laurels and by failing to plant three spirea and only one purple leaf sand cherry bush.*fn1
Concerning substitution of Peabody arborvitae, Costalos testified that the Leyland cypress were unavailable, and, under the contract, Scape-Abilities had the right to make minor substitutions. The trial court did not have to decide whether the substitution was minor because it credited the testimony of Costalos that Mrs. Cetlin approved the change and that she was authorized to do so.
Apparent authority is created as to a third person "by written or spoken words or any other conduct of the principal which, reasonably interpreted, causes the third person to believe that the principal consents to have the act done on his behalf by the person purporting to act for him." Jennings v. Reed, 381 N.J. Super. 217, 231 (App. Div. 2005) (quoting Restatement (Second) of Agency § 27 (1958)). Here, Mrs. Cetlin was home while Scape-Abilities did its work but Mr. Cetlin was not. Because Mr. Cetlin had told Costalos that the plantings were his wife's choice, Costalos reasonably believed that Mrs. Cetlin had authority to approve the substitution. The trial court had substantial credible evidence to conclude that Mrs. Cetlin was authorized to approve the substitution.
As to Cetlin's contentions that many of the plants were undersized and unhealthy, or planted improperly, Costalos provided responses that the trial court found credible. The court also concluded that Costalos had expertise in the field of landscaping but Cetlin did not and, therefore, Cetlin could not adequately support his contentions. We must defer to the trial court's credibility determinations regarding conflicting testimony at trial. In re Return of Weapons to J.W.D., 149 N.J. 108, 117 (1997); Rova Farms, supra, 65 N.J. at 484.
Cetlin's contentions regarding the trial court's factual findings are not sufficient to overturn the trial court's decision.
Finally, Cetlin argues that he was not required to complete payment because Scape-Abilities did not perform all its obligations under the contract, namely, the deep root feeding of trees. This argument also lacks merit. The deep root feeding was scheduled for the spring by agreement of the parties. Scape-Abilities never did the deep root feeding because Cetlin had not paid the full amount billed and disputes arose. Scape- Abilities had the right to stop performing its obligations under the contract when Cetlin did not pay its invoice issued upon completion of the plantings.
Moreover, Scape-Abilities substantially performed its obligations under the contract and was entitled to receive payment for the work that was done. Cetlin was entitled to a reduction of the overall contract price by a fair amount to cover the work that was not performed.
Substantial performance of a contract is found "where all the essentials necessary to the full accomplishment of the purposes for which the thing contracted for has been constructed are performed with such an approximation to complete performance that the owner obtains substantially what is called for by the contract." Perini Corp. v. Greate Bay Hotel & Casino, Inc., 129 N.J. 479, 502 (1992) (quoting Jardine Estates, Inc. v. Donna Brook Corp., 42 N.J. Super. 332, 337 (App. Div. 1956)). "[I]f the contractor has substantially performed his contract, even though he has failed to do so 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 performance of the contract." Ibid. (quoting Feeney v. Bardsley, 66 N.J.L. 239, 240 (E. & A. 1901)).
The deep root feeding constituted $450 of a contract for $18,126. The contract was primarily for installation of plants. The trial court's findings support the conclusion that Scape-Abilities' performance was substantially complete. Scape-Abilities was entitled to recover the contract price, less the value of the deep root feeding, which the parties had set at $450.