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Armm Associates, Inc. v. Concord Engineering Group


July 2, 2010


On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-5049-05.

Per curiam.


Submitted May 18, 2010

Before Judges Wefing, Grall and Messano.

This case involves a malpractice claim against an architectural and engineering firm, defendant Concord Engineering Group, Inc., that prepared the bid specifications and oversaw a public works project undertaken by the Jackson Township Board of Education (Board). The successful bidder, King Mechanical, Inc., paid the workers the prevailing wage for the wrong trade, and plaintiffs - Armm Associates, Inc., Armm Roof Design, Inc., Armm Ramm, Inc. and Frank and Holly Moore - are guarantors on the construction bond. Plaintiffs settled a separate lawsuit filed on behalf of the workers by agreeing to pay a total of $213,000.

Alleging that Concord's negligence in the preparation of the bid specifications and administration of the project caused King to underpay the workers, plaintiffs sought to recover the amount due from Concord. Following a bench trial, the judge determined that plaintiffs failed to prove their cause of action and entered judgment in favor of Concord.

Plaintiffs appeal and contend that the trial judge erred in two respects: 1) by holding that Concord did not have a duty to provide information about local rules governing the trade of the workers needed for the project; and 2) by holding that Concord did not have a duty to monitor King's compliance with local rules affecting prevailing wages. We reject these claims and affirm substantially for the reasons stated by Judge Millenky in his letter opinion of April 24, 2009 as supplemented to explain our reasons for accepting his determinations.*fn1

The evidence presented at trial is set forth at length in Judge Millenky's opinion. Accordingly, we recite only the facts that are essential to our opinion.

Concord was retained by the Board to prepare the bid specifications and oversee a project that involved the removal and replacement of heating and air-conditioning units on the roof of a school in Jackson. King, not Concord, was the general contractor on the project, and pursuant to the "General Conditions of the Contract for Construction," which were incorporated by reference in the contract between King and the Board, King was obligated to "classify and allocate the furnishing of materials and the performance of work to the various trades in accordance with local customs, jurisdictional awards, regulations and decisions insofar as they are applicable."

Pursuant to N.J.S.A. 34:11-56.28, "[t]he public body . . . [must] ascertain . . . the prevailing wage rate in the locality in which the public work is to be performed for each craft or trade needed to perform the contract . . . ." The prevailing wage data is prepared by the Commissioner of the Department of Labor, who must "establish the prevailing wage in the locality in which the public work is to be performed for each craft or trade or classification of all workmen needed to perform public work contracts." N.J.S.A. 34:11-56.30.

The bid specifications prepared by Concord did not include that prevailing wage data, but the judge concluded that the omission was not the proximate cause of their damage. The record supports that determination, and plaintiffs do not challenge it on appeal.

King's underpayment of wages was not attributable to a lack of information about prevailing wages. The payments were deficient because King did not comply with the terms of agreements between local unions, under which the aggregate weight of the heating and cooling units involved brought some of the work within the prevailing wage rate applicable to plumbing and pipefitting.*fn2 Based upon those undisputed facts, the trial judge found that Concord's failure to provide the prevailing wages was not the proximate cause of King's violation. Proximate cause is a question for the finder-of-fact, J.S. v. R.T.H., 155 N.J. 330, 351 (1998), and the judge's determination, which is based upon his assessment of the testimonial and documentary evidence and supported by the record, may not be disturbed on appeal. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974).

The judge also determined that Concord, in its capacity as the professional who assumed responsibility to prepare the bid specifications for the Board, had no duty to provide information about the local agreements. The question whether a duty is owed and the scope of that duty are questions of law. Pfenninger v. Hunterdon Cent. Reg'l High Sch., 167 N.J. 230, 240 (2001).

There is no question that the law imposes a duty when an individual has "undertake[n] 'gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other's person or things.'" Id. at 241 (quoting Restatement (Second) of Torts § 323 (1965)). In this case, plaintiffs presented testimony to establish a duty based on such conduct by Concord - testimony that a representative of Concord advised King that all of the workers could be paid at "HVAC rate." Concord's representatives denied making any such representations. Plaintiffs, however, cannot rely on the testimony they offered to establish error. For reasons set forth with careful reference to adequate supporting evidence, Judge Millenky rejected plaintiffs' version of the facts. Accordingly, we accept his determination that plaintiffs failed to establish the facts essential to prove a duty based upon negligence in providing inaccurate information. Rova Farms, supra, 65 N.J. at 483-84.

Judge Millenky also concluded that the plaintiffs did not establish breach of a duty based upon Concord's deviation from a standard of care recognized by professionals who prepare bid specifications for public contracts. Relevant to that inquiry, the judge accepted testimony from the parties' experts and found the opinion of Concord's expert more reliable than plaintiffs' expert because Concord's expert had more experience with the preparation of bid specifications. This is another finding that is supported by sufficient credible evidence in the record to preclude our intervention. See State v. M.J.K., 369 N.J. Super. 532, 549-52 (App. Div. 2004), appeal dismissed, 187 N.J. 74 (2005).

Plaintiffs further contend that the court erred by not holding, as a matter of law, that one preparing specifications for bids on a public project has a duty to provide information about local agreements relevant to classification of the work pertinent to selection of the appropriate prevailing wage. The imposition of a legal duty "involves a weighing of the relationship of the parties, the nature of the risk, and the public interest in the proposed solution." Pfenninger, supra, 167 N.J. at 240 (citation and internal quotations omitted). The "weighing process is fact-specific and principled . . . and must lead to solutions that properly and fairly resolve the specific case and generate intelligible and sensible rules to govern future conduct." Id. at 241 (citation and internal quotations omitted).

Relevant to the imposition of this legal duty, Judge Millenky reasoned that "[a]llocating to the design professional the duty of determining the impact of subtle rules involved in local collective bargaining agreements would suggest an allocation, to a project's designer, of the very business that the contractor is in - hiring [and] paying workers, and carefully estimating the cost of a project." Thus, in declining to impose a new duty, the judge properly weighed the relationship of the parties, their respective ability to identify the trades and crafts required to complete the project and assigned the obligation based upon the fairness of the allocation.

While the question of duty is one of law on which the judge's determination is entitled to no special deference, Manalapan Realty, L.P. v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995), we reach the same conclusion. In addition to the factors weighed by the judge, we deem it significant that the relationship between public bidding and prevailing wages involves questions of public policy that have been addressed by the Legislature in significant detail. See N.J.S.A. 34:11-56.25 to -56.46.

Given the specificity of the statutes and the nature of the public policy arguments advanced by plaintiffs without citation to authority, plaintiffs have not articulated reasons that warrant judicial action requiring public entities or their agents preparing bid specifications to make disclosures relevant to prevailing wages beyond those the Legislature has required. Where the Legislature has addressed an issue, a court's obligation is to construe statutes and apply them in accordance with the Legislature's intention as expressed in the language of the statute. State v. Gonzalez, 142 N.J. 618, 627-28 (1995). Plaintiffs do not offer any argument suggesting the statutes at issue should be interpreted to require an agent of a public entity to classify every task involved in completion of a construction project with reference to the list of prevailing wages prepared by the Commissioner.

Plaintiffs also argue that Concord owed them a duty to check the wages they paid for compliance with the local agreement contracts. The terms of the bid specifications and King's contract with the Board clearly allocate the responsibility for proper payment to King, and the arguments plaintiffs offer to establish a duty owed by Concord to them arising from their relationship lack sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). With respect to review and certification of payments to be made to King, Concord's duty was to the Board, not plaintiffs. Cf. Estate of Spencer v. Gavin, 400 N.J. Super. 220, 242-43 (App. Div.) (discussing the circumstances under which the duty owed by an attorney to his or her client extends to third parties), certif. denied, 196 N.J. 346 (2008). Plaintiffs fail to explain how Concord's review of King's payment records could have altered their obligation to pay the prevailing wages that King owed.

The judgment is affirmed.

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