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Famularo Electric, LLC v. Lyndhurst Residential Community

August 13, 2010


On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1320-07.

Per curiam.


Argued May 4, 2010

Before Judges Carchman, Lihotz and Ashrafi.

Defendants Lyndhurst Residential Community, LLC (Lyndhurst) and Daibes Brothers, Inc. (Daibes) appeal from a March 18, 2009 judgment, following a bench trial, in favor of plaintiff Famularo Electric, LLC on its breach of contract complaint and dismissal of their counterclaim with prejudice.

Plaintiff, an electrical subcontractor, entered into a contract with defendants to perform electrical work with respect to a mixed use residential/commercial building. Plaintiff initiated this action alleging defendants failed to make required periodic payments on invoices it had submitted. Defendants filed a counterclaim, contending plaintiff failed to perform as required under the contract.

On appeal, defendants argue the judgment is against the weight of the evidence and various trial errors warrant a new trial. Alternatively, attacking the award of damages, defendants argue plaintiff failed to mitigate its losses and was not entitled to prejudgment interest. Plaintiff cross-appealed, contesting a reduction made by the trial court in calculating its award.

Following our review of these arguments, in light of the record and applicable law, we affirm the entry of judgment in favor of plaintiff. However, we remand to the trial court for further findings regarding the calculation of the amount credited to defendants, prior to the entry of judgment.

The facts are taken from the trial record. On June 24, 2005, plaintiff entered into a contract with Daibes to provide electrical work with respect to three separate projects: a field house in Lyndhurst, a sports complex in Palisades Park and a six-story mixed use commercial/residential building in Riverside (Riverside project). Daibes was the Construction Manager for all three projects, and the Riverside property was owned by Lyndhurst. This appeal concerns only the award to plaintiff for its work on this project.

Using a pre-printed, American Institute of Architects (AIA) standard form A101/CMa-1992,*fn1 plaintiff and Lyndhurst prepared an agreement for work on the Riverside project (the Agreement). Generally, the Agreement provided plaintiff would be paid $1,625,000.00 for the specified electrical work set forth in plaintiff's June 9, 2005 bid proposal, subject to adjustments stated in the contract. Lyndhurst agreed to make progress payments based upon plaintiff's submission of monthly invoices to Daibes, which was responsible for reviewing the requests, certifying payment should be made and forwarding them to Lyndhurst. Invoices were to be accompanied by substantiation and, if submitted by the 25th day of a month, payment would follow by the 31st day of the following month. Any invoices submitted after the 25th of the month were to be paid within forty-five days after receipt.

In §5.6, the Agreement added these further conditions for calculating the payment amount of each invoice:

§5.6.1. Take that portion of the Contract Sum properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Work by the share of the total Contract Sum allocated to that portion of the Work in the Schedule of Values, less retainage of Ten percent (10.00%). Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute may be included as provided in Section 7.3.7 of the General Conditions; §5.6.2. Add that portion of the Contract Sum properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the complete construction (or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing), less retainage of Ten percent (10.00%)[.]

Thereafter, Article 6 stated final payment was due and payable when the work was fully performed. Specifically, the Agreement stated:

Final payment, constituting the entire unpaid balance of the Contract Sum shall be made by the Owner to the Contractor when (1) the Contract has been fully performed by the Contractor except for the Contractor's responsibility to correct nonconforming Work as provided in Section 12.2.2 of the General Conditions and to satisfy other requirements, if any, which necessarily survive final payment; and (2) a final Project Certificate for Payment has been issued by the Construction Manager and Architect[.]

Agreement was reached on three change orders regarding the Riverside project. Change order one modified air conditioning and heating work, increasing the cost by $42,021.00. Change order two dealt with kitchen range receptors, for the agreed price of $15,675.00. Change order three provided for the relocation of power for the elevators at a cost of $19,299.50.

Plaintiff submitted invoices to Daibes on a monthly basis between June 24, 2005 and March 29, 2006. When Lyndhurst failed to submit payment, plaintiff ceased its performance and filed a four-count complaint alleging Lyndhurst failed to pay the periodic invoices, improperly withheld ten percent of any payments made, and failed to pay the reasonable value of plaintiff's material and labor. Judgment was also sought against Daibes based on ...

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