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Morrow Equipment Co., LLC v. Noc VII Land Limited Liability Co.

October 21, 2010


On appeal from Superior Court of New Jersey, Chancery Division, Hudson County, No. F-22468-02.

Per curiam.


Argued September 14, 2010

Before Judges Wefing, Baxter and Koblitz.

Defendants appeal from a trial court order granting summary judgment to plaintiff and enforcing a lien claim in the amount of $868,665.95. After reviewing the record in light of the contentions advanced on appeal, we affirm.

Defendants are related entities who were involved in the construction of a high-rise building in the Newport section of Jersey City. Defendant NOC VII Office Associates, L.L.C. ("NOC VII") owned the land upon which the structure was to be built. Newport VII Construction Corporation ("Newport") served as the general contractor on the project on behalf of defendants. Newport, in turn, subcontracted with Blue Ridge Erectors, Inc. ("Blue Ridge") for the labor, materials and equipment needed to construct the building's steel frame. Blue Ridge required cranes to erect the structural steel, and it leased two cranes from plaintiff Morrow Equipment Company, L.L.C. ("Morrow").

In July 2001, Morrow and Blue Ridge executed lease documents for two Series 500 cranes manufactured by LiebherrWerk Biberach GmbH (Liebherr), and the cranes were delivered to the work site in October 2001. Blue Ridge encountered a series of problems with these cranes, and by January 2002, they were out of service. Blue Ridge requested replacements, and Morrow delivered two Series 630 Liebherr cranes to the site. The parties executed new lease documents for these cranes, which were substantially equivalent to the earlier lease documents. The minor variations which existed are not material to the issues on appeal.

The last day in which one of the 600 Series cranes was in service was in July 2002. On August 22, 2002, Morrow filed a construction lien against the property in the amount of $954,790.56, which encompassed rental payments under all four leases. On September 9, 2002, Morrow served a Notice of Lien; and in November, it filed a complaint to foreclose on its lien. In May it served an amended complaint naming Blue Ridge as an additional defendant.

This litigation was stayed to permit the conclusion of related litigation in another court, one part of which was a claim involving Morrow, Blue Ridge and Lexington Insurance Company ("Lexington") for damage to one of the 500 Series cranes. The settlement of that matter called, in pertinent part, for a payment of $700,000 to Morrow and Morrow agreeing not to seek to enforce its lien claim against Blue Ridge. Upon the termination of that litigation, this suit was restored to the active calendar in June 2008. The trial court held a conference with counsel at which counsel assured the trial court that the issues presented in this litigation were purely legal, i.e., whether Morrow's lien claim was timely filed. Based upon that representation, the trial court directed the parties to file cross-motions for summary judgment.

The parties filed their motions and submitted extensive briefs. After oral argument, the trial court reserved decision. It later placed its oral decision on the record, setting forth its reasons for concluding that Morrow's lien claim was timely filed. It held that Morrow had not been required to file separate lien claims for the 500 Series cranes and for the 630 Series cranes. Rather, it held that the four lease documents were joined by a "unity of purpose," and thus plaintiff's August 2002 lien claim encompassed the 500 Series cranes as well as the 630 Series. It then directed the parties to address the remaining questions, whether Morrow's lien claim was willfully overstated and whether defendants were entitled to a credit for the $700,000 Morrow had received in satisfaction of its claim for property damage.

It was only at that point that defendants' attorney informed the trial court that, contrary to its previous position, it believed there were disputed issues of fact that precluded a ruling as a matter of law on the question of timeliness. He said he had just learned of these alleged questions of fact through individuals who were not "employed or controlled" by his clients. Plaintiff protested this late change in position. The trial court informed the parties they were free to submit supplemental briefs on the remaining legal questions but that it would not at that date "accept any submissions that dispute any of those previously non-contested issues."

Defendants disregarded these clear instructions and submitted certifications from their expert and the president of Blue Ridge, seeking to establish that all sections of the Series 500 cranes had been removed from the jobsite and, as a consequence, that none had been utilized in connection with the 630 Series cranes. On this second round of motion practice, the trial court would not consider these certifications. Rather, it focused solely on the remaining questions: had Morrow willfully overstated the amount of lien claim, did Morrow have to account for the insurance proceeds it had recovered, and could Morrow seek to recover under its lien without first having proceeded against Blue Ridge. It concluded that Morrow's lien claim should not be reduced by the amount of insurance it had recovered, that certain charges were improperly included in the lien but that their inclusion did not amount to willful overstatement, and that Morrow did not first have to seek satisfaction from Blue Ridge before proceeding against these defendants. Defendants have appealed from the trial court's order.

The primary focus of defendants' appeal is the trial court's refusal to consider the certifications they submitted in an effort to create a material question of fact with respect to the question of a timely filing under the Construction Lien Law, N.J.S.A. 2A:44A-1 to -39. N.J.S.A. 2A:44A-3 provides in pertinent part that "[a]ny contractor, subcontractor, or supplier who provides work, services, material or equipment pursuant to a contract, shall be entitled to a lien for the value of the work or services performed, or materials or equipment furnished in accordance with the contract and based upon the contract price . . . ." N.J.S.A. 2A:44A-6 directs that a lien claim must be filed "not later than 90 days following the date the last work, services, material or equipment was provided for which payment is claimed." If a lien claim is not timely filed, it is forfeited. N.J.S.A. 2A:44A-15(a).

By their late submissions, defendants sought to establish that no portion of the 500 Series cranes remained on the job site after January 2002; this, they contended, demonstrated that defendants' August 2002 filing was untimely with respect to the first two rentals. They ...

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