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Estok Corp. v. O.A. Peterson Construction Co.

November 10, 2010

ESTOK CORP., T/A MIDDLESEX TRENCHING CO., PLAINTIFF-APPELLANT,
v.
O.A. PETERSON CONSTRUCTION CO., DEFENDANT-RESPONDENT, AND SOLARIS HEALTH SYSTEM, INC., DEFENDANT.



On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-0797-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 18, 2010

Before Judges Grall, C.L. Miniman and LeWinn.

This appeal follows a bench trial on a complaint filed by plaintiff Estok Corp., t/a Middlesex Trenching Co. (Middlesex), and a counterclaim filed by defendant O.A. Peterson Construction Co. (Peterson). Peterson, the general contractor on a project to demolish and rebuild a nursing school for Solaris Health System, Inc.,*fn1 retained Middlesex as the subcontractor responsible for site work that included grading and installation of walkways, curbing and a parking lot. Middlesex commenced this litigation and left the job before completing the work. Peterson thereafter retained a second subcontractor to complete the work.

Middlesex initially alleged that Peterson breached the parties' contract by failing to pay for additional work. Peterson asserted that Middlesex breached by improperly performing some of its work and failing to complete the job. In defense to Peterson's claim of breach, Middlesex asserted that its failure to perform was excused by Peterson's interference.

After a trial on the competing claims, the judge dismissed Middlesex's complaint with prejudice; rejected Middlesex's defense of excuse; awarded Peterson $232,826 in damages to cover the amount Peterson paid to have the unfinished work completed and Middlesex's non-conforming work fixed; deducted $173,922.30 that Peterson would have owed Middlesex if it completed the job; and entered a $60,894 judgment in favor of Peterson. Middlesex appeals.

Judge Brock provided detailed factual findings and stated her legal conclusions in a written opinion issued with the judgment on July 21, 2009. The judgment is supported by substantial credible evidence in the record, and, for that reason, we affirm. R. 2:11-3(e)(1)(A).

We provide a brief discussion of the issues raised on appeal. Middlesex contends:

I. THE COUNTERCLAIM AWARD TO DEFENDANT BASED UPON PLAINTIFF'S ALLEGED BREACH OF CONTRACT SHOULD BE REVERSED DUE TO THE LEGAL DOCTRINE OF EXCUSE.

II. UNDER THE DOCTRINE OF ESTOPPEL, DEFENDANT IS PRECLUDED FROM REFUSING PAYMENT FOR UPGRADES TO [THE] STAMPED CONCRETE WALKWAY [THAT MIDDLESEX INSTALLED BEFORE LEAVING THE JOB].

Our discussion of the facts is limited to those pertinent to the issues raised. Middlesex's claim of excuse is based on a disagreement about the adequacy of the compacting of the subsurface over which Middlesex was to lay pavement for the final parking lot. The dispute was between the principals of these companies, William Gulya, the president of Middlesex, and John C. Peterson, the owner of Peterson. Middlesex did its work in stages, and when Gulya returned to pave the final parking lot, he thought the grade elevation in the area was higher than he had left it. He suspected that the contractor responsible for compacting the subsurface had not followed the contract's specifications.

The vice president in charge of Solaris's facilities had observed the compacting. He was satisfied with the method used and the result obtained. Accordingly, Solaris did not require Peterson to test or have the subcontractor test for compliance with the specified compaction rate.

There was conflicting testimony about Gulya's allegation that the elevation of the grade in the parking lot had changed since he was last on site. Peterson admitted that there was a small area that Middlesex had graded during an earlier phase of the project, but he contended that no one else had done anything to change the grade in that location. In his view, Middlesex was obligated to rectify the condition it created. Gulya produced a report on the ...


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