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Fabcon East, L.L.C v. the Stegla Group

February 25, 2011

FABCON EAST, L.L.C., PLAINTIFF,
v.
THE STEGLA GROUP, INC., DEFENDANT.



The opinion of the court was delivered by: Debevoise, Senior District Judge

NOT FOR PUBLICATION

OPINION

Appearances by:

This case arises out of a dispute between a subcontractor, Fabcon East, L.L.C. ("Fabcon"), and a general contractor, The Stegla Group ("Stegla"), regarding unpaid invoices. Plaintiff Fabcon alleges that Defendant Stegla owes it $136,903.70 for work completed in connection with three movie theater construction projects. Defendant argues that the contracts at issue prohibit the parties from filing to enforce the contracts more than one year after work is complete and that Plaintiff's action is thereby untimely. Presently before the court is Defendant's Motion for Summary Judgment.

For the reasons set forth below, Defendant's Motion is DENIED.

I.BACKGROUND

The basic facts of this case are relatively straightforward. Plaintiff Fabcon is a Pennsylvania-based corporation that provides design and construction services on commercial projects. (Complaint ¶ 1). Defendant Stegla is a New York corporation that regularly engages in construction work in New Jersey. Id. at ¶ 2.

In 2005 and 2006, the parties entered into three contracts pursuant to which Fabcon would provide subcontractor services for Stegla. The first contract was signed on August 2, 2005 and required that Fabcon furnish and erect insulated wall panels at a Loews theater in Danbury, Connecticut (the "Danbury" project). Id. at ¶ 4. The second contract was signed October 3, 2005 and required that Fabcon furnish and install precast concrete wall panels at a Loews theater in Rockaway, New Jersey (the "Rockaway" project). Id. at ¶ 7.The third contract was signed on August 29, 2006 and required that Fabcon furnish, install, and caulk insulated sandwich panels at an AMC theatre in Linden, New Jersey (the "Linden" project). Id. at ¶ 10.

Under the terms of the three contracts, Stegla agreed to pay Fabcon a total of $1,584,197. Id. at ¶ 14. However Plaintiff contends that its final invoices issued in connection with each project were never paid, and that it is still owed an outstanding balance of $136,903.70. Id. at¶ 17. Stegla boldly admits that it "does not dispute substantially the amount that Fabcon claims is due for its Work on these projects." (Def. Br. 6). Stegla instead argues that the debt is time barred and uncollectable under the contracts. Id.

Each contract contains a section titled "CHOICE OF LAW, VENUE AND LIMITATIONS PERIOD." This section of the Rockaway and Linden contracts states, in pertinent part:

The internal laws of the State of New Jersey, without regard to its choice of law provisions, shall govern the performance and interpretation of the terms and conditions of this agreement.All actions and proceedings by [Fabcon] against Stegla must be commenced by the [Fabcon] within one year from the final completion of the Work.

Similarly, the Danbury contract provides that:

The internal laws of the State of Connecticut, without regard to its choice of law provisions shall govern the performance and interpretation of the terms and conditions of this agreement. All actions and proceedings by [Fabcon] against Stegla must be commenced by [Fabcon] within one year from the final completion of the Work.

Plaintiff brought this action on July 14, 2010 in New Jersey Superior Court, Morris County, seeking damages for breach of contract. (Doc. No. 1). On August 31, 2010, Defendant removed to Federal Court pursuant to 28 U.S.C. ยงยง 1332, 1441, and 1446. Id. Defendant now moves for summary judgment, asking this Court to dismiss ...


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