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Soom Dat Pokhan and Gangawattie Pokhan v. Tyrone Peters

March 18, 2011

SOOM DAT POKHAN AND GANGAWATTIE POKHAN, PLAINTIFFS-APPELLANTS,
v.
TYRONE PETERS, INDIVIDUALLY AND AS OWNER AND OPERATOR OF TYRONE PETERS AND ASSOCIATES, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3538-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 29, 2010

Before Judges Lisa and Sabatino.

This case arises out of a builder's incomplete effort to construct a house on plaintiffs' lot. After the construction stalled, the property-owners sued the builder for damages. The builder defaulted in the litigation, and a proof hearing was conducted. Following the proof hearing, the trial court dismissed the complaint with prejudice because the property-owners had failed to establish the essential terms of an enforceable contract. The property-owners now appeal that dismissal.

For the reasons that follow, we affirm the trial court's determination that the property-owners did not prove the builder's liability for breach of contract. However, we remand for further proceedings so that the trial court may consider more fully (1) whether the property-owners may recover damages under an alternative theory of quantum meruit, and (2) whether a recovery is warranted under the Consumer Fraud Act, even in the absence of an enforceable contract.

I.

These are the pertinent facts contained in the limited record before us. Appellants Soom Dat Pohkan and Gangawattie Pokhan, husband and wife ("plaintiffs" or "the property-owners"), own a house in Morris Plains. Respondent*fn1 Tyrone Peters ("defendant" or the "builder") is in the business of home construction.

In May 2005 the parties each signed what is styled as an "agreement" for defendant to build a separate two-story house next to plaintiffs' existing home. The agreement recites what is denominated as an "estimated" contract price of $315,489. That estimated price was to be paid in seven installments, corresponding to various specified phases of the construction. The job was to be completed in twenty-two weeks.

As it turned out, the construction was delayed, in part because plaintiffs needed to resolve some permitting issues with the township. Plaintiffs paid defendant several installments totaling $288,389, a sum about $26,000 short of the original estimated price.

Defendant stopped construction in April 2006, having only progressed to the fourth of the seven construction phases. He then asked plaintiffs for another $77,000 payment, asserting that his costs had risen due to inflation. Plaintiffs refused to pay the extra amount, and the project came to a halt. The record contains photographs showing that the work essentially did not progress beyond framing.

In July 2006, plaintiffs filed an action in the Law Division against defendant, principally alleging breach of contract. In support of that claim, plaintiffs obtained a price quote from another builder, Mendham Design-Build Contractors, LLC, estimating that the house would cost an additional $168,395.73 to complete. Plaintiffs also allege that defendant violated the Consumer Fraud Act because he misapplied portions of installments of $42,950 paid in February 2006 and $50,161 in March 2006.

Defendant initially was represented by counsel, who filed an answer and a counterclaim against plaintiffs. The counterclaim alleged that plaintiffs are responsible for the incomplete work because they delayed the start of the project and also because they refused to advance funds that were needed by the builder to finance the completion of the construction. At some point, defendant became pro se and he failed to appear at the trial date. This led to a default, which defendant never cured.

Plaintiffs appeared with their counsel before the trial court for a proof hearing in August 2008. They presented no expert testimony at the hearing, other than Mendham's written estimate of the costs of completion. Defendant was present ...


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