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Marone Contractors, Inc v. Phillip O. Colvin

July 14, 2011


On appeal from the Superior Court of New Jersey, Law Division, Cumberland County, Docket No. L-389-09.

Per curiam.


Submitted May 18, 2011

Before Judges Cuff and Simonelli.

Plaintiff Marone Contractors, Inc., a concrete contractor, sought to enforce construction liens against properties owned by defendants Phillip and Donna Colvin (the Colvins) and Dean and Lynn Swift (the Swifts)*fn1 pursuant to the New Jersey Construction Lien Law (CLL), N.J.S.A. 2A:44A-1 to -38. Plaintiff appeals from the grant of summary judgment to defendants based on the one-year statute of limitations established by N.J.S.A. 2A:44A-14a(1), and a general release plaintiff gave in a bankruptcy matter where defendants had been joined as third-party defendants. The Colvins cross-appeal from the denial of their motion for attorneys' fees and costs. We affirm the grant of summary judgment to defendants, reverse the denial of attorney's fees and costs, and remand for consideration of the amount of attorneys' fees and costs to award to the Colvins' counsel.

In March 2006, plaintiff entered into a residential construction contract with Elliot Building Group, Ltd. (Elliot), a developer, for concrete work on two properties owned by Forest Walk Associates, L.L.C. (Forest Walk). Plaintiff completed the work on October 26, 2006. Forest Walk and Elliot defaulted on payment.

On December 20, 2006, the Swifts purchased one of the properties from Forest Walk, but did not record their deed until February 5, 2007. In the meantime, on December 22, 2006, plaintiff filed notices of unpaid balance (NUBs) in the Cumberland County clerk's office against Forest Walk, care of Elliott, for both properties pursuant to N.J.S.A. 2A:44A-20. On December 28, 2006, the Colvins purchased the other property.*fn2

Plaintiff sought $26,589.28 against the Colvins' property and $23,526.28 against the Swifts' property.

On January 23, 2007, plaintiff filed a construction lien claim against both properties in the aforesaid amounts pursuant to N.J.S.A. 2A:44A-8 and -21b(8), and served them on Forest Walk, care of Elliot. On February 20, 2007, plaintiff filed a complaint against Forest Walk and Elliot but did not join the Colvins or the Swifts, who owned the properties at the time.

That matter was settled by way of a stipulation in lieu of judgment entered on April 4, 2007, which required Forest Walk and Elliot to make certain payments, among other things. After Forest Walk and Elliot defaulted, plaintiff obtained a judgment against them in May 2007.

On June 10, 2007, Forest Walk and Elliot jointly filed a Chapter 11*fn3 petition for bankruptcy in the United States Bankruptcy Court for the District of New Jersey. On August 31, 2007, they filed an adversary complaint against plaintiff to determine the extent, validity, and priority of its construction liens against the properties. On October 5, 2007, plaintiff filed an answer, crossclaims and a third-party complaint against Forest Walk, Elliott, the Colvins and the Swifts. In the third-party complaint, plaintiff alleged that Forest Walk transferred title to the properties to the third-party defendants with knowledge of plaintiff's lien claims, and the Colvins and the Swifts acquired title from Forest Walk on December 28, 2006, and December 20, 2006, respectively.

The bankruptcy action was eventually settled. The settlement agreement contained a general release by plaintiff in favor of Forest Walk and Elliot, which discharged all claims against Forest Walk and Elliot, including, but not limited to, . . . proofs of claim filed in the Debtors' . . . bankruptcy cases, the Crossclaims, demands, actions, causes of action, complaints, suits, debts, dues, sums of money, contracts, agreements, damages and judgments of any kind or nature whatsoever, whether in law or equity, they may have had, may now have, or may hereafter have, known or unknown, from the beginning of time to and including the date of the Settlement Agreement.

The bankruptcy court approved the settlement agreement on September 17, 2008. Based on the release, the Colvins' counsel demanded that plaintiff discharge the lien claim on their property. Instead, plaintiff filed a motion to amend the settlement agreement to preserve its claims against Forest Walk and Elliot. On April 15, 2009, the bankruptcy court denied plaintiff's motion and dismissed plaintiff's third-party complaint for lack of continued subject matter jurisdiction without prejudice to plaintiff's right to file an action in the Superior Court.

On April 28, 2009, plaintiff filed a complaint against the Colvins and the Swifts seeking to satisfy the liens. The Colvins and the Swifts filed summary judgment motions to dismiss the complaint and ...

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