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First American Title Insurance Company v. Semester Consultants

March 29, 2012

FIRST AMERICAN TITLE INSURANCE COMPANY, PLAINTIFF-APPELLANT,
v.
SEMESTER CONSULTANTS, INC., A NEW JERSEY CORPORATION, AND THOMAS J. OLENIK, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-9836-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 14, 2012

Before Judges Graves, J.N. Harris and Haas.

Plaintiff First American Title Insurance Company appeals from an order granting summary judgment and dismissing its claims against defendant Thomas Olenik for negligence, fraud, unjust enrichment, and breach of implied covenant of good faith and fair dealing. Plaintiff also appeals from the trial court's denial of its own motion for summary judgment against Olenik and, on some counts of its complaint, against defendant Semester Consultants, Inc. ("Semester").

On appeal, plaintiff argues that the trial court incorrectly determined that Olenik, a licensed professional engineer, could not be held individually liable for his negligence in the preparation of site plans for, and surveys of, property it owned in Jackson, New Jersey. It also asserts that the court erred in finding that neither defendant had engaged in fraud. We reverse the trial court's order granting summary judgment to Olenik on plaintiff's claim of negligence and remand for proceedings in conformity with this opinion. In all other respects, the trial court's orders are affirmed.

There is no dispute as to the material facts. Plaintiff's property is primarily comprised of wetlands and related buffer areas. Plaintiff decided to apply for a permit from the New Jersey Department of Environmental Protection ("DEP") that would enable it to sell the property for the construction of a single-family home. As part of this process, plaintiff entered into a contract with Semester, a New Jersey corporation that was engaged in the business of providing professional engineering and land surveying services. Olenik is Semester's president and sole owner.

On September 8, 2003, plaintiff and Olenik signed a "Contract for Engineering Services." Semester agreed to prepare a boundary survey, a topographic survey, and a site plan. It also agreed to prepare an analysis of freshwater wetlands on the property and to apply for a DEP Letter of Interpretation ("LOI") Application as part of the permit process. Plaintiff paid Semester $28,500 for its work.

On September 1, 2004, defendants provided plaintiff with a "LOI Plan." Olenik had "designed, drawn, and checked" this plan, which was submitted to the DEP. Upon review, the DEP advised plaintiff that the property would have to have a buffer zone three times larger than that proposed in the plan prepared by defendants. In response, defendants suggested that plaintiff file a different type of permit application, even though they predicted that this application would not be approved.

Plaintiff ultimately decided to retain a new consulting firm to assist it with the DEP permit process. Several years later, it asked defendants to give it the surveys and site plan that they had been retained to prepare under the contract. Instead, in 2008, defendants turned over a "Concept Plan." This plan had been "designed, drawn and checked" by Olenik in 2004. Defendants' LOI Plan and their Concept Plan contained a number of significant survey errors that prevented them from being used as part of plaintiff's ongoing permit application. For example, the surveys did not show a twenty-foot easement and they did not reveal the existence of a "gore area" along the northern boundary of the property. The property boundary lines were also inaccurately drawn.

When defendants refused to return the monies plaintiff had paid under the contract, it filed a complaint in the Law Division. Plaintiff alleged a breach of contract by Semester. Olenik was not named in this count of the complaint. In the remaining counts, plaintiff alleged negligence, fraud, unjust enrichment, and breach of implied covenant of good faith and fair dealing against both Semester and Olenik.

Plaintiff filed a motion for summary judgment. Semester opposed the motion. Olenik filed a cross-motion for summary judgment on the personal liability claims against him. In an oral opinion, the court granted plaintiff's breach of contract claim against Semester, finding that Semester had not provided all of the items required by the contract. The court found that the amount of damages would be determined at a later date.

On the negligence claim, the court found that defendants also failed to include information as to the easement and the boundaries of the property, and the Court finds that that constituted negligence and the failure to do that was unreasonable under the circumstances.

The property's boundaries were not indicated in the LOI or the concept plan and the Court finds, therefore, that . . . that does constitute negligence as a matter of law and that the defendants are liable to the plaintiff for any damages that arise from that ...


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