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Rational Contracting Inc., D/B/A Rational Roofing v. Congregation Agudath Israel of

July 10, 2012

RATIONAL CONTRACTING INC., D/B/A RATIONAL ROOFING, PLAINTIFF-APPELLANT,
v.
CONGREGATION AGUDATH ISRAEL OF WEST ESSEX, NEW JERSEY CORPORATION; TRANE US, INC., F/K/A TRANE, A DIVISION OF AMERICAN STANDARD, INC.; LAKELAND BANK, NEW JERSEY BANKING CORPORATION; ANDREW E. HALL & SON, INC., T.G. ELLIOT, INC., DEFENDANTS, AND FRANKOSKI CONSTRUCTION COMPANY, NEW JERSEY CORPORATION, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-9636-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted May 8, 2012 -

Before Judges Reisner and Simonelli.

Plaintiff Rational Contracting Inc. appeals from the June 10, 2011 judgment entered in favor of defendant Frankoski Construction Company, reflecting the jury's award of $84,490 for compensatory damages on defendant's counterclaim, and the trial judge's award of $9,357.55 for prejudgment interest. We affirm that part of the judgment awarding compensatory damages, and reverse and remand with respect to the prejudgment interest award.

Defendant, a general contractor, entered into a contract with Congregation Agudath Israel of West Essex to construct a synagogue in Caldwell. Defendant then entered into a contract with plaintiff to install exterior panels and a roof for a contract price of $454,250.*fn1 A dispute later arose between the parties, resulting in plaintiff filing a construction lien for the balance allegedly due under the contract. Plaintiff also filed a complaint to foreclose the lien, alleging that it had performed all the work required under the contract and was owed $154,347.

Defendant filed a counterclaim, alleging that plaintiff failed to perform the work within the terms of the contract, and that defendant had to retain another roofing company to "complete and correct the shoddy work performed by [p]laintiff, [and] to complete the work not performed by plaintiff" at a cost over and above the contract price. Defendant retained Northeast Roof Maintenance Associates (NRM) at an additional cost of $275,000 to correct plaintiff's allegedly defective work and complete the work plaintiff allegedly failed to complete.

Plaintiff moved in limine to bar the testimony and report of defendant's liability and damages expert, Andrew Hooey, who is NRM's president and co-owner. Plaintiff argued that Hooey rendered an inadmissible net opinion. The trial judge denied the motion, finding that Hooey was both a fact and expert witness because his company had completed the work, he had the training and experience to qualify as an expert, and there was a sufficient factual basis to support his opinion.

At trial, Hooey testified about his training, education, and experience in the roofing business, the nature of NRM's business, and how plaintiff's work was defective and did not conform with the contract's roofing specifications. Hooey also testified about the nature and amount of uncompleted work and the "corrective" work that was required to remedy plaintiff's defective work.

Regarding damages, Hooey testified that NRM charged defendant $275,000, which was "reasonable and necessary" to perform the remaining roof work and remedy plaintiff's defective work. He testified about the number of hours, dates of work, material used, and other particulars of the work NRM performed. He also testified that he determined what to charge defendant by adding the cost of labor and materials plus an overhead charge of twenty percent, plus a profit charge of an additional twenty-five percent. He calculated the labor charge by averaging the hourly rate for NRM's employees who are paid between $10 per hour and $40 per hour, which was consistent with what other roofing companies in the area paid their employees, and then adding a charge for payroll taxes, workers' compensation insurance premiums, and general liability insurance premiums. He concluded that the $50 per hour labor rate was reasonable.

On cross-examination, plaintiff's counsel challenged Hooey on the veracity of his labor and material charges. Hooey acknowledged that the charges he cited were "based on [his] own internal costs" and "not based on any study of the market."

Upon completion of Hooey's testimony, the judge noted that although Hooey was qualified as an expert, defense counsel never presented Hooey as an expert witness to the jury, and Hooey offered no expert testimony. The judge, thus, declared that "[s]o far as I'm concerned there is no expert testimony that has been provided in this case[,]" and determined to treat Hooey's testimony as fact testimony. As a result, the judge gave no instructions to the jury on how to treat expert testimony.

The jury entered a no cause of action verdict on plaintiff's claims against defendant, and awarded defendant $84,490 in compensatory damages on the counterclaim. On June 10, 2011, the judge entered an order for judgment reflecting the jury's verdict. Without explanation, the ...


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