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Adamsville Maintenance, Inc v. Watchung Crest

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


January 22, 2013

ADAMSVILLE MAINTENANCE, INC., PLAINTIFF-RESPONDENT,
v.
WATCHUNG CREST, LLC, DEFENDANT/THIRD PARTY PLAINTIFF-APPELLANT,
v.
RAYMOND A. GRIMES, ESQ. AND RAYMOND A. GRIMES, P.C., THIRD-PARTY DEFENDANTS-RESPONDENTS.

On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-170-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 13, 2012

Before Judges Messano, Espinosa and Kennedy.

Defendant/third-party plaintiff Watchung Crest, LLC (Watchung Crest or defendant) appeals*fn1 from a judgment entered against it and the dismissal of its third-party complaint against Raymond A. Grimes, Esq. and Raymond A. Grimes, P.C. (collectively, Grimes). This case arises from a construction dispute between plaintiff, Adamsville Maintenance, Inc. (Adamsville or plaintiff) and defendant regarding work that Adamsville performed for defendant in two phases, from 1999-2000 (Phase I) and in 2004 (Phase II). Following a non-jury trial, the court determined that Adamsville was entitled to payment of the outstanding balance for its services and that Watchung Crest was entitled to certain credits, resulting in a judgment in plaintiff's favor for $1714.30.

Defendant advances several arguments on appeal:

POINT I

THE TRIAL COURT ERRED BY NOT FINDING THAT THE FAILURE BY ADAMSVILLE TO PRODUCE THE COMPLETE PHASE I AGREEMENT CONSTITUTED A "SPOLIATION OF EVIDENCE" RESULTING IN AN ADVERSE INFERENCE THAT THE COMPLETE CONTRACT CONTAINED PROVISIONS THAT REQUIRED, AMONG

OTHER THINGS, WRITTEN CHANGE ORDERS[.]

POINT II

THE TRIAL COURT IMPROPERLY FOUND THAT RICHARD SCAGLIOTTA WAS AN EXPERT IN THE "SUBDIVISION AND SITE IMPROVEMENT BUSINESS."

POINT III

THE TRIAL COURT ERRED BY FINDING AN ENFORCEABLE CONTRACT BETWEEN THE PARTIES WITH RESPECT TO PHASE

II.

A. THE TRIAL COURT ERRED BY FINDING AN ENFORCEABLE CONTRACT FOR THE ADDITIONAL WORK PERFORMED DURING PHASE II BECAUSE THERE WAS NO MEETING OF THE MINDS WITH REGARD TO TERMS ESSENTIAL TO SUCH A CONTRACT[.]

B. THE TRIAL COURT ERRED BY NOT FINDING THAT ADAMSVILLE'S CLAIMS COULD ONLY BE BASED ON THE DOCTRINE OF QUANTUM MERUIT.

C. THE TRIAL COURT ERRED BY AWARDING ADAMSVILLE DAMAGES FOR THE TIME AND MATERIAL WORK ALLEGEDLY PERFORMED DURING PHASE II, EVEN THOUGH ADAMSVILLE DID NOT PROVE THE REASONABLE VALUE OF SUCH TIME AND MATERIAL WORK.

D. ALTERNATIVELY, EVEN IF THE TRIAL COURT DID NOT ERR BY FINDING THAT AN ENFORCEABLE CONTRACT EXISTED BETWEEN THE PARTIES WITH RESPECT TO PHASE II, THE TRIAL COURT ERRED BY NOT FINDING THAT THE COURSE OF DEALING BETWEEN THE PARTIES WAS THAT, FOR CHANGE ORDERS TO BE VALID, THEY EITHER NEEDED TO BE IN A PRIOR WRITING OR IN A WRITTEN CONFIRMATION DETAILING THE WORK AND COST, AND BY AWARDING ADAMSVILLE DAMAGES FOR SUCH WORK IN THE ABSENCE OF WRITTEN CHANGE ORDERS.

POINT IV

THE TRIAL COURT ERRED BY RELYING SOLELY ON THE CONCLUSORY STATEMENTS IN ADAMSVILLE'S POST-TRIAL SUBMISSION REGARDING THE AMOUNT OF ITS ALLEGED DAMAGES INSTEAD OF ISSUING FACTUAL FINDINGS REGARDING THE AMOUNT OWED ADAMSVILLE.

POINT V

THE TRIAL COURT ERRED BY NOT FINDING THAT ADAMSVILLE OVERCHARGED, AND WATCHUNG CREST OVERPAID, FOR THE WORK PERFORMED BY ADAMSVILLE.

POINT VI

THE TRIAL COURT ERRED BY FINDING THAT ADAMSVILLE AND GRIMES WERE PROTECTED BY AN ABSOLUTE DEFAMATION PRIVILEGE IN FILING AN ILLEGAL LIS PENDENS, PRECLUDING WATCHUNG CREST FROM RECOVERING DAMAGES UNDER THE DOCTRINE OF SLANDER OF TITLE.

POINT VII

THE TRIAL COURT ERRED BY FINDING THAT GRIMES DID NOT ACT WITH MALICE IN FILING THE ILLEGAL LIS PENDENS.

After reviewing these arguments in light of the applicable legal principles and the record, we are satisfied that defendant's arguments lack sufficient merit to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), and affirm substantially for the reasons set forth in the written opinion of Judge Thomas C. Miller.

Our scope of review in this case is limited. The factual findings of a judge in a non-jury case "are considered binding on appeal when supported by adequate, substantial and credible evidence." Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974). Therefore, we will not disturb the trial judge's factual findings "unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice[.]" Id. at 484. Because there is substantial evidence to support Judge Miller's factual findings, they are entitled to our deference.

In his opinion, Judge Miller set forth a detailed history of the facts pertaining to this construction dispute, which need not be repeated here. We summarize only the salient facts that are relevant to the issues on appeal.

Watchung Crest owned a parcel of land that it sought to develop into a residential subdivision. In November 1999, Adamsville submitted a proposal to do site improvement work for Watchung Crest. After the initial proposal was rejected, plaintiff submitted a revised proposal to perform "Phase I" improvements for a lump sum contract price of $287,051. This work related to the creation of roadways, the installation of sewer lines and other utilities, storm drainage, excavation, grading, and soil erosion control. However, after Phase I was started, significant changes to the scope of work were required, which plaintiff's principal, Richard Scagliotta, attributed to inaccuracies in the plans, additional requirements imposed by the Borough, and modifications requested by Ehrenworth, Watchung Crest's manager.

The documentation regarding this contract, and indeed, the ongoing dealings between the parties, is poor. As Judge Miller noted, "[t]he record is clearly incomplete regarding all of the writings between the parties[,]" and "[p]laintiff's record keeping can be described as sloppy at best." Nevertheless, "by piecing together the oral agreements, written memorializations of estimates, confirmations and memorandums provided in [the exhibits,]" Judge Miller concluded that the parties agreed that all additional work was to be performed on a time and material (T&M) basis.

The work for Phase I was performed in 1999-2000. Plaintiff billed defendant $469,599 for the Phase I improvements, which included the original contract price of $287,051 plus $182,548 for the additional work provided on a T&M basis. Ehrenworth testified that he never questioned any of the Phase I work invoices and paid them promptly.

The "Phase II" work was performed several years later. In December 2003, defendant asked plaintiff to complete paving of the roadways at the project. The work was performed in January 2004 for the agreed upon price of $50,800. Aside from "punch list" items, it was agreed that this work was performed satisfactorily.

In May 2004, the parties agreed that defendant would perform additional work for the sum of $14,225, as memorialized in a "proposal/contract." However, once again, there were many changes and additions and, once again, deficiencies in the documentation made it difficult for the parties and the court to reconstruct the scope and performance of the work undertaken. Judge Miller observed that "the custom and practice of both parties with regard[] to the Phase II work was that it proceeded between the parties on a very informal, verbal basis." Plaintiff invoiced defendant for the Phase II work periodically. The charges totaled $296,894.68. Defendant paid the invoices promptly, without any significant complaints, for most of the Phase II work.

Plaintiff filed a complaint against Watchung Crest in January 2008, seeking $48,765 for unpaid services performed during the period from 2004 to 2007. On April 8, 2008, Grimes filed a lis pendens against the property then owned by Watchung Crest on behalf of plaintiff. As a result, a scheduled closing for the sale of the property was delayed and Watchung Crest had to deposit $100,000 into escrow until July 25, 2008, when the lis pendens was discharged.

Defendant filed an answer, counterclaim, and third-party complaint against Grimes, alleging, inter alia, intentional interference with contractual relations and slander of title. Watchung Crest asserted that it suffered damages in the amount of $6391.94 as a result of the allegedly improper filing of the lis pendens. As to plaintiff's claim against it, Watchung Crest alleged that the fair and reasonable price for the work done on Phases I and II was $381,655.15 and that, in light of its payment of $726,293.86, it had overpaid for the work by $344,638.71. Watchung Crest also contended that it was entitled to additional credits of $59,898.31.

Judge Miller determined that, for both the Phase I and Phase II portions of the project, enforceable contracts existed between the parties for plaintiff to perform work on a T&M basis. Citing established principles of contract law, Judge Miller found that the parties had demonstrated their intent to be bound by those terms through "a course of conduct . . . that clearly corroborated that a contract existed between them." See Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435-36 (1992); W. Caldwell v. Caldwell, 26 N.J. 9, 24-25 (1958). As to Phase I, Judge Miller stated:

The actions of the parties clearly support that finding. The T&M work was necessitated by various circumstances including inaccuracies in the plans, municipal requirements and owners' requests for changes. The Plaintiff performed the additional work as evidenced by various documents. . . . The documents and the testimony support the fact that the additional work was performed by agreement on a T&M basis. The terms of the agreement and the authority to proceed is also corroborated by the evidence. Perhaps even the most important corroboration was the fact that the work was billed for and paid, promptly, without complaint. The court finds that the evidence supports the fact that the T&M work for Phase I was performed pursuant to an offer and acceptance. The parties agreed upon the essential terms which were sufficiently definite so that the parties clearly understood them and they manifested clear and definite intention to be bound by those terms.

Judge Miller observed that the documentary evidence regarding Phase II work was less extensive but reached the same conclusion:

The T&M work for the second phase was necessitated by circumstances that are similar to the reasons for the Phase I additional work. Again, the vagueness and inaccuracies of the plans, changes and suggestions from Borough Officials and changes authorized and needed by the Defendant to complete the project and/or to add value to its development were the reasons and motivation for requiring the T&M additional work.

The evidence supports the fact that the additional work was authorized to be done by the Defendant. The testimony of the independent witnesses, including the Defendant's agent, DiOrio, corroborates the grant of authority for Plaintiff to proceed with the work. The Plaintiff performed the additional work upon request of the Defendant and LE. The work was authorized and directed on an oral and informal basis. For the large part, the work was performed with no complaint. The work added significant value to Defendant's investment. It was billed by the Plaintiff and promptly paid for by the Defendant. The Defendant cannot point to any writings that it created during that time that indicate any complaints, issues or any indication that the parties had not made an offer, an acceptance, and that each had agreed upon essential and sufficiently definite terms.

The evidence supports the fact that the parties had a binding contract for Plaintiff to perform various work on a T&M basis including excavating and grading, the construction of a boulder wall, the construction of large berms and other miscellaneous work performed by Plaintiff based on regular, informal and oral authorizations from Defendant.

Defendant contended that it was entitled to certain credits pertaining to the Phase II work. Judge Miller correctly noted that defendant carried the burden of proving by a preponderance of the evidence its entitlement to a credit and also quantifying the amount of the credit due. The judge concluded that defendant failed to satisfy this burden as to credits claimed for "machine down time," improper backfilling of the basement of the foundation, and the improper installation of a fire hydrant. However, Judge Miller found that defendant had satisfied its burden of proving the existence and amounts of other credits it claimed.

A significant issue that arose during Phase I concerned whether plaintiff had "over cleared" a sewer easement that ran over Watchung Crest's property. Although the easement was only twenty-feet wide, plaintiff cleared "a swath of land that was at some point at least 70 feet in width[.]" There were complaints from affected private residents as well as the Borough Engineer, who required defendant to post an additional $8400 in escrow to secure the restoration work that was required. Defendant submitted the invoice of Hesperides, a landscape company, showing that the cost of designing and installing the improvements required by the Borough was $19,962. Judge Miller found that the evidence "overwhelmingly" supported defendant's claim that the easement was overcleared and that the Hesperides estimate was the best evidence of the damages incurred by defendant. Accordingly, the judge awarded defendant a credit of $19,962.

Defendant also claimed a credit for defective or incomplete work set forth in deficiency reports from the Borough Engineer, dated October 31, 2005, August 24, October 22, and November 13, 2007. Because these issues were not raised until five years after the completion of Phase I improvements, plaintiff had invoiced and been paid for all the work with the exception of the $8400 escrow. Defendant presented a deficiency list to plaintiff and, by letter dated October 18, 2006, plaintiff admitted responsibility for a portion of the list and asked defendant to "get a quote on what is mine, so I can determine [what there is] for me to do, or to have you pay and take off the $48,765.02 owed plus the Watch Crest $8,400."*fn2

Defendant hired Sun Valley Landscape, Inc. to perform remediation of the deficiencies, at a cost of $26,224.31. The court acknowledged plaintiff's admission of responsibility for "most of the cure work," and found that defendant satisfied its burden to show what portion of the bill was plaintiff's responsibility. Clark Cheshire, the principal of Sun Valley, was unable to provide specific testimony on this point due to health problems. However, Judge Miller heard and accepted as credible the testimony of counsel for defendant regarding her conversation with Cheshire about this allocation. In response, Cheshire sent a letter and a stack of invoices for the work that highlighted the charges attributable to the repairs necessary to correct plaintiff's work. The highlighted portions of the bills amounted to $24,308.70, which the court credited to defendant.

Defendant also hired Oswald Enterprises to perform a mandrel test at the site, at a cost of $1712, which apparently was necessary before the Borough would accept the sewer line. Judge Miller rejected defendant's claim for a credit for this amount:

Without proof as to the responsibility for the item, the Court does not find that it should simply attribute it to the Plaintiff.

In fact, usually the costs of permits, tests and inspections would be borne by the developer. Since no proof was presented on that issue, the Court finds that the Mandrel Test should be a cost and expense attributed to the Defendant.

Accordingly, Judge Miller concluded that plaintiff was entitled to the outstanding balance of $45,985 and defendant was entitled to a credit of $44,270.70, resulting in a judgment in plaintiff's favor of $1714.30.

Judge Miller also dismissed defendant's claims against Grimes. The court correctly dismissed defendant's claim for slander of title, based upon the filing of the lis pendens, as barred by the litigation privilege. See Wendy's of S. Jersey, Inc. v. Blanchard Mgmt. Corp. of N.J., 170 N.J. Super. 491, 494-95 (Ch. Div. 1979). The court also dismissed defendant's claim for intentional interference with contractual relations, finding that Grimes's conduct in filing the lis pendens was "negligent and not intentional or with malice[,]" and therefore insufficient to establish that cause of action.

In sum, Judge Miller navigated the competing claims of the parties under difficult circumstances. The claims dated back to 1999 and included contentions regarding work that had long been completed and paid for. There were deficiencies in the documentary evidence presented by both sides. Nonetheless, the trial court made findings of fact based upon the testimony, its credibility determinations, and the available documentary evidence. We are satisfied that those findings are amply supported by the record. Further, Judge Miller applied established principles of contract law to conclude that the parties had enforceable contracts regarding the work done by plaintiff and that defendant was entitled to certain credits. We discern no reason to disturb those conclusions. As to the dismissal of the claims against Grimes, Judge Miller again relied upon a determination of the facts and credibility of Grimes that was supported by the evidence, and reached conclusions that were supported by legal authority.

Affirmed.


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