OBSERVER PLAZA CONDOMINIUM ASSOCIATION, INC., A New Jersey Not-for-Profit Corporation, Plaintiff-Respondent,
OBSERVER HIGHWAY PLAZA, LLC, JOSEPH SORRENTINO, individually, NEIL SORRENTINO, individually, HERB SYLVESTRE, individually, ESTATE OF ANTHONY NAPOLEON, J-RO PROPERTIES, LLC, SERAFINO REALTY, LLC, and S.T.S. REALTY, LLC, Defendants-Appellants. OBSERVER HIGHWAY PLAZA, LLC, JOSEPH SORRENTINO, individually, NEIL SORRENTINO, individually, HERB SYLVESTRE, individually, ESTATE OF ANTHONY NAPOLEON, J-RO PROPERTIES, LLC, SERAFINO REALTY, LLC, and S.T.S. REALTY, LLC, Plaintiffs-Appellants,
OBSERVER PLAZA CONDOMINIUM ASSOCIATION, INC., A New Jersey Not-for-Profit Corporation, Defendant-Respondent.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 13, 2013
On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket Nos. L-6384-11 and L-276-12.
Buttafuoco, Arce & Price, L.L.C., attorneys for appellants (Nicholas R. Buttafuoco, on the brief).
Griffin Alexander, P.C., attorneys for respondent (Robert C. Griffin, on the brief).
Before Judges Simonelli and Accurso.
These consolidated appeals arise out of litigation relating to construction and development of a condominium project in Hoboken known as Observer Plaza. The project consisted of 79 residential units and 103 parking spaces.
Plaintiff, Observer Plaza Condominium Association, Inc. (plaintiff or the condominium association), sued the developer, Observer Highway Plaza, LLC (the developer), its principal, Anthony Napoleon, represented by his estate (the estate), individual defendants Joseph Sorrentino, Neal Sorrentino and Herb Sylvestre (the individual defendants), who participated in the development of the project and were board members of plaintiff while the units were being sold, and J-Ro Properties, LLC (J-Ro), S.T.S. Realty, LLC (S.T.S.), and Serafino Realty, LLC (Serafino) (collectively the real estate companies), formed by the developer to receive condominiums in lieu of distributions of profits from the sale of condominiums.
Plaintiff alleged that the developer and the individual defendants breached contracts and warranties by negligently constructing the condominium building and failing to provide adequate financial reserves for repairs, and that the real estate companies and the developer had failed to pay maintenance fees or emergency assessments on their condominiums. Defendants contended that plaintiff had violated its bylaws by improperly charging emergency assessments and late fees. After four years of litigation and failed mediation attempts, the parties agreed to go to binding arbitration before arbitrator Rosemarie Ruggiero Williams. That agreement was apparently never reduced to writing. They simply proceeded to arbitration before Williams, and the court dismissed plaintiff's complaint with prejudice. Following the arbitration, Williams issued a two-part award in favor of plaintiff; the first part related to construction defects and the second to unpaid maintenance fees and other charges. Although Williams issued a detailed opinion regarding the construction defects, she refused to disclose her reasoning for the maintenance fee award because defendants had failed to pay her fee. Thereafter, plaintiff filed a complaint to confirm the award and defendants filed a separate action to vacate it.
Judge Velazquez heard both matters and confirmed the award, entering judgment against the developer and the individual defendants for construction defects in the amount of $1, 582, 515.21; the developer for maintenance fees, late charges and attorney fees in the amount of $55, 323.79; the real estate companies for maintenance fees, late charges, and attorney fees in the amount of $308, 828.01; the estate for maintenance fees, late charges, and attorney fees in the amount of $81, 875.84; and the developer, the individual defendants, and the real estate companies for arbitration fees in the amount of $11, 287.50. Defendants filed two appeals, one from the order confirming the arbitration award and the other from the denial of their application to vacate the award. We have consolidated the matters and now affirm both orders.
The essential facts can be briefly summarized. Plaintiff contended that defendants' deviation from the architectural plans had resulted in severe construction defects, including: defective balconies; improperly installed exterior insulated finishing system (EIFS) associated with stucco exteriors; freezing pipes in the garage because of improper insulation; a poorly constructed front entrance; and a leaking roof deck. With respect to the balconies, the parties had stipulated that, according to the plans, an elastomeric coating should have been applied to each balcony, and that the developer had failed to do this. Defendants' expert estimated the repair to cost $79, 000. Plaintiff's expert, however, estimated the repair to cost $2.3 million because he maintained that, in order to do the repair correctly, exterior bricks would have to be removed. During the arbitration, plaintiff agreed to defendants' less-expensive alternative, on condition that defendants acknowledge that the less-expensive solution would not work in every instance. Plaintiff expected a failure rate of twenty percent, meaning that twenty percent of the units would require the more costly repair. Thus, plaintiff requested, and Williams awarded, twenty percent of $2.3 million, or $441, 950 minus the $79, 000 that had already been paid by defendants.
For the EIFS, plaintiff believed that the system had been improperly installed, but defendants' expert opined that the damage was attributable to plaintiff's negligent lack of maintenance of the system. Williams awarded plaintiff $276, 000, because defendants had not followed the plans when they installed the EIFS, but reduced the award by twenty percent to account for plaintiff's negligence in not properly maintaining the system. The pipes that were exposed in the garage had not been insulated with heat tape, in partial violation of the plans. The plans had called for "heat trace [on] all above-ground exposed horizontal piping" and for defendants to "provide all required accessories for complete operations systems." Among the accessories necessary to make the heat trace operational was electrical wiring to energize the heat tape. The arbitrator originally determined to award $59, 700, which was the cost to insulate all the exposed pipes in the garage. According to the plans, however, only the horizontal pipes in the garage were to have heat trace.
Accordingly, the arbitrator requested a new estimate which would include the cost of heat trace for only the horizontal pipes. When the new estimate was submitted, however, it exceeded $59, 700, because the original estimate was then several years old. Williams determined to limit the award to $59, 700 because that was the amount that plaintiff had requested. After Williams issued Part I of her decision, however, plaintiff's counsel notified her that she had made a typographical error, as she had awarded $15, 700 instead of $59, 700 for heat trace. $15, 700 was an amount that had been quoted for partial ...