April 11, 2018
appeal from Superior Court of New Jersey, Law Division,
Hudson County, Docket No. L-0516-11.
W. Mockbee (Mockbee Hall & Drake, PA) of the Mississippi
bar, admitted pro hac vice, and Sandhya M. Feltes, argued the
cause for appellant/cross-respondent (Kaplin Stewart Meloff
Reiter & Stein, PC and David W. Mockbee, attorneys;
Sandhya M. Feltes and David W. Mockbee, of counsel and on the
briefs; Mary Elizabeth Hall (Mockbee Hall & Drake, PA) of
the Mississippi bar, admitted pro hac vice, on the briefs).
Lawrence S. Lustberg argued the cause for
respondent/cross-appellant (Gibbons, PC, attorneys; Keith R.
Hemming, Charles T. Kane and Daniel A. Dorfman, on the
Judges Alvarez, Nugent, and Currier.
breach of contract action arising out of a purchase agreement
between the parties, the trial judge found, after a
Rule 104 hearing, that the testimony of
plaintiff's principal witness was insufficient to sustain
its claim and plaintiff required an expert to establish its
proofs. As a result, the judge dismissed plaintiff's
complaint and, after a bench trial, entered judgment for
defendant on its counterclaim. Because we conclude that the
trial judge erroneously precluded plaintiff's witness
from presenting proofs of its claims and required it to
produce an expert, we reverse and remand for a new trial.
E&H Steel Corporation was the successful bidder for a
proposal to fabricate sixteen types of structural steel items
to be used for equipment in a power station owned and
operated by defendant PSEG Fossil. Plaintiff based its unit
prices on documents and specifications submitted with the bid
package. Following the award of the bid, the parties met to
execute the contract. After the execution of the agreement,
defendant's representatives placed a CD in the contract
binder containing the drawings for the required steel
alleged that the CD contained forty-seven new drawings not
previously provided to the company that differed
significantly from the drawings supplied in the bid package,
upon which the contract price was based. There were also
numerous revisions to the drawings previously priced.
Defendant denied plaintiff's requests for a revision and
re-pricing of the units, and a conformity of the contract to
the new drawings.
plaintiff fabricated the steel according to the new drawings
and submitted change orders for its increased time and labor
needed to construct the steel in conformity with the
drawings. Defendant contended that the contract only
permitted change orders for increased tonnage, and not for
expenses of more time and labor. Accordingly, it issued a
change order increasing the tonnage amount of the contract
but refused additional change order requests.
filed a construction lien and a complaint alleging that
defendant breached the contract when it presented new
drawings which required additional time and labor than that
previously provided for in the bid drawings and purchase
agreement, and failed to approve change order requests
necessitated by the additional drawings. Defendant's
counterclaim also alleged breach of contract, asserting that
the contract only permitted change orders for increased
tonnage, not additional time and labor. The counterclaim also
sought the discharge of the construction lien.
moved for summary judgment, arguing that the complaint was
filed after the expiration of the one-year statute of
limitations period specified under the contract and
requesting the discharge of the construction lien. The motion
was denied on November 18, 2011. A second motion to discharge
the construction lien was denied in a September 4, 2013
judgment was again sought by defendant on several grounds,
including the statute of limitations, and was denied on May
15, 2015. Defendant moved for reconsideration of the denial
of its summary judgment motion and requested a Rule
104 hearing for a determination as to whether expert
testimony was required for plaintiff to establish its claims.
Although plaintiff's principal witness, Scott
Quattlebaum, had answered extensive interrogatories and been
deposed, he had not been designated as an expert.
motion for reconsideration was denied on June 15, 2015.
However, the court agreed to conduct a Rule 104
hearing to determine whether plaintiff required an expert to
establish a prima facie case.
Rule 104 hearing, Quattlebaum, a vice-president of
the company and a licensed professional engineer, testified
that he had worked for the company since 1987 in numerous
roles including as a general laborer, fabrication employee,
and shop employee, "doing the fabrication processes
starting from the very beginning . . . all the way through
the completed project." He worked in the engineering and
detailing department for several years drafting fabrication
or "shop" and erection drawings from engineering or
continued to work for plaintiff as assistant engineering
manager and, later, engineering manager. In that
role, he was in charge of the engineering and detailing
departments. He had offices in two different states,
overseeing thirty-five people who detailed or created shop
and erection drawings, compared the shop and erection
drawings for revisions, and compared the contract drawings to
determine change order requests.
put out a bid inquiry for a Selective Catalytic Reduction
Unit - a component of emission control equipment - to be
installed at its power plant. Quattlebaum explained the
specifications of the proposal, the request for pricing of
sixteen items including seven categories of structural steel,
and the requirements that the bid comply with the included CD
of drawings. He also detailed for the court what certain
terms meant and their importance. He advised that he reviewed
all of the contract drawings and specifications for the
project and created a budget of engineering and detailing.
to the bid documents for the specifications for connections
and bolts, Quattlebaum offered an extensive explanation of
the different factors that he considered in calculating the
bid price for those elements. He noted the importance of
determining what code governed the project because the
particular code standards had to be taken into account in
detailing fabrication and delivery of the steel parts. He
also used drawings and photographs to supplement and support
discussing the events surrounding the signing of the
contract, Quattlebaum stated that upon opening the CD
provided to his team as they left the signing, he discovered
there were forty-seven new drawings not previously provided
to his company that differed significantly from the drawings
supplied in the bid package, upon which the contract price
was based. There were also numerous revisions to the drawings
previously priced. He noted particularly the change in
connection details. Whereas the original drawings showed
connections to be 10% of the overall weight of the unit, the
new drawings increased the connections to 34% of the total
weight for the same length of beam. He described this as
"a dramatic increase in the quantity of connection
material, which is the most expensive commodity on this
piece." He added that as more connections are added to
each foot of steel beam, "the higher the man hour per
foot it costs" to produce that beam.
compared to the original set of drawings, Quattlebaum stated
that the steel members shown in the new drawings were
"very large and very heavy, requiring the use
of more and larger bolts and cranes to lift the pieces."
This required the revision and re-pricing of the units and
unit prices in the contract.
example, Quattlebaum showed the court photographs of the
connection plate that the bid drawings and specifications
required, and the connection plate that plaintiff eventually
fabricated and shipped to the site. In the photographs, the
templates are placed on either side of a man, demonstrating
the significant difference in the size of the two
connections. Numerous other photographs and drawings were
used to show the difference between the size of pieces
specified in the bid and the much larger "as built[,
]" or fabricated pieces constructed pursuant to the
additional CD drawings.
also explained how the change in drawings affected the
fabrication process and pricing scheme. For instance, the
original size of the pieces specified in the bid were small
enough to fit into plaintiff's automated equipment, but
some of the "as built" pieces were too large to do
that. They "ha[d] to be hand cut with a torch." In
addition, plaintiff's machinery was equipped to punch the
seven-eighths inch holes shown on the inquiry specifications,
but when the sizing was increased to 72 one-and-a-quarter
inch holes on the connections ...