Court Opinion

ID: 9907414
Source: CourtListenerOpinion
Date Created: 2023-12-06 15:06:11.693961+00
Date Added: 2024-06-11T09:55:01.090151
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-2576-22

CUSTOM RENOVATIONS, LLC,

          Plaintiff-Respondent,

v.

HARVEY G, LLC, and
CLAUDE and RYANNE1 GIROUX,

     Defendants-Appellants.
______________________________

                   Submitted September 20, 2023 – Decided October 2, 2023

                   Before Judges Currier and Firko.

                   On appeal from an interlocutory order of the Superior
                   Court of New Jersey, Law Division, Camden County,
                   Docket No. L-2691-22.

                   Rogers Counsel, attorneys for appellants (Lance Rogers
                   and Brian T. Newman, on the briefs).

1
  The initial complaint refers to this defendant as "Ryanne" Giroux. The record
also refers to this defendant as "Ryan" Giroux. We refer to this defendant as
"Ryanne" in our opinion.
            Siciliano & Associates, LLC, attorneys for respondent
            (Salvatore J. Siciliano and Jennifer McPeak, on the
            brief).

PER CURIAM

      By way of leave granted, defendants Claude and Ryanne Giroux and

Harvey G, LLC (collectively defendants)2 appeal from a March 17, 2023 Law

Division order denying their motions to discharge a lis pendens and to impose

sanctions against plaintiff Custom Renovations, LLC for the frivolous filing of

the lis pendens.   For the reasons that follow and based on the applicable

principles of law, we conclude the trial court misapprehended the law in denying

defendants' motion to discharge the lis pendens, and we reverse. We also

remand for the trial court to consider anew defendants' motion for sanctions .

                                       I.

      Plaintiff operates a construction and home renovation company. Plaintiff

and the Giroux defendants entered a Contract for Building, Construction, or

Repair (Contract) to perform home improvements on a Haddonfield home they

resided in and owned by defendant Harvey G, LLC for a total contract amount

2
  The record sometimes refers to Claude and Ryanne Giroux as defendants and
in other instances includes Harvey G, LLC, as a defendant as well. The merits
brief is filed on behalf of "defendants" but does not specify them. Therefore, in
our opinion, we construe defendants to include Claude and Ryanne Giroux and
Harvey G, LLC.
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of $200,000. The Giroux defendants requested additional renovation work and

upgrades at a cost of $15,755.77. The Giroux defendants only paid $150,000 to

plaintiff, claiming they were entitled to credits for unfinished work and that they

were "promised additional credits."

        On October 12, 2022, plaintiff filed a two-count complaint against

defendants alleging breach of contract (count one), and breach of contract and

fair dealing (count two). Plaintiff alleged it was owed approximately $56,000

from the Giroux defendants, after a credit and reduction in price by $9,750. That

same day, plaintiff also filed a notice of lis pendens in the Camden County

Clerk's Office against Harvey G, LLC, as the owner of the Haddonfield property,

where the work was performed. The lis pendens was recorded on October 21,

2022.

        The notice of lis pendens stated:

              PLEASE TAKE NOTICE of the commencement and
              pendency of a suit in the Superior Court of New Jersey,
              Law Division-Special Civil Part, 3 Camden County,
              captioned above in connection with all that tract or
              parcel of land commonly known as 377 Kings Highway
              West, Borough of Haddonfield, County of Camden,
              State of New Jersey, legally described as follows:

              SEE Exhibit "A"

3
    The complaint was filed in the Law Division, not the Special Civil Part.
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            The general object of said suit includes an action for
            breach of contract for professional services provided
            and seeks payment of outstanding legal fees owed to
            Plaintiff.

            The Complaint containing the claim in the above-
            entitled action was filed in the Office of the Clerk of
            the Superior Court of New Jersey on May 20, 2021.

      On November 10, 2022, counsel for defendants sent plaintiff's counsel a

letter stating the lis pendens was improperly filed because plaintiff's claim

against the Giroux defendants was for money damages only and a demand was

made that the lis pendens be discharged.      Defense counsel's letter notified

plaintiff the filing of the lis pendens was done with an "improper purpose" —to

"harass and/or cause a needless increase in litigation"—in violation of N.J.S.A.

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2A:15-594 and Rule 1:4-8(b)5, the frivolous litigation rule. Plaintiff did not

respond to the letter and did not discharge the lis pendens.

       Defendants moved to dismiss the complaint under Rule 4:6-2(e), for

failure to state a cause of action for breach of contract due to plaintiff's failure

to comply with the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to

-227. Plaintiff cross-moved seeking leave to file and serve a first amended

complaint adding a third count against Harvey G, LLC for unjust enrichment .

Following oral argument on December 16, 2022, the trial court dismissed counts

one and two of the complaint as against Harvey G, LLC but denied the motion

to dismiss the complaint as to the Giroux defendants. The trial court also granted

4
    N.J.S.A. 2A:15-59.1(a)(1) provides:

             A party who prevails in a civil action, either as plaintiff
             or defendant, against any other party may be awarded
             all reasonable litigation costs and reasonable attorney
             fees, if the judge finds at any time during the
             proceedings or upon judgment that a complaint,
             counterclaim, cross-claim, or defense of the
             nonprevailing person was frivolous.
5
  Rule 1:4-8(b) provides for "Motions for Sanctions." In pertinent part, the Rule
states, "[A]n application for sanctions under this rule shall be by motion . . ."
and "will be made within a reasonable time . . . if the offending paper is not
withdrawn within [twenty-eight] days of service of the written demand."

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plaintiff's cross-motion for leave to file and serve a first amended complaint to

add a third count against Harvey G, LLC for unjust enrichment (count three).

        On January 23, 2023, the Giroux defendants filed an answer and

counterclaim denying the allegations in the complaint and stating the

Haddonfield property was sold subsequent to the lawsuit being filed. They

alleged they overpaid plaintiff and were entitled to a refund because plaintiff

"failed to perform several material portions of the job." The Giroux defendants

alleged they had to "hire other contractors and professionals to complete the

job."

        In their counterclaim, the Giroux defendants averred plaintiff was a home

improvement contractor as defined by N.J.A.C. § 13:45A-17.2, and it did not

comply with provisions of the regulations pertaining to home improvement

contractors by failing to sign the Contract, failing to memorialize amendments

to the Contract in writing, failing to provide a completion date for the work, a

statement of guarantee or warranty for the labor and materials used and other

enumerated compliance failures under N.J.A.C. 13:45A-16.2. The Giroux

defendants also alleged plaintiff violated the CFA and attempted to stop the sale

of the property by filing a frivolous lis pendens. They alleged they owe no

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additional monies to plaintiff, and the Contract should be deemed invalid under

the CFA.

      Harvey G, LLC sold the subject property to a third-party buyer. The title

company escrowed $100,000 at the time of closing due to the lis pendens. On

February 1, 2023, the Giroux defendants filed a motion to discharge the lis

pendens and for sanctions, which is the subject of the matter under review.

      On March 17, 2023, the trial court heard oral argument on the motions and

rendered an oral decision that day. The trial court found "when you have a claim

to renovations in the property, it's perfectly appropriate to have a . . . notice of

lis pendens . . . and to have a construction lien." The trial court noted the

construction lien was "not file[d] properly" but "[i]t doesn't matter" because

plaintiff is "owed money . . . based on the renovations on this property." In

conclusion, the trial court stated, "[t]here is a lien against the property" and that

"a lis pendens is absolutely appropriate under the circumstances." The trial court

denied both motions. We granted defendants' motion for leave to appeal.

      Before us, the following arguments are presented:

             (1) plaintiff's lis pendens is legally flawed and the trial
             court erred in denying the motion to discharge the lis
             pendens; and

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            (2) defendants' motion for sanctions should be
            remanded to the trial court because the lis pendens was
            frivolous.

      Having reviewed these contentions in light of the record and applicable

legal principles, we conclude the trial court misapprehended the law in denying

defendants' motion to discharge the lis pendens warranting reversal. We also

remand for the trial court to consider anew whether sanctions should be awarded

to defendants under Rule 1:4-8 and N.J.S.A. 2A:15-59.1.

                                        II.

      A lis pendens provides notice to a prospective purchaser of a currently

pending claim that could impact the real property. Gen. Elec. Credit Corp. v.

Winnebago of N.J., Inc., 149 N.J. Super. 81, 85-86 (App. Div. 1977) (citations

omitted). Defendants argue that the filing of the lis pendens was procedurally

incorrect as plaintiff's first amended complaint sought only monetary damages,

and no claim or right to the property's title. Defendants further contend plaintiff

does not have a right in the subject property, and its right to file a mechanics or

construction lien expired months ago. And, the Haddonfield property is now

owned by an unrelated third-party. N.J.S.A. 2A:15-6 provides:

            In every action, instituted in any court of this State
            having civil jurisdiction or in the United States District
            Court for the District of New Jersey, the object of which
            is to enforce a lien upon real estate or to affect the title

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             to real estate or a lien or encumbrance thereon, plaintiff
             or his [or her] attorney shall, after the filing of the
             complaint, file in the office of the county clerk or
             register of deeds and mortgages, as the case may be, of
             the county in which the affected real estate is situate, a
             written notice of the pendency of the action, which shall
             set forth the title and the general object thereof, with a
             description of the affected real estate.

             No notice of lis pendens shall be filed under this article
             in an action to recover a judgment for money or
             damages only.

             (Emphasis added.)

      It is undisputed the action solely seeks a judgment for monetary damages

against the Giroux defendants individually and Harvey G, LLC. If plaintiff

prevails, it can obtain a monetary judgment against the Giroux defendants for

what they owe under the Contract and against Harvey G, LLC, if unjust

enrichment is proven. The matter here does not in any way seek "to enforce a

lien upon real estate or to affect the title to real estate or a lien or encumbrance

thereon." N.J.S.A. 2A:15-6. Moreover, plaintiff does not claim an ownership

interest in the property's title, and the statute plainly disallows the filing of a lis

pendens on this basis.

      We are satisfied that plaintiff is only seeking a monetary judgment against

defendants—in each of the three counts of its first amended complaint—and that

the trial court misapprehended the law in not discharging the lis pendens.

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N.J.S.A. 2A:15-6 unequivocally states no notice of lis pendens shall be filed to

recover a judgment for money or damages only. Therefore, we reverse the order

denying defendants' motion to discharge the lis pendens and remand for the trial

court to enter an order discharging the lis pendens.

                                       III.

      In light of our decision, we also reverse the trial court's order denying

sanctions and remand for the court to consider this aspect of defendants' motion

anew. N.J.S.A. 2A:15-59.1(a)(1) provides a prevailing party in a civil action,

as plaintiff or defendant, may be awarded all reasonable litigation costs and

reasonable attorney fees if the judge finds a pleading or defense of the

nonprevailing person was frivolous. Subsection (b)(1) of the statute requires the

judge to consider, in determining whether a pleading or defense was frivolous ,

if bad faith is shown, or the action was "solely for the purpose of harassment

delay or malicious injury."

      Subsection (b)(2) requires the judge to analyze whether the nonprevailing

party "knew, or should have known," that the pleading or defense "was without

any reasonable basis in law or equity and could not be supported by a good faith

argument for an extension, modification or reversal of existing law." We offer

no opinion as to the determination of the trial court on this issue.

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      To the extent we have not specifically addressed any remaining arguments

raised by defendants, we conclude they lack sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Reversed and remanded for further proceedings consistent with our

opinion. We do not retain jurisdiction.

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