Court Opinion

ID: 4186620
Source: CourtListenerOpinion
Date Created: 2017-07-17 14:14:01.150982+00
Date Added: 2024-06-11T14:39:55.495616
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                  APPROVAL OF THE APPELLATE DIVISION

                                           SUPERIOR COURT OF NEW JERSEY
                                           APPELLATE DIVISION
                                           DOCKET NO. A-0347-10T1

MICHAEL A. WALTER BUILDERS, INC.,

     Plaintiff-Respondent,

v.

BARBARA BEDNAR,

     Defendant-Appellant.
_______________________________

            Telephonically argued June 3, 2011 –
            Decided September 23, 2011

            Before Judges    R.    B.    Coleman,   Lihotz      and
            J. N. Harris.

            On appeal from the Superior Court of New
            Jersey, Law Division, Cape May County,
            Docket No. L-553-04.

            Keith A. Bonchi argued the cause for
            appellant   (Goldenberg,   Mackler, Sayegh,
            Mintz, Pfeffer, Bonchi & Gill, attorneys;
            Mr. Bonchi, of counsel and on the briefs;
            Rosann Allen, on the briefs).

            Stephen W. Barry argued the cause for
            respondent (Barry, Corrado, Grassi & Gibson,
            P.C., attorneys; Mr. Barry, on the brief).

PER CURIAM

     Defendant    Barbara   Bednar      appeals   from    a   final   judgment

granting relief to plaintiff Michael A. Walter Builders, Inc.

following    a    bench   trial,     and     an   order       dismissing   her
counterclaim.          On appeal, defendant argues the trial court's

factual findings are not supported by the record and certain

legal    conclusions         supporting      the       relief    ordered    in    favor    of

plaintiff and in dismissing her counterclaim were reached in

error.     We affirm.

     These facts are contained in the trial record.                               Defendant

owned    the    Heritage       Inn    Motel       in    Cape    May.       Defendant      had

obtained architectural and mechanical drawings for the motel's

proposed    modifications           that    were       prepared    by    architect     Blane

Steinman, mechanical engineer John Schade, P.E., and structural

engineer       Tom    Shepard.             After       reviewing       these     materials,

plaintiff's principal, Michael A. Walter, drafted estimates for

completion      of     the    job     and    submitted          his     "Proposal"     dated

November 20, 2003, which was accepted by defendant.                                  In the

contract,       plaintiff,        designated            as     "the     Builder,"      would

construct a third-floor addition to the motel and perform other

renovations1 for defendant, designated as "the Customer," for the

agreed sum of $1,037,300.

     Certain         provisions      of     the    proposal       as    accepted     by   the

parties as their contract are relevant to our review.                                First,

1
     Plaintiff had drafted three proposals for defendant, the
last of which was executed by the parties bearing the date of
November 20, 2003 but actually signed sometime in late January
2004.

                                              2                                     A-0347-10T1
the   proposal     expressly       incorporated         Steinman's       architectural

plans   that      utilized       Schade's       mechanical      specifications         for

thirty-three      Mitsubishi       "heat        pump    systems     at    14,500       BTUs

cooling."2      Also, the plans required each room to be equipped

with condenser and air handling units from the same manufacturer

with the same energy output of 14,500 BTUs.

      Second,     the   agreement      included          a    payment     schedule       to

provide fourteen draws.            Each draw was in a stated amount and

was due upon completion of various stages of the project.

      Third,      all   renovations         and    the       addition     were    to    be

completed      within      six     months        from    the     date     construction

commenced, or by May 20, 2004.                  The agreement allowed a thirty-

day extension for weather-related delays.

      Fourth,     additional       general       provisions:      (1)    mandated      any

changes were not effective "unless in writing, signed by both

Builder and Customer"; (2) required builders' risk insurance be

"provided    by    [the]     Builder   to       [the]    Customer       for   [the]    new

2
     A BTU, short for British Thermal Unit, is a basic measure
of thermal energy.   One BTU is the amount of energy needed to
heat one pound of water one degree Fahrenheit, measured at its
heaviest point.   When speaking of cooling power, the BTU works
in reverse. The air-cooling power of an air conditioning system
refers to the amount of thermal energy removed from an area.
The higher the BTU output, the more powerful the heating or
cooling.    http://www.eia.gov/emeu/consumptionbriefs/cbecs/
pbawebsite/office/office_refbtu.htm (last visited August 30,
2011).

                                            3                                    A-0347-10T1
addition" and the Customer would provide home-owner's insurance

"for    [the]    existing   hotel";   (3)     provided   the    "Builder     will

guarantee all workmanship of [the B]uilder and all of [the]

Builder's       Subcontractors,   for       one   year   from    the   day     of

settlement."

       Two additional provisions listed under "Additional Clauses"

must also be mentioned.           Subsection (F) stated, in pertinent

part:

            Additional work may be performed on hotel.
            Cost for work will be priced by Builder and
            accepted by Customer.      A spreadsheet for
            additional   items   will   be   provided   and
            updated by Builder periodically. . . .
            Payments   for   work   shall   be   made   the
            beginning     of     each     month,     during
            construction.    Ongoing cost for additional
            work shall not exceed 2% of the total house
            [sic] construction cost, as stated [i]n this
            [c]ontract.

            Additional work performed will affect the
            time of [a]ddition/renovation completion.
            . . .

and subsection (J) provided:

            Failure to insist upon strict compliance
            with   any   of   the   terms,   covenants or
            conditions hereof shall not be deemed a
            waiver of such term, covenant or condition,
            nor shall any waiver or relinquishment of
            any right or power hereunder at any one or
            more   times    be    deemed   a   waiver  or
            relinquishment of such right or power at any
            other time.

                                        4                              A-0347-10T1
    The construction did not proceed smoothly.              We will discuss

the dilemmas which bear on the parties' claims in litigation.

    As the details of the agreement were ironed out, plaintiff

commenced demolition on November 20, 2003.              The first step was

to remove the second floor ceilings, erect scaffolding,                   and

construct the third-floor "block walls" atop the second floor.

Plaintiff used subcontractors for this job.             It was decided the

second floor roofing would be removed and the block for the

third-floor wall would be laid in a piecemeal fashion because of

"weather concerns."        Walter explained:

            [Y]ou just can't build a wall straight
            up and then build the back wall and
            then another side wall . . . [i]t has
            to be done simultaneously with another
            room. . . . Because a block wall might
            be up six feet, another block wall
            might be up four foot, another one up
            two foot.    So, it wasn't on a level
            plane where we could put boards across
            and tarp [the open roof] . . . .

    To   protect     the    property    from   water   damage   during   this

process, plaintiff placed a tarp over the block walls and laid

wooden planks on the tarps to hold them in place.               Also, a rope

was woven through the eyelets of the tarps and tied to the sides

of the building.

    During November and December 2003, before the new roof was

shingled,    three   rainstorms        occurred.       Notwithstanding    the

protective measures employed, "[w]hen the storms came through,

                                        5                           A-0347-10T1
there [were] heavy winds that ripped the tarps off and water got

into the [m]otel."       After the first storm in November, plaintiff

added ropes and tarps, but "still the storm[water]                     got in[,]"

damaging the sheetrock ceilings of the first floor, the first

and second-floor carpeting, and some of the furniture stored in

the first-floor rooms.

      Upon   discovering     the     extent     of    the    damage,     plaintiff

suggested    the    parties'     submit    claims       to   their     respective

insurance carriers.        Plaintiff hired subcontractors to restore

the   existing     structure.       This   work      included    installing     new

sheetrock    on    the   ceilings    and   walls;      removing    the    old   and

installing   new    carpeting;      repairing     bathroom      tile   damage   and

"put[ting] new trim [], new doors, and paint" on the walls.                      At

the same time, plaintiff continued construction of the third

floor, believing "the insurance companies would take care of the

cost[s]" which the parties would "sort[] out later."

      Because of these construction delays, the parties agreed

the new third-floor guest rooms would be finished for the summer

and the meeting room, exercise room, and owner's quarters could

be completed in the fall.          Although the third-floor rental rooms

were completed on May 26, 2004, restoration of the first and

second floor rooms was not completed until immediately prior to

the July Fourth weekend.

                                       6                                  A-0347-10T1
       Another problem resulted regarding the heating, ventilation

and air conditioning (HVAC) installation.                               First, plaintiff and

the      architect          agreed          to       deviate         from      the        contract

specifications,            and    installed            the        condenser       units     on     a

fiberglass          deck   located       on      the     roof.           Consequently,        some

condensers          were   closer      to     some      rooms,       "both    vertically         and

horizontally[,]" than originally designed.                                 Second, plaintiff

learned the Mitsubishi 14,500 BTU condenser and air handling

units    specified         by    the     mechanical              engineer's    drawings       were

unavailable as "[t]here was no such thing."                                  Walter consulted

with defendant and outlined the attempts to find a comparable

unit.     Defendant expressed concern regarding the efficiency of

any    proposed       units.        On      April      7,    2004,      plaintiff     presented

defendant with three options, set forth in a written "additional

work authorization."             On May 4, 2004, defendant chose the second

alternative listed, requesting the proposed units be upgraded to

larger units.          She told Walter she desired plaintiff install a

17,000        BTU     condenser          and      Arcoaire           air      handling       units

manufactured by Bryant.                  Walter inserted this information into

the additional work authorization, which he signed that day.

       In July or August 2004, defendant expressed concern that

the air conditioning units were "getting cool too fast and some

mold    was    being       created"      in      some       of    the    rooms.      At    trial,

                                                 7                                        A-0347-10T1
defendant    asserted       she    never       experienced         a   mold      or     mildew

problem in any motel rooms prior to hiring plaintiff.                                Further,

she    expressed     that   for        the   first     time    she     began      receiving

complaints    from     guests      about       dampness       in   rooms.         Plaintiff

observed mold growth which was confined to the first floor and

attributed it to leaky pipes that "weren't pitched properly" in

a     downstairs     crawlspace.             Defendant        retained      a     different

contractor to remove and replace the HVAC units at a cost of

$117,895.98.

       The last payment defendant provided to plaintiff -- the

eleventh draw -- was in May 2004.                    On June 24, 2004, plaintiff

requested     the     twelfth      draw.            After     plaintiff         made     three

additional requests for payment, defendant allegedly responded,

stating she had no more money.

       Plaintiff filed its two count complaint, alleging breach of

contract and misrepresentation.                    Specifically, plaintiff sought

payment     under    the    contract         for     services      rendered          totaling

$148,100,    expenditures         for    storm      damage     repairs      amounting        to

$120,000    and     "extras"      of    $60,694.        Additionally,           it     alleged

defendant fraudulently induced plaintiff to provide services for

which she had no intention of paying.

       Defendant denied an obligation to plaintiff and filed a

five-count    counterclaim.              She       asserted    breach     of      contract,

                                               8                                      A-0347-10T1
consumer fraud, breach of express and implied warranties, common

law fraud, and negligence.                Defendant sought rescission of the

contract and return of the $971,705 she had paid plaintiff along

with compensatory damages resulting from plaintiff's failure to

follow the contract's specifications, lost profits, interest,

costs, and attorney's fees.3

     The seven day bench trial began on December 2, 2008.                             In

addition to the parties' testimony concerning the contract and

construction,       they     each    presented    fact     and   expert    witnesses.

With regard to the HVAC units, plaintiff offered Jim Berry, the

principal of the HVAC subcontractor, who testified the installed

units were marketed at approximately 17,000 BTUs but as a result

of installation, specifically the length of the refrigerant line

between    the     condenser        and   air   handler,    a    loss   of     capacity

resulted     in     an     average    effective     BTU     capacity      of   14,960.

Defendant's expert, Frank A. Vinciguerra, inspected the motel in

December, noting the rooms "were humid, very humid, and many

areas had mold growth within them."                He concluded the units were

oversized,        caused    short-cycling,        and    had     an   "inability      to

dehumidify spaces."            He countered Berry's assertions, opining

3
     Defendant later amended her pleadings to include a third-
party complaint against nineteen additional parties, including
the subcontractors and their respective insurers. Each of these
parties settled the claims or were dismissed prior to trial.

                                            9                                  A-0347-10T1
the reduction in capacity caused by the length of the lines was

irrelevant since "the ability to control humidity" is not the

same as effective cooling.

    Defendant       also   offered         expert        testimony    of     Sander     J.

Greenberg, who quantified her lost revenue between $140,000 and

$240,000.     This was rebutted by plaintiff's accountant, James A.

Stavros, who maintained Greenberg's methodology did not "follow

the standards set forth by the [American Institute of Certified

Public     Accountants]"   for       the        calculation     of    lost     profits,

because he failed to specify a "period of loss" and exaggerated

potential lost profits of the motel by including business loses

of another entity owned by defendant.

    In a written opinion, the trial judge found defendant, not

plaintiff,    unilaterally      breached         the     contract    by    ceasing     the

scheduled payments for completed work.                    The judge considered the

parties'    testimony.     He    rejected,          as    incredible,      defendant's

assertions plaintiff assumed full responsibility to pay for the

storm damage repair costs and that plaintiff never asked for the

twelfth draw.      Conversely, the judge noted plaintiff's principal

was "straightforward and believable," and "kept meticulous notes

and records that record[ed] the dates he requested the next

draw."       The   trial   court      described           the   uncompleted         items

discussed    by    defendant    at    trial       as     last-minute       "punch     list

                                           10                                  A-0347-10T1
items,"     which     would     have     been      completed           by    plaintiff          had

defendant     not     terminated       the    agreement          and        found    defendant

failed to mitigate her lost revenue damages by her six month

delay in accepting her contractor's proposal to rectify the HVAC

problems.

      On   the    complaint,      the     court         entered       an     order    awarding

plaintiff damages of $221,752.57, plus prejudgment interest and

costs of $42,377.58.           With respect to defendant's counterclaim,

the   court      considered      only        whether          plaintiff       breached          the

parties'      contract.          He     found       no        evidence        of     fraud       or

misrepresentation        by    plaintiff,          rather       the     court       determined

plaintiff "met the standard of good faith, honesty in fact and

observance     of     fair    dealing."           The    court     declined          to     credit

Greenberg's expert opinion as to any claimed economic damages,

concluding "the delays were caused by a number of factors which

Greenberg did not take into account."                     The trial judge dismissed

Defendant's counterclaim with prejudice.

      On   appeal,      defendant       argues          the    trial        court    erred       in

concluding plaintiff had no liability as a result of the faulty

performance      of    the     HVAC     subcontractor            and       for     failing       to

properly     secure     the     property          from        storms       while     work       was

progressing.          Finally,        defendant         argues     plaintiff          was       not

                                             11                                           A-0347-10T1
entitled to the twelfth draw under the contract.                        We turn to our

review of these issues.

      The scope of our review of a non-jury case is limited.

Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011).

The findings on which a trial court bases its decision will "not

be   disturbed      unless    they     are    so     wholly     insupportable      as    to

result    in   a    denial      of    justice[.]"          Rova    Farms     Resort      v.

Investors      Ins.    Co.,     65 N.J. 474,   483-84    (1974)    (internal

citations and quotations omitted).                   On the other hand, although

a trial court's factual findings will not be overturned absent

an abuse of discretion, questions of law are subject to de novo

review.     Balsamides v. Protameen Chems., Inc., 160 N.J. 352, 372

(1999).

      Defendant first argues the trial court erred as a matter of

law in concluding the engagement of a subcontractor to install

the HVAC units shielded plaintiff as the general contractor from

liability for alleged resultant damage in failing to follow the

contract    specifications           and   instead       installing      nonconforming

HVAC units.        We reject defendant's characterization of the trial

court's legal conclusions.

      Defendant       focuses    on    one    portion      of     the   trial    judge's

opinion,    which     mentions       defendant's         claim    resulted      from    her

dissatisfaction with the performance of the HVAC subcontractor,

                                             12                                  A-0347-10T1
Berry.    In the discussion, the judge commented that if the HVAC

did not work properly, "it would be the responsibility of Berry

or the manufacturer of the product; and not [plaintiff.]"                  This

comment related to the causation question; that is, whether the

mold resulted from the efficiency of the units.                It was not the

basis of the court's conclusion regarding plaintiff's liability,

as defendant now suggests.

       "Disputes between contractors and owner[s] as to extra work

and changes on building or working contracts are as old as the

practice of contracting for such work and are a fertile cause of

litigation."       Headley v. Cavileer, 82 N.J.L. 635, 637 (E & A

1912).    The "fundamental difficulty" encountered in this field

of    litigation   is   that   "there   is   no   statute   requiring      such

contracts . . . to be in writing[.]"           Id. at 637-38.         No matter

how "'solemn in form'" the original agreement, parties are free

to renounce or modify it in any way they see fit.                 Id. at 638

(quoting Cooper v. Hawley, 60 N.J.L. 560, 563 (E & A 1897)).

Therefore, a "writing requirement may be expressly or impliedly

waived by the clear conduct or agreement of the parties or their

duly authorized representatives."            Home Owners Constr. Co. v.

Glen Rock, 34 N.J. 305, 316 (1961).                 See also Salvatore v.

Trace, 109 N.J. Super. 83, 103 (App. Div. 1969), aff'd, 55 N.J.
362   (1970)   (observing      that   contracting    parties    can    waive    a

                                      13                               A-0347-10T1
writing       requirement         through     their        conduct).           These      aged

pronouncements reflect little has changed over time and aptly

describe what occurred in this matter.

       The judge thoroughly detailed his findings regarding who

made the decision to alter the specified HVAC units once those

identified in the specifications were unavailable.                             In doing so,

he specifically rejected defendant's claims that the decision

was unilaterally made by plaintiff.                        Further, the trial judge

found    defendant's         suggestion       that       she    was     ignorant    of     the

problem       was    not   believable       and     he     credited      the    painstaking

testimony, supported by documentation, presented by plaintiff

and Berry.          The court determined defendant knew of the problem

because plaintiff had discussed the "HVAC issues" with her on

"at least [six] occasions[,]" she selected the chosen unit and

authorized the change.               Moreover, plaintiff delayed her decision

for almost a month, giving her ample opportunity to consult with

Shade    or    Steinman,       the     architect      and      engineer      who   drew    the

original plans.            Finally, the court found no evidence submitted

by    defendant      showing      plaintiff        breached      the    amended    proposal

regarding the installation of the HVAC units.

       These        findings      by    the        trial       judge,       including      the

credibility determinations leading to his conclusion plaintiff

had    not    breached      the      parties'      agreement,         are   "supported      by

                                              14                                    A-0347-10T1
adequate,    substantial       and     credible     evidence."         Rova    Farms,

supra, 65 N.J. at 483-84.             The court's findings and conclusion

will not be disturbed.

    Defendant next maintains plaintiff breached the contract's

implied covenant of good workmanship by failing to adequately

protect the property from storm damage.                  Defendant asserts she

relied     upon    plaintiff's        express     expertise,     but     the     means

employed by plaintiff to secure the motel from storm damage

after removing the roof were performed improperly and not in a

workmanlike       manner.       Defendant       argues   the     court    erred      in

requiring her to pay plaintiff to correct the damage caused by

its breach and maintains she is entitled to recover judgment

against    plaintiff      on   this     issue.      We   find    these    arguments

unavailing.

    Absent an express guarantee of good workmanship, "the law

implies a covenant that the contract will be performed in a

reasonably good and workmanlike manner."                     Ramapo Brae Condo.

Ass'n, Inc. v. Bergen Cnty. Hous. Auth., 328 N.J. Super. 561,

576-77 (App. Div. 2000), aff'd, 167 N.J. 155 (2001); see also

McDonald v. Mianecki, 79 N.J. 275, 293 (1979).

    In the first count of her counterclaim, defendant includes

a claim of breach of contract.             The bases stated for the breach

include:    the    work     performed    and     materials     used    were    not    in

                                         15                                   A-0347-10T1
compliance with the plans and the work was not in compliance

with applicable construction codes and regulations.                   The court

found defendant's proofs on each of these issues was lacking and

denied relief, concluding defendant, not plaintiff breached the

contract.

    The third count of the counterclaim asserts "breach of UCC

warranties."    The trial judge specifically found: "The Uniform

Commercial     Code    claim       in    the    [t]hird    [c]ount      of     the

[c]ounterclaim was not pursued at trial and deemed abandoned by

the [c]ourt.    The [t]hird [c]ount is dismissed with prejudice."

    The     fifth   count     of   the   counterclaim     is   the   only    claim

directed to plaintiff's alleged failure "to protect the interior

of the structure from [] exposure to the elements."                   The claim

asserts plaintiff was negligent.               As to this issue, the trial

judge   correctly     noted    defendant       released   plaintiff    and     his

subcontractor when she settled the matter with the insurance

carrier.

    The release is limited to the negligence claims in count

five of the counterclaim and specifically reserves all other

claims between plaintiff and defendant.             The question is whether

a claim of breach of the implied covenant of good workmanship

was pled and proven.        We find it was not.

                                         16                             A-0347-10T1
    In    support   of   this   issue,     defendant   suggests      plaintiff

could have proceeded by removing smaller sections of the roof at

any given time.     Additionally, she notes the use of tarps, wood

and ropes did not allay the wind gusts of the storms and the

property was damaged.         From these facts, defendant concludes

that because the tarps did not hold, plaintiff's workmanship was

improper.

    At trial, defendant's evidence regarding plaintiff's breach

of the contract was directed to its summer 2004 construction

stoppage and the alleged mold formulation from the flawed HVAC

installation.     Defendant did not offer expert testimony opining

that the methods chosen to protect the property in the event of

a storm evinced a defect in workmanship (or merely was a result

of exceptional storm circumstances, as suggested by plaintiff).

In fact, there was no evidence offered to prove plaintiff's

workmanship in choosing the manner of roof removal, undertaking

piecemeal      construction     of       the    third-floor        rooms    and

weatherproofing the structure during construction, was improper.

    Defendant's     final     argument    urges   reversal    of    the    trial

court's     conclusion   that    she,     not   plaintiff,    breached      the

contract when she failed to release the twelfth draw payment.

Before the trial court, defendant argued plaintiff never asked

her for the twelfth draw.        This contention was soundly rejected

                                     17                               A-0347-10T1
by the trial judge, who found plaintiff's evidence credible.                          On

appeal, defendant now argues the completion of certain work,

which was not performed, was a precondition for the release of

the draw.        Thus, her obligation to pay was not triggered.                       We

decline to consider this assertion, which was not raised before

the trial judge.

    It is well-settled we "decline to consider questions or

issues    not    properly    presented        to    the   trial    court    when       an

opportunity for such a presentation is available 'unless the

questions so raised on appeal go to the jurisdiction of the

trial    court    or    concern   matters      of    great   public      interest.'"

Nieder    v.    Royal    Indem.   Ins.   Co.,       62 N.J. 229,   234     (1973)

(quoting Reynolds Offset Co., Inc. v. Summer, 58 N.J. Super.
542, 548 (App. Div. 1959), certif. denied, 31 N.J. 554 (1960)).

See also Spinks v. Twp. of Clinton, 402 N.J. Super. 465, 479

(App. Div. 2008), certif. denied, 197 N.J. 476 (2009).

    Affirmed.

                                         18                                    A-0347-10T1