Envirofinance Group, LLC and Earthmark Nj Kane Mitigation, llc v. Environmental Barrier Company, LLC

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2475-12T4
A-6202-12T3

ENVIROFINANCE GROUP, LLC,
APPROVED FOR PUBLICATION
Plaintiff-Appellant/
Cross-Respondent, April 14, 2015

and APPELLATE DIVISION

EARTHMARK NJ KANE MITIGATION, LLC,

Plaintiff,

v.

ENVIRONMENTAL BARRIER COMPANY, LLC,

Defendant-Respondent/
Cross-Appellant.
______________________________________________

Argued October 22, 2014 - Decided April 14, 2015

Before Judges Lihotz, Espinosa and St. John.

On appeal from the Superior Court of New
Jersey, Chancery Division, Bergen County,
Docket No. C-111-11.

Cory Mitchell Gray argued the cause for
appellant/cross-respondent (Greenberg
Traurig, LLP, attorneys; Mr. Gray, Robert C.
Epstein and Michael R. Glanzman, on the
briefs).

Paul J. Halasz (Day Pitney, LLC) and Gary H.
Nunes (Womble Carlyle Sandridge & Rice, LLP)
of the Virginia bar, admitted pro hac vice,
argued the cause for respondent/cross-
appellant (Day Pitney, LLC and Mr. Nunes,
 attorneys; Mr. Halasz, Mr. Nunes and Robert
G. Rose, on the briefs).

The opinion of the court was delivered by

LIHOTZ, J.A.D.

In these appeals, calendared back-to-back and consolidated

for purposes of our opinion, we examine several orders, which

fix the rights of the parties. Plaintiff EnviroFinance Group,

LLC (EFG) provided construction financing to plaintiff Earthmark

NJ Kane Mitigation, LLC (Earthmark), the developer of an

environmental mitigation project to be built on Bergen County

wetlands owned by the Meadowlands Conservation Trust (MCT). The

primary contractor of the project was defendant Environmental

Barrier Company, LLC, d/b/a Geo-Con (Geo-Con).

When Geo-Con was not paid for its work, it filed two

construction liens against Earthmark's leasehold interest in the

project. Earthmark and EFG filed this action against Geo-Con,

primarily to discharge the construction liens. The motion judge

concluded Geo-Con's liens were properly asserted against the

private leasehold interest and assets of Earthmark, not against

the public realty. Geo-Con requested default and later moved

for entry of final default judgment and to fix damages against

Earthmark. EFG opposed the motion, asserting a final judgment

against Earthmark would impair its collateral interest.

Following a hearing, the judge disagreed and found EFG lacked

2 A-2475-12T4
standing to oppose determination of claims between Geo-Con and

Earthmark. A final judgment in favor of Geo-Con and against

Earthmark was entered. A second order, filed over EFG's

objection and without benefit of a testimonial hearing, required

Earthmark's payment to Geo-Con of an award of counsel fees,

costs and pre—judgment interest. The first appeal, filed by

EFG, challenges these two orders (A-2475-12). This court

declined to consider, but did not dismiss this appeal, pending

the outcome of cross-motions for summary judgment.

Reviewing the summary judgment record, the judge upheld

Geo—Con's construction liens. He also determined EFG was liable

for cure payments under the terms of its agreement with Geo-Con

and assertions made in a February 2011 correspondence, but was

not liable for additional cost overruns outlined in a September

7, 2010 contract between Geo-Con and Earthmark, or otherwise

responsible to pay claims for work performed, despite

allegations of quantum meruit. The second matter regards cross-

appeals by EFG and Geo-Con from the summary judgment orders (A-

6202-12).

Following our review, of the arguments presented, the

record on appeal and the applicable law, we affirm.

I.

MCT owns 587 acres of environmentally sensitive wetlands in

the Richard P. Kane Natural Area located in Bergen County.

3 A-2475-12T4
Earthmark was chosen as the successful bidder following the

request for proposals to construct an environmental mitigation

bank on MCT's land. A mitigation bank is "a wetland, stream, or

other aquatic resource area that has been restored, established,

enhanced, or (in certain circumstances) preserved for the

purpose of providing compensation for unavoidable impacts to

aquatic resources permitted under . . . state or local wetland

regulation."1 Mitigation banks employ a market-based approach to

preservation, placing the implementation and success of a

project on a third party in exchange for credits, which may be

sold to future developers, whose ventures in the surrounding

area may impact the protected environment. See 33 C.F.R.

§ 332.2. The proposed mitigation bank in the Richard P. Kane

Natural Area was designed to allow transportation authorities,

including New Jersey Transit, the Port Authority of New York/New

Jersey, the New Jersey Department of Transportation and the New

Jersey Turnpike Authority, to buy credits to offset wetlands

disruption by prospective development in the Meadowlands region.

Effective January 22, 2009, MCT's Board of Directors

entered into a ground lease with Earthmark to construct the

project, at Earthmark's sole cost and expense, on a portion of

1
Mitigation Banking Factsheet, United States Environmental
Protection Agency, http://water.epa.gov/lawsregs/guidance/
wetlands/mitbanking.cfm (last updated Oct. 5, 2012).

4 A-2475-12T4
MCT's land. As required by the ground lease and request for

proposal, Earthmark, MCT, and the various federal and state

agencies comprising the Meadowlands Interagency Mitigation

Council, entered into the Richard P. Kane Natural Area

Mitigation Bank – Mitigation Bank Instrument (the project).

Earthmark contracted with Geo-Con to be the project's primary

contractor (construction contract).

The project was financed through a loan from EFG.

Earthmark executed a $12 million "Secured Revolving Loan and

Security Agreement" (the pledge agreement) on July 13, 2010. To

secure repayment of the construction financing, Earthmark

executed a "Pledge and Security Agreement" (the loan documents),

granting EFG collateral security, which included 100% ownership

and membership interests in Earthmark, including its leasehold

and proceeds from the sale of mitigation credits generated by

the project.

Geo-Con and EFG also entered into a Contractor Consent

Agreement (CCA), which collaterally assigned the construction

contract between Geo-Con and Earthmark to EFG. The agreement

required Geo-Con to provide notice and a cure period to EFG, in

the event Earthmark defaulted under the construction contract.

Additionally, the CCA precluded amendment or modification of the

initial Earthmark-Geo-Con construction contract, without EFG's

prior written consent.

5 A-2475-12T4
 Geo-Con commenced construction on the project in April

2010. Once EFG's financing was in place, monthly loan draw

requests were submitted by Geo-Con, which certified the work

covered had been completed as required by the project documents.

EFG asserts problems in implementing the initial construction

plan arose, creating a need for additional excavating and

grading work, which caused timetable setbacks and significant

cost overruns. The nature and treatment of these issues were

delineated in a September 7, 2010 agreement between Earthmark

and Geo-Con, amending the initial construction contract and

adding more than $2 million of expense to complete the

additional work. The amendment to the construction contract was

not presented to or approved by EFG.

Further, EFG alleged Geo-Con and Earthmark designed a

separate payment schedule for this additional work, which was

sought by, and disguised in, Geo-Con's draw requests to EFG.

When EFG learned of the separate agreement to address cost

overruns, it declared Earthmark in default in a December 8, 2010

letter.

By January 2011, Geo-Con ceased work on the project because

it was not being paid. Geo-Con notified EFG of Earthmark's

failure to remit payment of its October and November invoices,

and separately sent notice of its intent to stop work, unless

EFG cured the default. EFG challenged the work stoppage,

6 A-2475-12T4
advising Geo-Con it was willing to remit cure payments upon

receipt of certain documents required under the CCA.

Specifically, EFG identified Geo-Con's need to submit

engineering approval, and offered to meet to discuss the matter.

Geo-Con provided the engineer's certification approving the

October and November invoices. Also, Geo-Con rejected EFG's

position regarding the work stoppage, as well as its refusal to

pay for the additional work, and accused EFG of bad faith. When

EFG did not remit cure payments, Geo-Con recorded two

construction liens in the Bergen County Clerk's Office against

Earthmark's leasehold interest in the project, on March 28,

2011.

EFG and Earthmark initiated this action by filing a

verified complaint and an order to show cause, principally

seeking to discharge Geo-Con's construction liens. Further, EFG

sought damages for Geo-Con's wrongful filing of the construction

liens, which it argued violated the Construction Lien Law (CLL),

N.J.S.A. 2A:44A-1 to -38, because the liens attempted to attach

a public works project in violation of N.J.S.A. 2A:44A-15(a).

The complaint also alleged breach of contract, asserting Geo-Con

included sums in its liens pursuant to the concealed overrun

modification agreement, which were neither approved nor due.

Geo-Con counterclaimed, alleging Earthmark and EFG breached

their respective contractual obligations. Geo-Con sought

7 A-2475-12T4
quantum meruit payment from EFG, payment on an open book account

against Earthmark, an equitable lien against the assets of

Earthmark and EFG, and permission to foreclose the construction

liens.

On September 20, 2011, Judge Robert P. Contillo denied EFG

and Earthmark's request to discharge the construction liens,

finding the cited exception to the CLL inapplicable. Although

the project was in the nature of a public works project as it

would improve public property, the judge concluded the

improvements were not "contracted for and awarded by a public

entity," necessary elements for application of the exception.

N.J.S.A. 2A:44A-5(b) (emphasis added). The judge determined the

relationship from which the proposed liens arose between Geo-Con

and Earthmark was a private one and did not involve a public

entity. Therefore, the lien attached not to the public realty,

but to Earthmark's private interest in the ground lease.

Partial summary judgment was later granted dismissing Geo-

Con's claim for an equitable lien on mitigation credits

generated from the project that were pledged by Earthmark to

EFG. Subsequently, counsel for Earthmark requested to be

relieved, which was granted. Earthmark did not secure

substituted counsel and ceased participation in the litigation.

Thereafter, Earthmark entered into a Transition Agreement giving

EFG control of the project.

8 A-2475-12T4
 In June 2011, EFG assigned all its interest, including the

loan and its security interest in Earthmark and the project, to

Kane Mitigation, LLC (Kane). Kane was owned entirely by EFG.

In February 2012, Kane became the successor bank sponsor of the

project under the authorizing documents with MCT.

Without opposition, Geo-Con moved to dismiss Earthmark's

complaint and requested default on its counterclaims against

Earthmark. Geo-Con later moved for entry of final default

judgment against Earthmark, seeking damages of $5,505,328. EFG

opposed that motion and requested "a proof hearing on the

validity and amount of Geo-Con's claims against Earthmark."

Geo-Con challenged EFG's standing to oppose its motion, to which

EFG advanced it held a financial stake in the outcome and a

judgment would "impair EFG's collateral" and security interest

under the pledge agreement.

Following oral argument, Judge Contillo concluded EFG

lacked standing to oppose Geo-Con's motion for entry of default

judgment against Earthmark, finding EFG had almost two years to

exercise its rights under the pledge agreement and failed to do

so. Further, the judge determined Geo-Con's claims were

advanced solely against Earthmark and did not alter EFG's

security interests under the loan and pledge agreements.

Earthmark's complaint against Geo-Con was ordered dismissed with

prejudice and final judgment was entered on behalf of Geo-Con

9 A-2475-12T4
against Earthmark for $3,811,651, the sums approved for payment

by the project engineer for work performed. The order was

certified for execution purposes. See R. 4:42-1.

Geo-Con moved for additional compensation in the form of

attorney's fees, costs, and pre-judgment interest, pursuant to

the Prompt Payment Act (PPA), N.J.S.A. 2A:30A-1 to 2. On March

15, 2013, following oral argument, the judge granted Geo-Con an

additional judgment of $1,715,139, which he certified as final.

EFG appealed (A-2475-12). In our October 2, 2013 order, we

noted the matter was interlocutory and removed it from our

plenary calendar. However, we did not dismiss the appeal

pending the outcome of cross-motions for summary judgment, which

had been filed.

Following oral argument on the summary judgment motions,

Judge Contillo issued a written opinion on July 8, 2013. The

judge denied EFG's and granted Geo-Con's motion for breach of

contract, awarding Geo-Con, its successors and assigns,

$1,354,386.31, which represented agreed cure payments due from

EFG under the CCA, following Earthmark's default. Although the

judge found Geo-Con breached the CCA by entering into the

September 7, 2010 modification agreement with Earthmark without

notice to or consent from EFG, he found EFG's claim failed

because it did not prove resultant damages, "a[n] essential

component of a breach of contract claim."

10 A-2475-12T4
 As to the remaining claims, the judge rejected a

resubmitted challenge by EFG to discharge the construction liens

and subsequent judgments, holding EFG lacked standing to

challenge Geo-Con's claims against Earthmark. Geo-Con's

allegations for quantum meruit and to establish an equitable

lien against the mitigation credits were denied, as was its

assertion EFG was responsible to satisfy cost overruns of more

than $2 million. Finally, EFG's request to add Kane as a

necessary party and include a claim for strict foreclosure was

denied as untimely.

A final judgment memorializing these decisions was entered

on July 12, 2013. The sheriff's sale of the leasehold interest

was held on January 17, 2014.2 EFG filed a separate Law Division

action against the project engineer and Geo-Con. As against the

latter, EFG alleged general negligence, negligent

misrepresentation, breach of contract, strict foreclosure, and

violation of the construction lien law. The record suggests

that litigation is on-going.

Cross-appeals were filed by EFG and Geo-Con from the

summary judgment orders (A-6202-12). We calendared the two

appeals back-to-back and now address all issues in one opinion.

2
The sheriff's deed is not included in the record. EFG's
brief states Geo-Con was the successful bidder at sale; however,
Geo-Con's brief states Kane was the successful bidder.

11 A-2475-12T4
 II.

In its initial appeal (A-2475-12), EFG argues the judge

erroneously denied it standing to challenge Geo-Con's default

judgment against Earthmark, emphasizing EFG held a priority

security interest in 100% of Earthmark's membership3 in the

project through the pledge agreement, essentially giving EFG the

right to assume Earthmark's role in the project. EFG maintains

this accords it a significant financial stake in any action

affecting Earthmark's assets. EFG also challenges entry of

default judgment against Earthmark, arguing a proof hearing was

required prior to entry of any award of damages. In opposition,

Geo-Con argues EFG's security interest does not confer standing

to challenge Earthmark's obligations to its contractor.

In our review, we are obligated to defer to a judge's

factual determinations when supported by the evidential record.

Brunson v. Affinity Fed. Credit Union, 199 N.J. 381, 397 (2009).

However, we accord no special deference to a trial judge's

"interpretation of the law and legal consequences that flow from

established facts," Manalapan Realty, L.P. v. Twp. Comm. of

Manalapan, 140 N.J. 366, 378 (1995), which we review de novo.

Dep't of Envtl. Prot. v. Kafil, 395 N.J. Super. 597, 601 (App.

Div. 2007).

3
Earthmark, as an LLC, has membership interests, not stock.

12 A-2475-12T4
 "[S]tanding is an element of justiciability that cannot be

waived or conferred by consent." In re Adoption of Baby T, 160

N.J. 332, 341 (1999). Rather, it is a threshold inquiry because

"[a] lack of standing by a plaintiff precludes a court from

entertaining any of the substantive issues for determination."

Id. at 340. In short, the doctrine focuses on whether a party

has a legal entitlement to seek relief from the court. Triffin

v. Somerset Valley Bank, 343 N.J. Super. 73, 80 (App. Div.

2001). Our Supreme Court has described the essential purposes

of the doctrine, which seeks to

assure that the invocation and exercise of
judicial power in a given case are
appropriate. Further, the relationship of
plaintiffs to the subject matter of the
litigation and to other parties must be such
to generate confidence in the ability of the
judicial process to get to the truth of the
matter and in the integrity and soundness of
the final adjudication. Also, the standing
doctrine serves to fulfill the paramount
judicial responsibility of a court to seek
just and expeditious determinations on the
ultimate merits of deserving controversies.

[N.J. Chamber of Commerce v. N.J. Election
Law Enforcement Comm'n, 82 N.J. 57, 69
(1980).]

In New Jersey, standing is governed by R. 4:26-1, which

provides "[e]very action may be prosecuted in the name of a real

party in interest . . . ." To have standing in a case, our

Supreme Court has held "a party must present a sufficient stake

in the outcome of the litigation, a real adverseness with

13 A-2475-12T4
respect to the subject matter, and a substantial likelihood that

the party will suffer harm in the event of an unfavorable

decision." In re Camden Cnty., 170 N.J. 439, 449 (2002).

New Jersey courts take a liberal view of standing.

Generally, the threshold to prove a party's standing is "fairly

low." Reaves v. Egg Harbor Twp., 277 N.J. Super. 360, 366 (App.

Div. 1994). "A financial interest in the outcome ordinarily is

sufficient to confer standing." Strulowitz v. Provident Life &

Cas. Ins. Co., 357 N.J. Super. 454, 459 (App. Div.) (citing In

re Camden Cnty., supra, 170 N.J. at 448), certif. denied, 177

N.J. 220 (2003). "But standing is not automatic, and a litigant

usually has no standing to assert the rights of a third party."

Bondi v. Citigroup, Inc., 423 N.J. Super. 377, 436 (App. Div.

2011) (citation and internal quotation marks omitted), certif.

denied, 210 N.J. 478 (2012).

EFG argues the necessity to preserve its security interest

satisfies these standards. In financing the project, EFG

obtained a significant security interest in Earthmark and its

interest in the project. In a November 13, 2012 letter opinion,

the court acknowledged:

The terms and conditions of the
construction financing provided by EFG to
Earthmark are set forth in a Secured
Revolving Loan and Security Agreement dated
as of July 13, 2010. Pursuant to the
agreements, Earthmark granted [EFG] a
security interest in its leasehold interest

14 A-2475-12T4
 under the Lease, and in the proceeds from
the sale of all credits originally issued
under the Mitigation Banking Instrument
("MBI") and the proceeds of all future
credits to be issued under the terms of the
MBI, which provides for the Project to
generate 69.98 mitigation credits for the
tidal portion of the Project.

A condition of the loan included Earthmark's pledge of 100% of

its membership interest, which

include[ed] without limitation, all of
[Earthmark's] rights, powers, and remedies
under the Operating Agreement, and the
certificates representing such Pledged
Interests, if any;

(b) any additional shares of Stock, or
other right, title or interest in
[Earthmark] from time to time acquired by
[Earthmark] in any manner (which shares
shall be deemed to be part of [Earthmark's]
Pledged Interests), and any certificates
representing such Stock;

. . . .

(h) [Earthmark's] rights with respect to
any property or asset of [Earthmark]

. . . .

(q) any and all other rights, claims,
property interests, or other interests of
any kind that [Earthmark] may have from time
to time with respect to or against
[Earthmark], and any other or greater
interest that [Earthmark] may have from time
to time in, to or with respect to
[Earthmark.]

Notably, this litigation was commenced jointly by EFG and

Earthmark, showing the alignment of the two entities' interests.

15 A-2475-12T4
Although Earthmark's current status or viability is not certain,

its disclosed financial difficulties prevented it from fully

participating in the litigation, including challenging Geo-Con's

asserted damages claims. EFG argues standing should be granted,

otherwise Geo-Con is effectively insulated from substantive

challenge to its damage award and the resulting judgment

encumbers the value of the project. See e.g., Assocs.

Commercial Corp. v. Langston, 236 N.J. Super. 236, 242 (App.

Div.) (allowing the defendant standing to challenge a lien on

her house discovered after she sold it, despite the fact that

escrowed proceeds would have been given to the plaintiff),

certif. denied, 118 N.J. 225 (1989).

EFG fails to cite any authority supporting its position for

standing that squarely addresses a relationship matching the one

presented in this litigation. EFG is a party-plaintiff in the

litigation and its interest in the project was financially

intertwined with Earthmark through the pledge agreement and

security interest in all of Earthmark's assets, including the

project. EFG suggests its interest in the ground lease gives it

the right to challenge any attaching lien. This is incorrect,

because at all times EFG's interest was that of a secured

creditor. Although EFG could have exercised control rights over

the ground lease by exercising the provisions of the pledge

agreement, it chose not to do so.

16 A-2475-12T4
 EFG's merits brief also offers only general assertions

supporting its claim of standing, some of which were not

presented to the trial judge. These challenges offer little

more than unsupported contentions of financial harm and fail to

demonstrate an adverse interest to Geo-Con's claims to payment

for services performed under the contract, approved by the

project engineer, for which payment was not made.

In its brief under A-6202-12, EFG states the lien was

inflated by $2.1 million, a consequence of work performed under

the unauthorized modification agreement, and contends if it were

given standing it would have defeated the claim as invalid and

unenforceable. No evidence supports such an assertion. As

noted, EFG declined to exercise its rights under the pledge

agreement to essentially step into Earthmark's shoes and advance

whatever defenses Earthmark may have to the demanded payment.

Likely, EFG chose to avoid this role as it is two-edged: not

only would EFG have the right to control the project and

Earthmark's assets, but also it would be saddled with the

corresponding responsibility to address incurred liabilities,

including the debt due to Geo-Con for services rendered. In

limiting its role to that of a secured lender for the project,

we cannot agree EFG held a stake in any dispute between

Earthmark and its vendors. See Stubaus v. Whitman, 339 N.J.

Super. 38, 51 (App. Div. 2001) (finding a plaintiff must

17 A-2475-12T4
demonstrate harm from a direct injury), certif. denied, 171 N.J.

442 (2002).

We reject EFG's claim the trial judge erred by denying it

standing to challenge Geo-Con's judgement against Earthmark.

Having essentially made this same analysis, Judge Contillo

entered a default judgment for unpaid, approved invoices

totaling $3,811,651, concluding these sums were adequately

proven as due from Earthmark. An additional award for

attorney's fees, litigation costs, and pre-judgment interest was

deemed subject to proofs. During the hearing, EFG participated

and made its position known. Following review, these amounts

were found to be obligations owed to Geo-Con by Earthmark.

On appeal of that order, EFG argues the entitlement to

legal fees is overstated and fees should have been limited to

count three of Geo-Con's complaint.4 We disagree.

Rule 4:43-2(b) grants a trial court the discretion to

require proof of the quantum of damages as well as entitlement

to relief, prior to entry of default judgment. Douglas v.

Harris, 35 N.J. 270, 276 (1961). Factual findings must

establish the entitlement to relief. See Curtis v. Finneran, 83

4
Geo-Con's claim was based on the PPA, which provides in
pertinent part: "In any civil action brought to collect payments
pursuant to this section, the action shall be conducted inside
of this State and the prevailing party shall be awarded
reasonable costs and attorney fees." N.J.S.A. 2A:30A-2(f).

18 A-2475-12T4
N.J. 563, 569, (1980) ("In a non[-]jury civil action, the role

of the trial court at the conclusion of a motion a trial is to

find the facts and state conclusions of law.") (citing R. 1:7-

4).

When addressing statutorily authorized fee awards for

"separate claims in a complaint [which] share a common core of

facts with . . . or are based on related legal theories, the

trial judge, when awarding fees, must focus on the significance

of the overall relief obtained by [the] plaintiff in relation to

the hours reasonably expended." Silva v. Autos of Amboy, Inc.,

267 N.J. Super. 546, 551 (App. Div. 1993). Certainly, where a

party presents "distinctly different claims for relief in one

lawsuit, work on those unrelated claims cannot be deemed in

pursuit of the ultimate result achieved." Stoney v. Maple Shade

Twp., 426 N.J. Super. 297, 318 (App. Div. 2012) (citation and

internal quotation marks omitted). "However, when the p[arty]'s

claims for relief 'involve a common core of facts or will be

based on related legal theories,' such a suit cannot be viewed

as a series of discrete claims." Silva, supra, 267 N.J. Super.

at 556 (quoting Hensley v. Eckerhart, 461 U.S. 424, 435, 103 S.

Ct. 1933, 1940, 76 L. Ed. 2d 40, 51 (1983)).

We note, the methodology utilized in addressing a request

for statutorily authorized fees must consider the relief

obtained, the justification of the fees asserted, see Litton

19 A-2475-12T4
Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 386 (2009), and

the reasonableness of the amount sought, Rendine v. Pantzer, 141

N.J. 292, 334-35 (1995). These principles are further guided by

Rule 4:43-2(b) (addressing the appropriate amount of damages

awarded) and R.P.C. 1.5 (assessing the reasonableness of counsel

fees requested).

We have considered the written opinion by Judge Contillo

and conclude he did not mechanically allocate fees according to

various claims, Silva, supra, 267 N.J. Super. at 551, but

thoughtfully followed the above principles in making the fee

award. The judge found the claims arose from a common core of

facts and were based upon related legal theories, emphasized the

complexity of the issues and the interrelation of the facts, and

concluded the legal services rendered represented, "all

legitimate, appropriate, core work that had to be done."

Further, the judge analyzed the fee request against the criteria

of R.P.C. 1.5. He characterized time entries as consistent with

"commercial reasonableness," fairly stating tasks undertaken and

time allocated to sufficiently apprise the court and the client

on "what they're getting billed for."

"[A] reviewing court will disturb a trial court's award of

counsel feels 'only on the rarest of occasions, and then only

because of a clear abuse of discretion.'" Litton Indus., supra,

20 A-2475-12T4
200 N.J. at 386 (quoting Packard-Bamberger & Co. v. Collier, 167

N.J. 427, 444 (2001)). We find no basis to intervene.

III.

A.

Notwithstanding entry of this judgment, the contractual

dispute between Geo-Con and EFG was thereafter litigated. In

the related appeal, EFG challenges the order for summary

judgment, maintaining the judge erred in denying summary

judgment against Geo-Con for its breach of the CCA by its

unauthorized modification to perform extra work. EFG also

challenges the awarded judgment to Geo-Con for cure payments as

unsupported by the record and contradictory to the judge's prior

findings. We are not persuaded.

EFG was afforded the opportunity to prove its claims. The

judge agreed Geo-Con breached a material term of the CCA, when

it executed the September 7, 2010 side-agreement with Earthmark

and failed to provide notice to EFG of the overruns. However,

EFG offered no argument or proof it sustained damages by this

breach. When specifically asked by Judge Contillo at oral

argument whether damages resulted, counsel's response was "no."

To prevail on a breach of contract claim, a party must

prove a valid contract between the parties, the opposing party's

failure to perform a defined obligation under the contract, and

the breach caused the claimant to sustained damages. Murphy v.

21 A-2475-12T4
Implicito, 392 N.J. Super. 245, 265 (App. Div. 2007). EFG's

assertion that mere proof of the breach deprives Geo-Con of any

payment is legally unsupportable. See Lone v. Brown, 199 N.J.

Super. 420, 425 (App. Div.) (holding summary judgment on a

breach of contract claim was appropriate because grievant could

not assert damages), appeal dismissed, 103 N.J. 480 (1986).

EFG, for the first time on appeal, now lists, as resultant

damages, all expenses incurred in the litigation, as well as the

loss of the ground lease at sheriff's sale and the possible

inability to exercise its unencumbered security interest. The

costs of litigation are insufficient to support damage elements

of a claim. See Satellite Gateway Commc'ns, Inc. v. Musi Dining

Car Co., 110 N.J. 280, 284-85 (1988) (holding attorney's fees

incurred to prosecute breach of contract claim insufficient to

satisfy resultant damages). The other suggested damages were

not presented to the trial court. We reject EFG's late attempt

to justify its position, noting

[i]t is a well-settled principle that our
appellate courts will 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) (citation and internal
quotation marks omitted).]

22 A-2475-12T4
 Finally, EFG received notice of and chose not to

participate in the sheriff's sale, and there is no evidence its

overall security interest will be impaired. Thus, these

contentions are unproven and not tied to the asserted breach of

contract.

Regarding the related challenge to the judge's finding EFG

elected to provide cure payments, we recite the relevant terms

of parties' agreement. The CCA defines the rights and

responsibilities in the event of Earthmark's default, as

follows:

1. . . . Contractor [Geo-Con] hereby
agrees that if an event of default has
occurred under the Loan Agreement . . . and
such default is not cured within any
applicable grace or cure period . . . and if
Lender [EFG] has given written notice from
Lender to Contractor of such default, then
Lender shall have the right, at Lender's
option, either to terminate the Contract
with respect to the Property . . . or to
require that Contractor perform its
obligations under the Contract for the
benefit of the Lender.

. . . .

2. . . . Contractor agrees to not
enter into any amendment or modification of
the Contract without the prior written
consent of Lender.

3. Contractor agrees to give prompt
written notice to Lender of any default or
breach by Borrower of any of its obligations
under the Contract, and that, prior to
Contractor exercising any of its rights or
remedies under the Contract, Lender shall

23 A-2475-12T4
 have an opportunity to remedy or cure such
breach for a period of thirty (30) days
after receipt of notice thereof . . . .

We disagree with EFG's assertion that liability for cure

payments must be preceded by and is linked to its assumption of

the construction contract. There is nothing in the language of

paragraphs one and three supporting an interpretation they are

interdependent. In paragraph one, which addresses a remedy

available to EFG in the event Earthmark defaults under the Loan

Agreement, Geo-Con agrees to permit EFG to terminate the

construction contract or essentially step into Earthmark's shoes

and require Geo-Con to continue performance for EFG's sole

benefit. Conversely, paragraph three addresses Earthmark's

breach of the construction contract with Geo-Con and affords EFG

the "opportunity to remedy or cure [Earthmark's] breach for a

period of thirty (30) days after receipt of notice thereof."

The plain language of these distinct provisions gives EFG a the

right to keep construction on track by making cure payments,

while it determines whether to exercise its right to step into

the shoes of Earthmark and assume responsibility to complete

the construction contract, which may be made after the thirty-

day cure period.

In its February 8, 2011 correspondence to Geo-Con, EFG

stated it was ready to provide cure payments upon receipt of the

engineer's certificate certifying payment, stating:

24 A-2475-12T4
 Lender is prepared to cure certain of the
payment defaults of the Borrower . . . .
Unfortunately, Geo-Con has not presented all
documentation required for payment under the
Contract with respect to the amounts
represented by the Cure Notices. Lender is
willing to promptly make cure payments for
the following amounts upon receipt of the
engineer's certification executed by the
engineer and required by the terms of the
Contract[.]

This determination reflects an effort to keep the project

on track, pending EFG's consideration of its options. Judge

Contillo agreed with EFG, concluding it had no obligation to

satisfy the deferred charges generated from the modification

agreement. However, EFG, despite its assertions, never remitted

payment for the two invoices identified as acceptable, even

after it received the engineer's certification.

EFG now suggests other documentation was mandated under the

CCA, which Geo-Con failed to provide. However, EFG did not

detail what was missing to the trial judge. On appeal, EFG

asserts Geo-Con should have delivered lien waivers and withdraw

its work stoppage notice in writing. The fact is, no liens were

filed at this stage of the dispute and payment was never made by

EFG in exchange for discontinuing the work stoppage.

EFG also renews its challenge to the validity of the

construction liens, maintaining the judge's statutory

interpretation of N.J.S.A. 2A:44A-5(b) was erroneous. The

exemption to the CLL states:

25 A-2475-12T4
 No liens shall attach nor shall a lien
claim be filed:

. . . .

b. For public works or improvements
to real property contracted for and awarded
by a public entity; provided, however, that
nothing herein shall affect any right or
remedy established pursuant to the
"municipal mechanic's lien law," N.J.S.[A.]
2A:44-125 et seq.

[N.J.S.A. 2A:44A-5(b).]

EFG reads this provision as exempting any public works

project, arguing the provision for "improvements to real

property" is not contingent upon a project being "contracted for

and awarded by a public entity." We disagree substantially for

the reasons set forth in Judge Contillo's September 20, 2011

written opinion. R. 2:11-3(e)(1)(A).

Although the mitigation bank itself fit within the

definition of a public works project, the joint public-private

venture neither imposed nor required substitute surety

assurances, i.e., protections of payment or performance bonds or

other guarantees for the benefit of contractors or material

suppliers working on public projects, supporting the argument

the right to place a lien on the subject property was barred.

See N.J.S.A. 2A:44-143(a)(1). This distinction was detailed in

the trial judge's opinion, which we conclude correctly decided

this issue. R. 2:11-3(e)(1)(A).

26 A-2475-12T4
 We also reject as lacking merit, EFG's challenge to the

timeliness of the lien and to its propriety. R. 2:11-

3(e)(1)(E).

In the final issue raised, EFG argues the judgment was

improperly entered against its successors and assigns.

Plaintiff asserts Kane never participated in any of the trial

court proceedings and cannot be held liable. We disagree.

Successor liability, which holds one entity accountable for

another entity's debts, is an equitable doctrine that requires a

case-by-case assessment. Baker v. Nat'l State Bank, 161 N.J.

220, 227-28 (1999). A successor entity will be held liable for

the debts of its predecessor where it is a continuation of the

same. Lefever v. K.P. Hovnanian Enter., 160 N.J. 307, 310

(1999). In this matter, the facts show Kane is 100% owned by

EFG and was created for the sole purpose of assuming and

succeeding to EFG's rights with respect to the project. EFG's

allegation its due process rights were violated because Kane was

not a party to the litigation is legally unsupported.

B.

Geo-Con's cross-appeal challenges the trial judge's summary

judgment dismissal of (1) its claim for quantum meruit against

EFG, as set forth in the July 8, 2013 opinion, and (2) its

assertion of an equitable lien on the mitigation credits

received on the projected proceeds generated from their sale, as

27 A-2475-12T4
set forth in the November 13, 2012 opinion. We have considered

the arguments advanced on appeal, in light of the record and

applicable law and reject Geo-Con's arguments substantially for

the reasons set forth in the judge's thorough opinions. R.

2:11-3(e)(1)(A). We add these brief comments.

The equitable doctrine of quantum meruit allows "the

performing party to recoup the reasonable value of services

rendered." Weichert Co. Realtors v. Ryan, 128 N.J. 427, 438

(1992). Recovery "rests on the equitable principle that a

person shall not be allowed to enrich himself unjustly at the

expense of another," id. at 437 (citation and internal quotation

marks omitted), and requires proof of "(1) the performance of

services in good faith, (2) the acceptance of the services by

the person to whom they are rendered, (3) an expectation of

compensation therefor, and (4) the reasonable value of the

services." Starkey, Kelly, Blaney & White v. Estate of

Nicolaysen, 172 N.J. 60, 68 (2002) (citations and internal

quotation marks omitted). Geo-Con cannot meet this test.

Even if the requested compensation for services was

reasonable, payment for the work performed under the side-

modification agreement was between Geo-Con and Earthmark. Geo-

Con ignored its obligation under the CCA to notify EFG. There

was no expectation of payment from EFG or demonstrated proof EFG

28 A-2475-12T4
accepted the work and corresponding obligation or actually

received a benefit therefrom.

We also reject Geo-Con's claim EFG was unjustly enriched.

To demonstrate unjust enrichment, "a plaintiff must show both

that defendant received a benefit and that retention of that

benefit without payment would be unjust" and that the plaintiff

"expected remuneration" and the failure to give remuneration

unjustly enriched the defendant. VRG Corp. v. GKN Realty Corp.,

135 N.J. 539, 554 (1994). No evidence to support this position

is found within the record.

An equitable lien may lie when unjust enrichment or an

express agreement to grant a lien against a specific property is

shown. Id. at 546. Additionally, an equitable lien can be

imposed, if based on the "the dictates of equity and conscience

. . . a contract of reimbursement could be implied at law."

Ibid.

Here, no express or implied agreement was executed to grant

a lien on the underlying realty and we find no basis to infer

EFG agreed to provide payment for the overrun costs. Also, as

noted, there is no evidence of unjust enrichment. The trial

judge's written opinion thoroughly considered the law as applied

to the facts presented on this issue. We find no flaw in his

analysis. R. 2:11-3(e)(1)(A).

29 A-2475-12T4
 To the extent additional arguments had been raised but were

not specifically addressed, they were found to lack sufficient

merit to warrant extensive discussion in our opinion. R. 2:11-

3(e)(1)(E).

Affirmed.

30 A-2475-12T4