NOT FOR PUBLICATION WITHOUT THE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-1987-15T1
BEDROCK CONCRETE CORPORATION,
Plaintiff-Respondent/
Cross-Appellant,
v.
SICON CONTRACTORS, and 277 ROUTE 70,
LLC,
Defendants-Appellants/
Cross-Respondents,
and
OCEAN UTILITY CONTRACTING, INC.,
Defendant.
_________________________________________________
Submitted January 10, 2017 – Decided September 25, 2017
Before Judges Messano and Guadagno.
On appeal from the Superior Court of New
Jersey, Law Division, Ocean County, Docket
No. L-2628-13.
Mensching & Lucarini, PC, attorneys for
appellants/cross-respondents (John J.
Mensching, on the brief).
Richard A. Epstein, attorney for
respondent/cross-appellant.
PER CURIAM
Defendants Sicon Contractors (Sicon) and 277 Route 70, LLC
(Route 70), appeal from the December 3, 2015 judgment entered
after a bench trial in favor of plaintiff Bedrock Concrete
Corporation (Bedrock) in the amount of $77,915, together with
attorney fees of $20,863.99, costs of $670.99, and prejudgment
interest in the amount of 2.25% per annum. Sicon argues that
the judge erred in enforcing Bedrock's construction lien and in
awarding counsel fees, costs and prejudgment interest. Bedrock
cross-appeals from the judge's refusal to award the
contractually agreed upon rate of 18% for past due balances.
Route 70 is the owner of property located at 277 Route 70
in Toms River. Sicon was engaged as the general contractor to
construct a commercial building on the property. Sicon hired
Bedrock to provide labor, materials and equipment necessary to
construct a concrete slab and steel shell for the building. The
contract price was $668,435, which increased to $675,015 through
subsequent change orders.
Bedrock was required to construct the concrete slab and
shell in accordance with the project plans and specifications,
as well as the plans prepared by the project engineer, East
Coast Engineering, Inc. (East Coast). The contract called for
installation of base stone prior to the installation of the
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concrete slab. At Bedrock's request, East Coast placed stakes
in the ground which were used by Bedrock to determine the
location and elevation of the slab.
After the slab was completed, it was determined that the
finished floor grade was approximately two inches below the
grade specified in the project plans. It is not disputed that
the differential affected drainage at the site. To address the
grade discrepancy, Sicon engaged Ocean Utility Contracting, Inc.
to remove curbing in the front of the building, reinstall it at
a lower grade, and change the slope and grading of the parking
lot.
Sicon paid Bedrock approximately $597,000 of the contract
price but withheld final payment. In May 2013, Bedrock filed a
construction lien for the amount due. In September 2013,
Bedrock filed a complaint against defendants seeking enforcement
of the lien and alleging unjust enrichment and breach of
contract. Defendants filed a counter-claim also alleging breach
of contract and seeking to discharge the lien.
On February 6, 2015, the trial judge granted partial
summary judgment to Bedrock against Sicon in the amount of
$26,604.08, "with entitlement to interest on said sum to be
determined by the Court at a later date and subject to offsets,
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if any, to be determined at a later date." Neither party
appealed from that judgment.
Trial began on September 30, 2015 and continued for three
days. On October 28, 2015, the trial judge issued a written
decision enforcing Bedrock's lien. The judge based his decision
on the credibility of the witnesses, concluding, the plaintiff's
proofs were "more believable by a preponderance of the evidence"
than defendant's.
Specifically, the judge noted that Bedrock's president,
Lawrence Wilderotter, "answered questions while on the witness
stand easily and straightforwardly." The judge was impressed by
Wilderotter's candor in admitting "either the stakes [installed
by East Coast] were wrong or his use of them [was] wrong." The
judge also remarked that Wilderotter testified "in a manner and
with an assured and serious air that made one confident of his
position."
Similarly, the judge found Bedrock's project manager, Kevin
McNaboe, testified "in a direct and confident manner" that the
"final elevations were obtained from stakes set in the ground by
the engineer."
By contrast, the judge found that Jason Marciano, an
engineer employed by East Coast who was called by Sicon, "was
not [as] effective as a witness as Mr. McNaboe." The judge
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noted that Marciano admitted that another firm had established
the original proposed elevations for the job and he was merely
"on call" to perform the staking. Of significance, Marciano
"acknowledged that he never spoke to Mr. McNaboe about the
error" in the final elevation, and instead "resolved it with the
company who installed the curbing."
The judge found the testimony of Sicon's construction
manager, Jeffrey Crisalli even less persuasive:
Mr. Crisalli initially insisted that he tried
to reach Plaintiff [regarding the error], and
eventually emailed and set up a meeting with
Mr. McNaboe, but Mr. McNaboe failed to
attend. . . . He admitted that the emails were
general, and could not recall any single
discussion about the issue with Mr. McNaboe,
although he maintained rather vaguely that
they must have discussed it. It would seem
to this Court that on such an issue as this
one, in which so much money was involved,
there should have been a precise recollection
of informing Plaintiff, and their subsequent
conversation.
The judge observed that the contract required Sicon to
"give prompt written notice" to Bedrock if it became aware of
"any fault or defect in conformance of work with the plans and
specifications." Although Crisalli initially testified he tried
to contact Bedrock about the elevation issue, "under cross
examination, he retreated from that assertion." The judge
described Crisalli as "evasive" on the elevation issue and
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accused him of attempting "to obfuscate the major issue of
trial."
The judge concluded that when the elevation error was
discovered, Bedrock was not notified or given an opportunity to
review or investigate the issue. The judge entered an order on
December 3, 2015 enforcing the lien.
On appeal, defendants argue the judge's findings are not
supported by adequate, substantial, and credible evidence and
the judge erred in enforcing the construction lien. We find
these arguments so lacking in merit that they warrant no further
discussion beyond our observation that the trial judge's
thorough and extensive credibility determinations find abundant
support in the record. R. 2:11-3(e)(1)(E).
We next address Bedrock's cross-appeal on the award of
prejudgment interest. The contract provides for a "service
charge" of 1.5% per month (18% per annum) for "all unpaid
balances after 30 days." The trial judge observed that 18% was
"onerous, and excessive," and reduced the prejudgment interest
figure to 2.25%. Neither party accepts this decision. Bedrock
argues the award should have been for the full 18%, as provided
in the contract; Sicon claims that awarding prejudgment interest
on the entire judgment of $77,915 was erroneous.
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"Unlike prejudgment interest in tort actions, which is
expressly governed by Rule 4:42-11(b), the award of prejudgment
interest on contract and equitable claims is based on equitable
principles." County of Essex v. First Union National Bank, 186
N.J. 46, 61 (2006). Generally, an award for prejudgment
interest is addressed to the sound discretion of the trial
judge. Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372,
390 (2009). "Unless the allowance of prejudgment interest
'represents a manifest denial of justice, an appellate court
should not interfere.'" Ibid. (quoting County of Essex, supra,
186 N.J. at 61).
Applying these principals, we note that Bedrock's cause of
action seeking to enforce the construction lien is an equitable
claim, "grounded in the theory that a wrongdoer should not
profit from its wrongdoing regardless of whether the innocent
party suffered any damages." County of Essex, supra, 186 N.J. at
61. From the time Bedrock completed its work on the project,
Sicon had the benefit of the money the judge found Bedrock was
entitled to.
The contract is captioned, "Standard Shell Building
Agreement" and was negotiated by Wilderotter, who formed Bedrock
in 1996, and Crisalli, who signed on behalf of Sicon, and has
owned a construction consulting firm for twelve years.
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Wilderotter and Crisalli also negotiated three subsequent change
orders. During trial, Sicon contested the enforceability of the
lien, but did not challenge Paragraph 9 of the contract which
provides:
Should it become necessary to place this
account in the hands of an attorney for
collections, the buyer agrees to pay for any
and all costs of collections, including, but
not limited to, reasonable attorney fees
incurred by Bedrock Concrete. Service charges
in the amount of 1.5% per month (18% per annum)
will be added to all unpaid balances after 30
days.
We note that this section assesses a penalty for "unpaid
balances" and does not specifically reference prejudgment
interest. Whether it is called a service charge, as defined in
the contract, or prejudgment interest, the award is "regarded by
our courts as compensatory -- to indemnify the plaintiff for the
loss of what the monies due him would presumably have earned if
payment had not been refused." Rova Farms Resort, Inc. v. Inv'rs
Ins. Co., 65 N.J. 474, 506 (1974).
The basic consideration is that the defendant
has had the use, and the plaintiff has not,
of the amount in question; and the interest
factor simply covers the value of the sum
awarded for the prejudgment period during
which the defendant had the benefit of monies
to which the plaintiff is found to have been
earlier entitled.
[Ibid.]
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Other than a conclusory finding that 18% was onerous and
excessive, the trial judge gave no reason and cited no authority
for reducing the agreed-upon contractual rate from 18% to 2.25%.1
Sicon has presented no authority or any convincing argument as
to why the service charge and attorney fee provisions in a
contract entered into voluntarily by two experienced parties
should not be enforced.
That portion of the December 3, 2015 order entering
judgment in favor of Bedrock against Sicon in the sum of $77,915
is affirmed. The provision setting prejudgment interest at
2.25% is vacated and the matter is remanded to the trial judge
to set an interest rate consistent with the factors identified
in this opinion. We do not retain jurisdiction.
1
In their brief, defendants assume the judge relied on Rule
4:42-11, which governs prejudgment interest, in arriving at
2.25%, but there is no proof of this in the record.
9 A-1987-15T1