SRC CONSTRUCTION CORP. OF MONROE v. ATLANTIC CITY HOUSING AUTHORITY et al

Filing 131

OPINION. Signed by Judge Joseph E. Irenas on 10/24/2013. (tf, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
SRC CONSTRUCTION CORP.
OF MONROE,
Plaintiff,

v.
ATLANTIC CITY HOUSING
AUTHORITY, et al.,
Defendants.

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HONORABLE JOSEPH E. IRENAS
CIVIL NO. 10-3461 (JEI/AMD)
OPINION

APPEARANCES:
CONDON & ASSOCIATES, PLLC
By: Brian K. Condon, Esq.
55 Old Turnpike Road, Suite 502
Nanuet, New York 10954
Counsel for Plaintiff SRC Construction Corp. of Monroe
PARKER McCAY PA
By: Richard W. Hunt, Esq.
3 Greentree Centre, Suite 401
7001 Lincoln Drive West
P.O. Box 974
Marlton, New Jersey 08053
Counsel for Defendant Atlantic City Housing Authority
SUAREZ & SUAREZ
By: Joseph M. Suarez, Esq.
2016 Kennedy Blvd.
Jersey City, New Jersey 07305
Counsel for Defendant Lindemon, Winckelmann, Deupree,
Martin, Russell & Associates, P.C.

IRENAS, Senior District Judge:
In this diversity suit, the parties dispute who is responsible
for the extended delays that occurred during the construction of an
assisted living facility in Atlantic City, New Jersey, which resulted

in over three million dollars in additional costs.

Defendant

Lindenmon, Winckelmann, Deupree, Martin, Russell & Associates, P.C.
(“Lindemon”) presently moves for summary judgment, asserting that all
of Plaintiff SRC Construction’s claims against it are barred by New
Jersey’s Affidavit of Merit Statute.

Similarly, Defendant Atlantic

City Housing Authority (“ACHA”) moves for summary judgment on all of
SRC Construction’s claims against it, arguing that because Lindemon
cannot be liable to SRC Construction, ACHA also cannot be liable to
SRC Construction.

For the reasons stated herein, Lindemon’s Motion

will be granted and ACHA’s Motion will be denied.

I.
This is the third written opinion in this case.

Accordingly,

the Court presumes some familiarity with the previous opinions and
the parties’ disputes in this case.

See SRC Construction Corp. of

Monroe v. Atlantic City Housing Authority, et al., 2011 WL 1375680
(D.N.J. April 12, 2011); SRC Construction Corp. of Monroe v. Atlantic
City Housing Authority, et al., 935 F.Supp.2d 796 (D.N.J. 2013).
Plaintiff SRC Construction was the general contractor for the John P.
Whittington Senior Living Center project in Atlantic City, Lindemon
was the project architect, and ACHA is the property owner.1

It

appears from the record that the largest delays occurred as the
1

Czar Engineering, the project engineer, was also named as
a Defendant to this suit, but the Court granted its Motion to
Dismiss in April, 2011. Czar is no longer a party to this suit.
2

result of a prolonged permit approval process before the Atlantic
City Division of Construction (244 days); “first floor plank design
delay” (8 weeks); “Building Department field correction delay” (135
days); and “change order delays” (30 months). (Plaintiff’s Ex. D2)
SRC Construction argues that Lindemon’s negligence caused these
delays and that ACHA breached its contract with SRC Construction when
it refused to extend the project completion deadlines.
The pending summary judgment motions are basically “round two”
on an issue that this Court addressed in its Opinion granting in part
and denying in part Lindemon’s Motion to Dismiss.
1375680 (D.N.J. April 12, 2011).

See 2011 WL

Relying on the undisputed fact that

SRC had not obtained an affidavit of merit as required by New Jersey
statute, Lindemon argued that all of SRC’s claims should be
dismissed.

The Court held that: (1) the affidavit of merit statute

applies to all of SRC’s claims against Lindemon; (2) some of those
claims clearly allege professional architectural negligence, proof of
which would require expert testimony and are therefore barred by the
affidavit of merit statute; but (3) some claims might not be barred
because they might fall within the “common knowledge exception” to
the affidavit of merit requirement.

Most relevantly, the Court

stated,
2

Plaintiff’s Exhibit D is a spreadsheet of the
“construction schedule” for the senior living center. At oral
argument, Plaintiff’s counsel represented to the Court that the
document was created by SRC Construction to monitor construction
progress.
3

At least at this stage of the litigation, some of SRC
Construction’s factual allegations do not appear to
require proof by expert testimony. For example,
Lindemon’s alleged ‘fail[ure] to provide the necessary
building permits to SRC,’ (Compl. ¶ 29), and
‘submitt[ing] drawings on multiple occasions to the
Building Department that were deemed Non-Code Compliant’
(Compl. ¶ 118(i)), will not necessarily require expert
testimony.
A layperson could understand that simply
failing to provide a building permit, or submitting
drawings that were deemed non-code compliant by a thirdparty, could cause delays that allegedly resulted in
higher costs for the project.
Similarly, depending on why the alleged ‘verbal
approvals of change orders’ were ‘defective’ (Compl. ¶
118(iv)), expert testimony may not be necessary. For
example, if the defect were nothing more than the
inclusion of plainly erroneous information, such as an
incorrect quantity of a particular material, expert
testimony would not be needed.
Lastly, while Lindemon argues that SRC Construction will
need an expert to establish whether or not Lindemon
responded to requests for information in a ‘timely
manner,’ (Compl. ¶ 118(iii)), the Court cannot reach
that conclusion on the present record. Discovery may
produce facts demonstrating such extensive delays that
even a layperson could find them unreasonable. Thus, for
example, while expert testimony might be necessary to
establish the timeliness of a two week delay in
responding to a certain request, such testimony might
not be necessary to establish the untimeliness of a 599day delay when the entire project was expected to be
completed in approximately 600 days.
Id. at 17-18 (italics added).

In partially denying Lindemon’s Motion

to Dismiss based on the potential applicability of the common
knowledge exception, the Court explicitly stated, however, that “[i]f
. . . discovery demonstrates that establishing any of the remaining
claims [against Lindemon] will require expert testimony-- indeed, if
SRC Construction seeks to use an expert for such purpose-- such claim

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or claims would be subject to dismissal on summary judgment.”

Id. at

n. 10.

II.
“Under Rule 56(c), summary judgment is proper ‘if the
pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.’”

Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986) (quoting Fed. R. Civ. P. 56(c)).
In deciding a motion for summary judgment, the Court must
construe the facts and inferences in a light most favorable to the
nonmoving party.

Pollock v. Am. Tel. & Tel. Long Lines, 794 F.2d

860, 864 (3d Cir. 1986).

“‘With respect to an issue on which the

nonmoving party bears the burden of proof, the burden on the moving
party may be discharged by ‘showing’—that is, pointing out to the
district court—that there is an absence of evidence to support the
nonmoving party’s case.’”

Conoshenti v. Pub. Serv. Elec. & Gas, 364

F.3d 135, 145-46 (3d Cir. 2004) (quoting Celotex, 477 U.S. at 325).
The role of the Court is not “to weigh the evidence and determine the
truth of the matter but to determine whether there is a genuine issue
for trial.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249

(1986).

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III.
The Court addresses Lindemon’s Motion and then ACHA’s Motion.

A.
As should be apparent from the Court’s discussion above, the
procedural posture of this case is critical to the Court’s decision
concerning the applicability of the common knowledge exception to the
affidavit of merit requirement.

In contrast to where this case was

more than two years ago (when the Court ruled on Lindemon’s Motion to
Dismiss),

the Court now looks beyond the pleadings to the facts

developed in discovery and considers SRC Construction’s theory of its
case based on those record facts.

In so doing, the Court concludes

that it must now close the door that was left open at the pleadings
stage.
It is apparent from the parties’ submissions, and counsel’s
energetic oral argument, that SRC Construction’s negligence claims
against Lindemon do not rest on isolated incidents which caused
discrete delays in an otherwise smoothly progressing project.

On the

contrary, SRC Construction argues that its losses were caused by
Lindemon’s course of negligent conduct spanning many years.

To

understand Lindemon’s course of conduct and ultimately conclude that
Lindemon was negligent, a jury would need to understand Lindemon’s
function as architect and project manager, and its roles in (1) the
complicated and technical building permitting process; and (2) a

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change order process that is common to the construction industry.
Such facts are beyond the “common knowledge” of a layperson and thus
require proof through expert testimony.
Monroe, 2011 WL 1375680 at *5.

See SRC Const. Corp. of

(“A claim otherwise subject to the

Affidavit of Merit statute may nevertheless proceed without an
affidavit of merit ‘when expert testimony is not required at trial to
establish the defendant’s negligence’-—i.e., ‘when an expert will not
be called to testify that the care, skill, or knowledge of the
defendant fell outside acceptable professional or occupational
standards.’” (quoting Hubbard v. Reed, 168 N.J. 387, 390 (2001)).
Moreover-- and perhaps because SRC Construction’s theory rests
on a course of conduct, rather than isolated incidents-- SRC
Construction’s opposition brief gives very few specifics as to what
allegedly happened and when.

Where details are given, they are

unsupported by evidence and raise more questions than they answer.
For example, SRC’s brief states, “SRC contends that ‘Smoke/carbon
monoxide units not specified on construction drawing but required by
Code and Building Department’ (Change Order #40).”
p. 8)

(Opposition Brief

First, the sentence makes no sense, at least not to a

layperson.

Second, SRC Construction is apparently relying on Change

Order #40, however it does not submit that change order in support of
its opposition.3

Third, SRC Construction does not explain whether

3

Lindemon submits Change Order #40 along with its reply
brief, but that submission does not resolve the problem. The
Complaint specifically identifies by date and item, 39 separate
change orders (Compl. 48-86), yet the summary judgment record
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the Change Order is intended to be evidence of a change order delay
or a delay in the permit approval process or both.

In this regard,

SRC Construction has failed to come forward with record evidence
creating a triable issue of material fact as to Lindemon’s
negligence.
Thus, the Court holds that the common knowledge exception to the
affidavit of merit requirement does not apply to SRC’s remaining
claims against Lindemon.4

Accordingly, Lindemon’s Motion for Summary

Judgment will be granted.
B.
ACHA also moves for summary judgment, arguing that it cannot be
vicariously liable for Lindemon’s alleged negligence because: (1)
Plaintiff cannot prove Lindemon’s primary negligence because the
contains only two change orders-- SRC Construction’s Ex. X, and
Lindemon’s Ex. M.
4

To be clear, the Court will grant summary judgment to
Lindemon on all of the claims remaining against it-- the
negligence claim, as well as the breach of implied and express
warranty claims-- because they all rest on the same facts and
alleged failures of Lindemon. All of the claims allege “act[s]
of malpractice or negligence by [Lindemon],” N.J.S.A. 2A:53A-27,
and therefore are subject to the Affidavit of Merit statute. See
SRC Const. Corp. of Monroe, 2011 WL 1375680 at *4 (“‘[i]t is not
the label placed in the action that is pivotal but the nature of
the legal inquiry.... [R]ather than focusing on whether the claim
is denominated as tort or contract, attorneys and courts should
determine if the claim’s underlying factual allegations require
proof of a deviation from the professional standard of care
applicable to that specific profession.... If such proof is
required, an affidavit of merit shall be mandatory for that
claim, unless either statutory, N.J.S.A. 2A:53A–28, or common
knowledge exceptions apply.’”) (quoting Couri v. Gardner, 173
N.J. 328, 334 (2002)).
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common knowledge exception does not apply (i.e., there can be no
vicarious liability absent primary liability); and (2) as a matter of
law, ACHA cannot be liable for Lindemon’s negligence because Lindemon
was an independent contractor.
The flaw in ACHA’s argument is that the Complaint does not
allege that ACHA is vicariously liable for Lindemon’s negligence.
SRC Construction’s claims against ACHA are almost exclusively
contract claims: breach of contract, breach of express and implied
warranties, unjust enrichment, breach of good faith and fair dealing,
wrongful termination of contract, and conversion.
At oral argument ACHA’s counsel argued that SRC Construction’s
failure to obtain an affidavit of merit not only barred SRC
Construction’s claims against Lindemon, but that the failure also
barred SRC Construction’s claims against ACHA.

The Court disagrees.

The Affidavit of Merit statute, by its very terms, applies only
to certain claims against “licensed person[s] in his [or her]
profession or occupation.”

N.J.S.A. 2A:53A-27, and specifically

applies only to claims against the “licensed person[s]” enumerated in
N.J.S.A. 2A:53A-26 (defining “licensed person” to include attorneys,
physicians, accountants, architects, and engineers, among others).
ACHA is the property owner.

It plainly is not a “licensed person” to

whom the statute applies.
Accordingly, ACHA’s Motion for Summary Judgment will be denied.

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IV.
For the reasons set forth above Lindemon’s Motion for Summary
Judgment will be granted and ACAH’s Motion for Summary Judgment will
be denied.5

An appropriate Order accompanies this Opinion.

October 24, 2013

s/ Joseph E. Irenas
JOSEPH E. IRENAS, S.U.S.D.J.

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The dispositive motion deadline has passed, and this case
is now ready for pretrial conference. The cumulative result of
this decision, and the Court’s previous decisions on the parties’
dispositive motions, is the following.
Lindemon is no longer a Defendant to SRC Construction’s
claims against it. Accordingly, Lindemon’s cross-claims against
ACHA for indemnification and contribution (Docket #8) will be
dismissed as moot.
However, Lindemon remains a Defendant to ACHA’s cross-claims
for: (1) negligence in its role as Project Manager; and (2)
indemnification and contribution. (Docket #15) See SRC
Construction Corp. of Monroe v. Atlantic City Housing Authority,
et al., 2011 WL 1375680 (D.N.J. April 12, 2011) (holding that
ACHA’s cross-claims are not subject to the Affidavit of Merit
statute because “nothing in the facts pled suggests that
Lindemon’s professional skills as an architect were necessary
either to (a) ‘properly review payment applications’ submitted by
the general contractor (SRC Construction) to the property owner
(the Housing Authority) or (b) communicate defects to the Housing
Authority.”).
As between SRC Construction and ACHA, the following claims
remain: SRC’s claims against ACHA for breach of contract, breach
of warranties, unjust enrichment, breach of good faith and fair
dealing, wrongful termination of contract, and conversion (Docket
#1); and ACHA’s counterclaims against SRC for breach of contract,
negligence, intentional misrepresentation, negligent
misrepresentation, and conversion. (Docket #15)
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