WERNER DECONSTRUCTION, LLC v. SITEWORKS SERVICES NY, INC. et al

Filing 163

MEMORANDUM AND ORDER denying 143 Motion for Partial Summary Judgment. Signed by Judge Peter G. Sheridan on 9/30/2022. (mg)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

WERNER DECONSTRUCTION, LLC,

Civil Action No.
3: 15-cv-7682 (PGS)(TJB)

Plaintiff,

MEMORANDUM AND ORDER
DENYING SUMMARY
JUDGMENT
ON COUNTS ONE, TEN AND
FOURTEEN
(ECF No. 143)

v.
SITEWORK SERVICES NY, INC.;
THOMAS A. GARBETT; YVONNE
GARBETT alkla YVONNA HARLE;
RICHARD HARLE; SITEWORKS
SERVICES
CORP.;
SITEWORK
SERVICES NJ, INC.; THOMAS K.
GARBETT; JOHN DOES 1-10 and
XYZ Companies
1-10 (fictitious
defendants who participated in the
diversion/conversion of funds owned by
Werner Deconstruction, LLC),

Defendants.
This case is before the Court on Plaintiff’s Motion for Partial Summary
Judgment as to: (a) Count One of the Second Amended Complaint (Breach of
Contract); (b) Count Ten of the Second Amended Complaint (Piercing of the
Corporate Veil against SSNY, SSC, SSNJ, Thomas A. Garbctt (T.A.G.), and
Thomas K. Garbett (T.K.G.)); and (c) Count Fourteen of the Second Amended
Complaint (Alter Ego Liability against SSNY, SSNJ, and SSC). ECF No. 143. This
is a case where the parties cannot agree on the time of day. As such, there are
numerous facts in dispute. Therefore, summary judgment is denied.
1

I. Legal Standard
A motion for summary judgment should be granted only if “there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. p. 56(a). “A factual dispute is ‘genuine’ if the
‘evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Razak v. Uber Techs., Inc., 951 F.3d 137, 144 (3d Cir. 2020), amended,
979 F.3d 192 (3d Cir. 2020) (quoting Anderson v. Liberty Lobby, Inc., 477 U.s.
242, 248 (1986)). “A factual dispute is ‘material’ if it ‘might affect the outcome of
the suit under the governing law.” Id. “The Court must view the facts and
evidence presented on the motion in the light most favorable to the nonmoving
party.” Id. (quoting Anderson, 477 U.S. at 255). Moreover, summary judgment
“is inappropriate when the evidence is susceptible of different interpretations or
inferences by the trier of fact.” Hunt v. Croinartie, 526 U.S. 541, 553 (1999).
“When the moving party [Werner Deconstruction] has the burden of proof at
trial, that party must show affirmatively the absence of a genuine issue of material
fact: it.

.

.

must show that, on all the essential elements of its case on which it

bears the burden of proof at trial, no reasonable jury could find for the non-moving
party.” Wasserman v. Bressinan, 327 F.3d 229, 238 (3d Cir. 2003) (internal
quotation marks omitted). Where the moving party bears the burden of proof, the
evidence presented in support of summary judgment must be “credible” and
2

“entitle [Werner Deconstruction] to a directed verdict if not controverted at trial.”
Id. at 237 (quoting Celotex, 477 U.S. at 331 (Brennan, J. dissenting)). “Once a

moving party with the burden of proof makes such an affirmative showing, it is
entitled to summary judgment unless the non-moving party comes forward with
probative evidence that would demonstrate the existence of a triable issue of fact.”
Id. at 238.

II. Analysis
In Plaintiff’s Statement of Material Facts (“PSMF”) (ECF No. 143-2), it
alleges the litigation stems from the demolition of the Werner Generating Station
(Units 1, 2 and 3) in South Amboy, New Jersey. (PSMF at ¶1). Outside of this
basic fact, nearly all of Plaintiff’s facts are disputed or modified by Defendant
Sitework Services NY, Inc. (SSNY). SSNY alleges additional work, change orders
and factual disputes require a trial by jury. To highlight that point, numerous
examples of disputes are numbered and set forth below.
A. Background Pre- “Debris Removal Services Agreement”

Fact Issue I
Plaintiff claims in PSMF 9191 1-10:
the project owner was NRG REMA LLC, formerly known as “GenOn
REMA LLC” (“NRG REMA”). In order to deconstruct the
generating station, on April 5, 2013, (a) NRG REMA contracted with
Werner Deconstruction (the “Prime Contract”). (PSMF 9[3); (ECF No.
143-9 (Ex. 1)). The Prime Contract: (1) “include[dj the abatement
and management of all Hazardous Materials in a safe and lawful
3

manner, demolition of [the generating station] as set forth herein, (2)
salvage of materials and equipment, and (3) the disposal of any
remaining non-salvageable materials.
(PSMF ¶4); see also (ECF
No. 143-9 at 39 (Ex. 1)).
.

.

.“

Werner Deconstruction was responsible for “project management”
and served as the “owner’s representative”; it performed no
“engineering work, development of demolition, or environmental
remediation plans.” (PSMF 9j7). On April 9, 2012, Werner
Deconstruction subcontracted its obligations to BTU Solutions DE
LLC (“BTU”). Id.
On the other hand, Defendant SSNY claims in Defendants’ Statement of
Facts (DSMF9[91 1-10) (ECF No. 162):
the Prime Contract and the subcontract between Plaintiff and BTU
Solutions DE, Inc or plaintiff’s agreement with NRG REMA are
irrelevant to this litigation. (Defendants’ Statement of Facts (DSMF
¶91 1-10) (ECF No. 162).
On a motion for summary judgment, when there is an assertion that the
contracts are irrelevant and probably subject to an evidence issue, the Court
considers them to be in dispute for purposes of this motion.
Fact Issue 2
In PSMF9I 12, Plaintiff asserts:
12. In January 2014, BTU Solutions LLC entered into a
General Services Agreement with SSNY to demolish the
building housing Units 1. 2, and 3 at the Werner
Generating Station.(Kemper Cert. 91 8: Ex. No. 3).
Defendant agrees in part, but counters with additional facts (DSMF 9112).
12. Defendants agree that SSNY entered into an
agreement to demolish a building at the Werner
4

Generating Station. Additionally, Defendants state that
Site Enterprises. Inc. was originally retained by BTU
Solutions DE, Inc. to perform SSNY’s tasks, Roffe
Certification, Exhibit F, Tr. 39:2-40:15). Site Enterprises,
Inc. “walked off the job” because they were not paid and
successfully obtained a lien of $450,000 plus attorneys
fees on the Project. (Roffe Certification, Exhibit C).
Further, SSNY used the tracking pad Site Services. Inc.
installed but added additional stone on top. (Roffe
Certification. Exhibit F, Tr. 55:6-25).
Fact Issue 3
Plaintiff asserts in PSMF ¶91 13-14:
13. As part of that contract, SSNY and another BTU
entity, BTU Environmental Services, LL,C entered into
an agreement entitled “Statement of Work #01 “which
incorporated the General Services Agreement by
reference. (Kemper Cert.. ¶ 8: Ex. No. 4 ¶ I).
14. SSNY was BTU’s demolition contractor for the
Project. (Kemper Cert. ¶ 9).
Although Defendants agree with ¶ 13, it disputes ¶ 14 alleging
additional facts:
14. Defendants agree that SSNY was a demolition sub
contractor for a portion of the Werner Generating Station
Project. Defendants do not agree that SSNY was the
demolition contractor for the whole Project. Pursuant to
the contract by and between SSNY and BTU
Environmental, SSNY was to deconstruct one building
(RolTe Certification, Exhibit D).

5

Fact Issue 4
Plaintiff contends that SSNY’s responsibilities under the BTU contract were
as follows:
18. Generally, SSNY agreed to perform all of the
demolition work that BTU Solutions DE, LLC was
responsible to perform under the Subcontract with
Werner Deconstruction, with the exception of
transporting and disposing asbestos containing material
(“ACM”) and construction and demolition debris
(“C&D”) offsite which SSNY had specifically excluded.
(Kemper Cert. ¶9; Ex. No. 4 at Werner 00518 stating
“All disposal of ACM and C&D to be performed by BTU
or others”).
Defendants contend the above statement is overbroad and in dispute:
18. Defendants disagree with the facts stated in
Paragraph 18. Defendants state that SSNY was required
to perform only the tasks specified on “Scope of Work
#1.” To the extent the task listed comport with the Scope
of Work #1, Defendants agree with the facts stated.
Fact Issue 5
In PSMF ¶ 19, Plaintiff asserts that Paul Desser in his deposition described
the work to be perthrmed by SSNY:
A. Okay. had created, okay, to tear the building down, wash the
debris that was ferrous or non-ferrous metals on the tracking pad that
had already been provided by BTU or by somebody because it was
already there, power wash it, pass it out, process it and ship it out to a
scrap yard or scrap yards to get the most money to equal the benefit of
what Mr. Garbett was to get. The balance of anything above and
beyond that was to go to either BTU or Werner.
—

The debris from the structure demolition was to he taken away by
BTU and disposed of. They were to remove all of the debris, load it in
6

trucks, wrap it, do everything they needed. SSNY’s job was to get the
building down and create we’ll call it the debris pile....
but Defendants allege that it is an incomplete statement and must be supplemented
with other testimony. SSNY notes:
19. Defendants state that the quotation in this Paragraph
is accurate. Defendants further state that Desser further
testified that SSNY’s task under its agreement with BTU
in full detail at Roffe Certification, Exhibit F, Tr. 56:1767:18.
Fact Issue 6
In PSMF ¶ 21, Plaintiff alleges SSNY moved debris from the demolition
around the site, relying upon the deposition of Desser. In response, SSNY argues
that debris was moved, but this was caused by BTU’s failure, rather than its own
actions. Defendants assert (DSMF9 21):
21. Defendants agree with Paragraph 21 and further state
that this was due to the failure of BTU to remove the
debris.
Fact Issue 7
Continuing on the same point, Plaintiff contends in PSMF9I 22 that SSNY
“moved debris around the site”:
22. SSNY moved the debris around the site. (Kemper
Cert. Ex. No. 5 at ¶ 3 (“As a part of the demolition
process we have moved a substantial amount of the
residual material from the demolition to the north end of
the site and have indicated it may he needed for the
platform when we are demolishing the northern most
boiler.”); Ex. No. 8 at WcrnerO64O4 (“We have already
7

moved the material more than one time to keep the
operation going....”)).

Defendants agree, but noted that this caused additional work for SSNY. (DSMF ¶
22);
22. Defendants agree that SSNY moved the piles of
debris around the work site, but not elsewhere. As a
result, SSNY had to keep moving the piles. Roffe
Certification, Exhibit F, Tr. 70:17-22.
Fact Issue 8
In PSMF ¶ 26, Plaintiff contends that “Thomas Barbett testified that SSNY
initially contracted with BTU to demolish Units 1, 2 and 3”. Defendant agrees
with this statement, but defendants contend it fails to recognize some proposed
change orders (DSMF ¶ 26):
26. Defendants agree with Paragraph 26 as far as it goes
but also states that, significantly, it was sent to Malcolm
Carroll, Plaintiff’s project manager, and that he requested
to be “kept in the ioop” to ensure that the change order
described therein was “acceptable to” Plaintiff because
the scrap which was to pay SSNY’s fee for the Scope of
Work was not enough to cover said work, as previously
anticipated, and since Plaintiff “approved and signed off’
on SSNY’s contract with BTU Environmental, it needed
to be kept informed. Lastly, Desser testified that when
BTU Environmental failed to perform and defaulted
Roffe Certification, Exhibit F. Tr. 95: 17- 99:2 Plaintiff
stepped into the shoes of BTU Environmental and
performed its duties. Rofft Certification, Exhibit F, Ti-.
99:9-100:9. 105:24.

8

Fact Issue 9
In PSMF ¶91 27-29, Plaintiff refers to an email from Desser to Carroll of
Werner requesting additional compensation to SSNY. Carroll responded that
Desser’s recourse was with BTU.
Defendants agree with the above facts but assert that it is all subject to their
response in DSMF 26 concerning Carroll’s statement therein (see above). (DSMF

¶91 27-29).
Fact Issue 10
In PSMF ¶ 30, Plaintiff alleges that there was a letter proposal from SSNY
to BTU wherein it proposes the amount of $509,000 to process 20,000 tons of
debris for reuse in lieu of disposing of it off-site. Defendants agree that was part of
a quotation, but the terms had other provisions. (DSMF ¶30):
30. Defendants agree that the letter states what it says as
far as it goes, but the letter also states that “BTU/CAMS”
was required to remove the 20,000 tons of debris and,
since “BTU/CAMS” had not done so, SSNY would
process the debris to reduce the amount of material that
needed to be removed as contaminated by asbestos for
$510,900.00, not “for reuse in lieu of disposing it off the
site.” Indeed, the letter broke down the specific
procedure to be followed. Further, the letter states that
the work set forth is outside SSNY’s scope of work.
(Certification of Nicolas Kemper dated November 12,
2021 (the “Kemper Certification”) Exhibit 5). Further,
Defendants state that the removal of the tracking pad was
not placed into the Debris Removal Services Agreement.
Roffe Certil’ication, Exhibit H.

9

Fact Issue 11
In PSMF ¶ 31, Plaintiff alleges SSNY stated, in a November 17, 2014 letter,
that “[t]he existing approved EPA work plan requires us to remove and dispose of
all non-metal materials from the demolition of the Werner Generation Station as
Asbestos Contaminated debris.” (Kemper Ex. No. 5 at Werner 06512 ¶ 2).
However, Defendants contend they fulfilled their contractual obligation by
stockpiling the debris for removal once BTU/CAMS paid for its removal (DSMF
¶31):
31. Defendants agree with Paragraph 31 as far as it goes,
but states that the letter also states that BTU/CAMS is
required to pay for the removal, that SSNY was prepared
and ready to load the debris, and that SSNY would fulfill
its contractual obligations if it stockpiled the debris for
removal when BTU/CAMS paid for its removal. Further,
the next paragraph of the letter states, “As part of the
demolition process, we have moved a substantial amount
of the residual material from the demolition to the north
end of the site .This has allowed the material to remain
on site and not yet have BTU/CAMS incur the cost of
transportation and disposal of this material...
.

B.

.

Breach of Post- “Debris Removal Services Agreement”

(a)

Count One (Breach of Debris Removal Service Agreement
(DRSA) Against SSNY)

This lawsuit centers on the Debris Removal Service Agreement (DRSA).
Werner Deconstruction seeks partial summary judgment on a breach of contract
claim against SSNY on four different grounds: (i) SSNY’s failure to complete the
10

removal of debris on the site; (ii) the failure to pay sub-subcontractors and to
indemnify Werner Deconstruction against construction liens filed by those subsubcontractors; (iii) the failure to refund pre-payments that SSNY allegedly did not
earn; and (iv) the failure to remove and remediate the contaminated tracking pad at
the site. (Second Amended Complaint (SAC) ¶9129-65, ECF No. 69). As in the
first section, involving pre-DRSA events, the parties dispute the facts on each
ground.
(i) SSNY’s failure to complete the removal of debris on the site
Fact Issue 12
In PSMF91 171, Plaintiff alleges SSNY abandoned the Project, leaving
debris (including asbestos contaminated brick) and trash, scattered throughout the
site in breach of SSNY’s scope of’ work under the DRSA. SSNY does not dispute
debris remained on the site, but rather they deny abandonment of the project, and
argue lack of contractual responsibility for the debris that remained on the site.
(DSMF9I 171).
171. Defendants state that SSNY did not abandon the
project, that they cleaned up the site where they were
working. Desser Certification, Exhibit B, last 2 pages,
Roffe Certification, Exhibit B Tr. 120:18-122: 16. SSNY
was not required to, noi did they, clean areas they were
not assigned to work.

11

Fact Issue 13
In PSMF ¶ 33, Plaintiff states as a result of BTU’s lack of financial capacity
to transport and dispose of the asbestos contaminated debris offsite and complete
the remainder of its work, plaintiff had to it had to provide financially for the
disposal of the debris from the site.
SSNY does not dispute that plaintiff was placed in this position leading to
the contract between plaintiff and SSNY but adds that under the DRSA Plaintiff
was required to pay aper load fee for such additional removal. (emphasis added)
(DSMF9I 33).
Obviously, the parties dispute the scope of the work set forth in the DRSA.
Plaintiff submits the contract is inclusive of all debris on the site, while SSNY
argues Exhibit B to the DRSA (outlining the price schedule and estimate to be
20,000 tons) created a “per load” agreement for which plaintiff paid defendants in
advance, and SSNY cleaned the site of asbestos contaminated material and
documented same to plaintiff. (ECF No. 151 at 5-6).
In part, plaintiffs rely on the following section of the DRSA (PSMF 91 39):
In accordance with the terms and provisions of this
Agreement, [SSNY] shall provide to Werner all services
for the sole purpose of removal from the project site and
disposal to an authorized ACM contaminated landfill of
building debris and contaminated waste materials
(“Debris” or “Debris Pile”) of the demolished power
house at the Werner Generating Facility, located at 1 35
Main St., South Amboy[,j New Jersey, as described and
12

stated in Exhibit “A” which is attached hereto and made
a part hereof (the “Work”). [SSNY] will adhere to and
comply with all Federal, State, Local, and OSHA laws,
regulations and requirements in the performance of the
Work. [SSNY] has subcontracted or will subcontract
with Minerva Enterprises, LLC, a qualified disposal
landfill operator (“Landfill Contractor”) to supply
trucking, transport, and hauling and proper disposal of
the Debris and will generate and obtain all necessary and
appropriate documentation required in the performance
of the Work as records which shall be turned over to
Werner for submittal to the owner of the project site,
NRG REMA .The schedule for Contractor’s performance
of the Work shall be as set forth in Exhibit C.
(Id. at 195 (Ex. 9)). To the contrary, SSNY argues that Exhibits attached to the
DRSA limited its work (DSMF ¶ 33) (ECF No. 151 at 5-6).
Under a section with the heading “CONTRACTOR OBLIGATIONS,” the
DRSA required SSNY to “perform the Work as set forth in Exhibit ‘A’ to
completion

.

.

.

.“

(Id.). “Exhibit A” of the contract defined SSNY’s “scope of

work”:
Contractor shall provide all supervision, labor, materials,
equipment, maintenance, ACM handling, debris loading,
wetting, and wetting equipment, liners, weighing,
transportation, disposal, required documentation and
tracking, including EPA / NJDOL / NJDOH / OSHA,
interface and compliance necessary to complete removal
and proper disposal of the ACM Contaminated Building
Debris, associated structures, and materials which were
and are a product of the Open Air Demolition Plan Rev
10 approved by the EPA, NJDOH, and NJDOL for the
demolition of the power house located at the Werner
Generating Station (the “Werner Facility”), 135 Main

13

St., South Amboy, New Jersey. This scope of services
includes:

4. Weigh out utilizing existing site sales, record,
and provide shipping manifests and EPA required
documentation for each load shipped and maintain
records on site.

6. Construct and maintain necessary components
for handling the materials on site including
tracking pad, wheel wash, etc., required for the
loading and removal of materials.
7. Supply all labor, materials, and equipment to
install either “bladder bag liners” or “Burrito
wrap” for each of the loads.
8. Perform any additional activities,
documentation, or filings, that may be required by
the Federal, State, and Local[j governing agencies
that have jurisdiction over or are involved with the
performance of thc Work, whether or not
previously identified or mentioned, which are
necessary to complete the Work.
(Id. at 201 (Ex. 9)).
Exhibit B to the Agreement is titled “Price Schedule” and reads as follows:
Truck/Transport & Disposal: $1 12/ton
On Site Material Handling: $6/ton
Container Liner & Lining: $280/load
Debris pile is estimated by Contractor at 12000 Cu. Yds. Or
20,000 tons.
14

Upon completion of setup Contractor expects to load out 20
trucks/day.
Above pricing is warranted by Contractor for the duration of
the Work provided pursuant to this Agreement.
In addition, associated costs incurred by the Contractor to
maintain the routing on NRG’s side of the fence used by
disposal trucks and containers for performance of the Work as
necessary. (These costs are unknown at this time.)
For the purposes of this agreement Werner assumes these costs
would include supervision, labor, equipment, and materials
(loads of limestone aggregate) necessary to fill, spread, and
grade the route to recover and maintain it to a usable state
during material transport operations and to return it to its
original state upon completion of the Work.
(Id. at 202 (Ex. 9)).
Fact Issue 14
In PSMF ¶9 169, Plaintiff states it noticed SSNY by letter “that the balance
of the prepayment be utilized by SSNY in order to complete the work under the
contract without delay, pursuant to the pricing warranted by SSNY as set forth in
Exhibit ‘B’ in the Contract.” SSNY disagrees with this statement, SSNY argues
(DSMF9 169):
169. Defendants state that the letter states what is quoted
but is not factually accurate. Defendants state that SSNY
completed the project, and did not abandon it, they
requested a “close out” and the response was for another
proposal to do the tasks set forth in the letter Roffl
Certification, Exhibit B, Tr. 120:18-122:16

15

The material fact at issue is whether the contract was limited to a per-load
agreement as argued by SSNY (to which it argues it completed its contractual
obligations) or as plaintiff claims, whether the contract covered the remaining
debris as part of SSNY’s scope of work. This is a dispute of material fact.
(ii) the failure to pay sub-subcontractors and to indemnify Werner
Deconstruction against construction liens filed by those subsubcontractors;
Plaintiff seeks indemnification to recoup the cost of its defense against the
construction liens filed by Minerva and Ani & Joe, invoking its duty to defend
based on paragraph 9 of the DRSA (“Indemnification”).
Fact Issue 15
In PSMFfi 101, 187-8, Plaintiff claims SSNY did not pay Minerva
Enterprises and as a result Minerva Enterprises filed a construction lien claim
against the Project in the amount of $240,704.97 and Plaintiff incurred $10,566.22
in attorneys’ fees to have Minerva Enterprises’ construction lien claim discharged.
In addition, in PSMF 9I9 189-90, Plaintiff states SSNY did not pay Ani & Joe
Abatement Demolition, LLC and as a result Ani & Joe Abatement Demolition,
LLC filed a construction lien claim against the Project in the amount of $19,008.00
and Plaintiff incurred $3,210.00 in attorneys’ fees to have the construction lien
claim discharged.

16

To the contrary, in DSMF 9191 101, 188 and 189, SSNY disputes
responsibility for the liens:
101. Defendants deny the allegation contained in this Paragraph.
Defendants state that Minerva was fully and completely paid, when
back charges were factored in. Roffe Certification, Exhibit F, Tr.
211:18-212:24. Further, Defendants state that it is irrelevant as to
whether Minerva was paid as the Debris Removal Services
Agreement did not require Plaintiff to pay any contractors of SSNY,
and the Debris Removal Services Agreement does not require such
payment. Further, Defendants state that Plaintiff was fully aware of
what SSNY paid all contractors since they received daily or weekly
reports and all the tickets of transactions. Desser Certification, Exhibit
1, Roffe Certification Exhibit B 145:25-146:15, Exhibit F, 176:2178:6. Additionally, Desser provided a spreadsheet. Exhibit B, Tr.
231:9-233:21
188. Defendants state that the lien was an invalid lien, as evidenced by
the discharge, was part of the back charge dispute SSNY had with Ani
and Joe Abatement Demolition, and if Plaintiff sought a discharge, it
is its own liability. Indeed, when Desser asked for the lien, said he
would take care of it, and was told that Plaintiff dealt with it.
Additionally, Desser testified that Ani and Joe frequently sent invalid
and false bills. Roffe Certification, Exhibit B, Tr. 40:21-44:4, Exhibit
G Tr. 265:12-266:13, 268:9-25
189. Defendants state that the lien was an invalid lien, as evidenced by
the discharge, and did not owe any sums to Ani and Joe Abatement
Demolition, and if Plaintiff sought a discharge, it is its own liability.
Defendants also incorporate its response to Paragraph 188 herein.
Further, if Ani and Joe Abatement Demolition had a valid claim, they
should have sued SSNY.
As such, SSNY does not dispute the liens were filed or the accuracy or
validity of the billing for the attorneys’ fees by Werner, hut rather disputes
responsibility generally for the liens. SSNY challenges: (a) validity of the liens as
17

Minerva was fully paid and Ani & Joe’s lien was discharged; (b) they were denied
the opportunity to assert a defense against the claims; and (c) it was not plaintiff’s
responsibility under the prime contract or DRSA to pay such liens. (DSMF 162 ¶
188). As such this is another issue of material fact.
(iii)faiiure to

refund pre-pavinents

that

SSNY allegedly did

hot earn;

Fact Issue 16
The parties do not dispute Article 6 subparagraph 5 of the DRSA compels
SSNY “[alt the completion of the Work, Contractor shall refund any remaining
funds in the Contractor’s account by wire transfer back to Werner’s account within
two (2) business days.” PSMF ¶ 43. However, the amount owed by SSNY is in
dispute.
In PSMF ¶ 120, Plaintiff calculates the total amount owed by SSNY for
overpayments to the Pre-Payrnent Account is $122,298.66 (i.e., $188,798.66

-

$66,500.00). However, SSNY disputes this calculation. DSMF ¶ 120. SSNY
asserts:
120. Defendants state that this calculation is inaccurate and again state
that the calculations by both Plaintiff and SSNY in the spreadsheets
prepared are accurate.
SSNY references a spreadsheet apparently prepared by Desser as proof of
what Werner Deconstruction actually owed SSNY (Exhibit B, Tr. 231:9-233:21).

18

At his deposition, Desser testified that Werner Deconstruction’s calculation
of how much SSNY earned failed to account for costs that SSNY incurred while
working on the project, such as keeping the site wet during a work shut down
ordered by Werner Deconstruction. DSMF at ¶ 101; ECF No. 143-8, Tr. 14:1816:15 (Ex. H). This is corroborated by the parties’ contract, which contemplates
that Werner Deconstruction would compensate SSNY for “associated costs
incurred by {SSNY] to maintain the routing.

.

.

used by disposal trucks” for an

unspecified amount. ECF No. 143-9 at 202 (Ex. 9). At minimum, this creates a
genuine question of material fact for the jury to decide.
(iv) failure to remove and remediate the

contaminated

tracking pad

Fact Issue 17
Plaintiff seeks damages for the cost of removing the contaminated tracking
pad, alleging defendants were responsible for removal. The parties agree Exhibit A
to the DRSA, obligates SSNY to “[c]onstruct and maintain necessary components
for handling materials on site including tracking pad, wheel wash, etc., required for
the loading and removal of materials.” PSMF ¶ 152. Defendants argue that the
cited language does not obligate them to remove the tracking pad. In PSMF9 156,
Plaintiff states SSNY did not remove the tracking pad. However, defendants
dispute removal fell within their scope of work. DSMF 9[ 156.
156. Defendants state that SSNY did not remove the tracking pad and
state they were not required to pursuant to the Debris Removal
19

Services Agreement. Indeed, it was specifically left out after being
proposed by SSNY. Defendants incorporate their response to
Paragraph 39 herein.
(b)

Count Ten (Piercing of Corporate Veil against SSNY, SSC,
SSNJ, Thomas A. Garbett (T.A.G.), and Thomas K. Garbett
(T.K.G.))

By way of background1, there are two elements required to pierce the
corporate veil: “First, there must be such unity of interest and ownership that the
separate personalities of the corporation and the individual no longer exist.
Second, the circumstances must indicate that adherence to the fiction of separate
corporate existence would sanction a fraud or promote injustice.” Hunt Constr.
Grp. Inc. v. Farina, No. 11-4933, 2012 WL 72286 (D.N.J. Jan. 10, 2012).
In support of its motion for summary judgment, Plaintiff argues: T.A.G. and
T.K.G. are both officers or directors of all the corporate entities;
Fact Issue 18
In PSMF ¶ 201, Plaintiff states T.A. Garbett and T.K. Garbett completed a
“General Business Resolution” form with T.D. Bank, NA which identified both of
them as “officers, employees, members or agents” of SSNY with signature
authority to withdraw funds from SSNY’s accounts and to write checks. PSMF 91

J\s an aside, ihe Court requires briefing and a con l’erence on whether this claim shoti 1(1 he treated separately from
contract claim (DRSA), and whether it is an equitable remedy.

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201; O’Leary Cert. Ex. F. Defendants do not deny similar ownership, but maintain
SSNY and SSC are separate entities. DSMFJ[ 201.
201. Defendants state that SSNY and Siteworks Service Corp. are
separate entities that have similar ownership and there is no evidence
to the contrary. They have separate accounts and operate separately.
Defendants further state that, since Siteworks Services Corp. had no
direct claims against it, and the claims against Defendants are not
valid, it is irrelevant.
Fact Is sue 19
In PSMF ¶ 203, Plaintiff states SSNY never had a meeting of its board of
directors or its shareholders. PSMF9 203; Linares Cert. Ex. B at Tr. 21:3-2 1:13.
Similarly, in PSMF ¶ 238, plaintiffs allege SSNJ did not have meetings of its board
of directors or its shareholders. Defendants dispute the allegations as inaccurate or
false. DSMF ¶9 203, 238:
203. Defendants state that SSNY held such meetings. Defendants
further state that, since Siteworks Services Corp. had no direct claims
against it, and the claims against Defendants are not valid, it is
irrelevant.
238. Defendants do not challenge the facts stated in this Paragraph as
far as it goes, but state that SSNJ had only one shareholder so such
meetings were irrelevant. Defendants further state that since the claim
against Defendants is not well founded, it is irrelevant.

Fact Issue 20
Plaintiff alleges defendants engaged in the following improper financial
practices including: (a) T.A.G. and T.K.G. stripped SSNY, SSC, and SSNJ of their
21

assets; (b) T.A.G. and T.K.G. made large withdrawals (totaling hundreds of
thousands of dollars) from the bank accounts of these corporations; (c) T.A.G. and
T.K.G. used funds from the bank accounts of SSNY, SSC, and SSNJ on personal
expenses. (ECF No. 143-1 at 4 1-43). For example:
In PSMF ¶J[ 204-207, Plaintiff alleges defendant T.A. Garbett improperly
enacted a series of cash withdrawals between February 6, 2015 and June 30, 2015,
totaling $760,116.00 from the Pre-Payment Account leaving the accounts with low
to zero balances. Similarly, between February 6, 2015 and June 30, 2015 plaintiff
alleges defendant T.K. Garbett made improper cash withdrawals totaling $21,463.
Defendants dispute the impropriety of the withdrawals. DSMF 9191 205-207.
205. Defendants state that such funds were used to pay salaries and
expenses pursuant to the Debris Removal Services Agreement,
salaries and expenses for other jobs, and shareholder draws. The funds
were properly drawn Certification of Saul Roffe, Esq. dated
December 16, 2021 (“Roffe 2 Certification”, Exhibit A, 103:23,
1 3 1: 15-22., 109:7-1 11: 12. Defendants further state that, since
Siteworks Services Corp. had no direct claims against it, and the
claims against Defendants are not valid, it is irrelevant.

207. Defendants state that such funds were used to pay salaries and
expenses pursuant to the Debris Removal Services Agreement,
salaries and expenses for other jobs, and shareholder draws. The funds
were properly drawn Certification of Saul Roffe, Esq. dated
December 16, 2021 (“Roffe 2 Certification”, Exhibit A, 103:23,
1 3 1: 15-22., 109:7-111: 12. Defendants further state that, since
Siteworks Services Corp. had no direct claims against it, and the
claims against Defendants are not valid, it is irrelevant.

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Fact Issue 21
In PSMF ¶9[ 208-209, Plaintiff alleges defendants conducted multiple
improper transactions from the Pre-Payment account that did not have a legitimate
connection to the removal of demolition debris from the site. Defendants dispute
the impropriety of the transactions. DSMF ¶ 208:
208. Defendants state that the charges listed are both immaterial and
explained by Garbett in deposition ((“Roffe 2 Certification”, Exhibit
A, 103:23, 13 1:15-22., 109:7-111:12). Further, Plaintiff, beyond the
bald statement, provided no evidence of their impropriety. Defendants
further state that, since Siteworks Services Corp. had no direct claims
against it, and the claims against Defendants are not valid, it is
irrelevant.
Fact Issue 22
In PSMF ¶ 210, Plaintiff alleges defendant T.A. Garbett transferred sums
totaling $560,000.00 from the Pre-Payrnent Account to other bank accounts
maintained by SSNY and Siteworks Services Corp. at TD Bank. Defendants
dispute the accuracy of this claim. DSMF ¶ 208.
210. Defendants state that if SSNY transferred the funds from the
main bank account of SSNY to other accounts controlled by SSNY,
the funds were not removed from SSNY. Thus, this claim is patently
false by Plaintiff’s own claims. Defendants further state that, since
Siteworks Services Corp. had no direct claims against it, and the
claims against Defendants are not valid, it is irrelevant.

Fact Issue 23
In PSMF9[9[ 211-229, Plaintiff alleges defendants T.A. Garhett and T.K.
Garhett made several more cash withdrawals from the pre-payment account
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continually leaving the account with low to zero funds remaining. Defendants do
not deny the withdrawals occurred, but do contend that explanations were given as
to the reasoning of the withdrawals and maintain their legitimacy. DSFM

¶ 211-

229.
211. Defendants state that Garbett did, in fact state, generally, what
happened with the funds. Defendants further state that since the
claims against Defendants are not valid, it is irrelevant.

(c)

Count Fourteen (Alter Ego Liability against SSNY, SSNJ,
and SSC)

In support of its motion for summary judgment, Werner Deconstruction
points to several facts which could show how SSNY, SSNJ, and SSC were
intermingled or used to perpetuate fraud:
(1)

the Pre-Payment Account was set up in the name of SSC and not

SSNY, PSMF ¶ 42, which defendant does not dispute other than to note
plaintiff did not always make prepayrnents. DSMF 91 42.
(2)

there were possibly several large transfers of money between the

entities, e.g. PSMF fl240-42; which defendant does not dispute. DSMF
¶9[240-42.
(3)

checks intended for SSNY were deposited into an account for SSNJ,

PSMF 9191240-42; which defendant does

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not

dispute. DSMF 9191240-42.

However, construing the facts should be left to the trier of fact. Arranging
the Pre-Payment Account in the name of SSC (instead of contract party SSNY),
does not conclusively constitute intermingling. PSMF ¶ 42. Whether SSNY and
SSNJ used funds inappropriately (PSMF ¶239) or failed to hold meetings of their
boards of directors, (PSMF ¶91203, 238); is not irrefutable proof these corporate
entities acted fraudulently. The “fraudulent intent” element of piercing the
corporate veil is not a rigid test but rather considers several factors to determine if
the corporation is more than a mere legal fiction. Trs. of the Nat’l Elevator Indus.
Pension, Health Benefit & Ecluc. Funds v. Littyk, 332 F.3d 188, 194 (3d Cir. 2003).
This is a factual inquiry that is appropriate for the jury. Further, the alleged
transfers of money between the companies do not decisively establish the fact the
corporations were used by SSNY to perpetuate a fraud or injustice.
While T.A.G. was an owner or officer of all three entities, and T.A.G. and
T.K.G. created the bank accounts of all three entities, (PSMF9I9II9I-203, 236-37),
defendants maintain separate accounts and operate separately. DSMF ¶91191. A
trier of fact may need to rely on trial testimony to determine the credibility of the
statements and to draw a conclusion on the question of alter ego liability.
Concl us ion
In light of the enumerated disputes of material fact, summary judgment on
Counts One, Ten and Fourteen is denied.
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ORDER
THIS MATTER having come before the Court on Plaintiff’s Motion for
Partial Summary Judgment, (ECF No. 143); and the Court having carefully
reviewed and taken into consideration the submissions of the parties, as well as the
arguments and exhibits therein presented; and for good cause shown; and for all of
the foregoing reasons,
IT IS on this 30th day of September, 2022,
ORDERED that Plaintiff’s Motion for Partial Summary Judgment (ECF
No. 143) is hereby:
DENIED as to all claims under Count One, Count Ten, and Count Fourteen;

PETER G. SHERIDAN, U.S.D.J.

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