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BOROUGH OF BERLIN v. REMINGTON & VERNICK ENGINEERS, A-5916-11T4. (2014)

Court: Superior Court of New Jersey Number: innjco20140919256 Visitors: 14
Filed: Sep. 19, 2014
Latest Update: Sep. 19, 2014
Summary: NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION PER CURIAM. Plaintiff, Borough of Berlin ("Berlin"), appeals from the Law Division's order of June 15, 2012, granting defendants Remington & Vernick Engineers, Inc. ("R&V") and A.C. Schultes, Inc. ("Schultes") 1 summary judgment, as well as an earlier interlocutory order denying Berlin's cross-motion for change of venue. Defendants cross-appeal from the interlocutory denial of their motions to dismiss the complaint, based upon
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

PER CURIAM.

Plaintiff, Borough of Berlin ("Berlin"), appeals from the Law Division's order of June 15, 2012, granting defendants Remington & Vernick Engineers, Inc. ("R&V") and A.C. Schultes, Inc. ("Schultes")1 summary judgment, as well as an earlier interlocutory order denying Berlin's cross-motion for change of venue. Defendants cross-appeal from the interlocutory denial of their motions to dismiss the complaint, based upon Berlin's alleged violation of a "standstill agreement" ("the Agreement") entered into by the parties in 2007.

The procedural history is tortuous, and we refer to our prior reported and unreported decisions to provide the necessary context.

In January 1994, Berlin retained R&V to plan and construct two wells and to obtain from New Jersey's Department of Environmental Protection ("DEP") a water allocation permit for the wells. After the wells had been constructed, in April 1997, Berlin began receiving complaints from residents concerning unpleasant odors in the water supply from one of the wells. Berlin investigated the complaints, and well tests indicated that the problem's source was significant concentrations of isopropylmethoxypyrazine (IPMP) in the surface water and adjoining wetlands area located approximately seven-hundred feet north of the well. As a result, the well had to be closed in May 1997 because the odors exceeded DEP's safe drinking water standards. [Borough of Berlin v. Remington & Vernick Eng'rs, 337 N.J.Super. 590, 592-593 (App. Div.), certif. denied, 168 N.J. 294 (2001).]

Pursuant to N.J.S.A. 2A:53A-27, Berlin supplied an affidavit of merit from a hydrogeologist.2 Id. at 593. Reasoning that Berlin's complaint against a professional engineering firm required an affidavit from a licensed professional engineer, the Law Division dismissed the complaint, concluding Berlin failed to serve an affidavit of merit by an appropriate licensed person. Id. at 596.

On appeal, however, we noted that Berlin's complaint alleged R&V, through its employee, had failed to exercise the necessary care and skill "required of a qualified hydrogeologist" in applying for the permit, and DEP's regulations did not require that a licensed engineer sign the permit application. Id. at 596-97. We reversed the grant of summary judgment, concluding that Berlin had substantially complied with the statute. Id. at 598-99.

Berlin filed an amended complaint in 2003 that added Schultes as a defendant, claiming negligence in its actual drilling of test wells and breach of its contract with Berlin. Defendants moved for and successfully obtained summary judgment. See Borough of Berlin v. Remington & Vernick Eng'rs, No. A-3881-03 (Aug. 23, 2006) (slip op. at 4-5), certif. denied, 189 N.J. 104 (2006). As to Schultes, the motion judge concluded the statute of limitations had run. Id. at 6. As to R&V, the motion judge concluded that its employee, Cole, was not a hydrogeologist, and that Cole "had nothing to do with the siting" of Berlin's well. Id. at 5.

We reversed, however, deciding that as to Schultes, further proceedings on remand were necessary to determine whether Berlin was entitled to the equitable relief accorded by the discovery rule. Id. at 12-13. As to R&V, we described how Cole reported to his immediate supervisor, Gregory J. Sullivan, another employee of R&V, and that regardless of his title, "a reasonable factfinder might conclude that Cole was performing the function of a hydrogeologist." Id. at 14-15. We determined that the motion judge had read "too strictly" our prior opinion limiting R&V's potential vicarious liability for its employee's acts and omissions. Id. at 17.

There was evidence that Cole . . . computed the sphere of influence of the wells and concluded that the sphere of influence of [W]ell #12 did not include any neighboring wetlands. There are facts within the record indicating that the sphere of influence was improperly calculated and that neighboring wetlands were affected. [DEP] ultimately determined that there was a connection between the well and surrounding wetlands. As a result of that conclusion, [W]ell #12 was permanently removed from service. Berlin, at trial, would be permitted to demonstrate that the information provided to Sullivan did not contain information with respect to the hydraulic connection between the well and the associated wetlands, ultimately resulting in the loss of the well. The short answer to the siting issue. . . is that we never intended Berlin to be required to demonstrate that Cole himself was responsible for the decision to locate the well; all that was required was that the hydrogeologic data, on which the decision was based, came from Cole. [Id. at 18.]

Upon remand to the Law Division, the judge entered a case management order in February 2007, which is not in the appellate record. However, that provoked Berlin's motion for leave to appeal, which we granted. We summarily modified the case management order and provided further guidance regarding our prior decisions.

We have previously ruled that Berlin may not pursue any claim of engineering negligence against R&V and that claims that the wells were negligently sited as the result of hydrogeologic information are not claims of engineering negligence. Therefore, the question to be litigated is not whether siting a well is the practice of engineering. Rather, the question is whether Berlin can prove that (1) Sullivan was negligent in siting the well (a) because he relied upon incomplete or inaccurate hydrogeologic information supplied by Cole or (b) because he failed to request additional information from Cole; or (2) Cole was negligent because he supplied incorrect or incomplete hydrogeologic information to Sullivan; or (3) some other failure relating to incorrect or incomplete hydrogeologic information contributed to the incorrect siting of the wells. [I]f Berlin proves such negligence, then it must also prove that R&V should be responsible under respondeat superior or agency principles.

In September 2007, Berlin filed a second amended complaint, adding DEP as a defendant. Berlin alleged that DEP had intentionally tried to cover up its improper approval of the permit for Well #12. Berlin alleged that DEP urged the municipality to avail itself of $1 million in loans available through a State program to construct additional water treatment facilities in hope of curing the problems with Well #12's water source. Berlin claimed it spent $1 million dollars at DEP's insistence, but these efforts failed.

In December 2007, the parties entered into the Agreement, wherein Berlin dismissed its complaint to pursue legislative and administrative avenues of relief. The parties further agreed that Berlin could, "at its discretion, reinstate the [l]awsuit if it believe[d] it ha[d] not received appropriate relief from the Legislative and administrative processes. . . ." The parties further "agree[d] that the status quo of their rights, as well as their present positions both legally and factually, shall remain as presently situated should the [l]awsuit be reinstated."

On September 5, 2008, plaintiff filed a new complaint that named only R&V and Schultes as defendants. In his Rule 4:5-1 certification, Berlin's counsel stated that the borough had reached an "agreement in principal" through special legislation that would "resolve any and all claims" Berlin had against DEP.3 Defendants moved to dismiss the complaint with prejudice, arguing that Berlin's failure to include DEP as a defendant violated the Agreement's status quo provisions. The judge ultimately signed an order granting the motion without prejudice.

Berlin filed yet another complaint on April 18, 2011, reinstating DEP as a defendant. In his Rule 4:5-1 certification, Berlin's counsel stated its intention to immediately dismiss DEP as a party, and, in fact, DEP and Berlin entered into a stipulation of dismissal on September 9, 2011. Defendants again moved for summary judgment, arguing that the settlement with DEP violated the Agreement and barred Berlin from reinstating the suit. Berlin filed a cross-motion seeking a change of venue. A second Law Division judge denied both motions on December 2, 2011.4

On February 15, 2012, defendants deposed Wendell R. Inhoffer, a professional engineer who Berlin had retained as an expert on the issue of damages, and who had furnished an initial expert's report in August 2007 and a supplemental report in September 2007. Pursuant to that supplemental report, Inhoffer opined that the "[d]amage [t]abulation" associated with [W]ell #12 was $1,430,589.76.

Defendants again moved for summary judgment, reiterating arguments regarding the Agreement and also contending that Inhoffer's opinion as to damages was an inadmissible "net opinion," since it was nothing more than a mathematical calculation of costs obtained from Berlin's financial records. A third judge heard that motion and agreed; he also concluded that since Berlin had no expert proof as to damages, defendants were entitled to summary judgment. He entered an order dismissing the complaint as to each defendant.

On appeal, Berlin argues that Inhoffer was qualified to render opinions regarding damages, and his opinions must be considered in light of those expressed by Frank Getchell, Berlin's hydrogeologist and liability expert. Essentially, Berlin contends that when taken together, the experts' opinions were sufficient to demonstrate both liability and proximately-caused damages. Berlin also argues that it was error to deny their motion for a change of venue, contending that given the history of the litigation, there exists "substantial doubt that a fair and impartial trial can be had" in the vicinage. R. 4:3-3(a)(2).

Defendants contend that the judge correctly determined Inhoffer's opinions were "net opinion[s]," and that absent expert proof as to damages, summary judgment was appropriate. In their cross-appeal, defendants assert that Berlin was prohibited from reinstating its suit for two reasons: (1) Berlin was made whole by its settlement with the DEP; and (2) Berlin materially breached the Agreement's "status quo" provision and, as a result, Berlin's complaint is barred by the statute of limitations.

We reverse the grant of summary judgment to defendants, affirm the denial of the requested change of venue, and affirm the order denying defendants' motion to dismiss Berlin's complaint because of any alleged violation of the Agreement. We remand the matter for further proceedings consistent with this opinion.

I

A.

We first consider Berlin's argument that summary judgment was improperly granted. Berlin retained Getchell, a hydrogeologist employed by Leggette, Brashears & Graham, Inc., a multi-state firm that provides "professional ground-water and environmental engineering services." In his August 2007 report, Getchell reached the following conclusions:

1) R&V and its hydrogeologist failed to exercise the due care and skill required of a qualified hydrogeologist. 2) R&V and []Schultes[`s] failure to identify and/or monitor surface-water bodies and freshwater wetlands area within the radius of influence of Well 12 was evidence of a failure to exercise the due care and skill required of a qualified hydrogeologist. 3) []Schultes[] was negligent in its failure to provide an on-site hydrogeologist as part of its contract with the Borough. [4)] The []DEP testing and reporting guidelines which must be followed for approval . . . were not followed by R&V and [] Schultes since amongst other things they did not identify and monitor surface-water bodies and freshwater wetlands areas within the radius of influence of Well 12. [5)] The failure of R&V and [] Schultes[] to identify and/or monitor surface-water bodies and freshwater wetlands area within the radius of influence, even after being notified of such by the []DEP and the Pinelands Commission, constituted negligence and did not exercise the due standard of care and skill required of a qualified hydrogeologist. [6)] The disregard of the existence of a surface-water body and wetlands within the radius of influence of Well 12 . . . caused the improper siting of Well 12 relative to the local hydrogeologic conditions and resulted in the need for the Borough to provide treatment for Well 12 and eventually abandon the well as per the []DEP.5

Inhoffer's two reports were certainly terse. In the two-page August 2007 report, Inhoffer, who had been the general superintendent of the Passaic Valley Water Commission for twenty-nine years prior to retirement in 1995, stated that Berlin had "incurred a total loss of it[s] investment in Well #12," and that its damages "include[d] all costs associated with and specifically attributed to Well #12 . . . from early 1994 until June 2007 when [Berlin] replaced the lost water supply from Well #12 by connecting to New Jersey American Water." Inhoffer clearly stated that his report was "preliminary," as he was awaiting further information from plaintiff's counsel. He also stated that his "tabulation" was "based upon vouchers and other supporting data provided . . . by [Berlin]. . . ." Attached was a single page which set forth year-by-year damage tabulations broken down into broad catergories, such as "[c]onstruction," [e]ngineering, and "[l]egal & [a]dmin." The total was $1,908,503.11.

On September 15, 2007, Inhoffer wrote a one-page "revised damage tabulation" that "eliminated all costs associated with the purchase of water from adjacent sources." He explained that without additional data, he could not "adequately relate [Berlin's] need to purchase water based upon the use or non[-]use of [W]ell #12. . . ." Attached again was a one-page revised tabulation of damages in a format similar to the earlier report. The total was now $1,430,589.76.

During his deposition four-and-a-half years later in February 2012, Inhoffer repeatedly indicated that he would not discuss liability and characterized his report as "strictly a compilation of numbers that pertain to activities through the whole planning and construction project for Well Number 12 . . . and all of the ancillary potential sources of claims. . . ." He acknowledged that his "methodology" was to look at various municipal invoices and vouchers supplied to him and "determine specific costs . . . associated with Well [#12]." He admitted originally including the costs of purchasing water from another source, but he eliminated that from the compilation because he "had no knowledge of why [Berlin] bought water." Inhoffer stated that his "numbers" represented the "cold hard cash that went out of the borough. . . ."

During questioning, Inhoffer was confronted with his handwritten "work sheets" that provided backup for the compilation, and was asked to explain his calculations.6 He had difficulty, stating,

I knew that when we gave these breakdowns that we would have trouble discerning my notes. And quite frankly, I didn't have enough time to get prepared to reestablish these things. . . . And the mind set when you're going through this, in terms of what you've done, and where you've divided things, and then you just put them all in a heap. Now you have to reconstruct all of that. It's very difficult to do.

The following occurred between Inhoffer and counsel for R&V:

Q. [I]s it fair to say that what you've really done is in putting these numbers together, all you've done is gone and taken a look at the invoices for each one of these defendants . . . as well as construction numbers? A. Yes. Q. What you've done is you've just simply taken the invoices and added them up to come up with the number of 1,430,000? A. Correct. Q. Nothing more, nothing less? A. Correct.

Counsel examined Inhoffer about other work sheets supplied for various years and their relation to the yearly numbers contained in his report. Finally, Inhoffer acknowledged that he did not evaluate the "reasonableness" of any of the vouchers that Berlin had paid in connection with Well #12 in his review.

During colloquy with counsel, the motion judge noted Berlin had already received $1 million, and asked, "where are you going?" Berlin's counsel responded that the claim was for $1.43 million, but the judge stated, "you don't relate that. You don't relate those costs with your damage expert." Berlin's counsel noted that Getchell had opined Well #12 should not have been sited where it was, and therefore, "every dollar that [Berlin] spent on that well after 1994" was part of its damages. In his oral opinion that followed, the judge concluded that Inhoffer's opinion was "rank net opinion," lacking any "causal connection" to the liability of defendants. He further concluded that because Berlin was "without an expert report," summary judgment was appropriate as to both defendants.

In reviewing a grant of summary judgment, we apply the same standard as the trial court, Murray v. Plainfield Rescue Squad, 210 N.J. 581, 584 (2012), and our review is limited to the evidence in the record before the motion judge. Lombardi v. Masso, 207 N.J. 517, 542 (2011). We first determine whether the moving party has demonstrated there were no genuine disputes as to material facts. Atl. Mut. Ins. Co. v. Hillside Bottling Co. 387 N.J.Super. 224, 230 (App. Div.), certif. denied, 189 N.J. 104 (2006).

[A] determination whether there exists a `genuine issue' of material fact that precludes summary judgment requires the motion judge to consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party. [Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).]

We then decide "whether the motion judge's application of the law was correct." Hillside Bottling, supra, 387 N.J. Super. at 231. In doing so, we owe no deference to the motion judge's conclusions on issues of law, and review those de novo. Ibid. (citing Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995)).

"As a practical matter, a trial court confronted with an evidence determination precedent to ruling on a summary judgment motion squarely must address the evidence decision first." Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 384-85 (2010).

It is only after the trial court has made the findings required to either admit or exclude the proffered evidence and has made a ruling thereon that it may proceed to determine the then-pending summary judgment. On appeal, then, those rulings will be gauged separately: the evidentiary ruling under an abuse of discretion standard, and the legal conclusions undergirding the summary judgment motion itself on a plenary de novo basis. [Id. at 385.]

Thus, we apply a "deferential approach" to the decision to admit or reject expert testimony, reviewing that decision "against an abuse of discretion standard." Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J. 344, 371-372 (2011) (citing Kuehn v. Pub Zone, 364 N.J.Super. 301, 319-321 (App. Div. 2003)).

Certainly a court "must ensure that the proffered expert does not offer a mere net opinion." Id. at 372 (citing Polzo v. Cnty. of Essex, 196 N.J. 569, 583 (2008)). "An expert's conclusion is considered to be a `net opinion,' and thereby inadmissible, when it is a bare conclusion unsupported by factual evidence." Creanga v. Jardal, 185 N.J. 345, 360 (2005) (quoting Buckelew v. Grossbard, 87 N.J. 512, 524 (1981)). Stated another way, the expert must give the "why and wherefore" of his opinion, rather than a bald conclusion. Ibid. (quoting Rosenberg v. Tavorath, 352 N.J.Super. 385, 401 (App. Div. 2002) (internal quotation marks omitted)).

It is undoubtedly true that Inhoffer's two reports were woefully inadequate because they failed to explain both the data he relied upon in reaching his conclusions and his methodology in determining his damage compilations. However, at deposition, he clearly indicated the facts upon which he based his opinions, i.e., the vouchers and disbursements made by Berlin as they related to Well #12. He also referenced several worksheets providing the calculus by which he reached his conclusions. Granted, he was somewhat confused and ill-prepared to explain the process at deposition, but there is clear indication in the record that Inhoffer engaged in a process tethered to the facts of the case and that led to his conclusions.

On the other hand, we are loath to conclude that the motion judge mistakenly exercised his discretion in this case. Based on the reports and the confusing deposition testimony, it is difficult, if not impossible, to actually make a considered judgment regarding the opinions rendered by Inhoffer. The record does not permit us to independently assess whether Inhoffer's methodology relied upon standards that were "personal" to him, thereby rendering any opinions inadmissible net opinions. Pomerantz, supra, 207 N.J. at 373. Rather than exclude the testimony, however, the better course would have been to permit Inhoffer to be questioned at a N.J.R.E. 104 hearing, where his opinions and bases for them could be examined in detail and subject to the crucible of cross-examination.

There is another reason why we think summary judgment was inappropriately granted on this record. The essence of Berlin's claim is that defendants' collective acts, omissions and material breaches of contract resulted in the siting of Well #12 at a location rendering it totally inutile. In other words, unlike some cases where the nexus between the breach of a duty owed or the breach of a contract and proximately-caused damages must be explained through expert testimony, Berlin contends that its damages consist of every dollar spent in the design and construction of Well #12. Given the nature of its claim, whether Berlin could sustain its burden of proof without expert testimony is, in our opinion, an open question. We therefore reverse the grant of summary judgment to defendants and remand the matter for trial.

B.

The other point raised by Berlin, i.e., that it was error to deny its motion seeking a change of venue, lacks sufficient merit to warrant extensive discussion. R. 2:11-3(e)(1)(E). We add only the following.

Rule 4:3-3(a)(2) permits a change in venue if "there is a substantial doubt that a fair and impartial trial can be had in the county where venue is laid." The burden of demonstrating good cause for the change rests upon the moving party. Pressler & Verniero, Current N.J. Court Rules, comment on R. 4:3-3 (2014). The fact that Berlin's complaint has been dismissed on a number of occasions by different judges fails to raise "a substantial doubt" that a fair and impartial trial cannot take place in the vicinage.

II

We turn to defendants' cross-appeal. First, they argue that pursuant to the Agreement, Berlin was barred from reinstituting suit because it obtained "appropriate relief" through its settlement with DEP and the special legislation that resulted in repayment of $1 million to Berlin. Second, defendants contend that Berlin materially breached the status quo provision of the Agreement by settling with DEP. Both arguments are unavailing.

The Agreement is a contract between the parties, the terms of which we interpret as a matter of law. Bosshard v. Hackensack Univ. Med. Ctr., 345 N.J.Super. 78, 92 (App. Div. 2001) (citing Deerhurst Estates v. Meadow Homes, Inc., 64 N.J.Super. 134, 152 (App. Div. 1960)). "If the language of a contract is plain and capable of legal construction, the language alone must determine the agreement's force and effect." Manahawkin Convalescent v. O'Neill, 217 N.J. 99, 118 (2014) (internal quotation marks omitted).

Pursuant to the express terms of the Agreement, "the [p]arties agree[d] and underst[oo]d that [Berlin] may, at its discretion, reinstate the [l]awsuit if it believe[d] it ha[d] not received appropriate relief from the [l]egislative and administrative processes . . ." (emphasis added). Thus, contrary to defendants' contention, the Agreement left Berlin with the sole power to decide whether it had "received appropriate relief" through the administrative or legislative processes. Based upon the municipality's contention that it sustained more than $400,000 in additional damages, it exercised its discretion and recommenced litigation. The argument warrants no further discussion. R. 2:11-3(e)(1)(E).

Pursuant to the status quo provision of the Agreement, the parties agreed that if Berlin reinstated the suit,

the status quo of their rights, as well as their present positions both legally and factually, shall remain as presently situated. . . . Thus, in the event the [l]awsuit is reinstated, the parties hereby reserve all of their rights, claims, defenses, etc. as if the [l]awsuit had never been dismissed without prejudice.

The parties also agreed that "all statute of limitations, to the extent applicable, are hereby stayed and may not be invoked or otherwise relied upon or asserted, unless such a limitations period is presently an issue that has been framed in the [l]awsuit."

One of the prior motion judges seemingly accepted defendants' argument that the Agreement required Berlin to include DEP as a defendant when it filed its first post-Agreement complaint, because he dismissed that complaint without prejudice. Without passing on the propriety of that ruling, it matters little to our analysis, because Berlin complied and added DEP as a defendant in its second post-Agreement complaint. It then promptly settled the dispute with DEP. Nothing in the Agreement prohibited that.

Defendants argue that Berlin's settlement with DEP eliminates their crossclaims and prevents them from seeking contribution. They contend that only Berlin was "aware of the basis of its allegations" against DEP, and that the dynamic of the litigation has changed since now they, as opposed to Berlin, must bear the burden of proving claims against DEP.

These assertions do not prove that Berlin materially breached the Agreement. As in any multi-defendant litigation, "a non-settling defendant has the right to have a settling defendant's liability apportioned by the jury." Verni ex. rel. Burstein v. Harry M. Stevens, Inc. 387 N.J.Super. 160, 207 (2006) (citing Brodsky v. Grinnell Haulers, Inc., 181 N.J. 102, 113 (2004)). So it is in this case. Berlin's settlement with the DEP does not affect the defendants' rights in the present suit, and therefore does not violate the Agreement. We also note that when the complaint was dismissed, discovery had not ended. We fail to see why defendants are unable to learn all the necessary facts regarding Berlin's claim against DEP by engaging in discovery.

To the extent we have not addressed them directly, the balance of defendants' arguments lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Reversed in part, affirmed in part, and remanded for further proceedings consistent with this opinion.

FootNotes


1. The complaint also named Schultes' president and two of its employees as defendants. For the sake of simplicity, we refer to the company and those employees collectively as "Schultes."
2. N.J.S.A. 2A:53A-27 provides: In any action for damages for personal injuries, wrongful death or property damage resulting from an alleged act of malpractice or negligence by a licensed person in his profession or occupation, the plaintiff shall, within 60 days following the date of filing of the answer to the complaint by the defendant, provide each defendant with an affidavit of an appropriate licensed person that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice or work that is the subject of the complaint, fell outside acceptable professional or occupational standards or treatment practices.
3. It is undisputed that through special legislation Berlin received $1 million in compensation.
4. The record does not contain an order denying Berlin's cross-motion.
5. The appellate record does not contain a copy of Getchell's deposition testimony if he was deposed.
6. The work sheets are not part of the appellate record and do not appear to have been furnished to the motion judge.
Source:  Leagle

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