The opinion of the court was delivered by
ESPINOSA, J.A.D.
These back-to-back appeals, which we have consolidated for the purpose of writing a single opinion, arise from a failed effort to construct a quick change oil facility on property defendant/third-party plaintiff Joseph Todaro leased to defendant Langstone, LLC, a company wholly owned by defendant Salvatore Giordano, III. Following a bench trial, the trial judge awarded Langstone damages of $305,557.64 and dismissed Todaro's claims against Langstone and Giordano. Todaro appeals from this judgment and from adverse rulings in post-judgment motions. We affirm, substantially for the reasons set forth in the trial judge's comprehensive, sixty-nine page written opinion.
The underlying facts are set out at length in the trial judge's opinion and need not be repeated here. We summarize the salient facts to provide context.
Langstone obtained a franchise for a Valvoline quick change oil facility in 2003 from Ashland, Inc. Langstone
The leased "premises" were "a portion of the Property, together with a garage/office building, improvements, parking areas and appurtenances located on such portion of the Property," and Todaro's interest in "all roads and ways bounding or included in such land." The lease did not cover the common areas Langstone would share with other tenants. Todaro was required to provide access to all utilities "at the property line of the Premises" at his expense. The premises were served by a well, and if Langstone wished to close the well and "obtain city water" instead, it was to do so at its own expense.
Pursuant to the terms of the lease, Langstone was to develop and operate the facility. The "initial term" of the lease was fifteen years, beginning on the "commencement date," the date on which Langstone received a certificate of occupancy "and opens for business."
The rear of the house had a one-story enclosed porch and exterior stairway, which became an enduring point of contention between Langstone and Todaro. The renovations to the building and site necessary for the oil change facility to open were never completed due to problems the parties attributed to one another. A proliferation of lawsuits ensued.
Under the terms of the lease, Langstone had "sole discretion" to determine which improvements were required to operate the facility or to comply with approvals by the Borough. Todaro was required to "cooperate fully."
Langstone also had the prerogative to remove or reconstruct "on the Premises" whatever improvements it considered "necessary or appropriate" for the quick oil change business. Although Todaro had to approve any "structural changes" in writing, his consent could not be "unreasonably withheld, conditioned or delayed."
Todaro warranted good title and the absence of any liens and encumbrances on the premises, which he specifically disclaimed in the exhibit where they were to be named. If any lien or encumbrance arose, Todaro promised to provide Langstone with a nondisturbance agreement under which the encumbrance holder would honor the lease.
The lease required Langstone to avoid activity that could result in mechanic's liens against Todaro's ownership interest, and to redeem such liens or indemnify Todaro for any losses.
Langstone's initial application for site plan and subdivision approval was filed in August 2005, with Todaro's consent. The garage would be refurbished to become the facility, while the house would remain as it was. Todaro signed both the blueprints and the site plan application. The Bound Brook Planning Board (the Board) considered the application at its December 22, 2005, meeting and approved the application on January 12, 2006.
There was a delay in construction after a February 2006 title search revealed a mortgage and tax liens on the property. Todaro resolved those matters in June 2006 by refinancing the property with a lender that was willing to issue a subordination and non-disturbance agreement so that Langstone could finance the project. During the delay, Langstone was unable to perform any work at the project site and Giordano changed course, deciding to replace the garage instead of renovating it, simply because replacement would require less time than the necessary extensive modifications.
The revised application was considered by the Board at its October 12, 2006, meeting. Consistent with the plan for Langstone to connect to the municipal water system, the revised blueprints' dimension plan contained a new notation that the "existing well [is] to be closed." It also showed the house without the porch, and with a U-shaped staircase in the same location where the existing conditions plan continued to depict the porch. The elevation plan in the revised blueprints added depictions of the house to the depictions of the garage. That plan bore the notation "proposed stair and railing to second floor of adjacent structure." Both the rear and side elevations of the house plainly depicted the absence of the existing stairs, the absence of any porch, and the construction of a U-shaped stairway at the rear of the house, surrounded by solid walls, to the apartment's existing second-story door. A few additional steps connected the stairway to a ground-level landing. Michael Wright, the Borough's construction official, testified that those depictions indicated removal of the porch and the existing stairs.
Todaro was not specifically asked to sign this set of blueprints. However, Giordano testified he had spoken frequently to Todaro and told him without objection that the revision included removing the porch and the existing stairs.
At the October 12, 2006, Board meeting, Giordano confirmed that Langstone wished to construct the facility in conformity with the approval by demolishing the existing garage and replacing it. Todaro said he was surprised that Giordano would make such a change without showing him plans or giving written notification, but he did not object because he did not want to cause any additional delay.
The Board unanimously approved a motion "to amend [the] prior approval to provide that the applicant will demolish the building prior to constructing the same structure on the previously approved application." That approval required Langstone to submit, for approval by the Board's engineer, "a revised site plan with a demolition plan" that was "consistent with the previous resolution."
On October 23, 2006, Langstone's engineer modified the revised blueprints to include a demolition plan. There was no signature in the space for the owner's consent. The existing conditions plan was renamed "existing condition and demolition plan," and noted changes included "remove existing stairs and existing porch."
On October 26, 2006, the Board issued a resolution that approved the modification and stated the approval "permits applicant to demolish rather than convert the existing garage structure and make certain other changes intended to help implement that change." The resolution also required the revised plans to be signed by Todaro as the owner.
On October 30, 2006, Giordano sent Todaro a set of the amended site plan documents and a letter from his engineer. The letter noted the plan was modified "to be an Existing Conditions and Demolition Plan," and stated "[f]eatures that are to be demolished are outlined in dashed lines on this plan."
Todaro did not ask for clarification or respond in any way. He admitted at trial that the revised blueprints of August 14, 2006, and the modified blueprint of October 23, 2006, both plainly depicted the porch being replaced by a new configuration of stairs. He called the blueprints confusing, but admitted he had not asked anyone to explain them and did not study any blueprints for such details until trial.
Langstone obtained financing from Valley National Bank (VNB) at approximately the same time, and hired plaintiff Integrated Design Systems of New Jersey, LLC (Integrated) as its general contractor. However, Todaro failed to sign the amended site plan as the Board required, so Integrated could only do off-site preliminary work.
In December 2006, approximately three weeks after the revised blueprints and site plan were sent to Todaro, the first lawsuit was filed by Todaro against Langstone and Giordano to declare the lease null and void due to their failure to proceed with construction of the project as required by the lease. In January 2007, an order to show cause why the lease should not be declared null and void was entered.
In April 2007, the parties entered into a settlement agreement in Docket No. SOM-L-32-07 in which they released all claims as of that date. The parties amended the lease agreement to change the commencement date to January 1, 2008, and modify the timing and amounts of rent payments. Todaro promised to sign the latest site plan application, the permit application "for demolition of part or all of the garage," and "[a]ll building permits ... required ... in connection with the construction and site work by tenant at the premises pursuant to the Lease." The stipulation of settlement also provided:
In March 2008, Langstone and Giordano sought to enforce the settlement with an order to show cause to make Todaro consent to certain demolition activity in connection with the project, and to make him close the well on the property and connect the property to the municipal water system. The judge handling the matter at the time entered an order that required Todaro to do so.
However, in April 2008, with Todaro's knowledge, his counsel wrote to the Board to request modification or vacation of the amended site plan approval. He characterized the approval granted in October 2006 to remove the porch as the product of Langstone's "mistake or fraud" and represented that Todaro never consented to the removal of the porch. Ultimately, the Board found there was no mistake or fraud by Langstone and noted that Todaro was bound by the application.
Langstone suffered other setbacks as well. It defaulted on its loan from VNB and, in July 2008, VNB refused to provide additional financing.
In July 2008, Integrated instituted suit against Langstone and Giordano, asserting contract and tort claims, (SOM-L-1029-08) and filed a complaint for a construction lien of $98,756 against Langstone's leasehold interest in the property (SOM-L-1030-08). Integrated settled its claims against Giordano and Langstone, which concluded L-1029-08.
After this settlement, the surviving claims in SOM-L-1030-08 were Todaro's cross-claims against Langstone and Giordano for indemnification, and Langstone's cross-claims against Todaro for breaching the lease. In addition, Todaro brought a series of landlord-tenant actions against Giordano and Langstone for failure to pay rent. These actions were consolidated with SOM-L-32-07, as well as other actions not pertinent to this appeal.
In June 2009, the motion judge ordered Langstone and Giordano yet again to show cause why the lease should not be declared null and void, and ordered that the approximately $44,000 in rent Langstone had paid into escrow be released to Todaro.
There was a temporary stay of the litigation as a result of Langstone filing a petition in federal bankruptcy court. After the stay was lifted, the order to show cause was renewed. In November 2009, the motion judge entered an order that declared the lease null and void, compelled Langstone to vacate the premises and pay "all outstanding rent." The order repeated the instruction to release the escrowed rent to Todaro.
The matter proceeded to trial after the trial judge denied Todaro's motion for summary judgment on Langstone's cross-claim in L-1030-08. The judge found that Todaro was in material breach of the lease as of April 2008, which terminated Langstone's obligation to pay rent, notwithstanding the prior judge's order that Todaro be paid the rent that accrued to November 2009. The judge awarded Langstone damages of $305,557.64, comprising $268.557.64 in construction and other project costs, and $37,000 as reimbursement for the rent that was paid to Todaro for the period after March 2008. He also dismissed Todaro's claims against Langstone and Giordano.
Thereafter, Todaro filed motions to set aside the judgment pursuant to
In Docket No. A-5892-11,
In his appeal from the post-judgment motions (Docket No. A-3014-13), Todaro presents the following arguments:
After reviewing these arguments in light of the record and applicable legal principles, we affirm the judgment substantially for the reasons set forth in the trial judge's written opinion and conclude the arguments raised to challenge the denial of Todaro's post-judgment motions lack sufficient merit to warrant discussion in a written decision.
The scope of our review of a judgment entered in a non-jury case is limited. When "supported by adequate, substantial and credible evidence," a trial court's findings "are considered binding on appeal" and "should not be disturbed unless [] they are so wholly insupportable as to result in a denial of justice."
In challenging the trial judge's findings, Todaro contends that the findings are either at odds with other evidence he has identified or based upon testimony that he alleges was perjured. In essence, he asks us to engage in independent fact finding, untethered to the trial judge's assessments of credibility. However, our task is not to determine whether an alternative version of the facts has support in the record, as Todaro argues, but rather, whether "there is substantial evidence in support of the trial judge's findings and conclusions."
At oral argument, Todaro's counsel was asked about each of the trial judge's findings that Todaro contended was erroneous. Although counsel had clearly been diligent in scouring the record, his responses only provided evidence that might be inconsistent with the trial judge's findings and did not refute any finding that was material to the judge's analysis or conclusions.
By way of example, Todaro argues the trial judge erred in finding him in material breach of the contract and lease in April 2008, thereby relieving Langstone of the obligation to pay rent. Reviewing the record to determine whether it provides adequate support for the judge's finding, we note the following.
The settlement agreement disposed of all claims that accrued prior to April 2007. The record supports the conclusion that any claim based upon the demolition of the stairs was included in that settlement.
The trial judge found credible Giordano's testimony that he reviewed the changes to the site plan with Todaro, including demolition of the porch and stairs, before the October 12, 2006, Board meeting. The judge rejected Todaro's testimony that he did not know about the demolition until November 2007. He concluded that Todaro's refusal to sign the October 23, 2006, plans after the Board approved them established that Todaro understood them to provide for demolition of the stairs and porch. The trial judge found that the settlement agreement for L-32-07 amounted to Todaro's consent to the October 23, 2006, plans for the project, and that those plans unmistakably showed in various depictions the demolition of the stairs and the porch, and the erection of new stairs. On that basis, he held that Todaro's execution of the settlement agreement constituted his written approval to demolition of the porch and stairs, notwithstanding the fact that the lease was limited to the premises.
The settlement agreement was an independent contract, and Todaro's promise was enforceable in the absence of proof of fraud or other similarly compelling circumstances.
The April 2008 letter from Todaro's counsel to the Board seeking to vacate its approval of the demolition violated the cooperation provisions in both the lease and the settlement agreement. We are satisfied that the record provides adequate support for the trial judge's finding that Todaro's breaches as of April 2008 gave Langstone "the right to terminate the contract and excused Langstone from further performance."
Todaro also argues that the trial judge's findings are flawed because he was bound to a prior judge's interlocutory ruling in June 2009 that Langstone remained obligated to pay rent. This argument lacks sufficient merit to warrant discussion in a written opinion,
In essence, Todaro argues that the prior judge's ruling constituted the law of the case and was binding upon the trial judge. The doctrine is a non-binding rule intended "to prevent relitigation of a previously resolved issue."
In this case, facts were developed at trial that warranted a different conclusion than that reached by the prior judge. The trial judge found Todaro violated the prior judge's order in urging the Board to modify or vacate the amended approval after she had ordered him to "execute and deliver ... all documents and applications necessary for the demolition permit application." Notably, the record does not show that the prior judge was aware Todaro had violated her order when she concluded Langstone's obligation to pay rent continued.
Todaro also argues that the trial judge erred in finding that other actions of his relating to the property were breaches of both the lease agreement and the settlement. These arguments lack sufficient merit to warrant discussion,
In his determination of damages, the trial judge reviewed applicable principles of law and considered "the damages sustained by Langstone as a result of the material breaches of contract by Todaro." He acknowledged the impossibility of restoring Langstone to as good a position as if Todaro had performed the contract because: Langstone could not be provided with a completed Valvoline franchise; Langstone was evicted from the property; and another party had taken over the property, completed the building and was using the facility partially built by Langstone. He observed that Todaro knew that Ashland had the right to remove an unsuccessful franchisee and complete the facility itself, and having a new tenant to operate it meant that Todaro was benefiting from the improvements that Langstone did manage to make. As a result, Langstone expended substantial sums in improving the property that benefitted Todaro.
The judge concluded Langstone was entitled to recoup the "costs ... associated with improvements to the property in creating the Valvoline quick lube facility" and the losses it sustained as a result of losing the franchise. He explained in detail how he arrived at the damages awarded, which comprised "development costs" of $47,151.05, franchise-related costs of $39,303.24, and "project costs" of $17,103.35, plus the $165,000 actually paid to Integrated for work or materials outside of those other categories, for a total of $268,557.64.
The judge also found Langstone was released from additional liability for rent as of April 1, 2008. He found Todaro violated a March 28, 2008 order that directed him "to do what had to be done to demolish the porch, deck and stairs." He noted Todaro did not follow this order and, instead, had his attorney write to the Board asking them to modify or vacate the amended site plan approval to eliminate the approval for demolition. The judge calculated that Langstone was entitled to recover $37,000 for its overpayment of rent. The resulting judgment was $305,557.64.
Todaro argues that the damages awarded here were not compensatory as the trial judge asserted, but rather unjust enrichment damages to make Todaro disgorge the benefit of the value that Langstone added to the premises. He further argues that there was no expert testimony about the supposed increase in value, and thus no basis for the trial judge to incorporate the full amount of the billings by Integrated for its substantially faulty work, the cost of the Valvoline equipment package, or Langstone's unelaborated development and project costs. We disagree.
"[T]he traditional model for breach of contract damages permits a plaintiff to recover for such losses as may fairly be considered to have arisen naturally from the defendant's breach of contract."
A review of the trial court's analysis shows that the award of damages was rooted in these principles applicable to compensatory damages and fails to show any reliance upon a theory of unjust enrichment.
To the extent we have not addressed any argument raised by plaintiff, we have deemed such arguments lacking in sufficient merit to warrant comment in a written opinion.
Affirmed.