Winfield Mut. Housing Corp. v. Middlesex Concrete Products & Excavating Corp.

• Decision Date: 10 February 1956
• Docket Number: No. A--736,A--736
• Parties: WINFIELD MUTUAL HOUSING CORPORATION, a corporation, Plaintiff-Respondent, v. MIDDLESEX CONCRETE PRODUCTS AND EXCAVATING CORPORATION, a corporation, Defendant-Appellant. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 92

39 N.J.Super. 92

120 A.2d 655

WINFIELD MUTUAL HOUSING CORPORATION, a corporation, Plaintiff-Respondent, v. MIDDLESEX CONCRETE PRODUCTS AND EXCAVATING CORPORATION, a

corporation, Defendant-Appellant.

No. A--736.

Superior Court of New Jersey.

Appellate Division.

Argued Jan. 30, 1956.

Decided Feb. 10, 1956.

Melvin J. Koestler, Elizabeth, argued the cause for defendant-appellant (Koestler & Koestler, Elizabeth, attorneys).

Morris Spritzer, New Brunswick, argued the cause for plaintiff-respondent (Abe P. Friedman, Elizabeth, attorney).

Before Judges GOLDMANN, FREUND and CONFORD.

The opinion of the court was delivered by

CONFORD, J.A.D.

This was an action by the plaintiff (hereinafter referred to as 'Winfield' or 'owner') for damages ensuing from alleged breach of contract by defendant (hereinafter referred to as 'Middlesex' or 'contractor') in the performance of an agreement to construct 1,240 concrete porch additions to dwellings of the owner for the price of $79,650. Defendant counterclaimed for payment of moneys due for 312 of the porches actually erected and for damages for alleged breach by the owner of the contract. At the trial in the Law Division a jury returned a verdict for plaintiff on the complaint in the amount of $11,500 and for the defendant on the counterclaim for $16,865, apparently representing the contractor's bill of $19,365 at the contract unit prices for the porches constructed, less an abatement of $2,500 for deficiencies in performance. This appeal by the contractor from the judgment entered on the verdicts stated raises a number of assignments of error by the trial court but our determination will require disposition only of the points that the court erred in denying defendant's motions for dismissal and for judgment as to plaintiff's claim and for judgment on the defendant's counterclaim for the full amount sought to be recovered for the completed porches.

The material provisions of the contract, entered into July 7, 1952, were these. Unit prices were specified for the various porches on the basis of size and incidence and number of steps. The porches were to replace preexisting wooden porches. Payment was to be 'calculated by multiplying the number of units completed to the satisfaction of the Corporation (owner) by the unit price.' Article 5 of the contract reads:

'The contract work will be inspected by the Winfield Mutual Housing Corporation, and will be rejected if it is not in conformity with the contract provisions. Jrjected work shall immediately be corrected by the Contractor. When the work is substantially completed, the Contractor shall notify the Winfield Mutual Housing Corporation in writing that the work will be ready for final inspection on a definite date, at least 10 days thereafter, which shall be stated in such notice.'

Under Article 9 partial payments were to be made as the work progressed, at the end of each calendar month, on estimates by the owner, subject to a 10% Withholding until final completion and acceptance of all work. A provision concerning time for completion is not involved in this controversy. The only provision relative to specifications which material on this appeal is the requirement in the contract drawings for foundation piers of a depth of two feet six inches on porches having steps. A dispute over the sufficiency of the cement mix was determined by the trial court in favor of defendant and does not concern us on this appeal.

The contractor began the work on July 28, 1952 and the owner had it inspected by an employee, Hall, until the latter's illness on August 19, 1952. He was succeeded by Orsini, a maintenance foreman, until October 6, 1952. Then Hall resumed his duties as inspector and continued as such until November 11, 1952, when the owner by letter directed the contractor to stop 'until further notice, or indefinitely, by reason of the fact that reports on our inspections as to materials and workmanship have not been favorable.' The proofs show that Winfield's primary and only real complaint in this regard was that 195 of the 312 porches constructed by Middlesex had foundation piers less than 30 inches in depth. There is evidence that Winfield's executive director, Goldberg, complained to the contractor's president, Neiss, about the piers in August, 1952, yet subsequently wrote the latter to pur more men on so that the job could go faster. Neither Goldberg nor either of the owner's inspectors ever rejected any of the porches or requested that the work on any of them be redone. Orsini explained that 'we (owner) wanted to get the job done and so tried to allow as much leeway as possible'; also that he allowed a shallower foundation than 30 inches when he was satisfied the pier was 'down to rock or good hard surface.' It is undisputed that from October 6, 1952 until the stoppage on November 11 Middlesex constructed 54 porches in full and strict compliance with the contract, as evidenced by Hall's records and acknowledgment at the trial.

The contractor made demand for payment for the work it had completed but was never paid anything. There were conferences between the parties looking toward the possibility of adjustment of the differences and resumption of the work, but nothing came of them. There is no evidence that Winfield at any time called upon Middlesex to continue performance of the contract. Winfield tells us that this was because the defendant expressly refused to resume the performance of the contract unless it was paid in full without abatement for the deficiencies aforementioned and subject to the understanding that the porches to be erected would be 'good porches' and not necessarily in strict compliance with specifications. We cannot find plaintiff's contention substantiated in the record. There could not be a refusal in the absence of a request, express or implied, for performance, and there is not a shadow of evidential support for the existence of such a request. The letter by Neiss of June 22, 1953, relied upon by plaintiff, was only a strong statement of justification for defendant's demand for payment for the work completed and contained a separate voluntary expression of willingness to continue with the contract subject to cooperation by plaintiff in respect to a work schedule. The letter did, however, impliedly withdraw defendant's offer, by letter of June 10, 1953, to allow an abatement of $2,500 against the contract unit price of $19,430 for the porches already completed.

I

We direct our attention initially to the appeal in relation to the counterclaim. It is defendant's position that it was entitled to judgment as a matter of law for the full amount of its claim on the ground, Inter alia, that there was no competent proof of damage to plaintiff in the divergence between strict performance of the stipulations and the performance rendered by the contractor. It is well established that where there is substantial performance of a building contract, even though attended by minor shortcomings, the contract price may be recovered, less a fair allowance to the owner to make good the defects. Feeney v. Bardsley, 66 N.J.L. 239, 49 A. 443 (E. & A.1901); Borus Waton, Inc., v. Henn, 108 N.J.L. 514, 516, 158 A. 484, 81 A.L.R. 1208 (E. & A.1932); Dyer v. Lintz, 76 N.J.L. 204, 68 A. 908 (Sup.Ct. 1908); Globe Home Improvement Co. v. Michnisky, 120 N.J.L. 233, 199 A. 393 (Sup.Ct. 1938); cf. R. Krevolin & Co., Inc., v. Brown, 20 N.J.Super. 85, 89 A.2d 255 (App.Div.1952); Palmeri v. Albanese, 12 N.J.Super. 338, 342, 79 A.2d 699 (App.Div.1951). Th burden of establishing the amount of the allowance for defective work in such cases falls upon the owner. Globe Home Improvement Co. v. Michnisky, supra, and see Dyer v. Lintz, supra (76 N.J.L. at page 206, 68 A. 908); Wilkinson v. Orange Mountain Land Co., 103 N.J.L. 683, 689, 137 A. 591 (E. & A.1927).

Our consideration of the matter before us must postulate substantial performance by defendant since plaintiff does not appeal the award by the jury to defendant on the counterclaim--a verdict which emanated from the trial court's instruction to the jury that defendant was entitled to recover on the counterclaim, subject to abatement for defective work. Our independent examination of the record leads to concurrence with the conclusion by the trial court that substantial performance was rendered by defendant until the enforced stoppage. There was no evidence submitted at the trial--almost three years after the porches were built--that they were not substantially and efficiently serving the purpose for which the owner intended them. We are thus led to the question as to whether competent proofs support the abatement of $2,500 allowed by the jury or the denial by the court of the motion for judgment on the counterclaim to the extent of the full amount due, on the contract unit basis.

Aside from the defendant's letter offering a compromise abatement, to which we shall address our attention presently, there was nothing in the evidence upon the basis of which the jury could, short of sheer speculation, determine how much money it would take 'to make good the defects,' Dyer v. Lintz, supra (76 N.J.L. at page 206, 68 A. at page 908), assuming the undemonstrated premise that the porches were less valuable or serviceable as constructed than as strictly required to have been under the contract.

We turn to the letter-offer of June 10, 1953. In this, written after and in reference to a conference at which such a proposal had been informally discussed, the contractor wrote: '* * * we herewith confirm our compromise offer to allow you the sum of $2500.00 to be credited against our present bill of $19,430.00 * * * for work completed.' The letter also dealt with a resumption of contract performance. The trial court denied a motion by defendant to expunge the letter from the evidence on the ground the offer had not been accepted and he charged the jury it could consider the letter as...