TRIPLE T CONSTRUCTION, LLC VS. TOWNSHIP OF WEST MILFORD (L-1119-14, PASSAIC COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0614-18T2
TRIPLE T CONSTRUCTION,
LLC, SCOTT RIDINGS,
ORGANIC WASTE SOLUTIONS
LLC, and ORGANIC WASTE
SYSTEMS LLC,
Plaintiffs-Respondents/
Cross-Appellants,
v.
TOWNSHIP OF WEST MILFORD,
TOWNSHIP OF WEST MILFORD
PLANNING BOARD, NANCY
GAGE, and VINCENT LUPO,
Defendants-Appellants/
Cross-Respondents.
_________________________________
Submitted September 10, 2019 – Decided October 15, 2019
Before Judges Fisher and Gilson.
On appeal from the Superior Court of New Jersey, Law
Division, Passaic County, Docket No. L-1119-14.
Methfessel & Werbel, attorneys for appellants/cross-
respondents (Scott Ketterer and Brent Robert Pohlman,
on the briefs).
Robert L. Moshman, LLC, attorneys for respondents/
cross-appellants (Robert Lawrence Moshman and
Daniel B. Sullivan, on the briefs).
PER CURIAM
This appeal and cross-appeal arise out of a lease and sublease, under
which defendant Township of West Milford leased property from plaintiff Triple
T Construction, LLC and then subleased the property to plaintiff Organic Waste
Solutions, LLC so a "vegetative" waste recycling center could be operated.
After the term of the lease and sublease expired, a dispute arose concerning
whether the terms of the lease continued to govern under a holdover provision.
The Township appeals and plaintiffs cross-appeal from a judgment
entered after a twelve-day bench trial. The trial court found that the lease and
sublease had terminated because the Township failed to negotiate in good faith.
The court then awarded plaintiffs $315,000 in damages, consisting of $301,500
of unjust enrichment and $13,500 for unpaid rent. The Township contends that
the trial court failed to identify the applicable standard for good faith
negotiations, erred in not finding a holdover contract, and relied on documents
not admitted into evidence. Plaintiffs argue that the trial court abused its
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discretion in considering certain contractual issues and erred in deter mining
plaintiffs' damages. Having reviewed the record and law, we are not persuaded
by any of these arguments and we affirm.
I.
For a number of years, the Township had a vegetative waste recycling
center where both the Township and its residents could dispose of brush, grass,
and leaves. That center was located on three adjacent lots of land referred to as
Lots 29, 28.03, and 18.02. Lot 29 abutted Marshall Hill Road and Lycosky
Drive and the other two lots were "landlocked," meaning that they lacked direct
access to a road.
Plaintiff Scott Ridings is the owner of Triple T and a part owner of OW
Solutions. Sometime prior to 2010, Triple T acquired Lot 29, which consists of
approximately ten acres and is known as 28 Marshall Hill Road, Block 6 002,
Lot 29. In 2010, Triple T entered into a lease with the Township, under which
the Township leased approximately three-and-a-half acres of Lot 29, so that it
could continue to be used as part of the Township's recycling center for
vegetative waste. The lease was for a period of thirty-six months and the start
of its term was made retroactive to October 1, 2009. The term of the lease ran
to September 30, 2012. The lease provided that the Township would pay a
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monthly rent of $4500. The lease also had a holdover provision, which stated
that the Township "has no right to retain possession of the Premises or any part
thereof beyond the expiration of the term of this Agreement, unless the Parties
are negotiating a new lease or lease extension in good faith."
On the same day that Triple T and the Township entered into the lease,
the Township entered into a sublease with OW Solutions. The sublease allowed
OW Solutions to use the three and a half acres of Lot 29 as a compost sit e. The
lease also provided that OW Solutions would allow the Township and its
residents to bring brush, grass, and leaves to the site and that OW Solutions
would "provide all the tube grinding, screening compost and screening fill
services for the site[.]" Township residents were also allowed to take, free of
charge, approximately half of the mulch and topsoil produced at the site. For its
part, OW Solutions had the right to sell or otherwise dispose of the other half of
the mulch and topsoil. In connection with the sublease, the Township also
allowed OW Solutions to use an exemption it had received from the New Jersey
Department of Environmental Protection allowing composting and recycling of
vegetative waste at the site.
The sublease had the same termination date as the lease; that was:
September 30, 2012. The sublease also had an identical holdover provision as
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the lease. Accordingly, the provision in the sublease stated that OW Solutions
"has no right to retain possession of the Premises or any part thereof beyond the
expiration of the term of this Agreement, unless the Parties are negotiating a
new lease or lease extension in good faith."
In short, the lease and sublease allowed OW Solutions to operate the
vegetative waste recycling center. The center accepted brush and vegetation
from the Township and its residents, and processed the waste into mulch and
topsoil. Township residents could then take some of the mulch and topsoil for
free, and OW Solutions could sell the rest. OW Solutions also accepted
vegetative waste from contractors and other towns and charged fees for that
service.
In the summer of 2012, the parties began discussing a new lease. Triple
T wanted to increase the rent and extend the terms of the lease. The Township,
in contrast, wanted to reduce its rental payments and to have a shorter term for
the lease.
By September 30, 2012, the parties had not agreed to terms for a new lease
or lease extension. Nevertheless, the parties and their attorneys continued to
communicate and exchange proposals after September 30, 2012. Those
discussions went on until July 2013, when the Township informed Triple T that
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it would vacate the portion of Lot 29 that it had leased and end the parties'
relationship.
The Township also continued to pay the monthly rent after September 30,
2012. The Township sent Triple T monthly rental payments for October 2012
through June 2013. Triple T cashed those rent payments until April 2013, but it
did not cash the monthly checks for April, May, or June 2013. In 2014, the
Township cancelled the uncashed checks for those three months.
Meanwhile, on October 29, 2012, Super Storm Sandy struck. The storm
had a devastating effect on the Township and thousands of trees within the
Township were knocked down. As a result, the Township and its residents
brought large quantities of trees and other vegetation to the recycling center for
disposal and processing. The large increase in the quantity of debris being
brought to the recycling center was a topic of discussion while the parties tried
to come to terms on a new lease or lease extension.
OW Solutions sent the Township a number of invoices seeking payment
for processing the Sandy-related debris. The Township did not pay those
invoices, but there were discussions that the Federal Emergency Management
Agency (FEMA) might pay those invoices or if the Township paid the invoices,
FEMA might reimburse the Township. Payment for the Sandy-related debris
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remained an issue in dispute when the Township terminated the lease and
sublease in July 2013.
In March 2014, plaintiffs Ridings, Triple T, OW Solutions and Organic
Waste Systems, LLC (OW Systems) filed suit against the Township, its planning
board, and two Township officials. 1 The complaint filed by plaintiffs contained
twenty counts that alleged a number of causes of action, including claims for
breach of contract, unjust enrichment, fraud, defamation, extortion, malicious
prosecution, mental and physical harm, and violations of federal civil rights and
the first amendment of the federal Constitution.
Defendants removed the action to federal court based on federal question
jurisdiction. Defendants then moved for partial summary judgment to dismiss
the majority of plaintiffs' claims. In June 2014, the federal court dismissed
seventeen of the twenty counts alleged by plaintiffs. One of the dismissed
claims was plaintiffs' breach of contract claim. The federal court also dismissed
the unjust enrichment claim against the planning board and the two town
officials and, thereby, left that claim only against the Township.
1
In 2013, Ridings established OW Systems and apparently that entity took over
the responsibility for operating the recycling center from OW Solutions. Thus,
some of the work in processing the Sandy-related debris was performed by OW
Systems and some of the invoices for that work were sent by OW Systems.
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Thereafter, the federal court ruled that it would not retain jurisdiction over
the remaining state law claims and, in January 2017, it remanded the remaining
claims to the Law Division. After the action was remanded, there were three
remaining claims: an unjust enrichment claim against the Township, a
negligence claim, and a trespass claim. Defendants moved for summary
judgment on those three claims. The trial court granted summary judgment
dismissing the claims of negligence and trespass, but denied summary judgment
on the unjust enrichment claim.
In the Law Division, the parties agreed to a bench trial of the only
remaining claim, the unjust enrichment claim against the Township. A trial was
conducted over twelve days between June 2018 and September 2018.
After the evidence was presented, the trial court rendered its decision on
September 12, 2018. The court made its findings of fact and conclusions of law
on the record. The trial judge found that the Township had not negotiated in
good faith and, as a result, concluded that the holdover provision of the lease
had not been triggered. The trial court found that OW Solutions was entitled to
damages of $301,500 under the theories of unjust enrichment and quantum
meruit.
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In making that damage award, the trial court found that OW Solutions had
processed 67,000 cubic yards of Sandy-related debris and it was entitled to
payment of $4.50 per cubic yard. The trial court found that $4.50 was the
appropriate rate because OW Solutions had used that amount on the initial
invoices sent to the Township. The trial court also awarded Triple T $13,500,
consisting of the rent payments for April, May, and June of 2013. The court
then embodied its ruling into a judgment that was entered on September 25,
2018.
II.
As previously noted, the Township appeals and plaintiffs cross-appeal
from the September 25, 2018 judgment. The Township makes three arguments:
(1) trial court failed to identify a standard for what constitutes good faith
negotiations and, therefore, the matter should be remanded for a new tri al under
the correct legal standard; (2) the parties negotiated in good faith and the
holdover provision was triggered so there should have been no award for unjust
enrichment; and (3) the trial court erred by relying on documents not admitted
into evidence. On their cross-appeal, plaintiffs make two arguments, contending
that the trial court erred: (1) in considering contract issues when the only claim
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being tried was an unjust enrichment claim; and (2) in its determination of
damages.
Having considered the parties' arguments in light of the record and law,
we affirm because the trial judge's determinations are supported by substantial
credible evidence and we discern no error warranting reversal. We initially,
identify our standard of review and then analyze the Township's appeal and
plaintiffs' cross-appeal.
A. Our standard of Review
"Final determinations made by [a] trial court sitting in a non-jury case are
subject to a limited and well-established scope of review." City Council of
Orange Twp. v. Edwards, 455 N.J. Super. 261, 271 (App. Div. 2018) (quoting
D'Agostino v. Maldonado, 216 N.J. 168, 182 (2013)). We will not "disturb the
factual findings of the trial court 'unless we are convinced that they are so
manifestly unsupported by[,] or inconsistent with[,] the competent, relevant[,]
and reasonably credible evidence as to offend the interests of justice.'" Id. at
272 (alterations in original) (quoting D'Agostino, 216 N.J. at 182). A trial
court's credibility determinations are also accorded deference because the court
"'hears the case, sees and observes the witnesses, and hears them testify,'
affording it 'a better perspective than a reviewing court in evaluating the veracity
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of a witness.'" Ibid. (quoting Gnall v. Gnall, 222 N.J. 414, 428 (2015)). "To the
extent that the trial court interprets the law and the legal consequences that flow
from established facts, we review its conclusions de novo." Motorworld, Inc. v.
Benkendorf, 228 N.J. 311, 329 (2017) (first citing D'Agostino, 216 N.J. at 182;
then citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366,
378 (1995)).
B. The Township's Appeal
The Township's first two arguments relate to whether the parties
negotiated in good faith. In that regard, the Township contends that it did
negotiate in good faith and, therefore, the holdover provision was triggered and
the terms of the lease and sublease continued to govern the parties' dealings until
the formal termination of the lease and sublease in July 2013. The Township
then contends that under the express terms of the sublease, OW Solutions was
obligated to accept all debris from the town and its residents without charging
any fee. In challenging the decision made by the trial court, the Township
asserts that the trial court failed to identify a standard for what constituted good
faith and, therefore, we should reverse the judgment and remand for a new trial.
We disagree.
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Here, the term "good faith" was used in the holdover provision in both the
lease and the sublease. As such, it is a contractual term and should be given its
plain and ordinary meaning. See Kernahan v. Home Warranty Adm'r of Florida,
Inc., 236 N.J. 301, 321 (2019) (citing Roach v. BM Motoring, LLC, 228 N.J.
163, 174 (2017)). "Good faith" is a common legal term. "Among other things,
good faith means 'honesty and belief or purpose' and 'fairness to one's duty or
obligation.'" State v. Crawley, 187 N.J. 440, 461 n.8 (2006) (quoting Black's
Law Dictionary, 701 (7th Ed. 1999)); see also Restatement (Second) of
Contracts, § 205 cmt. a ("Good faith performance or enforcement of a contract
emphasizes faithfulness to an agreed common purpose and consistency with the
justified expectations of the other party. . . ."). Because courts cannot catalogue
every form of bad faith conduct, "[e]ach case is fact-sensitive." Brunswick Hills
Racquet Club, Inc. v. Rt. 18 Shopping Center Assocs., 182 N.J. 210, 225 (2005).
The trial court conducted this "fact-sensitive" inquiry. The central issue
was whether the parties had negotiated in good faith on the terms of a new lease
or lease extension. The trial judge found that although the parties had engaged
in negotiations over the course of months, the Township had not participated in
those negotiations in good faith. In making that finding, the court reviewed the
testimony of the witnesses at trial and the evidence submitted, which included
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correspondence concerning the negotiations and minutes of the Township's
executive committee sessions. Based on that evidence, the trial court found that
from the outset, the Township was seeking to end the relationship and to find a
way out of the relationship so that it could recycle its vegetative waste without
dealing with plaintiffs. Consequently, the trial court's findings concerning the
Township's lack of good faith were factual findings based on substantial credible
evidence. We discern no basis for reversing the trial court's finding that the
Township did not negotiate in good faith.
The Township goes on to argue that the evidence presented at trial
demonstrated that both parties were engaged in good faith negotiations. In
support of that position, the Township cites to certain findings made by the trial
court and details the evidence that it contends supports its position. The short
rebuttal to this argument is that the Township simply disagrees with the trial
court's factual findings. As already noted, the trial court's factual findings are
supported by substantial credible evidence presented at the trial. That the
Township can point to other evidence is not a basis for reversing the finding s of
fact made by the trial court.
Finally, the Township contends that the trial court improperly relied on a
document not admitted into evidence in reaching its conclusion that the
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Township did not negotiate in good faith. Specifically, the Township points to
the trial court's reference to certain handwritten notes on a document. In
referencing those notes, however, the trial court made it clear that the notes were
"not tremendously important." More importantly, the trial court identified
numerous other documents, which had been admitted into evidence, in support
of its findings concerning the lack of good faith by the Township. The trial court
also reviewed the testimony of the various witnesses. Thus, to the extent that
the trial court referenced a document not in evidence, there was other substantial
credible evidence supporting its findings. Furthermore, the Township has failed
to demonstrate that the trial court placed undue reliance on the document that
was not in evidence.
When parties do not have an express contract governing their relationship,
the law allows for quasi-contractual remedies. New York-Connecticut Dev,
Corp. v. Blinds-To-Go (U.S.), Inc., 449 N.J. Super. 542, 556 (App. Div. 2017).
Accordingly, plaintiffs sought damages under the theories of unjust enrichment
and quantum meruit.
To establish unjust enrichment, the plaintiff must show that it expected
remuneration from defendant at the time it performed or confirmed a benefit on
defendant and that retention of that benefit without payment would be unjust.
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Woodlands Community Ass'n, Inc. v. Mitchell, 450 N.J. Super. 310, 317 (App.
Div. 2017) (citing VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554 (1994)).
"Recovery under quantum meruit similarly rests on the principle that one party
should not be allowed to be enriched unjustly at the expense of another party."
Mitchell, 450 N.J. Super. at 318 (citing Weichert Co. Realtors v. Ryan, 128 N.J.
427, 437 (1992)).
The trial court found that OW Solutions processed a large quantity of
Sandy-related debris after the lease and sublease had expired. The court also
found that OW Solutions expected the Township to pay for the cost of
processing the extra debris at the time that those services were being performed
in late 2012 and 2013. Finally, the court found that the Township's receipt of
that benefit without payment would be unjust. Accordingly, the trial court's
legal findings concerning OW Solution's right to damages under the theories of
unjust enrichment and quantum meruit were supported by the trial court's factual
findings and were consistent with the law. We, therefore, discern no basis for
reversing the trial court's judgment.
C. Plaintiffs' Cross-Appeal
Plaintiffs first argue that they were unfairly prejudiced when the trial court
allowed the Township to introduce evidence concerning its argument that it
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negotiated in good faith and the lease and sublease continued to govern the
parties' relationship. Plaintiffs contend that the contractual claim had already
been dismissed from the case and the Township had failed to raise that claim as
an affirmative defense. A review of the record, however, establishes that
plaintiffs suffered no prejudice. Indeed, plaintiffs prevailed on their unjust
enrichment claim.
Prior to the trial, plaintiffs moved in limine to preclude the Township from
raising the issue of whether there was a contract. As they argue now, plaintiffs
argued before the trial court, that the Township had waived the affirmative
defense that there was a contract and that the trial should focus only on plaintiffs'
claim of unjust enrichment. Plaintiffs also argue that if contractual evidence
was allowed, they would be prejudiced because they had only prepared for a
trial on the unjust enrichment claim.
The trial judge denied plaintiffs' in limine motion. The trial judge
reasoned that although the remaining claim was on unjust enrichment,
defendants' defense to that claim was that the contract still existed and,
therefore, the remedy of unjust enrichment was not available to plaintiffs.
Determinations on the admissibility of evidence are committed to the
sound discretion of the trial court. Estate of Hanges v. Metro. Prop. & Cas. Ins.
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Co., 202 N.J. 369, 383 (2010) (citing State v. Harvey, 151 N.J. 117, 166 (1997)).
We use a deferential standard of review in considering a trial court's decision on
the admission of evidence and will only reverse for an abuse of discretion. Ibid.
We discern no abuse of discretion in the trial court's decision to allow the
Township to contend that it negotiated in good faith and that the lease and
sublease continued to govern the relationship of the parties. As the in limine
motion demonstrated, all parties were aware that the contract defense would be
an issue at trial. Just as importantly, a review of the trial record establishes that
plaintiffs, and their counsel, were well-prepared to address these contentions
and they did not suffer any undue prejudice. Indeed, plaintiffs prevailed on their
claim that there was no contract and that they were therefore entitled to unjust
enrichment. Their argument that they somehow suffered prejudice and, in
particular, that their damage claim was somehow negatively affected, is not
supported by the record.
Next, plaintiffs contend that there were errors of law, errors of fact, and
oversights made by the trial court in its determination of damages. In that
regard, they contend that the trial court's determinations of the amount of debris
and rate for processing that debris were errors. The questions of the amount of
Sandy-related debris processed by plaintiffs and the appropriate rate of
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compensation were disputed issues of fact at the trial. The trial judge reviewed
the evidence submitted by the parties and found that plaintiffs had not kept
accurate records concerning the quantity of debris that was brought to the center
for processing. Accordingly, the court looked to certain invoices sent by OW
Solutions to the Township. Relying on those invoices, the court found that the
Township and its residents brought 67,000 cubic yards of Sandy-related debris
to the center. Also using those invoices, the court found that the expected and
reasonable compensation was $4.50 per cubic yard as invoiced by OW Solutions
itself.
Plaintiffs' arguments concerning the errors of law, fact, and oversight are
simply disputes about the factual findings made by the trial judge. While
plaintiffs argue that the trial judge "missed the ballpark" in determining
plaintiffs' damages, all of those arguments rely on evidence which the trial court
considered, but rejected.
We also reject plaintiffs' arguments that the trial court erred in not
distinguishing work and invoices sent by OW Solutions and OW Systems. Nor
are we persuaded by the arguments that the trial court overlooked three elements
of plaintiffs' damages. Again, the trial court did not commit reversible error in
not considering those contentions; rather, the evidence was presented and the
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trial court made its findings based on other evidence, which it found to be more
credible. In short, we find no grounds to reverse the trial court's determinations
on the amount of and basis for the damages.
Affirmed.
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