From Casetext: Smarter Legal Research

Amscot Structural Prods. Corp. v. Crane-Hogan Structural Sys., Inc.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION
Aug 10, 2016
DOCKET NO. A-5015-13T1 (App. Div. Aug. 10, 2016)

Opinion

DOCKET NO. A-5015-13T1

08-10-2016

AMSCOT STRUCTURAL PRODUCTS CORP., Plaintiff-Respondent/Cross-Appellant, v. CRANE-HOGAN STRUCTURAL SYSTEMS, INC., Defendant-Appellant/Cross-Respondent.

Anthony J. Adams, Jr. (Adams Bell Adams, P.C.) of the New York bar, admitted pro hac vice, argued the cause for appellant/cross-respondent (Jasinski P.C. and Mr. Adams, attorneys; Peter P. Perla, Jr., Erin L. Henderson and Daniel P. Adams (Adams Bell Adams, P.C.) of the New York bar, admitted pro hac vice, of counsel and on the briefs). Keith R. Hemming argued the cause for respondent/cross-appellant (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Mr. Hemming, of counsel and on the brief; Charles T. Kane, on the brief).


NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Messano and Simonelli. On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-2899-11. Anthony J. Adams, Jr. (Adams Bell Adams, P.C.) of the New York bar, admitted pro hac vice, argued the cause for appellant/cross-respondent (Jasinski P.C. and Mr. Adams, attorneys; Peter P. Perla, Jr., Erin L. Henderson and Daniel P. Adams (Adams Bell Adams, P.C.) of the New York bar, admitted pro hac vice, of counsel and on the briefs). Keith R. Hemming argued the cause for respondent/cross-appellant (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Mr. Hemming, of counsel and on the brief; Charles T. Kane, on the brief). PER CURIAM

Defendant Crane-Hogan Structural Systems, Inc. (Crane-Hogan) appeals from: (1) the April 2, 2012 Law Division order, which denied its motion to dismiss for lack of jurisdiction; (2) the October 15, 2013 order, which denied its cross-motion for partial summary judgment; (3) the April 3, 2014 order, which awarded attorney's fees to plaintiff Amscot Structural Products Corp. (Amscot); and (4) the June 6, 2014 final judgment. Amscot cross-appeals from the April 3, 2014 order and from that part of the June 6, 2014 final judgment awarding attorney's fees. We affirm in part, reverse in part, and remand for further proceedings.

Incorrectly listed in Crane-Hogan's notice of appeal as a March 30, 2012 order.

I.

We derive the following facts from the record. Amscot is a New Jersey corporation with its principal place of business in Dover. Amscot prepares drawings for and fabricates, manufactures and sells structural bridge bearings and metal components in Dover.

Crane-Hogan is a New York corporation with its principal place of business in the Village of Spencerport, New York. In early 2009, Crane-Hogan, as general contractor, bid on the prime contract for a New York State Department of Transportation (NYDOT) project known as The Rehabilitation of Interstate 81 Bridge Over Route 11 in the Town of Salina (the project). The project involved repairs to a bridge located in Onondaga County, New York, including the removal and replacement of structural bearings.

In preparing the bid, Crane-Hogan solicited estimates for the structural bearings and related materials required to complete the project, apparently using an online system that allowed it to advertise the requirements to subcontractors. Although Crane-Hogan's solicitation for estimates was not limited to subcontractors in New York, there were only four subcontractors in the United States that could supply the specific bearings the NYDOT required for the project. Amscot was one of the four subcontractors and was also the closest subcontractor, geographically, to the location of the project.

On March 4, 2009, Amscot submitted a quote to Crane-Hogan to provide the structural bearings and related materials required by the NYDOT's bid specifications (the Amscot quote). Regarding delivery of the bearings, the Amscot quote provided: "Drawings: 3 Weeks A.R.O. . . . Est. Delivery: 12/14 Weeks for partials + testing time[.]" The Amscot quote further provided that "Amscot shall not be held responsible for any delays caused by incomplete contract drawings and[/]or field information necessary for fabrication of . . . materials." Amscot sent the Amscot quote to Crane-Hogan, and Crane-Hogan returned an initialed copy.

At trial, Amscot's president, Peter Somogyi, explained that the term "3 weeks A.R.O." meant that Amscot would provide the drawings for the bearings three weeks after receipt of a purchase order from Crane-Hogan, and the term "Est. Delivery: 12/14 Weeks for partials + testing time" was an estimate of the time it would take to manufacture and begin delivering the bearings for testing by the NYDOT. Somogyi also explained that the twelve-to-fourteen week time period did not include the time required for the NYDOT's testing; the NYDOT tested each bearing after fabrication; and Amscot was not permitted to deliver bearings to Crane-Hogan until after the NYDOT completed the testing and approved the bearings.

On March 9, 2009, Crane-Hogan sent Amscot a letter of intent to purchase the bearings based on the Amscot quote. The letter of intent was subject to the NYDOT ultimately awarding the prime contract to Crane-Hogan. Regarding delivery of the bearings, the letter of intent provided, "[t]hese bearings would be needed on site by early Summer 2009 in order for us to maintain the NYDOT's schedule. We will forward to you a more formal scheduling/sequencing with our Purchase Order." On April 7, 2009, the NYDOT awarded the prime contract to Crane-Hogan.

On April 10, 2009, Crane-Hogan sent Amscot a purchase order for over four hundred bearings and other materials at the price of $313,394 (the purchase order). Regarding delivery of the bearings, the purchase order provided, "DELIVERY DATES: ALL BEARINGS - 2ND QUARTER 2009 (ASAP AFTER DRAWING APPROVAL) . . . SELLER IS DIRECTED TO IMMEDIATELY COMMENCE SHOP DRAWINGS FOR NYSDOT APPROVAL AND BEGIN FABRICATION IMMEDIATELY TO COMPLETE FABRICATION BY EARLY 2ND QUARTER 2009." The purchase order also provided that Amscot would store all bearings and material at its site in New Jersey prior to delivery. Neither Amscot nor Crane-Hogan signed the purchase order.

Thereafter, on April 23, 2009, Crane-Hogan sent Amscot a "bearing installation sequence," which indicated the order in which Amscot should deliver the bearings. In July 2009, Crane-Hogan sent Amscot another purchase order for four additional bearings.

Amscot made its first delivery of bearings to Crane-Hogan in New York in September 2009, and made its final delivery in March 2011. Amscot delivered all requested bearings, and Crane-Hogan accepted them. Amscot submitted invoices to Crane-Hogan requesting payment.

The project was completed on June 30, 2011. The NYDOT paid Crane-Hogan for its work, but Crane-Hogan withheld final payment to Amscot in the sum of $61,290, for alleged costs incurred as a result of Amscot's delayed delivery of the bearings.

Amscot instituted suit against Crane-Hogan suit in New Jersey, asserting claims for breach of contract under common law and the New Jersey Uniform Commercial Code (UCC), N.J.S.A. 12A:1-101 to 12A:2-725; breach of the implied covenant of good faith and fair dealing; book account; and quantum meruit.

Crane-Hogan filed a motion to dismiss for lack of personal jurisdiction. Crane-Hogan argued that it never worked on a construction project in New Jersey; all communications between the parties occurred by mail, email or telephone; it never met with Amscot's representatives in New Jersey at any time; and no one from Crane-Hogan or anyone on its behalf "ever set foot in New Jersey in connection with the contract, or for any other purpose."

In an oral opinion, rendered on March 30, 2012, Judge David B. Rand denied the motion, holding that Crane-Hogan had sufficient minimum contacts with New Jersey to warrant the exercise of personal jurisdiction. The judge found as follows:

the connection between [Crane-Hogan] and New Jersey . . . did come about, by action of [Crane-Hogan] purposely directed toward New Jersey. Crane-Hogan directed its order
instructions to Amscot's Dover, New Jersey headquarters and certainly it had actual knowledge that Amscot would be performing the obligations under the parties' contract at or from the headquarters in Dover.

There were communications throughout the fabrication process including but not limited [to] the provision of shop orders, shop drawings . . . which were critical to the operation of this work.

Thus, . . . Crane-Hogan purposely availed itself of Amscot's services, knowing that Amscot was located in New Jersey, [was] a New Jersey entity, and would be fabricating the contracted products in New Jersey, would be storing those products in New Jersey, would be shipping the finished products from New Jersey to the location of the [project].

The [purchase order] itself indicates that the products would be stored in Amscot's material yard here in New Jersey and delivered from New Jersey only when [Crane-Hogan] directed Amscot to do that. And be sent to the job in New York.
The judge memorialized his decision in an order dated April 2, 2012.

Thereafter, Amscot filed an amended complaint, adding a claim under the New Jersey Prompt Payment Act (NJPPA), N.J.S.A. 2A:30A-1 to -2, and a claim for unjust enrichment. Crane-Hogan filed an amended answer and counterclaim, asserting claims for breach of contract, breach of the covenant of good faith and fair dealing, consumer fraud, breach of express and implied warranties, and violations of the UCC. Crane-Hogan alleged that it sustained damages as a result of Amscot's late delivery of the bearings and delivery of defective bearings.

Amscot filed a motion for partial summary judgment pursuant to the NJPPA, and Crane-Hogan filed a cross-motion for partial summary judgment on its claim relating to the late delivery of the bearings. The parties disagreed as to whether the Amscot quote or the purchase order was the controlling contract. In a written opinion and order, dated October 15, 2013, Judge Thomas V. Manahan denied both motions, finding it was unclear from the record which document the parties intended to be the controlling contract, and there was a genuine issue of material fact as to whether delivery of the bearings or the timing of delivery was reasonable.

At the one-day bench trial before Judge Donald S. Coburn, retired on recall, Somogyi testified that Amscot would not have accepted the job absent all of the terms of the Amscot quote. He also testified that Amscot provided to Crane-Hogan, and continuously updated, its schedule for delivering the bearings; the delivery schedule was based on the time the NYDOT required for testing; and the NYDOT's "testing time [was] not in [Amscot's] control." Somogyi acknowledged that Crane-Hogan requested the "fabrication to happen quicker," but testified that this was "impossible to do."

Somogyi also testified that in December 2009, Amscot received a "work stoppage notice" from Crane-Hogan because Crane-Hogan had experienced "some design field issues," and that, after receiving this notice, Amscot immediately stopped all fabrication and awaited further instruction. Somogyi described how Amscot's delivery schedule was further impacted because the NYDOT had to redesign a series of bearings. Lastly, Somogyi testified that delivery of all bearings by the time provided in the purchase order was not realistic or possible; no other fabricator could have fabricated the bearings faster; and it was for this reason that Amscot did not sign the purchase order. Somogyi maintained that Amscot completed delivery of all bearings in accordance with the delivery schedule in the Amscot quote.

Crane-Hogan's vice president, Frank Fisher, testified that he prepared a preliminary construction schedule for the project, which planned for completion by June 30, 2010. According to Fisher, the project was not completed by that date because "[t]he bearings were . . . late and were not delivered by that point in time." He requested an extension from the NYDOT to complete the project, and prepared a revised schedule with a completion date of December 17, 2010; however, the project was not completed by that time because "bearings did not arrive by that date to allow [Crane-Hogan] to complete the project."

During Fisher's testimony, Crane-Hogan sought to admit into evidence a two-page "summary of costs" Fisher had prepared, reflecting costs Crane-Hogan allegedly incurred due to the late delivery of the bearings. The document was based, in part, on information Crane-Hogan obtained from subcontractors. Judge Coburn found the document contained inadmissible hearsay and was not admissible as a business record produced in the ordinary course of business.

Crane-Hogan also sought to admit documents summarizing additional costs it allegedly incurred due to the delivery of defective bearings, as well as invoices of costs allegedly incurred by subcontractors due to Amscot's delayed delivery. Judge Coburn found the documents contained inadmissible hearsay, were not admissible as business records, there were no business records confirming the costs and their reasonableness, and whether the bearings were defective required expert testimony. The judge also rejected Crane-Hogan's request to qualify Fisher as an expert in the field of bridge construction.

At the conclusion of trial, Judge Coburn awarded damages to Amscot, finding as follows:

Neither party signed the [purchase order]. [Amscot] didn't sign the [purchase order]
because [it] was not willing to be bound by those conditions, and [Crane-Hogan] did not insist on the signing of [the purchase order]. So what we actually have is a combination of written documents and conduct creating a contract. There is no question about the price, there's no question about what was to be built and so on. That's all set forth in the written documents, and as to that there's no . . . dispute. What is disputed is the time of the delivery, and it's clear that the parties did not agree on the time for the delivery. Yet they continued on with their relationship. When parties do that what they are in effect agreeing to -- and I so infer -- is a reasonable completion time. So the question becomes whether [Amscot] failed to provide this material within a reasonable period of time, not whether [Amscot] provided it later than [Crane-Hogan] would want it. On that issue there is only testimony from [Amscot] explaining the difficulties that they ran into. And there is no testimony from [Crane-Hogan] expert, or otherwise, that would indicate that anything that [Amscot] did was an unreasonable delay and, therefore, there is no basis for the resistance offered to the payment of the last sum, which is $61,290.

Judge Coburn further observed that even if evidence of costs incurred by Crane-Hogan due to delayed delivery had been admitted, such evidence would have been "without any effect or meaning at all," as the court "would not have granted those damages, because there's no proof that the delivery was unreasonable." The judge reserved entering final judgment pending the parties' post-trial submissions addressing the calculation of pre- and post-judgment interest and Amscot's request for attorney's fees.

Amscot filed a post-trial motion for attorney's fees and pre- and post-judgment interest pursuant to the NJPPA. Alternatively, Amscot sought attorney's fees in the amount of $70,435.70 and interest at the rate of eight percent totaling $2,767.29 pursuant the offer of judgment rule (OJR), Rule 4:58-2(a). In opposition, Crane-Hogan argued, in part, that the NJPPA did not apply, but rather, the New York Prompt Payment Act (NYPPA), N.Y. State Fin. Law § 139-f(2), which incorporates N.Y. Gen. Bus. Law § 756-b(1)(b), applied under a conflict of law analysis. Crane-Hogan argued that, even if the NJPPA applied, Amscot failed to comply with its provisions, and even if the NJPPA or the OJR applied, Amscot failed to meet its "lodestar" burden by failing to substantiate the attorney's fees demanded.

In a written opinion and order, dated April 3, 2014, Judge Jared D. Honigfeld, retired on recall, conducted a conflict of laws analysis to determine whether the NJPPA or the NYPPA applied. The judge found a conflict in the two statutes because: (1) the NJPPA allows for attorney's fees, while the NYPPA does not permit fee shifting; (2) the NJPPA requires payment within ten days, while the NYPPA allows a general contractor to withhold payment from a subcontractor; and (3) the interest rates permitted under each statute varied. Thus, the judge applied the "most significant relationship test" and determined that all considerations weighed in favor of applying the NYPPA. The judge held that because the NYPPA had no provision for attorney's fees relating to disputes arising under the NYPPA, Amscot was not entitled to attorney's fees under the NYPPA. The judge also determined that Amscot was not entitled to reasonable attorney's fees under the NJPPA.

Amscot does not challenge this ruling.

Addressing Amscot's alternative argument for an award of attorney's fees and interest pursuant to the OJR, Judge Honigfeld found as follows:

Rule 4:58-2(a) permits a plaintiff to submit to a defendant a monetary offer to settle the case. . . . If the offer is rejected and plaintiff recovers a money judgment of 120% or more, plaintiff is entitled to litigation costs incurred after the rejection of the offer, prejudgment interest of eight percent on the amount of any money recovered from the date of the offer, and reasonable attorneys' fees. . . . [Amscot] offered [Crane-Hogan] $40,000 to settle the case on April 30, 2103. [Crane-Hogan] rejected that offer and opted for trial. [Amscot] prevailed at trial and received judgment of $61,290. The amount awarded at trial was 153.225% greater than the offer of judgment. Since the amount awarded at trial exceeds 120% of the offer of judgment, plaintiff is entitled to all the benefits listed under [Rule] 4:58-2(a).
[(Emphasis added).]
Citing Rendine v. Pantzer, 141 N.J. 292 (1995), and considering Crane-Hogan's arguments that Amscot's claimed fees were excessive and unnecessary, the judge reduced the amount sought and awarded $29,133 to Amscot.

On June 6, 2014, Judge Coburn entered final judgment in Amscot's favor and against Crane-Hogan in the amount of $61,290 for unpaid invoices, and awarded Amscot $29,133 in attorney's fees. The judge also awarded Amscot pre- and post-judgment interest from May 14, 2011 to May 8, 2014 in the amount of $23,192.81, calculated in accordance with the NYPPA. This appeal and cross-appeal followed.

II.

Crane-Hogan contends that because it had no sufficient minimum contacts with New Jersey, the court lacked specific personal jurisdiction over it. Crane-Hogan asserts it is a New York corporation, its only contact with New Jersey was the placement of the purchase order, and this single transaction was not sufficient to subject it to suit in New Jersey.

Crane-Hogan also argues that the court lacked general jurisdiction over it. Amscot did not address this argument and neither will we, as Judge Rand's decision was not based on a finding of general jurisdiction.

"The question of in personam jurisdiction is a mixed question of law and fact[.]" Patel v. Karnavati Am., LLC, 437 N.J. Super. 415, 423 (App. Div. 2014) (alteration in original) (quoting Citibank, N.A. v. Estate of Simpson, 290 N.J. Super. 519, 532 (App. Div. 1996)). Our review requires us to "examine whether the trial court's factual findings are 'supported by substantial, credible evidence' in the record." Ibid. (quoting Mastondrea v. Occidental Hotels Mgmt. S.A., 391 N.J. Super. 261, 268 (App. Div. 2007)). "However, whether these facts support the court's exercise of 'personal jurisdiction over a defendant is a question of law,' which we review de novo." Ibid. (quoting YA Global Invs., L.P. v. Cliff, 419 N.J. Super. 1, 8 (App. Div. 2011)).

"Territorial presence in the forum is the basic prerequisite for subjecting a defendant to its in personam judgment." Ibid. "The Fourteenth Amendment's Due Process Clause protects a person against having the Government impose burdens upon him except in accordance with the valid laws of the land." Ibid. "Those who live or operate primarily outside a State have a due process right not to be subjected to judgment in its courts as a general matter." Ibid.

Nevertheless, "[a]bsent actual territorial presence, jurisdiction may extend to out-of-state parties that engage in sufficient contacts with the forum, as long as those contacts satisfy the protections of the Due Process Clause of the Fourteenth Amendment." Id. at 424. "Specifically, the contacts with the forum must be such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Ibid. "Any jurisdictional analysis must begin with an examination of the defendant's minimum contacts with the state." Ibid. "The analysis is fact sensitive and must be undertaken on a case-by-case basis." Ibid.

"[S]pecific jurisdiction is available when the cause of action arises directly out of a defendant's contact with the forum state." Id. at 425. "In the context of specific jurisdiction, the minimum contacts inquiry must focus on the relationship among the defendant, the forum, and the litigation." Ibid. "When the defendant is not present in the forum state, it is essential that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefit and protection of its laws." Ibid.

"This purposeful availment requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts." McKesson Corp. v. Hackensack Med. Imaging, 197 N.J. 262, 277 (2009) (quoting Lebel v. Everglades Marina, Inc., 115 N.J. 317, 323-24 (1989)). "The question is whether the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Id. at 277-78.

Finally, "[o]nce it is established that defendant's activities relating to the action established minimum contacts with the forum state, the fair play and substantial justice inquiry must still be made." Id. at 278. "The burden here, however, shifts, for it is the nonresident defendant who has been found to have minimum contacts with the forum who must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Ibid.

Applying these principles, in Bayway Refining Co. v. State Utilities, Inc., 3 33 N.J. Super. 420, 433 (App. Div.), certif. denied, 165 N.J. 605 (2000), we found no specific personal jurisdiction over an out-of-state defendant whose "role in the transaction sued upon was no more than that of a passive buyer" that did "nothing to avail itself of the benefits or protections of New Jersey law[.]" There, the defendant, a New York corporation, purchased fuel oil from a fuel terminal located in New York. Id. at 425. The plaintiff, a company which refined fuel in New Jersey, took over operations of the fuel terminal, and the defendant continued to purchase fuel oil from the terminal. Id. at 425-26, 430. When the defendant allegedly failed to perform under its contract to purchase fuel, the plaintiff instituted suit in New Jersey. Id. at 428.

The defendant's contacts with New Jersey included: receiving a solicitation from the plaintiff to enter into a contract; accepting the plaintiff's offer to establish a commercial relationship; mailing payments for fuel oil to the plaintiff's New Jersey office; and knowing that the fuel oil was refined in New Jersey, and thus, its purchases had effects in New Jersey. Id. at 430-33. We found that these contacts, even when taken together, were insufficient to warrant the exercise of jurisdiction. Id. at 431. We first noted that "[b]ecause 'minimum contacts' requires that the contacts supporting jurisdiction result from the defendant's purposeful conduct and not the unilateral actions of the plaintiff, New Jersey courts have found it significant to identify the initiator of the commercial contact." Id. at 429-30 (citation omitted). We determined that the plaintiff had solicited the defendant, and thus, the defendant had not made a "purposeful foray into New Jersey." Id. at 431.

Moreover, we found that the defendant's acceptance of the plaintiff's "offer to establish a commercial relationship . . . [could not] alone confer jurisdiction." Ibid. We observed that, "[i]f the law were otherwise, every commercial purchase would subject the buyer to jurisdiction in the home state of the seller on every dispute related to the transaction." Ibid. Thus, we determined that "[t]he existence of a contractual relationship alone is not enough to sustain jurisdiction unless the foreign corporation entering into that relationship can reasonably have contemplated significant activities or effects in the forum state." Ibid. We stated that in determining whether a contract may establish minimum contacts with a forum state, the contract must be examined "in the context of the overall business transactions related to and surrounding the agreement and the parties' relationship." Id. at 431-32.

In this regard, we found that the fact the defendant mailed its payments for fuel oil to the plaintiff's New Jersey office did not "support the proposition that [the defendant] availed itself of the benefits or protections of New Jersey law, or militate in favor of New Jersey's jurisdiction." Id. at 432. We noted that "[i]t is not uncommon for large corporations to have billing offices or banking relationships in a state other than the state where the corporation or its customer is located" and that the plaintiff "could have required that payments be mailed or transferred to any number of locations." Ibid. Thus, we concluded that "[j]urisdiction premised only upon the presence of a billing office and a customer's adherence to requested mailings to that office in a particular state would be random, fortuitous, and attenuated." Ibid.

Finally, we found that the fact the defendant had direct knowledge "that the oil it was purchasing was refined in New Jersey and that its purchases therefore had effects in New Jersey" was not sufficient to establish minimum contacts with New Jersey. Id. at 433. We stated that the plaintiff's sale of fuel oil to the defendant "was a commercial transaction of a type that occurs perhaps hundreds of thousands of times every day." Id. at 434. "No special manufacturing was required; no special delivery was involved; [and] no special financing terms existed[.]" Ibid. We found that the contract at issue was "nothing more than an agreement to buy a specified quantity of a generic, mass-produced commodity for an agreed upon price at an agreed upon time." Ibid.

We also observed that this was not a situation where "the foreign defendant had entered into a contract either for goods or services made to order by the New Jersey corporation, or for a joint enterprise that clearly contemplated ongoing activity in New Jersey." Ibid. Specifically, we distinguished the circumstances presented from those found in Resin Research Laboratories, Inc. v. Gemini Roller Corp., 105 N.J. Super. 401 (App. Div. 1969); Avdel Corp. v. Mecure, 58 N.J. 264 (1971); and Elizabeth Iron Works, Inc. v. Kevon Construction Corp., 155 N.J. Super. 175 (App. Div. 1976), aff'd o.b., 75 N.J. 332 (1978). Id. at 435-36.

In Resin, supra, we found minimum contacts sufficient to support the exercise of personal jurisdiction over a New York defendant, a manufacturer of rollers for the printing trades, who contacted a New Jersey plaintiff to procure a formula for a vinyl resin to use in its rollers. 105 N.J. Super. at 403, 405. The plaintiff prepared the vinyl resin for the defendant, and filed suit in New Jersey after the defendant refused to pay the balance due. Id. at 403-04. We found the court had personal jurisdiction over the defendant based on its contacts with the plaintiff in New Jersey, and the fact that the plaintiff's "work was done here, where it was reasonable to expect it would be done," and thus, "substantial performance" of the contract was contemplated in New Jersey. Id. at 404-05.

In Bayway, supra, we observed that the critical factors supporting the exercise of personal jurisdiction in Resin were: (1) "the out-of-state corporation made a specific foray into New Jersey, soliciting the New Jersey firm to produce the desired product"; and (2) "the product [the defendant] sought was not a standard, off-the-rack product; it was to be specially designed and manufactured to order by the New Jersey company." 333 N.J. Super. at 435.

Similarly, in Avdel, supra, our Supreme Court found sufficient minimum contacts to exercise personal jurisdiction over a New York defendant who had contacted a New Jersey plaintiff to procure rivets for use in its construction of lockers. 58 N.J. at 267. The plaintiff manufactured the majority of the rivets in its New Jersey plant specifically for the defendant and in accordance with the defendant's specifications. Ibid. The plaintiff subsequently instituted suit in New Jersey to recover the outstanding balance due. Id. at 266. Ultimately, the Court found jurisdiction over the defendant because the defendant "ordered a product which he knew would have substantial business effects in this state," "followed up his order with numerous contacts here in relation to that contract," and therefore, "purposely availed himself of the opportunity to engage in a commercial transaction involving activities in this state." Id. at 273. The Court further observed that the exercise of personal jurisdiction "[did] not offend traditional notions of fair play and substantial justice" because New Jersey and New York are "contiguous," and thus, the defendant suffered no special inconvenience in defending suit here. Ibid.

Finally, in Elizabeth Iron Works, supra, we found minimum contacts, and thus, personal jurisdiction over the defendant, a Pennsylvania corporation engaged as the general contractor for a bridge construction project in Pennsylvania, who contacted the plaintiff, a New Jersey supplier of structural steel, to procure steel beams that had to be specially fabricated for the project. 155 N.J. Super. at 176-77. After the defendant's initial inquiry, the plaintiff sent a purchase order, which the defendant signed in Pennsylvania; the defendant never physically entered New Jersey. Id. at 177-78. The plaintiff was thereafter unable to deliver the beams by the agreed-upon date and, although the beams were ultimately delivered, the defendant deducted an amount "resulting from alleged improper fabrication and loading." Id. at 177. The plaintiff instituted suit in New Jersey to recover the deducted amounts. Ibid. We concluded the court had personal jurisdiction over the defendant because the defendant "ordered steel beams from New Jersey, knowing they were to be specially fabricated to his order in this State" and "[t]he contract was largely performed in this State, with delivery to Pennsylvania being the only part of the contract performed elsewhere." Id. at 179-80.

Here, the facts support Judge Rand's finding that Crane-Hogan had sufficient minimum contacts with New Jersey to warrant the exercise of specific personal jurisdiction. Crane-Hogan placed an order for specially-fabricated bridge bearings that Amscot had to manufacture and fabricate in New Jersey. Moreover, Crane-Hogan placed its order for the bearings at, and directed further instructions regarding that order to, Amscot's headquarters in New Jersey. The agreement between the parties contemplated that all manufacturing and fabrication of the bearings would take place at Amscot's site in New Jersey. In addition, the agreement expressly provided that, even after fabrication, the bearings would be stored at Amscot's New Jersey facility prior to delivery and delivered to Crane-Hogan from that site.

Thus, the facts of this case mirror those presented in Resin, supra, 105 N.J. Super. 401; Avdel, supra, 58 N.J. 264; and Elizabeth Iron Works, supra, 155 N.J. Super. 175. Like the defendants in those cases, Crane-Hogan contracted with a New Jersey plaintiff to purchase a product that the plaintiff had to specially design and manufacture according to particular specifications. Further, like the agreements in those cases, the agreement here contemplated that substantial performance of the contract would be completed in New Jersey.

Moreover, unlike the contract in Bayway, supra, the contract between the parties in this case was not for the purchase of "a generic, mass-produced commodity for an agreed upon price at an agreed upon time." 333 N.J. Super. at 434. Rather, the contract required a "special undertaking by a New Jersey business," and thus, demonstrated an intent on the part of Crane-Hogan "to do business in New Jersey," "benefit from its laws," and "affect persons or events in New Jersey." Id. at 436.

Under these circumstances, Crane-Hogan's contacts with New Jersey were such that it should reasonably have anticipated being haled into court here. See McKesson Corp., supra, 197 N.J. at 277-78. Lastly, requiring Crane-Hogan, a New York defendant, to litigate in New Jersey poses no special inconvenience, and therefore, does not offend "traditional notions of fair play and substantial justice," "since the two states are contiguous." Avdel supra, 58 N.J. at 273. Accordingly, the court's exercise of personal jurisdiction over Crane-Hogan was proper.

Walden v. Fiore, ___ U.S. ___, 134 S. Ct. 1115, 188 L. Ed. 2d 12 (2014), on which Crane-Hogan relies, does not change this outcome. In Walden, the United States Supreme Court held that a Nevada court could not exercise personal jurisdiction over a Georgia defendant based on the defendant's tortious conduct in Georgia solely because the defendant knew the plaintiffs had connections to Nevada, and thus, his conduct would have an effect in that state. ___ U.S. at ___, 134 S. Ct. at 1119, 188 L. Ed. 2d at 17. The Court observed that "[t]he inquiry whether a forum State may assert specific jurisdiction over a nonresident defendant focuses on the relationship among the defendant, the forum, and the litigation." Id. at ___, 134 S. Ct. at 1121, 188 L. Ed. 2d at 19-20.

In support of some of its arguments in this appeal, Crane-Hogan relies on reported and unreported federal district court opinions, and reported opinions from other jurisdictions, none of which are binding on us. See Lipkowitz v. Hamilton Surgery Ctr., LLC, 415 N.J. Super. 29, 36 (App. Div. 2010); Young v. Prudential Ins. Co. of Am., 297 N.J. Super. 605, 622 (App. Div.), certif. denied, 149 N.J. 408 (1997); R. 1:36-3. --------

In this regard, "the relationship must arise out of contacts that the defendant himself creates with the forum State," and thus, the "minimum contacts analysis looks to the defendant's contacts with the forum State itself, not the defendant's contacts with persons who reside there." Id. at ___, 134 S. Ct. at 1122, 188 L. Ed. 2d at 20. Moreover, "[d]ue process requires that [the] defendant be haled into court in a forum State based on his own affiliation with the State, not based on the random, fortuitous, or attenuated contacts he makes by interacting with other persons affiliated with the State." Id. at ___, 134 S. Ct. at 1123, 188 L. Ed. 2d at 21. As the defendant in Walden had committed a tort in Georgia and had no connection with Nevada other than "the mere fact that his conduct affected plaintiffs with connections to [Nevada]," the Court concluded that the Nevada court's exercise of personal jurisdiction over the defendant was unwarranted. Id. at ___, 134 S. Ct. at 1126, 188 L. Ed. 2d at 24.

Walden is distinguishable from the present case. Unlike the defendant in Walden, personal jurisdiction over an out-of-state defendant was not based on a random, fortuitous, or attenuated contact with a New Jersey plaintiff outside of New Jersey. Rather, as explained, supra, Crane-Hogan intentionally created an affiliation with New Jersey by entering into a contract with a New Jersey plaintiff that would be substantially performed in New Jersey. Crane-Hogan sent its purchase order for the bearings and additional instructions regarding those orders to Amscot in New Jersey. Moreover, Crane-Hogan contemplated that all of the bearings would be manufactured, fabricated, and stored in New Jersey and delivered from New Jersey.

Because Crane-Hogan had sufficient minimum contacts with New Jersey such that it could reasonably anticipate suit in this State, and because the court's exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice, Crane-Hogan's arguments on this point present no basis for reversal.

III.

Crane-Hogan contends that even if the court had personal jurisdiction over it, it was error for Judge Manahan to deny the motion for partial summary judgment and for Judge Coburn to find following trial that Amscot delivered the bearings in a reasonable time. Crane-Hogan argues that, under the UCC, Amscot was obligated to deliver the bearings within a reasonable time; however, Amscot failed to complete delivery until March 2011, nearly two years after Crane-Hogan's requested deadline, twenty months after Amscot's quoted delivery time, and nine months after the project's original completion date. Crane-Hogan asserts that Amscot was aware of its delivery requirements and "never voiced any reservation or objection" to those requirements, and under these circumstances, there is no credible evidence in the record to support the court's finding of reasonableness.

"[W]e review the trial court's grant of summary judgment de novo under the same standard as the trial court." Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co., 224 N.J. 189, 199 (2016). "That standard mandates that summary judgment be granted 'if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law.'" Ibid. (quoting R. 4:46-2(c)). "When no issue of fact exists, and only a question of law remains, [we] afford[] no special deference to the legal determinations of the trial court." Ibid. (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).

Our review of a trial court's fact-finding in a non-jury case is limited. Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011). "The general rule is that findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence. Deference is especially appropriate when the evidence is largely testimonial and involves questions of credibility." Ibid. (quoting Cesare v. Cesare, 154 N.J. 394, 411-12 (1998)). We "should not disturb the factual findings and legal conclusions of the trial judge 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." Ibid. However, we owe no deference to a trial court's interpretation of the law, and review issues of law de novo. Mountain Hill, L.L.C. v. Twp. Comm. of Middletown, 403 N.J. Super. 146, 193 (App. Div. 2008), certif. denied, 199 N.J. 129 (2009). We also review mixed questions of law and fact de novo. In re Malone, 381 N.J. Super. 344, 349 (App. Div. 2005). Applying the above standards, we discern no reason to disturb Judge Manahan's and Judge Coburn's rulings.

The contract at issue was for the sale of goods. Thus, its terms were governed by the UCC. "The UCC fixes the obligations imposed on both buyers and sellers relating to the sale of goods, as well as their respective remedies for nonperformance by the other party." Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J. 344, 363 (2011). N.J.S.A. 12A:2-207(3) provides as follows:

Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.

Accordingly, when parties fail to agree on a particular term of a contract, the contract may still be formed, and the missing terms "could be provided by the gap-filling provisions of the UCC." Sun Coast Merch. Corp. v. Myron Corp., 393 N.J. Super. 55, 76 (App. Div. 2007), certif. denied, 194 N.J. 270 (2008). Relevant here, when a contract fails to specify a time for the shipment or delivery of the contracted-for goods, the UCC gap-filling provision provides that "[t]he time for shipment or delivery . . . shall be a reasonable time." N.J.S.A. 12A:2-309(1). The UCC further provides that "[w]hether a time for taking an action . . . is reasonable depends on the nature, purpose, and circumstances of the action." N.J.S.A. 12A:1-205(a).

There was no evidence in this case that the parties agreed to the time for delivery of the bearings. The Amscot quote, initialed by Crane-Hogan, only indicated that some bearings would be ready for testing within twelve to fourteen weeks after receipt of the purchase order. The unsigned purchase order indicated that the bearings must be delivered by the second quarter of 2009, which was impossible given that the purchase order was dated April 10, 2009. Because there was no agreement as to time for delivery, the time was governed by the UCC gap-filling provisions, and delivery had to be made within a reasonable time under the circumstances. See N.J.S.A. 12A:2-309(1); see also N.J.S.A. 12A:1-205(a).

Crane-Hogan had ordered over four hundred specially-fabricated bearings on April 10, 2009. Amscot presented evidence that delivery of all bearings within the time provided in the purchase order was not realistic or agreed to. Somogyi testified as to how the process of manufacturing and fabricating the bearings was time-consuming and could not be expedited. He also testified that delivery of the bearings was subject to the NYDOT's testing, and the time for testing was not in Amscot's control. Finally, he testified as to how Crane-Hogan's work-stoppage notice in December 2009, as well as the NYDOT's redesign of a series of bearings, further delayed delivery. Crane-Hogan presented no evidence rebutting Somogyi's testimony.

We are satisfied that the court properly denied partial summary judgment to Crane-Hogan. Viewing the evidence in the light most favorable to Amscot, there clearly was a genuine factual dispute as to whether delivery was reasonable under the circumstances. We are also satisfied that the record amply supports the court's ultimate finding that Amscot delivered the bearings within a reasonable time under the circumstances.

IV.

Crane-Hogan contends that Judge Coburn erred in barring the admission of evidence supporting its counterclaim and in refusing to qualify Fisher as an expert. We disagree.

"A trial court's evidentiary rulings are 'entitled to deference absent a showing of an abuse of discretion, i.e., there has been a clear error of judgment.'" Belmont Condo. Ass'n v. Geibel, 432 N.J. Super. 52, 95 (App. Div.) (quoting State v. Marrero, 148 N.J. 469, 484 (1997)), certif. denied, 216 N.J. 366 (2013). "On appellate review, a trial court's evidentiary ruling must be upheld 'unless it can be shown that the trial court palpably abused its discretion, that is, that its finding was so wide off the mark that a manifest denial of justice resulted.'" Id. at 95-96 (quoting Green v. N.J. Mfrs. Ins. Co., 160 N.J. 480, 492 (1999)). We discern no abuse of discretion here.

Hearsay is defined as an out-of-court statement "offered in evidence to prove the truth of the matter asserted." N.J.R.E. 801. Hearsay is generally not admissible unless an exception to the hearsay rule exists. N.J.R.E. 802. Relevant here, the business records hearsay exception permits the admission of

[a] statement contained in a writing or other record of acts, events, conditions, and, subject to [N. J.R.E.] 808, opinions or diagnoses, made at or near the time of
observation by a person with actual knowledge or from information supplied by such a person, if the writing or other record was made in the regular course of business and it was the regular practice of that business to make it, unless the sources of information or the method, purpose or circumstances of preparation indicate that it is not trustworthy.

[N. J.R.E. 803(c)(6).]

Crane-Hogan's "summary of costs" contained inadmissible hearsay from subcontractors, and it was not admissible under the business records exception. Crane-Hogan did not show that the document was made in the regular course of its business or that it was the regular practice of its business to make such a document. Accordingly, Judge Coburn properly barred admission of the "summary of costs."

Judge Coburn also properly barred admission of invoices of costs allegedly incurred by subcontractors. None of those subcontractors testified at trial, and thus, the documents constituted inadmissible hearsay and were not admissible under the business records exception.

As for qualifying Fisher as an expert, N.J.R.E. 701 provides that a non-expert witness may testify as to an opinion if the testimony: "(a) is rationally based on the perception of the witness and (b) will assist in understanding the witness' testimony or in determining a fact in issue." In contrast, "[i]f scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue," the trial court may require the witness to be "qualified as an expert by knowledge, skill, experience, training, or education[.]" N.J.R.E. 702.

Judge Coburn was correct that whether the bearings were defective and what expenditures were necessary to fix them required the technical or specialized knowledge of an expert witness. The judge was also correct to deny Crane-Hogan's request to qualify Fisher as an expert. Crane-Hogan never identified Fisher as an expert witness prior to trial or submitted an expert report. See R. 4:17-4(a) and (e). Moreover, in support of its request to qualify Fisher as an expert, Crane-Hogan merely stated he was qualified to give an expert opinion "as to the need for . . . structural tubes . . . based on his years of experience in his business." Crane-Hogan made no proffer that Fisher had the technical or specialized knowledge to be qualified as an expert as to the defective bearings and the costs associated therewith.

Even if there was error, it was harmless error. Under the harmless error doctrine, "[a]ny error or omission shall be disregarded . . . unless it is of such a nature as to have been clearly capable of producing an unjust result[.]" R. 2:10-2. As the court expressly noted, all of Crane-Hogan's excluded evidence pertained to its counterclaim for damages. Judge Coburn properly found that because Amscot made delivery of the bearings within a reasonable time and did not breach its contractual obligations, Crane-Hogan was not entitled to any damages. Accordingly, we agree with the court that even if all of the barred evidence had been admitted, it would have been "without any effect or meaning at all."

V.

Lastly, Crane-Hogan contends that Judge Coburn erred in applying the NYPPA to calculate pre- and post-judgment interest. We review a trial court's award of pre-judgment interest in a non-tort case for abuse of discretion. Litton Indus. v. IMO Indus., Inc., 200 N.J. 372, 390-91 (2009). Applying this standard, we agree with Crane-Hogan.

In addressing Amscot's alternative argument for application of the OJR, Judge Honigfeld ruled that since the amount awarded at trial exceeded 120% of Amscot's offer of judgment, Amscot was "entitled to all the benefits listed under [Rule] 4:58-2(a)" (emphasis added). Those benefits include "prejudgment interest of eight percent on the amount of any money recovery from the date of the offer or the date of completion of discovery, whichever is later[.]" Judge Coburn gave no reason for deviating from this ruling. He also failed to apply Rule 4:42-11(a) to calculate post-judgment interest. That rule applies to a money judgment obtained in any cause of action. Brown v. Davkee, Inc., 324 N.J. Super. 145 (App. Div. 1999). Accordingly, we reverse the award of pre- and post-judgment interest, and remand for recalculation of pre-judgment interest in accordance with Rule 4:58-2(a) and recalculation of post-judgment interest in accordance with Rule 4:42-11(a).

VI.

On cross-appeal, Amscot requests a remand for reconsideration of the amount of attorney's fees. Amscot argues, in part, that Judge Honigfeld failed to conduct the requisite Rendine analysis in rendering the award. Rendine, supra, 141 N.J. 292. Specifically, Amscot asserts that the judge failed to consider the total value of the case, the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal services properly.

We review an award of attorney's fees and costs for abuse of discretion. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 443-44 (2001); Rendine, supra, 141 N.J. at 317. We discern no abuse of discretion in the amount of attorney's fees awarded to Amscot.

Our Supreme Court has established standards governing the award of attorney's fees under a fee-shifting statute. Rendine, supra, 141 N.J. at 335. "The starting point in awarding attorneys' fees is the determination of the 'lodestar,' which equals the 'number of hours reasonably expended multiplied by a reasonable hourly rate.'" Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 21 (2004) (quoting Rendine, supra, 141 N.J. at 335). Moreover, "Rule of Professional Conduct 1.5(a) commands that '[a] lawyer's fee shall be reasonable' in all cases, not just fee-shifting cases." Id. at 21-22. This rule lists factors to consider in determining the reasonableness of a fee, which include:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services;

(8) whether the fee is fixed or contingent.

[Id. at 22 (quoting R.P.C. 1.5(a)).]

In Furst, the Court emphasized that "[t]hose factors must inform the calculation of the reasonableness of a fee award in this and every case." Ibid. If the trial court fails to explicitly acknowledge the Rendine factors in rendering an attorneys' fees award, such would be a basis for this court to vacate the award and remand the matter. Id. at 24.

Here, Judge Honigfeld expressly referenced Rendine and the factors identified in R.P.C. 1.5(a) in his award of attorney's fees. First, in considering "the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly," the judge determined that, because the matter was tried as a bench trial, Amscot was not entitled to attorney's fees for the time spent preparing jury voir dire or jury charges.

Judge Honigfeld then calculated the "lodestar" and determined that "[Amscot's] demand for attorneys' fees should be reduced." The judge granted fees for the time billed by the partner who tried the case, but only granted half of the additional hours expended by two associates for trial preparation, finding this time was duplicative, excessive and unnecessary, especially when Amscot only called one witness at the one-day trial. The judge also granted in full fees for paralegal trial preparation time. Finally, the judge evaluated the amount Amscot claimed for work done after the settlement offer, but before trial preparation. The judge noted that this work consisted of "correspondence with defendant, organizing the file, and preparing documents to be attached to the trial binder." The judge found Amscot's claim of $36,419 for this work to be "seemingly excessive," and thus awarded Amscot one-third of those additional bills.

Because Judge Honigfeld expressly referenced Rendine and the R.P.C. 1.5(a) factors, and thereafter made a detailed and reasoned evaluation of each of Amscot's requested fees, it is clear that the calculation of the reasonableness of the fee award in this case was informed by Rendine, and therefore, the award will not be reversed. See Furst, supra, 182 N.J. at 22.

Having reached this conclusion, we decline to address Amscot's additional argument that Crane-Hogan should be compelled to produce its attorney's billing records for in camera review to guide the court on remand in its Rendine analysis.

Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.

CLERK OF THE APPELLATE DIVISION


Summaries of

Amscot Structural Prods. Corp. v. Crane-Hogan Structural Sys., Inc.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION
Aug 10, 2016
DOCKET NO. A-5015-13T1 (App. Div. Aug. 10, 2016)
Case details for

Amscot Structural Prods. Corp. v. Crane-Hogan Structural Sys., Inc.

Case Details

Full title:AMSCOT STRUCTURAL PRODUCTS CORP., Plaintiff-Respondent/Cross-Appellant, v…

Court:SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

Date published: Aug 10, 2016

Citations

DOCKET NO. A-5015-13T1 (App. Div. Aug. 10, 2016)