Disputes and Defenses with Regard to Lien Enforcement Lawsuits Under the New Jersey Construction Lien Law

The New Jersey Court Rules giving rise to a summary action to enforce a construction lien are exceedingly straightforward:

RULE 4:67-1

This rule is applicable . . . (b) to all other actions in the Superior Court other than matrimonial actions and actions in which unliquidated monetary damages are sought, provided it appears to the court, on motion made pursuant to R. 1:6-3 and on notice to the other parties to the action not in default, that it is likely that the matter may be completely disposed of in a summary manner.

RULE 4:67-2 (b) Motion for Order to Proceed Summarily. Actions referred to in R. 4:67- 1(b) shall be commenced, and proceedings taken therein, as in other actions, except as herein provided. The notice of motion to proceed summarily shall be supported by affidavits made pursuant to R. 1:6-6 and, if addressed to the defendant, may be served with the summons and complaint; but it shall not be returnable until after the expiration of the time within which the defendant is required to answer the complaint. If the court is satisfied that the matter may be completely disposed of on the record (which may be supplemented by interrogatories, depositions and demands for admissions) or on minimal testimony in open court, it shall, by order, fix a short date for the trial of the action, which shall proceed in accordance with R. 4:67-5, insofar as applicable.

However, the existence of valid counterclaims, setoffs and affirmative defenses are frequently sufficient to defeat an application for summary action, is as exemplified in Hannigan v. Township of Old Bridge, 288 N.J. Super. 313 (App. Div. 1996). Hannigan involved the enforcement of settlement agreement involving police officer employment contract. Id. Due to age of the plaintiff, specific performance was not available and he was forced to resort to damages for breach of contract. Id. at 318. Speaking to the amenability to summary proceeding of such breach of contract action, the Hannigan court held, We have a claim for breach of contract, not a misunderstanding as to contract terms or a grudging lack of cooperation in fulfilling the agreement. Id. at 319. “[Rule 4:67-2(b)] is usually reserved for situations where the matter may be completely disposed of on the existing record or on minimal testimony in open court.” Id.; see, also, Rules Governing the Courts of the State of New Jersey, Sylvia B. Pressler (2004), comment to R. 4:67-2, p. 1835 (“The rule . . . authorizes the court to order a summary disposition even where it appears that testimony will be required, provided that testimony is minimal. Minimal testimony should be construed as testimony which clearly will not exceed one day. (citations omitted).

Similarly, the case of Taylor v. Ford Motor Co., 703 F.2d 738 (3d. Cir. 1983), involved the use of a summary action to confirm an arbitration award. Id. However, the Taylor court spoke as to the impropriety of the use of this procedure in more complex cases involving disputed issues of fact:

Rule 67 can be invoked also to provide for a summary remedy of enforcement whenever it appears that there is no genuine issue of material fact. Subsection 1(b) of Rule 67 makes summary action appropriate to any Superior or county court actions with the exception of matrimonial actions or those which involve unliquidated monetary damages. In these actions, the likelihood that the action can be resolved summarily must be apparent to the court and to the other party.

Id. at 742. Thus, the court may order a summary action only if the matter can be disposed of completely on the record or if the testimony is minimal. Id. at 743.

Thus, valid counterclaims, setoffs and affirmative defenses are frequently sufficient to defeat an application for summary action and leave the lienor to its proofs through a plenary action. See Kvaerner Process, Inc. v. Barham-McBride Joint Venture, 368 N.J. Super. 190 (App. Div. 2004) (“We are mindful that N.J.S.A. 2A:44A-14a(2) confers upon a lienee the opportunity to force an evaluative review of the lien claim” . . . and it is the lienor that shoulders the burden of proof to justify its claim).

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