Sean Wood, L.L.C. v. Hegarty Group, Inc.
29 A.3d 1066
| N.J. Super. Ct. App. Div. | 2011Background
- Wood, L.L.C. sues the Hegarty Group and Kenneth Hegarty for $14,583.25 on two contracts to rig, load, and transport tanks/equipment to Perry Videx and a New York customer; Hegarty counterclaims for lost profits exceeding the Special Civil Part limit.
- Trial resulted in a six‑day bench ruling: Wood awarded $2,500 against the Hegarty Group; counterclaim dismissed for failure to mitigate; all parties appeal.
- Contracts: (1) Dec. 26, 2008 contract for 13 tanks and 3 machines to Perry Videx for $22,583.23 with $10,000 deposit; (2) Jan. 6, 2009 NY contract for 4 tanks to North Collins for $5,000 with 50% deposit; both signed by Kenneth Hegarty who claimed no ownership.
- Wood delivered part of the Perry Videx work but imposed COD on remaining balance after learning of alleged nonpayment; Hegarty refused to authorize applying any offset; tanks were stored, then taken back and later scrapped after Hegarty regained possession.
- Trial court rejected Wood’s quasi‑contract (quantum meruit) and UFTA theories and found Wood breached by imposing COD unilaterally; court held Hegarty Group failed to mitigate damages on the counterclaim; court pierced the corporate veil to hold Hegarty personally liable and remanded for joint and several judgment against him and the Hegarty Group.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wood breached by inserting COD and whether damages were appropriate | Wood contends COD was justified to protect payment and Wood’s broader damages pool supports quantum meruit | Hegarty argues no valid COD modification and that Wood bore the risk of nonpayment; mitigation applies | Wood’s unilateral COD breach affirmed; damages limited; no quantum meruit recovery |
| Whether Wood’s UFTA claim was rightly dismissed | Wood seeks relief under UFTA for fraudulent conveyance | Hegarty contends no fraudulent transfer; assets sufficiently valued | UFTA claim affirmed; no fraudulent transfer found |
| Whether judgment should be joint and several against Hegarty Group and Kenneth Hegarty | Wood seeks piercing of the corporate veil to impose liability on both | Hegarty Group argues no alter ego; assets insufficient | Veil piercing established; judgment to be entered against both jointly and severally |
| Whether Hegarty Group failed to mitigate damages on its counterclaim | Wood asserts counterclaim damages supported by recovered value | Hegarty Group argues mitigation by alternative disposition could reduce loss | Mitigation failed; damages not recoverable for counterclaim |
| Whether Wood’s damages against the Hegarty Group should be adjusted for credits | Credit should reduce judgment | Credit not properly applied | Remand to reflect a $500 credit and amend judgment accordingly |
Key Cases Cited
- Dunkin’ Donuts of Am., Inc. v. Middletown Donut Corp., 100 N.J. 166 (N.J. 1985) (unjust enrichment and contract damages interplay)
- Weichert Co. Realtors v. Ryan, 128 N.J.427 (N.J. 1992) (quasi‑contract recovery framework; measure of value)
- Starkey, Kelly, Blaney & White v. Estate of Nicolaysen, 172 N.J. 60 (N.J. 2002) (elements of quantum meruit and value of services)
- Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474 (N.J. 1974) (standard for trial‑level factual review; jury questions reasonable)