WALLACE BROS., INC. VS. EAST BRUNSWICK BOARD OF EDUCATION (L-1605-14, MIDDLESEX COUNTY AND STATEWIDE)
A-1432-15T3
| N.J. Super. Ct. App. Div. | Nov 9, 2017Background
- East Brunswick Board of Education contracted with Wallace Bros., Inc. to construct New Memorial School for $18,233,000 (plus extras); Board paid $19,713,664.11 but withheld final payment of $366,130.26.
- Wallace contends the project was completed and no final punch list was delivered until after litigation; Board contends multiple punch lists (starting April 2013) identified outstanding work and back charges/liens that justify withholding final payment.
- The architect signed two Certificates of Substantial Completion (Nov. 9, 2012 and Oct. 3, 2013) but struck language referencing attached punch lists; architect says the strike only meant punch lists were not attached.
- A punch-list status report (April 2013, revised Aug. 2013, Oct. & Nov. 2014) lists ~300 items; November 2014 indicated about $163,890 of work remaining and no final Certificate for Payment had been issued.
- The trial court granted summary judgment for Wallace, concluding the Board waited too long to assert defects and that the January 2015 punch list was untimely and maintenance-related; the Appellate Division reversed, finding material factual disputes and remanding for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wallace completed the contract and is owed the final payment | Wallace: architect-signed Certificates (with struck language) and long occupancy show completion and entitlement to final payment | Board: multiple punch lists and outstanding items/back charges/liens show contract not fully performed | Reversed summary judgment; material facts disputed, trial required |
| Whether Board waited too long to assert defects (equitable forfeiture) | Wallace: Board delayed and occupied the building for two years; belated punch list is untimely | Board: earlier punch lists (Apr 2013 and revisions) and related back charges show timely assertion | Court: timeliness disputed; cannot resolve on summary judgment |
| Effect of occupancy/partial use on acceptance | Wallace: occupancy for two years supports acceptance and forecloses new punch-list claims | Board: contract provision (partial occupancy not acceptance) preserves right to require compliance | Court: contractual language controls; disputed facts preclude summary judgment |
| Whether missing closeout documentation precludes final payment | Wallace: motion judge viewed many items as ordinary maintenance and rejected as hostage-taking | Board: closeout docs (vendor waivers, warranties, tests, recorded drawings) were contractually required before final payment | Court: existence/adequacy of closeout docs disputed; trial needed |
Key Cases Cited
- Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436 (standard of appellate review for summary judgment)
- Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (summary judgment standard; view evidence in favor of non-moving party)
- Fastenberg v. Prudential Ins. Co. of Am., 309 N.J. Super. 415 (trial court's contract interpretation reviewed de novo)
- Dunkin' Donuts of Am., Inc. v. Middleton Donut Corp., 100 N.J. 166 (equitable relief limited; courts cannot rewrite contracts to avoid perceived unfairness)
- Nieder v. Royal Indemn. Ins. Co., 62 N.J. 229 (appellate courts may consider issues not raised below when public interest warrants)