BH CERAMIC TILE & MARBLE LLC v. ROYAL K. SUPPLY & WAREHOUSE, INC. t/a DESIGN FLOORS

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4511-04T14511-04T1

BH CERAMIC TILE &

MARBLE LLC,

Plaintiff-Respondent,

v.

ROYAL K. SUPPLY & WAREHOUSE,

INC. t/a DESIGN FLOORS,

Defendant-Appellant.

 

Submitted February 7, 2006 - Decided April 17, 2006

Before Judges Lefelt and Hoens.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-00433-03.

Michael V. Dowgin, attorney for appellant.

Ambar I. Abelar, attorney for respondent.

PER CURIAM

Defendant Royal K. Supply & Warehouse, Inc., doing business as Design Floors (Design Floors) appeals from the January 6, 2005 judgment in favor of plaintiff BH Ceramic Tile & Marble LLC (BH Ceramic) and from the April 8, 2005 order denying its motion for reconsideration. We affirm.

The following facts are derived from the record on appeal. Design Floors engaged BH Ceramic to be its tile and flooring subcontractor on a number of jobs. When Design Floors failed to pay BH Ceramic for three of the jobs, BH Ceramic filed its complaint seeking contract damages. It is undisputed that BH Ceramic performed in an acceptable manner on two of the jobs, which the parties have referred to as the Land Rover contract and the DeLucia contract, and that Design Floors owed BH Ceramic a total of $24,630.35 for its work on those contracts. Design Floors, however, withheld payment from BH Ceramic because of a dispute about the work BH Ceramic performed on the third job. That job was subcontracted to BH Ceramic as part of a contract between Design Floors and Mr. and Mrs. Siegel, the owners of a home in Marlboro.

The Siegels hired Design Floors to install flooring in several rooms of their home. In particular, they were remodeling their kitchen and contracted with Design Floors for a tile floor in that room. According to Frank Miller, the quality auditor for Design Floors, the Siegels were planning to remove all of the kitchen cabinets and appliances and, in addition to the new tile floor and subfloor, they were planning to install entirely new "high-end" cabinets and appliances. They wanted the floor in the kitchen to be perfect so that the cabinets and the appliances could be installed correctly.

There is little disagreement among the parties that the floor in that kitchen was not installed correctly. The tiles were not uniform in size, the grout was of differing widths, the tiles were not level, the spacing between the tiles was uneven, the floor was not flat, the grout lines were not straight and there were individual misaligned tiles that created sharp edges throughout the surface of the floor. Reginaldo Abreu, the principal of BH Ceramic, admitted at trial that he had left the project to unsupervised workmen whose performance was not within the acceptable bounds of workmanship.

Neither Abreu nor Miller inspected the tile floor after it was installed by the BH Ceramic workmen and before the completion of the kitchen renovations. In addition, the BH Ceramic workmen told the Siegels that they could not enter the room until the grout had dried and the tiles were set. By the time the Siegels saw the condition of the floor, the other kitchen contractors had already installed the cabinets and the appliances on top of it. When the Siegels did see the floor, they were extremely displeased. They contacted Miller and demanded that Design Floors make good on the original agreement to install a perfect kitchen floor. They refused to permit BH Ceramic or its workmen to enter the house to attempt to repair the floor and they demanded that Design Floors replace it.

Miller agreed with the Siegels that the tile floor was so poorly installed that it had to be removed and replaced. He was concerned about doing so, however, because the other kitchen renovations had already been finished. As a result, replacing the floor required the new cabinets and appliances to be removed and reinstalled as well. In addition, the new cabinets were designed to use the full height of the walls up to the ceiling. Consequently, Miller was worried that he might not be able to reinstall the existing cabinets, because a new floor might be of a slightly different height. He was also concerned that the cabinets, the associated crown moldings, the appliances or the counter tops might be damaged during the removal and reinstallation process.

Miller estimated that it would cost Design Floors at least $22,000 to remedy the problem. He also thought that the Siegels might sue Design Floors and demand treble damages under the Consumer Fraud Act. At the same time, the Siegels retained a new contractor, Design Kitchens, to assist them in deciding how to fix the floor and complete the kitchen. Mr. Yehuda, who was affiliated with Design Kitchens, met with Miller and presented his estimate for the needed repairs. Including removal, replacement of the floor and reinstallation of the cabinets and the appliances, Yehuda estimated that the work would cost $10,485.

Eventually, because of concerns about how the repairs would disrupt life for the Siegels and in order to avoid a potential treble damage claim, Design Floors agreed to pay the Siegels $15,000 in exchange for their agreement to engage another contractor to perform the repairs and to release Design Floors from its contract with them. After settling with the Siegels, Design Floors sought to recover its losses on the job by backcharging BH Ceramic. Because of the way in which Design Floors calculated the backcharge, the effect was that BH Ceramic received no payment on the two undisputed jobs. BH Ceramic then sued Design Floors, seeking to be paid for the work it had performed on all three of the jobs.

During the bench trial on the complaint, neither party disputed that BH Ceramic was entitled to be paid in full for the work it had performed on the Land Rover and DeLucia contracts, totaling $24,630.35 in payment due BH Ceramic that Design Floors was withholding because of the Siegel backcharge. Rather, the only issues addressed during the trial were whether BH Ceramic had breached its contract with Design Floors for the work at the Siegel residence and the amount of damages which could then be offset in favor of Design Floors against the balance due BH Ceramic on the other two jobs. At the close of the evidence at trial and following post-trial submissions, the judge concluded that BH Ceramic had breached its contract with Design Floors, that the amount of damages Design Floors had sustained was $10,439.96 and that BH Ceramic was therefore entitled to be paid $14,190.39 by Design Floors after offsetting the amount due Design Floors in damages against the sums otherwise owed to BH Ceramic.

On appeal, Design Floors argues that the trial judge erred both factually and as a matter of law in his analysis of the damages it sustained as a result of BH Ceramic's breach. We will confine our review, therefore, to the judge's findings and conclusions as they relate to damages. The trial judge first rejected the argument advanced by BH Ceramic that Design Floors was not entitled to any award of damages because BH Ceramic had been deprived of an opportunity to cure the defect in the floor. That conclusion was based on the judge's rejection of BH Ceramic's argument that the Uniform Commercial Code ("U.C.C."), N.J.S.A. 12A:2-201 to -725, applied to the tile installation subcontract. Although BH Ceramic did not cross-appeal, it argues that the failure to offer it the opportunity to cure precludes Design Floors from recovering from it the settlement money it paid to the Siegels. Whether or not there is logic in that assertion, it is plain that the judge's U.C.C. analysis was correct. Because the contract between Design Floors and BH Ceramic was for the performance of services rather than a sale of goods, it fell outside the scope of the U.C.C. by definition. See N.J.S.A. 12A:2-105.

Having rejected BH Ceramic's U.C.C. theory, the judge analyzed the question of damages by utilizing standard breach of contract principles. He found, as a matter of fact, that prior to discovering that the work was not acceptable to the Siegels, Design Floors had paid BH Ceramic the total of $4,431.40 for its work. He further found that Design Floors had provided the tile and material costing $2,332.20 that BH Ceramic had used and that would need to be replaced. He found that the difference between the amount that the Siegels had agreed to pay Design Floors and its costs for material and labor, an amount totaling $2,176.36, represented lost profit. Finally, the judge found that Design Floors had estimated that the cost to remove the tile would be $1,500. He therefore found that the total of these items, or $10,439.96, represented the damages sustained by Design Floors. Design Floors does not directly challenge any of these calculations.

The trial judge then considered whether Design Floors was also entitled to recover from BH Ceramic as part of its contract damages the $15,000 it paid to the Siegels in settlement of their claims against Design Floors. He concluded that because the amount paid to settle the claim made by the Siegels did not "arise naturally" from the breach of contract and was not reasonably within the contemplation of these parties at the time they entered into their contract, it could not be included in the award of damages.

On appeal, Design Floors argues that the judge erred. First, Design Floors contends that the cost to it of settling with a dissatisfied customer arises naturally or fairly from the breach of the contract. In the alternative, Design Floors argues that the parties to the contract certainly were aware of the possibility that the homeowner might demand replacement or repair of the floor if the work were not done properly.

These arguments present us with an attack on both the factual findings and the legal conclusions of the trial judge. To the extent that Design Floors challenges the factual findings of the trial judge, the scope of our review is limited. "[W]e do 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." Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974)(quoting Fagliarone v. Township of North Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)). Therefore, if the findings and conclusions of the judge are supported by substantial credible evidence, this court will not disturb them. Ibid.; see Weiss v. I. Zapinsky, Inc., 65 N.J. Super. 351, 357 (App. Div. 1961). We, however, owe no special deference to the decision of the trial judge on matters of law. See Manalapan Realty, L.P. v. Township Committee, 140 N.J. 366, 378 (1995).

Applying these principles to the matters on appeal, we find no basis on which to interfere with the trial judge's findings and conclusions. We defer to the judge's factual finding that the $15,000 sum that Design Floors agreed to pay to the Siegels was based on Miller's concern about issues unrelated to the work itself, including the health and welfare of Mrs. Siegel and her children whose lives would be disrupted during the repair process. We defer as well to the trial judge's finding that the settlement sum was also based in part on Miller's concern about protecting the business reputation of Design Floors.

Each of these factual findings is supported by substantial credible evidence in the record. We find no error in the judge's conclusion that these were concerns that fell beyond damages that naturally or fairly arose from the BH Ceramic breach. Contract damages are designed to put the injured party in as good a position as if the contract had been performed. See Matter of Liquidation of Integrity Ins. Co., 147 N.J. 128, 136 (1996); Donovan v. Bachstadt, 91 N.J. 434, 444 (1982); 525 Main Street Corp. v. Eagle Roofing Co., 34 N.J. 251, 254 (1961). The "entirety of such sums of money as were required to be expended," see Price v. B. Construction Co., 77 N.J. Super. 485, 488 (App. Div. 1962), certif. denied, 39 N.J. 239 (1963), is included in the damages awarded. However, determinations about the adequacy of damages are left to the sound discretion of the trier of fact. See Endress v. Brookdale Comm. College, 144 N.J. Super. 109, 142 (App. Div. 1976); Commonwealth Land Title Ins. Co. v. Conklin Assocs., 152 N.J. Super. 1, 10 (Law Div. 1977), aff'd, 167 N.J. Super. 392 (App. Div. 1979).

We discern, under the circumstances, no abuse of discretion in the judge's conclusion that the settlement paid to the Siegels went beyond that which "naturally" arose from the BH Ceramic breach. Similarly, the judge's factual finding that the parties did not contemplate, at the time that they entered into the contract, that in the event of a breach by BH Ceramic, Design Floors would agree to pay a sum well in excess of the customer's estimate to repair the floor is supported by substantial credible evidence in the record. See Port Auth. v. Honeywell Protective Servs., 222 N.J. Super. 11, 27 (App. Div. 1987).

Affirmed.

 

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A-4511-04T1

April 17, 2006