WILLIAM TROPP et al. v. DISTINCTIVE POOLS, INC.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5659-04T15659-04T1

WILLIAM TROPP and

PAULA TROPP,

Plaintiffs-Appellants,

v.

DISTINCTIVE POOLS, INC.,

Defendant-Respondent.

________________________________

 

Submitted: May 2, 2006 - Decided May 22, 2006

Before Judges Skillman and Axelrad.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, L-3056-04.

Otto J. Kostbar, attorney for appellants.

Drazin and Warshaw, attorneys for respondent (Ralph E. Polcari, on the brief).

PER CURIAM

In November 1999 plaintiffs William and Paula Tropp hired defendant Distinctive Pools to install an in-ground swimming pool at their residence, which defendant worked on from April 2000 through the Spring of 2001. A dispute arose about the quality of the work and an outstanding balance. Defendant filed a Notice of Unpaid Balance/Right to File Lien Form on November 26, 2001 and Construction Lien Claim Form on February 25, 2002 with the Monmouth County Clerk. It is undisputed that defendant's Notice and Construction Lien violated the requirements of the Construction Lien Law, N.J.S.A. 2A:44A-6, which requires that a lien claim be filed with the county clerk "not later than 90 days following the date the last work, services, material or equipment was provided for which payment is claimed." The documents listed a total lien claim amount of $16,812.84.

Plaintiffs became aware of the construction lien claim during a title company search in September 2002 when they were refinancing their mortgage. The parties reached an accord and satisfaction as to the dispute, which was memorialized in a letter from defendant dated September 4, 2002. Plaintiffs, who were professional printers, agreed to pay $7,500 and print a four-page brochure in full settlement of the outstanding bill, and defendant agreed to release its lien on the property "once the bill [was] paid." On or about September 19, 2002, defendant received the title company's check in the amount of $7,500 as payment of the settlement amount. Defendant did not discharge the lien.

When plaintiffs refinanced their mortgage in May 2004, the lien appeared of record. Plaintiffs' counsel wrote to defendant, explaining that the lien was procedurally defective as untimely filed pursuant to N.J.S.A. 2A:44A-6 and not timely enforced pursuant to N.J.S.A. 2A:44A-14, enclosed a discharge of the lien to sign, and instructed if it was not returned within ten days, suit would be filed and statutory counsel fees would be sought. Defendant's president called and said she would agree to release the lien if plaintiffs would agree in writing to print the brochure.

Plaintiffs filed this action on July 2, 2004 seeking a discharge of the notice and lien claim, damages and pre-judgment interest, and counsel fees and costs pursuant to the Construction Lien statute. Defendant filed a counterclaim for damages on December 20, 2004, alleging breach of the settlement agreement in not printing the brochure.

Plaintiffs moved for summary judgment, attaching requests for admissions, which were not denied by defendant, which included: "[Defendant] promised that it would release its lien once the $7,500 was paid" and "[Defendant] has not presented a brochure to the plaintiffs for printing." Defendant's president certified that following the finalization of the settlement agreement, she placed at least two telephone calls to William Tropp to ascertain what materials he required of her and to ask him other questions relating to the production of the brochure, but he did not return the calls. Defense counsel conceded the lien was procedurally deficient but contended discharge under the settlement agreement was conditioned on satisfaction of two components, payment and printing of the brochure. Thus, according to defendant, since plaintiffs failed to live up to their end of the bargain, they did not make final payment of the amount due, and thus defendant was not obligated to discharge the lien.

The court granted summary judgment to plaintiffs but denied counsel fees, noting on the March 18, 2005 order that the lien should be discharged "based on settlement agreement between the parties [but] no counsel fees were allowed in the settlement agreement." The order further provided for judgment to be entered in favor of plaintiffs dismissing defendant's counterclaim.

On reconsideration, plaintiffs argued they were statutorily entitled to counsel fees and costs because the notice and lien claim were filed more than ninety days after the date of last work performed, N.J.S.A. 2A:44A-6 and 2A:44A-15; because defendant did not enforce its lien within a year of the last work, N.J.S.A. 2A:44A-14; and because defendant did not discharge the lien after the $7,500 was paid, N.J.S.A. 2A:44A-30. Plaintiffs argued that printing the brochure was a separate issue and was not consideration for the lien discharge. The court held that the settlement agreement, which was entered within the one-year period that defendant could have enforced the lien, essentially superseded defendant's statutory obligation to sue, and because it did not provide for counsel fees, plaintiff was not entitled to them. On May 16, 2005, the court denied plaintiff's motion for reconsideration.

On appeal, plaintiffs renew their arguments that they are statutorily entitled to counsel fees based on defendant's filing of and failing to discharge a deficient notice and lien claim or, alternatively, failing to file a discharge of the lien claim within thirty days following receipt of the $7,500 settlement check. Plaintiffs urge that to deny them recovery of their legal fees rewards defendant for willful violation of the statute.

We agree. Even if we were to construe the settlement agreement as a waiver by plaintiffs of their right to challenge the defective nature of the notice and lien claim, plaintiffs are still entitled to counsel fees pursuant to N.J.S.A. 2A:44A-30 based on defendant's failure to discharge the construction lien after receipt of the settlement check. Although the problem could have been avoided by a simultaneous exchange of the check and discharge, the record clearly indicates the parties' intent that defendant was obligated to discharge the lien upon receipt of the $7,500 check. If defendant's president had considered the brochure to be an integral term of the settlement, she surely would have followed up with more than two vague phone calls of unidentified dates and would have submitted a brochure to the plaintiffs for printing. Her inaction undercuts defendant's position and evidences the minor role that defendant considered the brochure to play in the context of the settlement.

Plaintiffs then gave defendant another opportunity to discharge the lien when their counsel contacted defendant prior to instituting suit and advised of the statutory penalties for failing to discharge the lien and provided a discharge of the lien for signature and return, which defendant refused to execute. N.J.S.A. 2A:44A-30 requires a lien claimant to file a discharge of record when the claim has been "paid, satisfied or settled by the parties or forfeited by the claimant." Failure to do so renders the lien claimant liable for court costs and counsel fees. N.J.S.A. 2A:44A-30c.

We are satisfied that plaintiffs were entitled to counsel fees and reverse that portion of the March 18, 2005 order. The matter is remanded to the trial court for review of the affidavit of services submitted by plaintiffs' counsel and determination of the amount of the award.

 

Presumably the counterclaim was dismissed based on defendant's admission that it failed to timely present the brochure for printing. Although defendant filed a notice of cross-appeal from the dismissal of its counterclaim, the counterclaim was dismissed for failure to prosecute.

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A-5659-04T1

May 22, 2006