HI-TECH STEEL ERECTORS, INC. v. TLC DRYWALL CONSTRUCTION

Annotate this Case

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2531-07T1

HI-TECH STEEL ERECTORS, INC.,
a New Jersey Corporation,

Plaintiff-Appellant,

TLC DRYWALL CONSTRUCTION,

Defendant,

and

XL SPECIALTY INSURANCE
COMPANY and XL INSURANCE
COMPANY,

Defendants-Respondents.

___________________________________

January 5, 2010
Submitted December 9, 2009 - Decided

Before Judges Sabatino, Lyons, and J. N.
Harris

On appeal from the Superior Court of New
Jersey, Law Division, Essex County, Docket
No. L-7233-06.

Neal H. Flaster, L.L.C., attorneys for
appellant (Neal H. Flaster and Scott J.
Goldstein, on the briefs).

Tesser & Cohen, attorneys for respondents
(Stephen Paul Winkles, on the brief).

PER CURIAM

This appeal arises out of unpaid work performed by

plaintiff Hi-Tech Steel Erectors, Inc. ("Hi-Tech"), on the

construction of a police station. Plaintiff filed suit against

two sureties that had issued bonds for the project. The Law

Division dismissed plaintiff's complaint for failure to comply

with the requirements of the Public Works Bond Act, N.J.S.A.

2A:44-143 to -147 (the "Bond Act"). The court also denied

plaintiff's late request to amend its complaint to name the

project's general contractor as a defendant in the surety

action, and to reinstate another subcontractor as a defendant.

Reconsideration was denied.

Plaintiff now appeals the trial court's various orders

denying it relief. We affirm.

These are the pertinent facts, and the relevant procedural

events. On March 30, 2004, the City of East Orange entered into

a contract with a general contractor, Imperial Construction

Group, Inc. ("Imperial"), to build a new police station. On

that same day, defendants XL Specialty Insurance Company and XL

Insurance Company ("the Sureties") issued both a performance

bond and a payment bond for the project in the amount of

$11,615,314, for which they were listed as the "Surety."

Imperial was the "Contractor" named on the bonds and the City of

A-2531-07T1
2

East Orange was identified as the "Owner" and named as obligee

for the bonds.

The payment bond allowed claimants who had not been paid by

Imperial within ninety days of completion of work on the project

to "sue on this bond for the use of such claimant, prosecute the

suit to final judgment for each sum or sums as may be justly due

claimant, and have execution thereon." Such claimants were

defined in the bond as "one having a direct contract, with a

subcontractor for labor, material, or both, used or reasonably

required for use in the performance of the contract . . . [.]"

However, suit under the bond was prohibited unless certain

criteria were met by the claimant. Specifically, any such

lawsuit was required to be brought in a "court of competent

jurisdiction in and for the county or other political

subdivision of the state in which the project, or any part

thereof, is situated, or in the United States District Court for

the district in which the project, or any part thereof, is

situated[.]" Such an action was also required to be brought

prior to:

the expiration of one (1) year following the
date on which Contractor ceased work on said
contract, it being understood, however, that
if any limitation embodied in this bond is
prohibited by law controlling the
construction hereof, such limitation shall
be deemed to be amended so as to be equal to

A-2531-07T1
3

the minimum period of limitation permitted
by such law.

[(Emphasis added).]

Moreover, the payment bond prohibited suit by a claimant against

the Surety:

Unless claimant, other than one having a
direct contract with the Contractor, shall
have given written notice to any of the
following: the Contractor, the Owner or the
Surety above named, within ninety (90) days
after such claimant did or performed the
last of the work or labor, or furnished the
last of the materials for which said claim
is name[d], stating with substantial
accuracy the amount claimed and the name of
the party to whom the materials were
furnished, or for whom the work or labor was
done or performed.

[(Emphasis added).]

In May 2004, Imperial entered into a subcontract with

defendant TLC Drywall ("TLC") to provide various types of

construction and carpentry work on the project, in return for

payment of $928,000. TLC's work was to include "[e]xterior

soffits framing and sheathing" and "[i]nterior soffits[.]"

Under its agreement with Imperial, TLC was permitted to

subcontract out its work, with the understanding that it "shall

not subcontract any portion of the labor or materials involved

in the work under this Subcontract without first obtaining

written approval of its prospective subcontractor or supplier by

the Contractor."

A-2531-07T1
4

Five months after Imperial's subcontract with TLC was

executed, on October 22, 2004, Imperial entered into a

subcontract with plaintiff ("the Imperial/Hi-Tech contract") to

perform other steel work on the project.1 Plaintiff alleges that

it commenced work on the project immediately.

According to plaintiff, in January 2005 its site

supervisor, Pat Cianicullo, was approached by a representative

from Imperial at the project site. The representative, Joseph

Richardi, a supervisor for Imperial, allegedly "requested

[plaintiff's] assistance in constructing a steel soffit for the

[project]." Richardi explained to Cianicullo that TLC "did not

have the expertise to construct and install the soffit and [that

he] wanted [p]laintiff to do the job but bill TLC Drywall for

payment." According to Cianicullo, Richardi further stated that

"[p]laintiff would be paid when Imperial was paid by East

Orange, through [TLC]."

On January 15, 2005, plaintiff and TLC entered into a

written contract for the soffit work to be performed by

1
Although it is described in plaintiff's amended complaint as a
written contract, the agreement between Hi-Tech and Imperial
apparently was not presented to the trial court, and it is not
part of the record before us.

A-2531-07T1
5

plaintiff instead of TLC ("the TLC/Hi-Tech Contract").2 Pursuant

to that agreement, plaintiff completed this particular soffit

work on February 5, 2005. However, plaintiff continued its other

work on the site under its subcontract with Imperial.

In November 2005, after TLC had failed to pay plaintiff the

$26,200 that plaintiff claimed was due under the TLC/Hi-Tech

Contract, plaintiff filed a notice of an unpaid balance and an

asserted right to file a construction lien on the property.

According to plaintiff, it continued to work on the project

until its performance under the Imperial/Hi-Tech Contract was

completed on January 10, 2006.

Still not paid for the soffit work that it performed in

lieu of TLC, plaintiff filed the instant civil action in the Law

Division on August 30, 2006. Plaintiff named as defendants the

two sureties, XL Specialty Insurance and XL Insurance Company,

and also named TLC. This initial complaint alleged damages

caused by TLC for breach of contract, breach of promise to pay,

quantum meruit, and detrimental reliance. The complaint also

alleged that plaintiff was "an intended Third-Party beneficiary

of the Surety Agreement ("Bond") entered into by [d]efendants .

. . [.]" The complaint further alleged that "[d]espite demand

2
This agreement also evidently was not supplied to the trial
court, and it is not part of the record before us.

A-2531-07T1
6

having been made by [plaintiff] for payment for services

rendered at the [s]ubject [p]remises, payment had not been made

in accordance with the terms of the [b]ond by said [Surety]

[d]efendants." Pursuant to Rule 4:5-1, plaintiff's counsel

certified that this complaint was "not the subject matter of any

other action pending in any court[.]"

The Sureties answered the complaint on November 17, 2006,

denying the allegations. Their common answer also asserted

seventeen separate affirmative defenses. Among those defenses

were: (1) that the "[p]laintiff's complaint fail[ed] to state a

cause of action against [the Sureties] upon which relief can be

granted"; (2) that "[p]laintiff's claims are barred by the terms

of the bonds issued by [the Sureties]"; and (3) that

"[p]laintiff['s] claims are barred because [p]laintiff failed to

comply with the terms of the payment and performance bonds or

In his Rule 4:5-1
with the Bond Act under New Jersey [l]aw."

certification, the Sureties' counsel asserted that there were

two other related cases then active in the Law Division in Essex

County, including "Hi-Tech Steel Erectors v. Imperial

Construction Group, Inc., Docket No.: ESX-L-7154-06."3

3
At oral argument on the first motion in this case, plaintiff's
counsel represented that if the court "allows [plaintiff] to
continue the cause of action, plaintiff would move to
consolidate this case with the other cases." A docket search as
(continued)

A-2531-07T1
7

Plaintiff contends that it served TLC in November 2006 by

private process server at TLC's primary place of business in New

York. However, proof of that alleged service was not timely

filed by plaintiff with the Essex County Sheriff's Office.

Consequently, on January 12, 2007, the trial court sent a notice

to plaintiff's counsel advising that its "complaint would be

dismissed for lack of prosecution in 60 days unless one of the

actions required by Rule 1:13-7 were taken." Plaintiff

apparently took none of those required steps within sixty days,

and its complaint against TLC was thus administratively

dismissed by the court under Rule 1:13-7 for lack of prosecution

on March 17, 2007.

Thereafter, the Sureties filed a motion to dismiss

plaintiff's complaint. In support of their motion, the Sureties

relied upon a certification by Richard Briggs, a principal of

Imperial. Briggs certified that "[p]rior to February 5, 2005,

Imperial never received any notice from [p]laintiff that it was

(continued)
of the time of this opinion reflects that the defendants named
in L-7154-06 were Imperial, XL Specialty Insurance Company, XL
Insurance Company, and an unrelated metal fabrication company.
The docket reflects that case was ultimately settled as to
Imperial and the Sureties, and default was entered against the
metal fabricator. The terms of the settlement are not
disclosed. We have no docket information concerning the third
related action alluded to by counsel.

A-2531-07T1
8

performing work for TLC on the [p]roject as a beneficiary under

the bond."

Plaintiff filed a cross-motion, seeking to amend its

complaint against the Sureties and also for leave to add

Imperial as a defendant. Plaintiff noted that no trial date was

scheduled, that the discovery period had not yet expired and

that the Sureties' counsel had consented to a sixty-day

extension of discovery pursuant to Rule 4:24-1(c). Given that

the original discovery period was initially set to expire on

September 13, the sixty-day consensual extension would move the

discovery end date to November 13, 2007.

Plaintiff's proposed amended complaint would add Imperial

as a co-defendant on the breach of contract, quantum meruit, and

detrimental reliance claims. The amended complaint also would

add common-law claims of constructive trust and unjust

enrichment against TLC and Imperial. Plaintiff further sought

to have a constructive trust imposed under N.J.S.A. 2A:44-148

against Imperial.

The trial judge heard oral argument on these initial

motions on September 20, 2007. At that oral argument, counsel

and the judge both referred to the Sureties' motion as one for

summary judgment under Rule 4:46-1 rather than as a motion to

A-2531-07T1
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dismiss, given the references to matters outside of the

pleadings, including certifications from Briggs and Cianicullo.

After considering these arguments, the trial judge granted

summary judgment to the Sureties, dismissing the claims against

them under the payment bond. In her oral ruling, the judge

cited plaintiff's non-compliance with the notice requirements of

N.J.S.A. 2A:44-145. Specifically, the judge noted:

[A]t this point in time everybody knows what
the bond law [N.J.S.A. 2A:44-145] requires
and does not require, so the explicit
requirement that the notice be given should
have even greater effect and the Court
stated in Dial [Block Co., Inc. v. Mastro
Masonry Contractors,
374 N.J. Super. 13
(App. Div. 2004), certif. denied,
183 N.J.
215 (2005)], "[T]he requirements to provide
notice under the [B]ond [A]ct are not
harsh[.] [A]ll a person seeking to become a
beneficiary under the payment bond need do
is give written notice of that intent to the
contractor before starting work." [Dial
Block Co., Inc., supra, 374 N.J. Super. at
24.]

Plaintiff failed to do so, consequently
plaintiff has no claim to the -- bond under
the [B]ond [A]ct. For those reasons
defendant[s'] motion for summary judgment is
granted.

With respect to plaintiff's cross-motion to amend the

complaint, the judge faulted plaintiff for not joining Imperial

as a defendant at the outset of the lawsuit. The judge was then

under the misimpression, fortified by a mistaken representation

at oral argument by plaintiff's counsel, that TLC had defaulted

A-2531-07T1
10

in this action and thus the claims against TLC were simply

waiting a future default judgment. As a result, the judge found

that:

at this point in time [the surety defendants
are] dismissed [and] that TLC Drywall is in
default. The [c]ourt does not believe that
it is -- [worth the] resources to now amend
a complaint in a case that's basically over.
So rather than ruling on the futility issue
the [c]ourt is simply going to deny the
motion on judicial economy issues and
require that if Hi-Tech now wishes to bring
a cause of action against Imperial it do so
separately.

[(Emphasis added).]

The judge entered a corresponding written order that same

day, dismissing the complaint against the Sureties and denying

plaintiff's cross-motion for leave to amend the complaint.

Nineteen days later, on October 9, 2007, plaintiff filed

the first of two successive motions for reconsideration.

Plaintiff asked the court to reconsider the denial of leave to

amend the complaint to include Imperial. In his certification

supporting that request, plaintiff's counsel advised the court

that "[t]he present status of the case is that a Notice of

Motion to Reinstate the Complaint and enter Default against co-

defendant TLC Drywall Construction, Inc. must be filed because

the complaint against this defendant [TLC] was dismissed for

1:13-7 and/or R[ule]
lack of prosecution pursuant to R[ule]

A-2531-07T1
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4:43-2." Fearing that entire controversy issues might arise if

it tried to sue Imperial in a new action, plaintiff further

requested the court to enter an order specifically reserving its

ability to bring such a future action against Imperial for the

unpaid soffit work at issue in this case.

Ten days later, plaintiff filed a motion to reinstate its

complaint and to enter default against TLC.

Then, on December 5, 2007, seventy-five days after the

court's original order was entered, plaintiff filed a second

motion for reconsideration. That motion asked the court to

reconsider its summary judgment order entered on September 20,

2007 against plaintiff in favor of the Sureties. In support of

that request, plaintiff mainly relied on decisions from two

federal Courts of Appeals denying summary judgment to a Surety

in allegedly-similar circumstances under the Miller Act, 40

U.S.C. §§ 3131-34, the federal analogue to the New Jersey Public

Works Bond Act, N.J.S.A. 2A:44-143 to -147.

On January 3, 2008, the trial judge heard oral argument on

all three of plaintiff's pending motions. Despite the lateness

of plaintiff's second motion for reconsideration, the court

agreed to consider it on its merits.

The judge denied all three of plaintiff's applications.

With respect to plaintiff's arguments concerning the Bond Act,

A-2531-07T1
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the judge noted that she did not "see anything to disturb [her]

decision that a previous direct contractual relationship [with

a] general contractor absolved plaintiff of the notice

requirement of the Bond Act on a contract where the plaintiff

does not have a direct contractual relationship with the general

contractor." The judge also rejected plaintiff's contention

that the court had improperly treated the surety defendants'

motion as one for summary judgment. Even considering the

matters presented outside of the pleadings in a light most

favorable to plaintiff, the judge continued to find that

plaintiff's claims under the bond had "no legal basis" and that

there were no disputed facts. The judge also found inapposite

plaintiff's citation to the two federal cases under the Miller

Act because that statute had no notice requirement similar to

the one set forth in N.J.S.A. 2A:44-145. Consequently, the

judge denied reconsideration of the dismissal of the Sureties.

The judge also denied plaintiff's motion to reinstate the

complaint against TLC because plaintiff had not established good

cause to do so. The judge noted that the moving papers were

silent as to the reason why plaintiff did not file timely proof

of service upon TLC in response to the court's warning notice

under Rule 1:13-7. In this regard, the judge highlighted that

plaintiff had waited for seven months from March 17, 2007, when

A-2531-07T1
13

the court's notice of dismissal was issued, to move to reinstate

TLC. The judge found the delay particularly troublesome, given

that plaintiff had filed more than one motion on other issues in

the case during the intervening period, and given that plaintiff

had misinformed the court as to the status of TLC during oral

argument on September 20, 2007. The judge also noted that the

court "has absolutely no competent evidence before it to

indicate that TLC was ever served." Consequently, the judge

denied plaintiff's motion to reinstate the complaint against

TLC.

Third and finally, as to plaintiff's motion for

reconsideration of the denial of leave to amend the complaint to

add Imperial, the judge found that "the standards for

reconsideration are neither addressed nor met." As to

plaintiff's concerns about forfeiting such a claim under entire

controversy principles, the judge observed that "one of the

goals of the entire controversy doctrine is judicial economy,

which would not be served here by granting leave to amend to

name a new party." The judge declined to enter an order

specifically reserving plaintiff's ability to sue Imperial in a

future lawsuit. Instead, the judge left issues of the potential

applicability of the entire controversy doctrine for disposition

in such a future action, where Imperial would have the ability

A-2531-07T1
14

to assert its interests and show how it might have been

prejudiced by the repetitive litigation.

The judge entered two companion orders on January 4, 2008

memorializing these decisions.

II.

Plaintiff now appeals the trial court's initial order of

September 9, 2007, and its subsequent orders on January 4, 2008.

Plaintiff asserts that, in denying it relief from the Sureties,

the trial judge misapplied the statutory notice standards under

the Bond Act. Plaintiff argues that, by virtue of its separate

subcontracting agreement with Imperial, it functioned as a so-

called "first-tier" subcontractor on the instant soffit work,

rather than as a "second-tier" subcontractor working for another

subcontractor, TLC. As an alleged first-tier contractor,

plaintiff argues that it was not required under the Bond Act to

give formal notice to Imperial of its completion of the soffit

work. Plaintiff also claims that the judge misapplied the

general standards for summary judgment and was too quick to

dismiss its claims against the Sureties.

Plaintiff further argues that the trial judge misapplied

her discretion in denying amendment of the complaint to include

Imperial, in denying reconsideration of that ruling, and in

denying the motion to reinstate the complaint against TLC.

A-2531-07T1
15

Having fully considered plaintiff's contentions on appeal,

we affirm all of the orders appealed from, substantially for the

reasons expressed by Judge Rachel N. Davidson in her oral

rulings of September 9, 2007 and January 4, 2008. We add

several observations on the discrete issues warranting comment.

First, we concur with the trial judge that plaintiff

manifestly failed to comply with the procedural requirements of

the Bond Act, and with the express terms of the payment bond

itself.

With respect to notice, the Bond Act specifically requires

that "[a]ny person who may be a beneficiary of the payment bond,

as defined in this article, and who does not have a direct

contract with the contractor furnishing the bond . . . shall,

prior to commencing any work, provide written notice to the

contractor by certified mail or otherwise . . . that said person

N.J.S.A. 2A:44-145 (emphasis
is a beneficiary of the bond."

added). Additionally, the payment bond in this case plainly

states that unless the claimant under the bond has a "direct

contract with the Contractor", the claimant "shall have given

written notice to [either] the Contractor, the Owner or the

Surety . . . within ninety (90) days after such claimant did or

performed the last of the work or labor, or furnished the last

of the materials[.]" The notice must state "with substantial

A-2531-07T1
16

accuracy the amount claimed and the name of the party to whom

the materials were furnished, or for whom the work or labor was

done or performed." The record is clear that such written

notices were not supplied by plaintiff here concerning the

soffit work it performed for which it seeks payment under the

bond.

The judge correctly ruled that plaintiff was not exempt

from these notice requirements. The Bond Act establishes two

tiers of subcontractors who are potential beneficiaries: first-

tier subcontractors having direct contracts with the general

contractor for the work in question, and second-tier contractors

lacking a direct contract with the general contractor pertaining

to the subject work. The legislative purpose of the notice

provision, which was added to Section 145 by amendment in 1996,

"was to clearly define the risk assumed by the surety issuing

Velez v. Wilkerson Elec. Srvcs., Inc., 351 N.J.
the bond."

Super. 2, 10 (App. Div. 2002). The notice mechanism

communicates that risk by "identify[ing] potential claimants and

beneficiaries in a uniform and organized fashion." Ibid.

(quoting Laborers Local Union #779 Pension, Welfare, & Annuity

Funds v. Am. Cas. Co. of Reading, Pa.,
339 N.J. Super. 345, 352

(Law Div. 2000)).

A-2531-07T1
17

We have previously instructed that the requirement of a

"direct contract" that makes a party a first-tier subcontractor

under the statute "must mean more than just any contract.

Otherwise, the term 'direct' would have no meaning." Dial Block

Co., Inc., supra,
374 N.J. Super. at 23. In Dial Block, the

general contractor, a subcontractor, and a supplier on the

project were all parties to what was described as a joint-check

agreement. Id. at 16. Under that agreement, the general

contractor would provide checks in the names of both the

subcontractor and the supplier, so as to make payment for

materials by the subcontractor easier. Ibid. The joint-check

agreement was subject to a limit of $125,000, thereby protecting

the general contractor from larger exposures. Id. at 17. After

the supplies delivered to the subcontractor had well exceeded

that limit and the subcontractor had ceased to pay for them, the

supplier contacted the general contractor, requesting that the

limit be raised on the agreement and that the joint checks

Id. at 18. When the general contractor
continue to be issued.

refused, the supplier sued on the bond that had been issued

under the Bond Act. Id. at 19.

We held in those circumstances in Dial Block that the

"direct contract" for providing materials for the construction

project was between the supplier and the subcontractor, not

A-2531-07T1
18

between the supplier and the general contractor. Id. at 23.

Consequently, no "direct contract" was created between the

supplier and the general contractor within the meaning of

N.J.S.A. 2A:44-145. Ibid. The supplier was thus a second-tier

subcontractor (or sub-subcontractor) obligated to comply with

the statute's notice requirements. We rejected the supplier's

argument that joint-check agreement functionally satisfied the

notice requirements of the Bond Act. Id. at 24.

Here, the trial judge correctly applied the principles of

the Bond Act and the related case law, including Dial Block.

The soffit work in question was undertaken by plaintiff pursuant

to a contract between plaintiff and TLC. Imperial, the general

contractor, was not a party to that agreement. The fact that

plaintiff was performing other work on the site under a

separate direct contract with Imperial as a first-tier

subcontractor is irrelevant.

In addition, the alleged oral discussions between

Imperial's representative and plaintiff's representative that

led to plaintiff entering its agreement with TLC do not change

the analysis. Those alleged oral communications, even if we

accept them as true----viewing the record most favorably to

plaintiff, see Brill v. Guardian Life Ins. Co. of Am.,
142 N.J.
520, 540 (1995)----do not satisfy the statute's mandate for the

A-2531-07T1
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formality of written notice. Without a direct contract, there

is no genuine issue of material fact that plaintiff was a

"second-tier" subcontractor for purposes of the Bond Act.4

We also note that the soffit work in question was completed

by plaintiff on February 5, 2005, and plaintiff did not file

suit against the Sureties until more than a year later in August

2006. That timing violates the one-year time limitation set

forth in both the payment bond here and also N.J.S.A. 2A:44-145,

which specifies that suit under the Bond must be filed "in no

event later than one year from the last date upon which such

beneficiary shall have performed actual work or delivered

materials to the project." We recognize that plaintiff did not

complete its other work on the site, under its separate contract

with Imperial, until January 2006. Even so, plaintiff cannot

4
We do not read Onorato Construction, Inc. v. Eastman
Construction Co.,
312 N.J. Super. 565 (App. Div. 1998), a case
relied upon by plaintiff to support its claims of a direct
contractual relationship, as applicable to this case. In
Onorato, a sub-subcontractor sued a general contractor for
nonpayment of funds owed to the sub-subcontractor by a
subcontractor. Significantly, the lawsuit was not brought under
the Bond Act. Id. at 567. Additionally, the general contractor
had been notified by the subcontractor of the amounts owed to
the sub-subcontractors, and the general contractor had allegedly
agreed to the pay that sum. Id. at 567-68. The present
scenario, where no such notice is involved, is completely
distinguishable.

A-2531-07T1
20

bootstrap the later date of completion of its other work to

justify its violation of the one-year limitations period.

For all of these reasons, summary judgment in favor of the

Sureties was appropriately granted. We also discern no

reversible error in how the judge applied the summary judgment

standards, once it became clear to her that the analysis

involved delving into matters beyond the bare face of the

pleadings.

Further, we detect no misapplication of discretion by the

trial judge in declining to restore TLC as a defendant.

Plaintiff never supplied the court with documented proof that

TLC was actually served with process, and has still not supplied

such proof of service in the record on this appeal. See R. 4:4-

7. Absent such proof, the judge had no obligation to restore

TLC to party status, and the judge did not misapply her

discretion here in concluding that plaintiff had not shown good

See R. 1:13-7(a); Weber v. Mayan
cause for such reinstatement.

Palace Hotel & Resorts,
397 N.J. Super. 257, 264 (App. Div.

2007) (applying the "good cause" standard for reinstatement of a

Rule 1:13-7 dismissal).5

5
We do not consider the trial court's orders as foreclosing
potential relief to plaintiff under Rule 4:50-1 if service is
achieved and proven, or as precluding a separate new action
against TLC filed within the applicable statute of limitations.

A-2531-07T1
21

Likewise, the judge did not clearly misapply her discretion

by rejecting plaintiff's request to amend the complaint

See Franklin Med.
belatedly to name Imperial as a defendant.

Assocs. v. Newark Pub. Sch.,
362 N.J. Super. 494, 504 (App. Div.

2003) (noting that a trial judge's discretionary ruling "will

not be disturbed on appeal, unless it constitutes a 'clear abuse

28 N.J. 20, 26
of discretion'")(quoting Salitan v. Magnus,

(1958)). Although, as a general matter, leave to amend a

pleading is freely granted in the interests of justice, see Rule

4:9-1, "the granting of a motion to file an amended complaint

always rests in the court's sound discretion." Kernan v. One

Washington Park Urban Renewal Assocs.,
154 N.J. 437, 457 (1998).

"'[C]ourts are free to refuse leave to amend when the newly

asserted claim is not sustainable as a matter of law.'" Notte v.

Merchants Mut. Ins. Co.,
185 N.J. 490, 501 (2006) (quoting

Interchange State Bank v. Rinaldi,
303 N.J. Super. 239, 256-57

(App. Div. 1997)). "'[T]here is no point to permitting the

filing of an amended pleading when a subsequent motion to

dismiss must be granted.'" Ibid. (quoting Interchange State

Bank, supra,
303 N.J. Super. at 257). In addition, even where

the merits of the claim are at least marginal, it is not an

abuse of discretion to deny leave to add such a claim when it is

Stuchin v. Kasirer, 237 N.J.
likely to prolong the litigation.

A-2531-07T1

22 Super. 604, 609 (App. Div.), certif. denied,
121 N.J. 660

(1990); see also Pressler, Current N.J. Court Rules, comment

2.2.1 to R. 4:9-1 (noting that a motion to amend is properly

denied "where its merits are marginal, its substance generally

irrelevant to the main claim, and allowing the amendment would

unduly protract the litigation").

The trial judge acted within her discretion in declining to

add Imperial as a party to this case at the eleventh hour, for

at least two reasons. First, plaintiff had already sued

Imperial in another Law Division complaint for other work that

it had performed on the police station project. Although we do

not resolve the issue here, Imperial could plausibly argue that,

under entire controversy principles, plaintiff should have added

the instant claims to that other lawsuit. See R. 4:30A,

Prevratil v. Mohr,
145 N.J. 180, 190 (1996). Second, the judge

rightly was concerned about judicial efficiency and economy.

With the Sureties dismissed from the case and TLC not appearing

in the action as a viable party, for all practical purposes

there was no lawsuit left. Adding Imperial would only "unduly

protract" an otherwise-moribund litigation. See Pressler,

supra, comment 2.2.1 to R. 4:9-1.

Finally, the judge did not misapply her discretion in

declining plaintiff's request for a judicial reservation of

A-2531-07T1
23

claims against Imperial. Such a reservation, if it had been

granted, would insulate plaintiff from a defense of entire

controversy asserted by Imperial in a future action. DiIorio v.

Structural Stone & Brick Co., Inc.,
368 N.J. Super. 134, 139

(App. Div. 2004). However, Imperial might wish to argue that

plaintiff inexcusably delayed in asserting its full claims

against Imperial in the prior action and that Imperial was

substantially prejudiced by that delay. See R. 4:30A; Hobart

Bros. Co. v. Nat'l Union Fire Ins. Co.,
354 N.J. Super. 229, 242

(App. Div.), certif. denied,
175 N.J. 170 (2002). The trial

judge rightly exercised caution in not foreclosing that

potential argument of prejudice by a party that was not even

before her.

The orders appealed from are affirmed in all respects.

A-2531-07T1
24

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