GLENMORE MANAGEMENT LLC VS. RIS CONSTRUCTION CORP. (L-0858-18, SOMERSET COUNTY AND STATEWIDE)

CourtNew Jersey Superior Court Appellate Division
DecidedNovember 1, 2021
DocketA-1920-19
StatusUnpublished

This text of GLENMORE MANAGEMENT LLC VS. RIS CONSTRUCTION CORP. (L-0858-18, SOMERSET COUNTY AND STATEWIDE) (GLENMORE MANAGEMENT LLC VS. RIS CONSTRUCTION CORP. (L-0858-18, SOMERSET COUNTY AND STATEWIDE)) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
GLENMORE MANAGEMENT LLC VS. RIS CONSTRUCTION CORP. (L-0858-18, SOMERSET COUNTY AND STATEWIDE), (N.J. Ct. App. 2021).

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1920-19

GLENMORE MANAGEMENT, LLC, and 955 RTE 22W, LLC,

Plaintiffs-Appellants/ Cross-Respondents,

v.

RIS CONSTRUCTION CORPORATION and BLAGOJ PEOVSKI,

Defendants-Respondents/ Cross-Appellants. ______________________________

Third-Party Plaintiffs- Respondents/Cross-Appellants,

FOX ARCHITECTURAL DESIGN, P.C., BOWMAN CONSULTING GROUP, LTD., OMLAND ENGINEERING ASSOCIATES, INC., and FRONTIER ENGINEERING SERVICES, LLC,

Third-Party Defendants/ Respondents. ______________________________

Argued October 4, 2021 – Decided November 1, 2021

Before Judges Sabatino, Rothstadt and Natali.

On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-0858-18.

Joseph A. DiPisa, III argued the cause for appellants/cross-respondents Glenmore Management LLC and 955 RTE 22W, LLC (Beattie Padovano, LLC, attorneys; Joseph A. DiPisa, III, of counsel and on the briefs).

Robert J. Greenbaum argued the cause for respondents/cross-appellants RIS Construction Corporation.

William F. Waldron, Jr. argued the cause for respondent Bowman Consulting Group, Ltd. (Marshall Dennehy Warner Coleman & Goggin, attorneys; William F. Waldron, Jr., of counsel and on the brief; Michael S. Fogler, on the brief).

Peter K. Oliver argued the cause for respondent Frontier Engineering Services, LLC (Hoagland, Longo, Moran, Dunst & Doukas, LLP, attorneys; Lawrence P. Powers, of counsel and on the brief; Peter K. Oliver, on the brief).

A-1920-19 2 Don R. Sampen (Clausen Miller, PC) of the Illinois bar, admitted pro hac vice, argued the cause for respondent Fox Architectural Design, PC (Clausen Miller PC, attorneys; Carl M. Perri, Matthew T. Leis, and Don R. Sampen, on the brief).

PER CURIAM

These appeals and cross-appeals stem from a trial court's dismissal of a

lawsuit, and all counterclaims, cross-claims, and third-party complaints pled in

that lawsuit, based on entire controversy grounds.

Plaintiff had filed a lawsuit against a single defendant in one county.

While that first case was still pending, plaintiff filed a second lawsuit in another

county against other defendants. They, in turn, filed a third-party complaint in

the second case against the defendant from the first case. Various other third-

party claims, counterclaims, and cross-claims were also pled in the second case.

Although the subject matters of the two cases partially overlapped,

plaintiff did not include with its pleadings the related-matter notices required by

Rule 4:5-1(b)(2).

Months later, plaintiff settled with the sole defendant in the first case and

the case was dismissed. That settling party then moved to dismiss the third-

party complaint against it in the second case, invoking the entire controversy

doctrine. The trial court in the second case granted that motion, and issued an

A-1920-19 3 order extinguishing all claims asserted by all parties in the second lawsuit. The

court also denied reconsideration. The present appeals ensued.

Having reviewed these circumstances in light of the equitable principles

limiting the entire controversy doctrine, we reverse the second trial court's

dismissal order. Although we appreciate the court's laudable concern to enforce

Rule 4:5-1(b)(2)'s notice requirement, its blanket dismissal order had overly

preclusive consequences.

We reinstate the claims in the second lawsuit, except for what we will

describe as "pass-through" claims asserted in the third-party complaint against

the settling party. The matter is remanded to litigate the remaining open claims,

and also to adjudicate the "economic loss" defenses that have been asserted. On

remand, the trial court shall consider alternative measures to sanction plaintiff's

unjustified failures to comply with Rule 4:5-1(b)(2).

I.

We need not burden the reader with a comprehensive discussion of the

complicated factual and procedural history of the two lawsuits. The parties are

surely familiar with that background. In addition, only limited discovery has

been conducted. The following abbreviated summary will suffice for our

purposes.

A-1920-19 4 The disputes concern two separate construction projects in which plaintiff

Glenmore Management, LLC and RTE 22W, LLC 1 ("Glenmore") was the

owner/developer of: (1) a parcel in Englewood (in Bergen County) that

Glenmore planned to convert to a parking lot; and (2) a site in North Plainfield

(in Somerset County) that Glenmore planned to develop as a Goodwill retail and

collection center.

Glenmore contracted with Bowman Consulting Group, Ltd. ("Bowman"),

formerly known as Omland Engineering Associates, Inc. ("Omland"), to provide

engineering and design services for both the Englewood project and the North

Plainfield project.

For the North Plainfield project, Glenmore contracted with RIS

Construction Corp. ("RIS") to act as the lead contractor, for a contract price of

$1.654 million. The principal of RIS, Blagoj Peovski, personally guaranteed his

company's performance and obligations. Also for the North Plainfield project,

Glenmore entered into separate agreements with Frontier Engineering Services,

1 For simplicity, we refer collectively to these entities as "Glenmore" and describe them as "plaintiff" in the singular. A-1920-19 5 LLC ("Frontier") and Fox Architectural Design, P.C. ("Fox").2 RIS and Peovski

were not involved in the Englewood project, nor were Frontier and Fox.

Problems arose with the construction at both sites. On the Englewood

project, the work apparently stalled because Bowman allegedly delayed in

providing waivers to the Englewood Zoning Board of Adjustment needed for a

variance. Substantial delays also occurred on the North Plainfield project.

Glenmore and RIS contend the delays were caused, at least in part, by alleged

defects with Bowman's engineering designs.

On June 25, 2017, Glenmore and RIS entered into an Agreement of Loan

and Guaranty to address their respective rights ("the June 2017 Agreement").

Among other things, that agreement provides that RIS is liable for liquidated

damages if it causes delays in the work. Glenmore subsequently gave notice to

RIS in March 2018 that it was in breach of contract due to such delays.

The June 2017 Agreement stated that RIS agreed it owed Glenmore

$320,000 in liquidated damages as of that date, which could thereafter increase

on a daily basis. However, Glenmore and RIS also agreed that the $320,000

sum "may decrease if a lawsuit or similar legal action is commenced relating to

2 It does not appear from the limited appellate record that RIS or Peovski had contracts with Bowman, Frontier, or Fox, all of whom were hired by Glenmore. A-1920-19 6 [the] Project . . . and a court determines that the delays . . . were less than 66%

[of RIS's] fault[.]" The June 2017 Agreement provided that if RIS's fault were

proven to be less than 66%, it would be entitled to a pro rata (i.e., proportional)

reduction of the stipulated delay damages, described as a "set-off." The June

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GLENMORE MANAGEMENT LLC VS. RIS CONSTRUCTION CORP. (L-0858-18, SOMERSET COUNTY AND STATEWIDE), Counsel Stack Legal Research, https://law.counselstack.com/opinion/glenmore-management-llc-vs-ris-construction-corp-l-0858-18-somerset-njsuperctappdiv-2021.