Goljac, LLC v. Emerald Bay Developers, Llc.

• Court: New Jersey Superior Court Appellate Division
• Decided: March 19, 2024
• Docket: A-1154-23
• Status: Unpublished

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-1154-23

GOLJAC, LLC,

Plaintiff-Appellant,

v.

EMERALD BAY DEVELOPERS, LLC, CRAIG ROPER, DYKES LUMBER COMPANY, INC., REYNAERS, INC. and MELMOUSE, LLC,

Defendants-Respondents. ________________________________

Argued March 6, 2024 – Decided March 19, 2024

Before Judges Accurso and Vernoia.

On appeal from an interlocutory order of the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-1353-20.

Bernadette Hamilton Condon argued the cause for appellant (Lum, Drasco & Positan, LLC, attorneys; Paul A. Sandars, III, of counsel and on the brief; Bernadette Hamilton Condon, on the brief).

Respondents have not filed briefs. PER CURIAM

By leave granted, plaintiff Goljac, LLC appeals from orders denying its

motion for leave to file a third-amended complaint adding as defendants J.

Cullen Alterations (J. Cullen), Titan Construction Management Services, Inc.

(Titan) and Titan Building Co. (Titan Building). 1 Based on our review of the

record, and having concluded the court abused its discretion by denying the

motion, we reverse.

This matter arises out of a dispute concerning the construction of a multi-

million-dollar home (the project) in Sagaponak, New York. Plaintiff owns the

property.

According to plaintiff's counsel's certification supporting the motion for

leave to file a third-amended complaint, in 2018, Dykes Lumber Company, Inc.

(Dykes Lumber) filed an action against Emerald Bay Developers, LLC (Emerald

Bay) and Craig Roper (Roper) for sums due for materials supplied for the

1 Plaintiff appeals from a November 3, 2023 order denying its motion for leave to file a third-amended complaint adding J. Cullen as a defendant and a November 14, 2023 order denying its motion for leave to file a third-amended complaint adding Titan and Titan Building as defendants. Entry of the orders followed plaintiff's filing of a single motion for leave to file a third-amended complaint adding all three entities as defendants. The court filed a single written opinion dated November 3, 2023, supporting its denial of plaintiff's motion but entered separate orders denying the requested relief. A-1154-23 2 construction of the project. 2 In that matter, Emerald Bay and Roper filed a third-

party complaint against plaintiff and Steven Dorsky (Dorsky).

In 2020, plaintiff and Dorsky separately filed this action against Emerald

Bay and Roper, asserting "claims for construction defects and delay." The initial

complaint, and the subsequent first- and second-amended complaints, are not

included in the record on appeal. The court later consolidated this matter for

discovery purposes with the prior action filed by Dykes Lumber.

In support of the motion for leave to file the third-amended complaint,

plaintiff's counsel represented that documents produced by Emerald Bay in

discovery included a construction supervision agreement between Emerald Bay

and J. Cullen and a framing contract between Emerald Bay and Titan and Titan

Building. According to plaintiff's counsel, Emerald Bay had construction

management responsibilities at the project and had "subcontracted its

construction management responsibilities to" J. Cullen.

Plaintiff obtained a December 8, 2022 expert report concerning

construction management at the project that identified J. Cullen, Titan, and Titan

Building as "parties" on the project and explained J. Cullen's responsibilities on

2 The matter is captioned as Dykes Lumber Company, Inc. v. Emerald Bay Developers, LLC and Craig Roper, under Docket No. HUD-L-2129-19. A-1154-23 3 the project. The report further concluded "the Construction Manager did not

meet industry standards of care" on numerous aspects of the construction

management on the project.

In plaintiff's counsel's certification, he noted that Emerald Bay had

submitted an expert report in discovery, explaining Emerald Bay had engaged J.

Cullen as "a construction project supervisor" to "provide full-time onsite

construction project supervision."

Plaintiff's counsel further explained that Emerald Bay had subcontracted

with Titan and Titan Building to perform framing work on the project.

Additionally, plaintiff's expert's report explained the project suffered from

"extensive framing defects."

Plaintiff's counsel asserted the addition of J. Cullen, Titan, and Titan

Building as defendants in the proposed amended-third-party complaint was

required because plaintiff had determined their work on the project was

defective and contributed to plaintiff's alleged damages. Plaintiff's counsel also

represented that plaintiff had expected Emerald Bay would implead J. Cullen,

Titan, and Titan Building after their work was described as defective in

plaintiff's expert's report because those proposed defendants had been Emerald

Bay's subcontractors.

A-1154-23 4 Counsel further explained the addition of J. Cullen, Titan, and Titan

Building as defendants in plaintiff's complaint was discussed at an October 11,

2023 conference with the court, and the case management order entered that day

authorized plaintiff to move for leave to amend its complaint to add them as

defendants. Counsel also represented that an order granting plaintiff leave to

file the third-amended complaint would not prejudice any of the other parties

because "fact discovery [was] still open[,]" "fact depositions [were] not

completed and expert depositions [had] not yet occurred." Counsel asserted

plaintiff "would be prejudiced if it were not allowed to recover any of its

provable damages from any parties," including J. Cullen, Titan, and Titan

Building, "responsible for causing its damages."

None of the other parties in the consolidated matters filed opposition to

plaintiff's motion. Thus, none claimed they would be prejudiced by plaintiff's

proposed amendment adding J. Cullen, Titan, and Titan Building as parties.

Similarly, none of the other parties oppose plaintiff's appeal from the court's

orders denying its request to file the proposed third-amended complaint.

In the court's written opinion, it found that "in all likelihood" the

document that provided impetus for plaintiff's expert's report identifying J.

Cullen's, Titan's, and Titan Building's role in the construction of the project had

A-1154-23 5 been supplied in discovery "many months ago," and that prior to plaintiff's

expert's report, no other expert in the case had implicated J. Cullen in the project.

The court also found that "in all likelihood," the construction supervision

agreement between Emerald Bay and J. Cullen "had . . . been produced in

discovery . . . well before" the court had entered a June 9, 2023 case

management order, which "limited expert reports to certain topics."

The court explained no trial date in the matters had been set and

"Administration for the Hudson County Court System ha[d] determined that no

such trial will be scheduled in the foreseeable future." The court further noted

the consolidated cases involve "a complicated construction dispute amongst

many, many parties," deadlines had been set for the completion of certain fact

witnesses and experts, and "battling" expert reports had been exchanged. The

court reasoned that joining additional defendants "would severely delay the

potential for this case to be reached for trial in [the] foreseeable future."

The court concluded plaintiff had waited too long to request to join the

putative defendants and that granting the requested relief "would unduly protract

[the] litigation and cause undue prejudice to all of the other parties who,

undoubtedly, will be compelled to again produce various witnesses and

participate in depositions, which" counsel for the putative defendants would

A-1154-23 6 "insist be completed." The court therefore denied plaintiff's motion and entered

the memorializing orders from which this appeal is taken.

Rule 4:9-1 provides in part that motions for leave to amend a pleading

"shall be freely given in the interest of justice." We have explained that under

the Rule, "motions for leave to amend a complaint must 'be granted liberally,'

but the decision is left to the trial 'court's sound discretion.'" C.V. v. Waterford

Twp. Bd. of Educ., 255 N.J. 289, 306 (2023) (quoting Kernan v. One Wash. Park

Urb. Renewal Assocs., 154 N.J. 437, 436-57 (1998)). In exercising that

discretion, a court must engage in a two-step process; the court must determine

"whether the non-moving part[ies] [would] be prejudiced, and whether granting

the amendment would . . . be futile." Ibid. (second alteration in original)

(quoting Notte v. Merchs. Mut. Ins. Co., 185 N.J. 490, 501 (2006)).

Here, there is no claim the proposed addition of the putative defendants

would be futile, and the court did not deny plaintiff's motion on that basis. See,

e.g., Bustamante v. Borough of Paramus, 413 N.J. Super. 276, 298 (App. Div.

2010) (affirming the denial of a motion to amend a complaint, finding the

proposed amended claim was futile because it was barred under the statute of

limitations). In fact, plaintiff's counsel's certification supporting the motion

established that the proposed third-party complaint asserted viable and

A-1154-23 7 significant claims against J. Cullen, Titan, and Titan Building, explaining the

proposed defendants played important roles in the construction of the project

and, according to plaintiff's expert, their alleged deficient performance of their

responsibilities contributed to plaintiff's damages.

The court primarily denied plaintiff's motion based on its conclusion the

other parties to the case would suffer prejudice—by having to engage in

additional and possibly duplicative discovery—if the proposed amendment was

granted. We reject the court's reliance on that finding because none of the

numerous other parties opposed plaintiff's motion or claimed the motion should

be denied because they would suffer prejudice. Thus, the court's determination

plaintiff's motion should be denied based on its finding the other parties would

suffer prejudice is without support in the record. See Rova Farms Resort, Inc.

v. Inv's. Ins. Co. of Am., 65 N.J. 474, 484 (1974) (finding appellate courts are

only constrained by a trial court's factual findings when those findings are

supported by substantial credible evidence in the record).

The court also cited the lateness of plaintiff's motion and the delay it might

cause to the progress of the litigation. In that regard, the court reasoned that

adding J. Cullen, Titan, and Titan Building as parties would delay the matter

from proceeding to trial in the foreseeable future. That finding, however, is

A-1154-23 8 contradicted by the court's express acknowledgement that it had been advised

by judicial administration that "no such trial would be scheduled in the

foreseeable future." Indeed, when the court denied the motion, fact discovery

had not been completed and no trial date had been set. In any event, the court's

candid acknowledgement the case would not be scheduled in the foreseeable

future undermines its determination that the proposed amendments to plaintiff's

complaint should be denied because it would delay a trial.

As the court recognized, this matter is a complicated construction dispute

involving many parties. We appreciate the court's frustration with what it

viewed as plaintiff's delay in making its motion. We cannot, however, ignore

that proposed amendments to pleadings asserting viable claims, such as the

proposed amendments here, should be liberally granted in the interest of justice.

R. 4:9-1. In our view, unsupported findings of prejudice to the other parties and

a concern that granting the amendment will delay a trial the court acknowledges

will not be scheduled in the foreseeable future are not grounds for denying an

otherwise meritorious motion and is not in the interest of justice. See, e.g.,

Cavuoti v. N.J. Transit Corp., 161 N.J. 107, 134-35 (1999) (affirming the grant

of a motion to amend a complaint to a claim on the eve of trial because the

"defendant would not be prejudiced").

A-1154-23 9 The motion court cited our decision in Murray v. Plainfield Rescue Squad,

as support for its conclusion that plaintiff's late filing of its motio n to amend

alone warranted denial of the motion. 418 N.J. Super. 574 (App. Div. 2011),

rev'd on other grounds, 210 N.J. 581 (2012). In Murray, however, we affirmed

the trial court's denial of a motion to amend a complaint to add two individual

defendants because the motion was filed "more than two years after the statute

of limitations had expired." Id. at 591. We determined the putative defendants

would therefore "be clearly prejudiced by an amendment joining them as

individual defendants." Ibid. Our holding in Murray is inapplicable because

there are no similar circumstances here. The record on appeal does not a permit

a finding the statute of limitations has run on plaintiff's claims against the three

proposed defendants.

An abuse of discretion occurs "when a decision is 'made without a rational

explanation, inexplicably departed from established policies, or rested on an

impermissible basis.'" U.S. Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 467-

68 (2012) (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)).

We conclude the court abused its discretion by relying on purported prejudice

to the other parties that finds no support in the record and by determining that

granting the application will delay a trial it acknowledged would not take place

A-1154-23 10 in the foreseeable future. The court's reasoning lacked a rational basis in the

record presented and therefore its orders denying plaintiff's motions constitute

an abuse of discretion. Compare In re J.G., 463 N.J. Super. 263, 277 (App. Div.

2020) (explaining a trial court's factual findings should not be disturbed when

those findings are supported by evidence in the record) with In re A.R., 234 N.J.

82, 104 (2018) (finding appellate courts should intervene in the interest of

justice when a trial court's factual findings are not supported by sufficient

credible evidence).

Reversed and remanded for further proceedings consistent with this

opinion. We do not retain jurisdiction.

A-1154-23 11