Quality Guaranteed Roofing, Inc. v. Hoffmann-La Roche, Inc.

694 A.2d 1077, 302 N.J. Super. 163, 32 U.C.C. Rep. Serv. 2d (West) 1072, 1997 N.J. Super. LEXIS 295
CourtNew Jersey Superior Court Appellate Division
DecidedJune 25, 1997
StatusPublished
Cited by8 cases

This text of 694 A.2d 1077 (Quality Guaranteed Roofing, Inc. v. Hoffmann-La Roche, Inc.) 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
Quality Guaranteed Roofing, Inc. v. Hoffmann-La Roche, Inc., 694 A.2d 1077, 302 N.J. Super. 163, 32 U.C.C. Rep. Serv. 2d (West) 1072, 1997 N.J. Super. LEXIS 295 (N.J. Ct. App. 1997).

Opinion

The opinion of the court was delivered by

MICHELS, P.J.A.D.

Defendant Hoffinann-La Roche, Inc. (Hoffinann-La Roche) appeals from a judgment of the Law Division that awarded plaintiff Quality Guaranteed Roofing, Inc. (Quality Roofing) $162,366.48 due under a contract for goods and services rendered in connection with the installation of a watertight roof and that dismissed Hoffinann-La Roche’s counterclaim for damages for breach of contract and warranty, negligence, and misrepresentation.

Briefly, Hoffmann-La Roche entered into a number of separate contracts with Quality Roofing for the installation of foam roofs upon a number of buildings located at Hoffinann-La Roche’s Nutley, New Jersey facility. After the installation of several roofs, the parties contracted for additional foam roofing work to be performed on Building 71. Upon or near completion of the installation of Building 71’s roof, Hoffinann-La Roche suspended all remaining work and/or payments allegedly because it had discovered quality deficiencies with Quality Roofing’s workmanship. Because of Quality Roofing’s alleged poor performance, Hoffmann-La Roche refused to let Quality Roofing bid on the repair work and did not demand that Quality Roofing perform any repairs. Thereafter, Quality Roofing instituted this action against Hoffinann-La Roche to recover the balance due under the con[165]*165tract pertaining to Building 71. Hoffmann-La Roche counterclaimed.

At the conclusion of a bench trial, the trial court awarded Quality Roofing damages of $162,366.48 and dismissed HoffmannLa Roche’s counterclaim. The trial court held that the Uniform Commercial Code (UCC) governed the contracts involved in this matter. In reaching this conclusion, the trial court explained “that the dominating factor in the transaction between the plaintiff and the defendant was the sale of materials which were identifiable and moveable at the time of contracting.” The trial court also found that Hoffmann-La Roche had accepted the roofs of the buildings which had been completed by Quality Roofing and had paid for these roofs in full. The trial court held:

Now the absolute undisputed testimony by all of the witnesses who testified in this case, both for the plaintiff and the defendant, was to the effect that when the plaintiff was barred from the premises, no notice of any kind was given to the plaintiff of the alleged defects, nor was the plaintiff given any opportunity whatsoever to cure any such defects.
Therefore, according to the UCC and the statute which I’ve just read [, N.J.S.A. 12A:2-607], the defendant is barred from any remedy against the plaintiff for all of the roofs that were accepted.

Hoffmann-La Roche appealed.

Hoffmann-La Roche seeks a reversal of the judgment and a remand for a new trial, contending that the contracts were service contracts with any sale of goods being incidental thereto and that, therefore, its contractual relationship with Quality Roofing was not governed by the UCC. We agree and reverse.

The Uniform Commercial Code-Sales (UCC-Sales), N.J.S.A. 12A:2-101 to -725, applies to “transactions in goods.” N.J.S.A. 12A:2-102. The UCC-Sales does not, however, apply to service contracts. Neither party disputes that the contracts in question were “transactions” and concerned “goods.” Additionally, neither party disputes that the contracts in question also concerned service or labor. Thus, the contracts are mixed goods and services contracts. See Newmark v. Gimbel’s Inc., 54 N.J. 585, 593, [166]*166258 A.2d 697 (1969). The question, of course, is whether the UCC-Sales applies to these mixed contracts.

Whether the UCC-Sales governs a mixed contract “depends upon how the contract may be accurately characterized — as one for the sale of goods ... plus incidental services, or as one for ... services with the [service provider] furnishing materials as well as labor.” Meyers v. Henderson Constr. Co., 147 N.J.Super. 77, 79, 370 A.2d 547 (Law Div.1977). See also Custom Communications Eng’g, Inc. v. E.F. Johnson Co., 269 N.J.Super. 531, 537, 636 A.2d 80 (App.Div.1993). “The legal analysis most frequently employed when courts are faced with such mixed contracts is that Article 2 of the UCC is applicable ‘if the sales aspect predominates and is inapplicable if the service aspect predominates.’ ” Custom Communications Eng’g, Inc. v. E.F. Johnson Co., supra, 269 N.J.Super. at 537, 636 A.2d 80 (citation omitted). See also Docteroff v. Barra Corp. of Am., 282 N.J.Super. 230, 240, 659 A.2d 948 (App.Div.1995); Meyers v. Henderson Constr. Co., supra, 147 N.J.Super. at 82, 370 A.2d 547.

Whether the goods aspect or the services aspect predominate in a mixed contract is a question of fact. See Conopco, Inc. v. McCreadie, 826 F.Supp. 855, 868 (D.N.J.1993), aff'd, 40 F.3d 1239 (3d Cir.1994). See also Docteroff v. Barra Corp. of Am., supra, 282 N.J.Super. at 240, 659 A.2d 948. When error in the factfinding of a judge is alleged, the scope of appellate review is limited. The court will only decide whether the findings made could reasonably have been reached on sufficient or substantial credible evidence present in the record, considering the proof as a whole. The court gives “due regard” to the ability of the factfinder to judge credibility. See Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484, 323 A.2d 495 (1974); Close v. Kordulak Bros., 44 N.J. 589, 599, 210 A.2d 753 (1965).

In determining the predominant nature of a mixed contract, courts have found it “helpful to look at the language and circumstances surrounding the contract____the compensation structure of the contract____ [and] the interrelationship of the goods and [167]*167services to be provided; whether one is incidental to the other as well as the intrinsic worth of the goods being provided.” Conopco, Inc. v. McCreadie, supra, 826 F.Supp. at 868 (citations omitted). One court has also considered whether the nonsale aspects of the contract are viewed as intending to foster the dominant purpose of the contract. See Custom Communications Eng’g, Inc. v. E.F. Johnson Co., supra, 269 N.J.Super. at 537, 636 A.2d 80.

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694 A.2d 1077, 302 N.J. Super. 163, 32 U.C.C. Rep. Serv. 2d (West) 1072, 1997 N.J. Super. LEXIS 295, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quality-guaranteed-roofing-inc-v-hoffmann-la-roche-inc-njsuperctappdiv-1997.