COUNTY OF HUDSON VS. PMK GROUP, INC. (L-2728-12, HUDSON COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE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-1543-17T1
COUNTY OF HUDSON,
Plaintiff-Appellant,
v.
PMK GROUP, INC.,
BIRDSALL SERVICES GROUP,
CME ASSOCIATES CONSULTING &
MUNICIPAL ENGINEERS, UNION
PAVING AND CONSTRUCTION CO.
INC., APPLIED DEVELOPMENT CO.,
SHIPYARD ASSOCIATES, INC.,
TAMS CONSULTANTS, INC., and
J.T. CLEARY, INC.,
Defendants-Respondents.
__________________________________
Argued January 29, 2019 – Decided February 28, 2019
Before Judges Hoffman, Suter and Firko.
On appeal from Superior Court of New Jersey, Law
Division, Hudson County, Docket No. L-2728-12.
Kenneth L. Winters argued the cause for appellant
(Jardim, Meisner & Susser, PC, attorneys; Kenneth L.
Winters, on the brief).
Michael D. Suarez argued the cause for respondent
PMK Group, Inc. (Suarez & Suarez, attorneys; Michael
D. Suarez, of counsel and on the brief; Lisa Olshen
Adelsohn, on the brief).
Joseph M. Suarez argued the cause for respondent CME
Associates Consulting & Municipal Engineers (Suarez
& Suarez, attorneys; Joseph M. Suarez, of counsel and
on the brief; Lisa Olshen Adelsohn, on the brief).
PER CURIAM
Plaintiff County of Hudson (County) appeals from orders granting
summary judgment to defendants, PMK Group, Inc. (PMK), and CME
Associates Consulting & Municipal Engineering (CME), finding that the parties
are bound to releases covering two separate incidents, one occurring prior to and
the other after the releases' execution.1 After reviewing the record in light of
the applicable law, we reverse and remand.
I.
The following facts are derived from evidence the parties submitted in
support of, and in opposition to, summary judgment, viewed in a light most
favorable to the County, the non-moving party. Polzo v. Cty. of Essex, 209 N.J.
51, 56-57 n.1 (2012) (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J.
520, 523 (1995)). This matter began with two separate construction projects
1
The motion judge also denied the County's motion for reconsideration.
A-1543-17T1
2
initiated by the County to construct Sinatra Drive North along the waterfront in
Hoboken. The developer of the projects hired PMK and CME to serve as design
engineers and to perform geotechnical evaluations for both projects. Each
project involved extending and connecting 14th and 15th Streets with Sinatra
Drive North at different points. The first project, completed in 1998, extended
12th and 14th Streets, and included a connector loop constructed on timber
pilings. The second project, which extended 15th Street and connected it to the
first loop, was built on preexisting steel pilings and concrete platforms.
On July 2, 2001, after completion of the first project, the northern portions
of the 15th Street extension that were constructed on the existing platform
collapsed because the steel pilings and concrete platform gave out. The platform
was constructed between 1942 and 1957. In 2006, the County sued to recover
the repair costs relative to the 2001 collapse. After litigation ensued, a
settlement was achieved with PMK and CME, and form releases, prepared by
the County, were executed on July 16, 2010, memorializing the settlements. The
release with CME provided, in pertinent part:
We release and give up any and all claims and rights
which we may have against you. This releases all
claims, including those of which we are not aware and
those not mentioned in this Release. This Release
applies to claims resulting from anything which has
A-1543-17T1
3
happened up to now. We specifically release the
following claims:
For any and all claims asserted by us against CME
Associates which formed the basis of a lawsuit entitled
County of Hudson v. CME Associates v. PMK Group
Consulting Engineers, filed in the Superior Court of
New Jersey, Law Division, Hudson County, under
docket number HUD-L-6114-06.
[(Emphasis added).]
Similar language appears in the release with PMK. The County was paid
$100,000 by PMK and $340,000 by CME to settle their claims.
Less than three months later, a sudden collapse of an entirely different
portion of Sinatra Drive North, between Constitution and 14th Streets,
measuring fifty feet by fifteen feet, occurred on October 8, 2010. Notably, the
14th Street extension was completed between 1997 and 1998. In order to
remediate the damage for the October 8 collapse, the County estimated the cost
at approximately $12,000,000. PMK and CME moved for summary judgment
seeking to relieve themselves from liability for the October 8 collapse based
upon their interpretation of language in the July 16 releases arguably insulating
them from liability with respect to the 14th Street extension as well. In defense,
the County argued that the July 16 releases did not bar future, unaccrued claims,
and that discovery on this issue was incomplete as to PMK and not conducted at
A-1543-17T1
4
all as to CME. The County further asserted that CME was commissioned to
prepare construction drawings and it confirmed the structural integrity of the
piers and platform. As engineer of record, CME failed to address the structural
integrity of the entire roadway, not just the vicinity where the first collapse
occurred. PMK, as consulting engineers, should also be accountable, as argued
by the County. After litigation was concluded with the other parties named in
the pleadings, this appeal followed.
II.
At argument on the motions, PMK and CME asserted that the July 16
settlement with the County was intended to cover all their existing claims,
whether or not such claims were known to the County, and that this intention is
evidenced in the releases' language. The County's position was that the
settlement covered the first collapse and anything that occurred up to July 16
only, and that the intent of the parties was not to enter general releases in respect
of potential future claims relative to the Sinatra Drive North project.
The motion judge granted both motions, ruling in his written decision that:
"[t]he [County] prepared this release which clearly encompassed future claims
growing out of this four block project at least as long as [CME's] wrongdoing
took place before the release[.] There are no inconsistencies in the release.
A-1543-17T1
5
There is only language that amplifies . . . ." The release language found
persuasive by the motion judge was: "claims resulting from anything which has
happened up to now" and claims "we may have." The motion judge found that
the phrase "may have" is "necessarily future oriented," and implies that the
County may have a future claim relative to the Sinatra Drive North project.
On appeal, the County argues: 1) that the releases do not apply to claims
occurring after July 16; 2) that the motion judge erred in granting summary
judgment by relying upon an incorrect and factually presumptuous interpretation
of the releases; 3) that discovery was incomplete; 4) that genuine issues of
material fact are present regarding contractual intent and whether the releases
should be construed as future-oriented, requiring reversal and remand for a
factual hearing; and 5) the releases should be voided on public policy grounds.
After carefully reviewing the record and applicable law, we reverse and remand.
A trial court will grant summary judgment to the moving party "if the
pleadings, depositions, answers to interrogatories and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any
material fact challenged and that the moving party is entitled to a judgment or
order as a matter of law." R. 4:46-2(c); see also Brill, 142 N.J. at 523. "An
issue of fact is genuine only if, considering the burden of persuasion at trial, the
A-1543-17T1
6
evidence submitted by the parties on the motion, together with all legitimate
inferences therefrom favoring the non-moving party, would require submission
of the issue to the trier of fact." R. 4:46-2(c).
On appeal, "the propriety of the trial court's order is a legal, not a factual,
question." Pressler & Verniero, Current N.J. Court Rules, cmt. 3.2.1 on R. 2:10-
2 (2019). "We employ the same standard that governs trial courts in reviewing
summary judgment orders." Prudential Prop. & Cas. Inc. Co. v. Boylan, 307
N.J. Super. 162, 167 (App. Div. 1998).
III.
First we address the County's argument that the motion judge violated
principles of contract law when it "impermissibly rewrote the releases to bar
future, un[-]accrued claims." We agree.
The interpretation of a contract, such as a release, is subject to de novo
review by an appellate court. Kieffer v. Best Buy, 205 N.J. 213, 222-23 (2011)
(citing Jennings v. Pinto, 5 N.J. 562, 569-70 (1950) ("[I]t is a general rule that
the construction of a contract is a question of law . . . .")). "Accordingly, we
pay no special deference to the trial court's interpretation and look at the contract
with fresh eyes." Id. at 223 (citing Manalapan Realty, L.P. v. Twp. Comm., 140
N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal
A-1543-17T1
7
consequences that flow from established facts are not entitled to any special
deference.")).
When interpreting a contract, the court's goal is to ascertain the "intention
of the parties to the contract as revealed by the language used, taken as an
entirety; and, in the quest for intention, the situation of the parties, the attendant
circumstances, and the objects they were thereby striving to attain . . . ." Driscoll
Constr. Co., Inc. v. State, Dept. of Transp., 371 N.J. Super. 304, 313 (App. Div.
2004) (citing Onderdonk v. Presbyterian Homes of N.J., 85 N.J. 171, 184
(1981)).
Well-settled contract law provides that "[c]ourts enforce contracts based
on the intent of the parties, the express terms of the contract, surrounding
circumstances and the underlying purpose of the contract." Manahawkin
Convalescent v. O'Neill, 217 N.J. 99, 118 (2014) (quoting Caruso v.
Ravenswood Developers, Inc., 337 N.J. Super. 499, 506 (App. Div. 2001)).
Thus, "[w]hen the terms of a . . . contract are clear, it is the function of a
court to enforce it as written and not to make a better contract for either of the
parties." Cypress Point Condo. Ass'n v. Adria Towers, L.L.C., 226 N.J. 403,
415 (2016) (alteration in original) (quoting Kampf v. Franklin Life Ins. Co., 33
N.J. 36, 43 (1960)). "It follows that '[i]n attempting to discern the meaning of a
A-1543-17T1
8
provision in a . . . contract, the plain language is ordinarily the most direct
route.'" Ibid. (alteration in original) (quoting Chubb Custom Ins. Co. v.
Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008)). Further, when "the
language of a contract is plain and capable of legal construction, the language
alone must determine the agreement's force and effect." Ibid.(quoting Manahawkin, 217 N.J. at 118).
When the provision at issue is subject to more than one reasonable
interpretation, it is ambiguous, and the "court may look to extrinsic evidence as
an aid to interpretation." Templo Fuente de Vida Corp. v. Nat'l Union Fire Ins.
Co. of Pittsburgh, 224 N.J. 189, 200 (2016) (quoting Chubb, 195 N.J. at 238).
The County argues that the terms of the releases are unambiguous and do
not encompass any events that might later occur because potential claims had
not accrued as of July 16. Alternatively, the County argues that, even if the
terms of the releases are ambiguous, extrinsic evidence should be admissible at
a hearing to establish the intention of the parties, which the motion judge
rejected. According to the County, the intention of the parties was not to have
general releases covering all claims—such as those potentially arising from
separate and subsequent incidents on Sinatra Drive North. The motion judge
A-1543-17T1
9
found that the terms were unambiguous as a matter of law, and failed to give the
requisite, favorable inferences to the County.
The County argues that the disputed language, "which has happened up to
now," only applies to existing or accrued claims at the time the releases came
into effect, i.e. July 16. In support, the County cites Isetts v. Borough of
Roseland, 364 N.J. Super. 247, 256 (App. Div. 2003), which held that where a
plaintiff surrendered "any and all" claims, rights, or actions, plaintiff only
surrendered those rights existing at the time of the surrender. Focusing on the
word "has," and the phrase "[t]his release applies to claims resulting from
anything which has happened up to now," the County contends that this language
can only relate to present or prior-existing claims.
We conclude that there is a genuine issue of material fact as to whether
language in the releases contemplates only present or prior-existing claims and
whether the County was aware of such claims or not. Nothing in the releases
indicates that they were intended to serve as a general, forward looking releases
of all subsequently accruing claims relating to Sinatra Drive North, and this
presents material issues of fact.
Several factors support the County's interpretation of the releases: the two
projects at issue were separate and distinct projects, two blocks apart, and built
A-1543-17T1
10
on two very different types of platforms; each project had a separate design
contract; the releases specifically use the language "anything which has
happened up to now"; and the releases recite the docket number of the previous
litigation regarding the 14th Street collapse. Contrary to summary judgment
standards, the motion judge found that the County was "clearly aware" of
wooden platforms and timber deteriorations in the four block project, thus
barring the subsequent lawsuit. The record does not support his finding as a
matter of law.
PMK and CME have not provided any persuasive reasoning in support of
the contrary, except for references to unpublished opinions, which have no
precedential value.2 Moreover, the judge's reliance upon an unexplained,
unpublished decision is contrary to the restrictions set forth in Rule 1:36-3
2
Rule 1:36-3 provides:
No unpublished opinion shall constitute precedent or be
binding upon any court. Except for appellate opinions
not approved for publication that have been reported in
an authorized administrative law reporter, and except to
the extent required by res judicata, collateral estoppel,
the single controversy doctrine or any other similar
principle of law, no unpublished opinion shall be cited
by any court. No unpublished opinion shall be cited to
any court by counsel unless the court and all other
parties are served with a copy of the opinion and of all
contrary unpublished opinions known to counsel.
A-1543-17T1
11
against giving such opinions binding or precedential value. Trinity Cemetery
Ass'n v. Twp. of Wall, 170 N.J. 39, 48 (2001).
The scope of the releases is a fact-sensitive question, and its interpretation
turns on the intention of the parties. The record reflects that the County raised
material disputed facts regarding "the contracting parties' intent in what was
being released and the associated facts and circumstances surrounding the two
projects . . . ."
In its motion for reconsideration, the County provided the certification of
Donato Battista, Esq., Hudson County Counsel, who addressed the
circumstances surrounding construction of the two separate projects:
3. The 15th Street Extension case involved the
collapse of a portion of the 15th Street roadway
constructed on top of a concrete platform that
extended into the Hudson River. It was claimed
that the defendant design engineers: (a)
mistakenly relied upon a marine inspection
performed by Tams Consultants, Inc., which
never inspected the pilings which supported the
platform; and (b) failed to recognize that no
structural or geotechnical inspections were
conducted of the platform. As a result of these
design errors, the roadway load caused the
platform to collapse during construction.
4. The 15th Street Extension case did not involve
the design or construction of Sinatra Drive,
which was an entirely separate project, built at a
A-1543-17T1
12
different time involving different engineering
and construction companies.
5. In settling the 15th Street Extension case, the
County intended to settle only those claims
involving the collapse of the platform and 15th
Street Roadway. The County was totally unaware
of any issues, problems and possible claims
involving the construction of Sinatra Drive and
never considered that it was releasing the
defendant design engineers from problems which
only became known after the 15th Street
Extension case was settled.
6. We would not even have known about the issues
related to any area south of the 15th Street
[E]xtension, because we never appreciated that
any geotechnical or structural inspections went
beyond the 15th Street extension to 14th Street.
7. As indicated, the 15th Street [E]xtension project
was a completely separate project from the
remainder of Sinatra Drive. It was built at a
separate time and involved different
constructions, and engineering, than the rest of
Sinatra Drive.
Battista's certification clearly raises genuine issues of material fact, and
the motion judge failed to consider the salient arguments presented in the
County's reconsideration motion. We cannot conclude that PMK and CME were
entitled to judgment as a matter of law. See Town of Kearny v. Brandt, 214 N.J.
76, 91 (2013).
A-1543-17T1
13
IV.
Next we address the County's argument that the motion judge erred in
denying discovery. Generally, where discovery is incomplete, summary
judgment is inappropriate, at least where it is clear that at least one of the parties
seeks discovery. See, e.g., Crippen v. Cent. Jersey Concrete Pipe Co., 176 N.J.
397, 409 (2003). We review discovery matters for abuse of discretion. Capital
Health Sys., Inc. v. Horizon Healthcare Servs., Inc., 230 N.J. 73, 79 (2017).
Thus, "appellate courts are not to intervene but instead will defer to a trial
judge's discovery rulings absent an abuse of discretion or a judge's
misunderstanding or misapplication of the law." Id. at 79-80 (citing Pomerantz
Paper Corp. v. New Cmty. Corp., 207 N.J. 344, 371 (2011)).
We conclude that the motion judge's decision to deny discovery was an
abuse of discretion. 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'l Ass'n v. Guillaume, 209
N.J. 449, 467-68 (2012) (quoting Iliadis v. Wal-Mart Stores Inc., 191 N.J. 88,
123 (2007)). Measured against these standards, the motion judge mistakenly
applied his discretion in denying discovery and interpreting the releases in the
face of clear issues of material fact.
A-1543-17T1
14
In light of our decision, we do not need to address the other arguments
presented by the County. In short, we reverse the orders granting summary
judgment to PMK and CME and denying the County's motion for
reconsideration. On remand, the parties shall complete discovery and a hearing
shall be conducted relative to the interpretation of the releases vis-à-vis the
October 10 incident.
Reversed and remanded. We do not retain jurisdiction.
A-1543-17T1
15