Novingers, Inc. v. A.J.D. Construction Co., Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

NOVINGER’S, INC., : CIVIL ACTION NO. 1:18-CV-1145

:

Plaintiff : (Judge Conner)

:

v. :

:

A.J.D. CONSTRUCTION CO., INC., :

:

Defendant :

MEMORANDUM

Plaintiff Novinger’s, Inc. (“Novinger’s”), advances claims for breach of

contract and quantum meruit against defendant A.J.D. Construction Co., Inc.

(“AJD”). AJD asserts a breach-of-contract counterclaim. Before the court are the

parties’ cross-motions for partial summary judgment.

I. Factual Background & Procedural History1

Novinger’s is a Pennsylvania corporation and specialty subcontractor

“engaged in furnishing and installing drywall, acoustical ceilings, metal studs, lath

and plaster, fireproofing, stucco, and exterior wall finishes on structural steel

1 Local Rule 56.1 requires that a motion for summary judgment pursuant to

Federal Rule of Civil Procedure 56 be supported “by a separate, short, and concise

statement of the material facts, in numbered paragraphs, as to which the moving

party contends there is no genuine issue to be tried.” M.D. PA. L.R. 56.1. A party

opposing a motion for summary judgment must file a separate statement of material

facts, responding to the numbered paragraphs set forth in the moving party’s

statement and identifying genuine issues to be tried. Id. Unless otherwise noted,

the factual background herein derives from the parties’ Rule 56.1 statements of

material facts. (See Docs. 56-1, 62, 68, 75-9). To the extent the parties’ statements

are undisputed or supported by uncontroverted record evidence, the court cites

directly to the statements of material facts.

studs.” (Doc. 56-1 ¶¶ 1-2; Doc. 75-9 ¶¶ 1-2). AJD is a New Jersey corporation and a

general contractor engaged in construction. (Doc. 56-1 ¶¶ 4-5; Doc. 75-9 ¶¶ 4-5).

A. “Journal Squared” Project and Novinger’s-AJD Subcontract

AJD entered into a prime contract with Journal Square I Urban Renewal,

LLC (the “Owner”), regarding a project known as “Journal Squared - Tower I.”

(Doc. 56-1 ¶ 6; Doc. 75-9 ¶ 6; Doc. 61-37 (prime contract)). The Owner enlisted AJD

to assist in the development of a 53-story, high-rise building containing residential

units, mechanical space, retail space, and a parking structure. (Doc. 75-9 ¶ 6; see

Doc. 56-1 ¶ 6). We refer to this project as the “Journal Squared Project.” Three

sections of the building, the precise contours of which the parties dispute, are

relevant to the instant motions: the “Podium,” the “Tower,” and the “Mechanical

Room Area.”2 (Doc. 56-1 ¶¶ 7-10; Doc. 75-9 ¶¶ 7-10). The Podium is the lowermost

segment of the building; the Tower begins at the eighth floor and extends to the top

of the building; and the Mechanical Room Area is located near the top of the

building. (See Doc. 56-1 ¶¶ 7-10; Doc. 75-9 ¶¶ 7-10).

2 The parties and witnesses in this case refer to the Mechanical Room Area

interchangeably as the elevator machine room, the EMR, and the penthouse area.

(See, e.g., Doc. 56-1 ¶ 10; Doc. 75-9 ¶ 8).

AJD and Novinger’s executed a subcontract regarding the Journal Squared

Project.3 (See Doc. 57-1, Ex. A).4 Pursuant to the subcontract, Novinger’s agrees to

“design, fabricate, deliver and install a panelized exterior heavy gauge wall system

extending from elevation 77’8” to 572’7”. The exterior wall section details to

accommodate a panelized light gauge metal stud system, configured as a column

and slab cover that will bypass the edge of slab.” (Rider A ¶ 24; see also id. at 1).

The subcontract explains that “framing sizes and gauges will be determined by”

AJD’s engineer, and “stud gauges will vary depending on the most economical way

to achieve specified” criteria. (Id. ¶ 26). None of these criteria are intended to limit

Novinger’s’ scope of work. (Id. at 1). In return, AJD agrees to pay Novinger’s a

lump sum of $8,798,820. (See Subcontract, Art. 10 § 10.1).

Under the subcontract, AJD may “order changes in the Work consisting of

additions, deletions, and revisions.” (Rider C2, Art. 19 ¶ 19.1). This provision gives

AJD the right to

delete Work from the Contract for any reason whatsoever

and to direct other Subcontractors/Suppliers to perform

such work, and in such event Subcontractor/Supplier

shall have no claim against [AJD] or Owner for such

deletion of work or for breach of Contract. The Contract

3 There is a factual dispute over the date of execution of the subcontract.

AJD claims the parties executed the subcontract on or about July 30, 2014. (Doc. 62

¶ 39; Doc. 75-9 ¶ 19). Novinger’s maintains it delivered a signed contract to AJD on

October 29, 2014, (see Doc. 56-1 ¶ 40), and subsequently received a fully executed

copy from AJD on November 5, 2014, (id. ¶ 41; Doc. 68 ¶ 39). Given the plethora of

factual issues sub judice, this particular dispute is immaterial to the court’s

disposition. Obviously, it will be an additional matter for resolution by the

factfinder.

4 We cite to the subcontract herein as “Subcontract at __” or “Subcontract,

Art. __ § __” and to its multiple riders as “Rider __ at __” or “Rider ¶ __.”

Price and completion time requirements shall be adjusted

as set forth below to the extent that Owner in its sole

discretion agrees to such adjustment.

(Id.) Conversely, if Novinger’s has a claim against AJD, Article 5, Section 5.3

requires Novinger’s to “make all claims promptly . . . for additional cost, extensions

of time and damages for delays” in connection with the subcontract’s performance.

(Subcontract, Art. 5 § 5.3). A “claim” is a

demand or assertion by [AJD] or Owner seeking, as a

matter of right, adjustment or interpretation of Contract

terms, payment of money, extension of time, specific

performance, or other relief with respect to the terms of

the Contract. The term “Claim” also includes other

disputes and matters in question between the Owner and

[AJD] arising out of or relating to the Contract.

(Doc. 61-37, Art. 4 § 4.3.1 (prime contract); Subcontract, Art. 1 § 1.1).5

The subcontract also includes provisions governing AJD’s potential options

should Novinger’s fail to abide by its contractual obligations. As relevant here, AJD

may file “claims for the costs of services or materials provided due to [Novinger’s’]

failure” to perform after seven days’ notice that AJD intends to secure substitute

services or materials. (Id., Art. 3 § 3.3.2(.1)). The subcontract further requires AJD

to provide Novinger’s with written compilations of services and materials provided

in lieu, as well as their respective charges, by the fifteenth day of the month after

such provision. (Id. § 3.3.2(.2)). Alternatively, if Novinger’s “defaults or neglects” to

5 The subcontract incorporates by reference the prime contract and its terms.

(Subcontract, Art. 1 § 1.1). It also states that “[AJD] shall assume toward

[Novinger’s] all obligations and responsibilities that the Owner, under such

documents, assumes toward [AJD], and [Novinger’s] shall assume toward [AJD] all

obligations and responsibilities which [AJD], under such documents, assumes

toward the Owner and the Architect.” (Id., Art. 2).

perform its work, AJD may “make good such deficiencies and . . . deduct the

reasonable cost thereof from the payments” due, so long as it provides Novinger’s

five days’ notice “to commence and continue correction of such default or neglect

with diligence and promptness.” (Id. § 3.4).

Relatedly, the subcontract establishes a process by which AJD can withhold

payment from Novinger’s if Novinger’s fails to resolve claims arising from its

performance of the subcontract. “Before issuance of the final payment,

[Novinger’s], if required, shall submit evidence satisfactory to [AJD] that all

payrolls, bills for materials and equipment, and all known indebtedness connected

with the [Novinger’s’] Work have been satisfied.” (Subcontract, Art. 12 § 12.2). In

another section, the subcontract provides that AJD may refuse payment if there are

“[c]laims filed or evidence indicating probable filing or making of claims.” (Rider

C2, Art. 18 ¶¶ 18.8, 18.8.2). Article 18, Paragraph 18.17 of Rider C2 also permits

withholding upon “evidence of any unpaid obligation, lien or claims for which, if

established, [AJD] or Owner . . . might become liable.” (Id. ¶ 18.17).

To receive final payment, Novinger’s must submit “a full and final release

and waiver of all liens and claims in connection with the Work . . . by each

subcontractor or supplier who has performed work or supplied materials” on the

subcontractor’s or supplier’s behalf. (Id. ¶¶ 18.11, 18.11.1; see also id. ¶ 18.12).

Acceptance of final payment “shall constitute a release of Owner and [AJD] of and

from all liability” associated with the project. (Id. ¶ 18.12). Additionally,

“[a]cceptance of final payment by [Novinger’s] shall constitute a waiver of claims by

[Novinger’s], except those previously made in writing and identified by [Novinger’s]

as unsettled at the time of final application for payment.” (Subcontract, Art. 12 §

12.2).

The subcontract includes an integration clause stating that the “Subcontract

represents the entire and integrated agreement between the parties hereto and

supersedes prior negotiations, representations or agreements, either written or

oral.” (Id., Art. 1 § 1.1). It separately provides that the “agreement supersedes and

replaces all previous written and oral agreements, proposals, etc.” (Rider A ¶ 8; see

also Rider D ¶ 14 (“The subcontractor agrees this agreement supersedes, replaces

and voids all previous proposals, agreements whether verbal or written and is the

only agreement between both parties on record.”)).

B. Dispute Regarding Novinger’s Scope of Work

The parties each claim that preliminary negotiations and discussions inform

the scope of Novinger’s’ work. They agree that AJD originally intended to employ

Bamco, Inc. (“BAMCO”), as its subcontractor for part of the Journal Squared

Project. (Doc. 56-1 ¶ 16; Doc. 75-9 ¶ 16). They also agree that Novinger’s ultimately

replaced BAMCO. (Doc. 62 ¶¶ 6-8; Doc. 56-1 ¶¶ 16-18). They dispute, however, the

extent of the work BAMCO was intended to perform and, consequently, the role

Novinger’s was intended to assume. (Doc. 56-1 ¶¶ 17-18; Doc. 75-9 ¶¶ 17-18). James

Novinger, President of Novinger’s, explained in a declaration that BAMCO referred

Novinger’s to AJD because BAMCO could not complete the panel prefabrication

work on the Tower, but Novinger’s could. (Doc. 57-2, Ex. F ¶ 4).6

The parties engaged in extensive negotiations regarding the scope of

Novinger’s’ work. Novinger’s submitted five proposals to AJD over the course of

roughly two months which only add to the parties’ confusion about the scope of

performance under Novinger’s subcontract. In the first, dated February 26, 2014,

Novinger’s proposes only to “[f]urnish and install a panelized wall system extending

from elevation 77’8” to 572’7”.” (Doc. 61-7 at 1). Novinger’s notes that its proposal

“accommodate[s] a panelized light gauge metal stud system” that would “bypass

and attach to the structure.” (Id.) It also flags necessary framing and sheathing.

(Id.) On March 14, 2014, Novinger’s submitted its second proposal identifying these

same items, now under a “Tower Overview” heading, and similarly noting framing

and sheathing. (See Doc. 61-32 at 1). Unlike the earlier proposal, this one includes

Podium work. (See id.) Neither mentions the Mechanical Room Area. (See id.; see

also Doc. 61-7).

On March 15, 2014, Jayanti Patel, AJD’s Project Manager for the Journal

Squared Project, emailed Novinger’s and asked it to “provide colored evaluation

[drawings] indicating scope of [its] work.” (Doc. 62 ¶ 20 (alterations in original)). In

6 To the extent AJD claims that this evidence, which is based on

conversations with other individuals, must be excluded as inadmissible hearsay, we

are unpersuaded. “[H]earsay statements can be considered on a motion for

summary judgment if they are capable of being admissible at trial.” Fraternal Order

of Police, Lodge 1 v. City of Camden, 842 F.3d 231, 238 (3d Cir. 2016) (quoting

Stelwagon Mfg. Co. v. Tarmac Roofing Sys., Inc., 63 F.3d 1267, 1275 n.17 (3d Cir.

1995)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).

response, Novinger’s supplied a highlighted version of the building blueprint

identifying the space reaching up to 572’7” as within its scope of work. (Id. ¶¶ 21-23;

Doc. 61-33). AJD contends this highlighted portion encompasses the Mechanical

Room Area. (Doc. 62 ¶ 22). Novinger’s disputes whether these drawings are

accurate, complete, or up-to-date. (Doc. 68 ¶¶ 21-23).

Novinger’s submitted a third proposal on March 25, 2014, the relevant

portions of which did not materially change. (See Doc. 61-34 at 1). Like prior

iterations, this proposal does not expressly speak to the Mechanical Room Area.

(Id.) One month later, on April 25, 2014, Novinger’s submitted a fourth proposal,

which again describes a panelized wall system “extending from elevation 77’8” to

572’-7”.” (Doc. 61-35 at 1). Unlike the prior proposals, however, this one specifies

“exterior wall section details to accommodate a panelized light gauge metal stud

system, configured as a column and slab cover that will bypass the edge of slab.”

(Id.) It further specifies that Novinger’s “will provide imbeds for panel

attachment,” that “framing sizes and gauges will be determined by our engineer[,

and that] stud gauges will vary depending on the most economical way to achieve

specified deflection criteria.” (Id.) This proposal expressly excludes Podium work

and again fails to mention the Mechanical Room Area. (Id. at 2; Doc. 62 ¶ 30). On

May 5, 2014, Novinger’s submitted a fifth and final proposal which is substantially

similar to its April 25 proposal. (Doc. 61-36; Doc. 62 ¶ 32; Doc. 68 ¶ 32).

Before installing the system, Novinger’s submitted “shop drawings” to AJD

regarding its planned work. (Doc. 62 ¶ 52; Doc. 68 ¶ 52; Doc. 56-1 ¶ 35). According

to Novinger’s, it submitted these shop drawings in August and September of 2014,

and discussed those drawings with AJD in October of 2014. (Doc. 56-1 ¶¶ 35-37; Doc.

68 ¶¶ 52-53). Novinger’s then began installing the exterior panelized wall system.

(Doc. 62 ¶ 51; Doc. 68 ¶ 51; Doc. 56-1 ¶¶ 43-44). Roughly one year after Novinger’s

submitted its shop drawings, in September 2015, AJD asked Novinger’s why it had

not submitted shop drawings for the Mechanical Room Area. (Doc. 62 ¶¶ 53-54;

Doc. 68 ¶¶ 53-54; see also Doc. 56-1 ¶ 36). This factual dispute, among others, lead

inexorably to the instant litigation.

Subsequent to the dispute over Novinger’s scope of work, AJD enlisted

BAMCO and paid it $489,000 to perform work on the Mechanical Room Area. (Doc.

62 ¶¶ 59-60; Doc. 68 ¶¶ 59-60). AJD issued a “deduct change order” to Novinger’s in

the amount of $489,000. (Doc. 62 ¶¶ 61, 63; Doc. 68 ¶¶ 61, 63).

Upon completion of its perceived scope of work, Novinger’s submitted a

request for payment to AJD with an adjusted subcontract price of $9,425,282.19.

(Doc. 62 ¶¶ 68-70; Doc. 68 ¶¶ 68-70). Novinger’s executed a partial release for

payment on May 5, 2017. (Doc. 62 ¶¶ 73-74; Doc. 68 ¶¶ 73-74). AJD released

$8,856,294.80 in payment. (Doc. 62 ¶ 75; Doc. 68 ¶ 75). By letter dated June 9, 2017,

Novinger’s requested payment in the amount of $568,987.39, consisting of $14,497.52

in pay application fees and $554,489.87 in unpaid retainage. (Doc. 56-1 ¶ 52; Doc.

75-9 ¶ 52). Novinger’s has not provided contractually required close-out documents,

but states it is prepared to do so upon receipt of full payment. (Doc. 56-1 ¶ 58).

C. Novinger’s Claims for Extra Costs

After completing its work on the Journal Squared Project, Novinger’s

submitted a breakdown totaling $119,946.77 for costs associated with certain

cleaning work it performed. (Doc. 62 ¶ 76; Doc. 68 ¶ 76). Novinger’s also submitted

a breakdown totaling $171,352.53 for costs associated with removing and

reinstalling certain safety cables. (Doc. 62 ¶ 79; Doc. 68 ¶ 79).

D. AWMC-Novinger’s Dispute

AJD has purportedly withheld payment to Novinger’s in part because of a

$68,400 claim against Novinger’s by Architectural Window Manufacturing

Corporation (“AWMC”). (Doc. 56-1 ¶ 55; Doc. 75-9 ¶¶ 74-79). By letter dated

September 8, 2017, AWMC wrote to Novinger’s, demanding payment for costs

incurred due to a defective mockup by Novinger’s during the Journal Squared

Project. (Doc. 75-9 ¶ 76). AWMC notified AJD of this claim against Novinger’s. (Id.

¶ 77). As far as we are aware, AWMC’s claim remains pending. (See id. ¶ 78). On

July 31, 2020, AWMC’s counsel wrote to Novinger’s again, increasing its demand to

$100,900 for the same alleged failure. (Id. ¶ 79).

E. Procedural History

Novinger’s originally filed this case in the Court of Common Pleas of

Dauphin County, Pennsylvania, before AJD timely removed the matter to this

court. Novinger’s asserts claims for breach of contract and quantum meruit. AJD

asserts a reciprocal breach-of-contract counterclaim. Following a period of

discovery, Novinger’s and AJD both filed motions for partial summary judgment.

The motions are ripe for disposition.

II. Legal Standard

Through summary adjudication, the court may dispose of those claims that

do not present a “genuine dispute as to any material fact” and for which a jury trial

would be an empty and unnecessary formality. FED. R. CIV. P. 56(a). The burden of

proof tasks the non-moving party to come forth with “affirmative evidence, beyond

the allegations of the pleadings,” in support of its right to relief. Pappas v. City of

Lebanon, 331 F. Supp. 2d 311, 315 (M.D. Pa. 2004); see also Celotex Corp. v. Catrett,

477 U.S. 317, 322-23 (1986). The court is to view the evidence “in the light most

favorable to the non-moving party and draw all reasonable inferences in that party’s

favor.” Thomas v. Cumberland County, 749 F.3d 217, 222 (3d Cir. 2014). This

evidence must be adequate, as a matter of law, to sustain a judgment in favor of the

non-moving party on the claims. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

250-57 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-89

(1986). Only if this threshold is met may the cause of action proceed. See Pappas,

331 F. Supp. 2d at 315.

Courts may resolve cross-motions for summary judgment concurrently. See

Lawrence v. City of Philadelphia, 527 F.3d 299, 310 (3d Cir. 2008); see also Johnson

v. FedEx, 996 F. Supp. 2d 302, 312 (M.D. Pa. 2014); 10A CHARLES ALAN WRIGHT ET

AL., FEDERAL PRACTICE AND PROCEDURE § 2720 (3d ed. 2015). When doing so, the

court is bound to view the evidence in the light most favorable to the non-moving

party with respect to each motion. FED. R. CIV. P. 56; Lawrence, 527 F.3d at 310

(quoting Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d Cir. 1968)).

III. Discussion

Before disposing of the pending motions, we must address two threshold

evidentiary issues raised by Novinger’s. Citing the best evidence rule and the

sham-affidavit doctrine, Novinger’s challenges a declaration submitted by Jayanti

Patel and certain factual assertions in AJD’s statement of material facts. (See, e.g.,

Doc. 72 ¶¶ 1- 9, 11, 13; Doc. 73 ¶ 1-7). We reject both challenges.

The best evidence rule provides that the “original writing, recording, or

photograph is required in order to prove its content unless these rules or a federal

statute provides otherwise.” FED. R. EVID. 1002. The best evidence rule, by its plain

terms, applies when attempting to prove the contents of a document. Here, the best

evidence rule is inapplicable because the referenced document has been produced.

See StoneCoat of Tex., LLC v. ProCal Stone Design, LLC, No. 4:17CV303, 2019 WL

9899920, at *14 (E.D. Tex. June 28, 2019) (citing I.F. v. Lewisville Indep. Sch. Dist.,

No. 4:14CV359, 2016 WL 7734555, at *7 (E.D. Tex. Dec. 1, 2016)); see also D’Angelo

v. United States, 456 F. Supp. 127, 131 (D. Del. 1978), aff’d, 605 F.2d 1194 (3d Cir.

1979) (“The rule is not applicable when a witness testifies from [p]ersonal

knowledge of the matter, even though the same information is contained in a

writing.”); cf. United States v. Miller, 248 F. App’x 426, 429 (3d Cir. 2007)

(nonprecedential) (“[A] party need only produce original documents if a witness

testifies to the actual content of a writing.”). Moreover, Patel’s declaration is not

offered to prove the contents of particular documents. The documents themselves

continue to serve as the definitive source. He simply offers his perspective and

recollection—based on his personal knowledge—of the documents and their

significance regarding the scope of the subcontract. If Patel’s statements are

inconsistent with certain documents, or any other evidence of record, this

inconsistency may be indicative of a factual dispute for the jury, but it does not

require exclusion of the declaration. The court concludes that Patel’s declaration

may be considered in the context of the parties’ Rule 56 motions. See Willis v. BW

IP Int’l Inc., 811 F. Supp. 2d 1146, 1155 (E.D. Pa. 2011) (citing, inter alia, D’Angelo,

456 F. Supp. at 131).

We likewise decline to apply the sham-affidavit doctrine. The sham-affidavit

doctrine allows courts—in their discretion—to disregard an affidavit at summary

judgment if it “contradicts earlier deposition testimony without a satisfactory or

plausible explanation” and a “genuine, material factual dispute exists.” Daubert

v. NRA Grp., LLC, 861 F.3d 382, 389, 391 (3d Cir. 2017) (citations omitted). AJD

offers plausible evidence-based explanations for purported discrepancies. (See

Doc. 80 at 13-16). Ultimately, those explanations may be unpersuasive or

undermined on a fuller record, but we decline to exercise our discretion to exclude

the statements at this stage of the litigation.

A. Breach of Contract

The parties agree that New Jersey law applies in this case. (See Doc. 61 at 6

n.2; Doc. 58 at 15 & n.3). Under New Jersey law, a movant asserting a breach of

contract must prove “first, that the parties entered into a contract containing

certain terms; second, that [the movant] did what the contract required [the

movant] to do; third, that [the nonmovant] did not do what the contract required

[the nonmovant] to do, defined as a breach of the contract; and fourth, that [the

nonmovant’s] breach, or failure to do what the contract required, caused a loss to

the [movant].” Globe Motor Co. v. Igdalev, 139 A.3d 57, 64 (N.J. 2016) (internal

quotations marks and citation omitted). In New Jersey, “[t]he polestar of

construction is the intention of the parties to the contract as revealed by the

language used, taken as an entirety.” Conway v. 287 Corp. Ctr. Assocs., 901 A.2d

341, 347 (N.J. 2006) (quoting Atl. N. Airlines v. Schwimmer, 96 A.2d 652, 656 (N.J.

1953)).

To determine the parties’ intent, courts may consider “the particular

contractual provision, an overview of all the terms, the circumstances leading up to

the formation of the contract, custom, usage, and the interpretation placed on the

disputed provision by the parties’ conduct.” Id. (quoting Kearny PBA Local # 21

v. Town of Kearny, 405 A.2d 393, 400 (N.J. 1979)). We also consider the purpose of

the contract. See Manahawkin Convalescent v. O’Neill, 85 A.3d 947, 958 (N.J. 2014)

(citation omitted). Additionally, “the subsequent conduct of the parties in the

performance of the agreement may serve to reveal their original understanding.”

Michaels v. Brookchester, Inc., 140 A.2d 199, 204 (N.J. 1958); see also RESTATEMENT

(SECOND) OF CONTRACTS § 202 (AM. LAW INST. 1981). “The construction of a written

contract is usually a legal question for the court, but where there is uncertainty,

ambiguity or the need for parol evidence in aid of interpretation, then the doubtful

provision should be left to the jury.” Schor v. FMS Fin. Corp., 814 A.2d 1108,

1113-14 (N.J. Super. Ct. App. Div. 2002) (quoting Brookchester, 140 A.2d at 203-04;

Garden State Bldgs. v. First Fid. Bank, 702 A.2d 1315, 1323 (N.J. Super. Ct. App.

Div. 1997)); see Mylan Inc. v. SmithKline Beecham Corp., 723 F.3d 413, 420-21 (3d

Cir. 2013) (summary judgment improper under New Jersey law when “alternative

reading of the contested language suggested by [plaintiffs] was both reasonable and

supported by objective evidence of the parties’ intentions”).

1. Scope of the Subcontract

The parties vigorously dispute whether the Mechanical Room Area of the

building was within the scope of Novinger’s’ contractual duties. To inform that

scope, the parties refer to the subcontract’s plain language, their negotiations, and

the purpose for which AJD contracted Novinger’s.

We read contractual terms in accordance with their “plain and ordinary

meaning.” GMAC Mortg., LLC v. Willoughby, 165 A.3d 787, 794 (N.J. 2017) (citation

omitted). Specifically, we employ “the meaning that would be ascribed to [the

terms] by a reasonably intelligent person who was acquainted with all the operative

usages and circumstances surrounding the making of the writing.” YA Glob. Invs.,

L.P. v. Cliff, 15 A.3d 857, 862-63 (N.J. Super. Ct. App. Div. 2011) (quoting Deerhurst

Ests. v. Meadow Homes, Inc., 165 A.2d 543, 551 (N.J. Super. Ct. App. Div. 1960)). We

are also mindful that technical terms and words of art may carry with them a

unique meaning under the circumstances. See Deerhurst Ests., 165 A.2d at 551-52;

Borough of Lodi v. Passaic Valley Water Comm’n, No. A-4172-11T4, 2013 WL

6122592, at *5 (N.J. Super. Ct. App. Div. Nov. 22, 2013) (citing RESTATEMENT

(SECOND) OF CONTRACTS § 202(3)(b) (AM. LAW. INST. 1981)).

We start with the subcontract’s plain text. The subcontract’s “scope of work”

rider states that Novinger’s shall “design, fabricate, deliver and install a panelized

exterior heavy gauge wall system extending from elevation 77’8” to 572’7”. The

exterior wall section details to accommodate a panelized light gauge metal stud

system, configured as a column and slab cover that will bypass the edge of slab.”

(Rider A ¶ 24; see also id. at 1). Novinger’s argues that the phrase “panelized wall

system” is a term of art in this context that means “prefabricated units containing

several elements,” (Doc. 58 at 16; see also Doc. 57-2, Ex. C at 23; Doc. 57-2, Ex. D at

34), and could only apply to the Tower, not the Mechanical Room Area, (Doc. 58 at

17). AJD notes, however, that the subcontract limits Novinger’s’ responsibilities by

elevation (77’8” to 572’7”) and by design specification (“details to accommodate a

panelized light gauge metal stud system, configured as a column and slab cover that

will bypass the edge of slab”). (Rider A ¶ 24). In response, Novinger’s observes: the

Mechanical Room Area requires only skin cladding made of light gauge metal girt

system (i.e., metal paneling); the Mechanical Room Area does not bypass the edges

of slabs; and the metal skins applied to the Mechanical Room Area do not include

metal stud framing or sheathing, as indicated by the subcontract. (Doc. 58 at 16-18;

see Rider A ¶¶ 26, 28 (framing and sheathing)). In other words, Novinger’s argues

that AJD’s interpretation would render parts of the subcontract superfluous.

Neither party’s interpretation is patently unreasonable.

Evidence of the parties’ preliminary negotiations provides only limited

clarity. Between February 26, 2014, and May 5, 2014, Novinger’s submitted five

different work proposals to AJD. (Doc. 62 ¶¶ 9-34). Each proposal identified the

relevant scope of work to extend from elevation 77’8” to 572’7”, and none of them

affirmatively included or excluded the Mechanical Room Area. (Id.; see also Doc. 62

¶ 3).

All told, the extrinsic evidence of the parties’ intent points in several

directions. For every one of AJD’s points, Novinger’s has a counterpoint, and vice

versa. Our court of appeals has advised that we should deny summary judgment

when the parties offer “alternative reading[s] of the contested language” that are

“both reasonable and supported by objective evidence of the parties’ intentions.”

Mylan, 723 F.3d at 420-21. In sum, substantial ambiguity lies as to the contents,

meaning, and timing of the parties’ discussions regarding the Mechanical Room

Area work. Given the competing evidence, we will deny both parties’ motions

regarding the scope of Novinger’s’ responsibilities under the subcontract.

2. Notice Provisions

Novinger’s argues that AJD failed to give the necessary notice prior to

deducting payment. (Doc. 58 at 21). The parties agree that AJD issued a

“deduction” for the Mechanical Room Area work, (Doc. 62 ¶ 61; Doc. 68 ¶ 61), but

they dispute the application of certain notice provisions. Novinger’s contends the

notice requirements found in Article 3, Sections 3.3.2 and 3.4 govern such

deductions. (Doc. 58 at 21-22; Doc. 71 at 20-21). These sections require separate

five- and seven-day notice periods. Section 3.3.2 also requires that AJD provide a

compilation of costs. (Subcontract, Art. 3 §§ 3.3.2, 3.4). AJD rejoins that only Article

3, Section 3.4 applies. (Doc. 75 at 16-19). Section 3.4 permits deductions if AJD

provides notice “to commence or continue correction of such default or neglect with

diligence and promptness” and Novinger’s fails to cure the deficiency within five

days of receiving that notice. (Subcontract, Art. 3 § 3.4).

Novinger’s asserts that the term “claim” used in Section 3.3.2 necessarily

encompasses the deduction imposed by AJD. (Doc. 79 at 15-16). Consequently, the

notice provisions in Section 3.4 and Section 3.3.2 can coexist. Novinger’s cites the

definition of “claim” used in the prime contract—and incorporated into the

subcontract—to argue that the deduction constitutes a qualifying modification of

contract terms. (See id. (citing Doc. 61-37, Art. 4 § 4.3.1)). We disagree. Section 3.4

clearly applies to “deduct[ions],” while Section 3.3.2 clearly applies to affirmative

“claims” for expenses undertaken by AJD. The interpretation of “claim” proffered

by Novinger’s would render these two provisions duplicative, an interpretation we

are careful to avoid. See Penske Logistics, Inc. v. KLLM, Inc., 285 F. Supp. 2d 468,

474 (D.N.J. 2003) (citations omitted). AJD imposed a deduction from the amount

due under the subcontract; it did not issue a claim. (See Doc. 61-16). Section 3.4

therefore applies.

Despite our conclusion that only Section 3.4 applies, we find that a genuine

dispute exists as to AJD’s compliance with Section 3.4’s notice provisions. The

parties agree that, on October 29, 2015, a representative of AJD reached out to

Novinger’s regarding the latter’s declination of Mechanical Room Area work. (Doc.

62 ¶ 55; Doc. 68 ¶ 55). The parties, however, do not agree as to the effect of that

communication. AJD contends this communication is sufficient notice to

Novinger’s that it must either complete the work or be replaced; Novinger’s rejoins

that the notice provides no such indication. (Doc. 62 ¶ 55; Doc. 68 ¶ 55). A similar

dispute arises surrounding a November 5, 2015 email. (Doc. 62 ¶ 56; Doc. 68 ¶ 56).

The parties’ disagreement reflects a textbook factual dispute. Summary judgment

is therefore inappropriate.

3. AWMC-Novinger’s Dispute

Novinger’s seeks summary judgment with respect to AJD’s withholding of

payment based upon a separate dispute between Novinger’s and AWMC. (Doc. 58

at 22-23; Doc. 75 at 20-22). AJD invokes Article 18, paragraph 18.8 of Rider C2,

which provides that it may decline to pay if there is evidence of “[c]laims filed or

evidence indicating probable filing or making of claims.” (Rider C2, Art. 18 ¶ 18.8).7

AJD asserts that this language permits it to “withhold payment from Novinger’s if

there are any unresolved claims arising from Novinger’s work.” (Doc. 75 at 21

(emphasis added)). Novinger’s responds by invoking Article 18, paragraph 18.17 of

Rider C2, which gives AJD the right to withhold payment if there is evidence of

“any unpaid obligation, lien or claim for which, if established [AJD] or Owner . . .

might become liable.” (Rider C2, Art. 18 ¶ 18.17 (emphasis added)).

The court finds that a genuine dispute exists as to the likelihood or

probability that AJD may be liable for the Novinger’s-AWMC dispute. The term

“claim” used in the prime contract and incorporated into the subcontract

contemplates disputes between the Owner, AJD, and Novinger’s. (See Subcontract,

Art. 1 § 1.1; id., Art. 2). When paragraphs 18.8 and 18.17 of Rider C2 are read in light

of this definition, it is plain that a withholding of payment must implicate some risk

of liability between these parties. The Rule 56 record is unclear whether AJD faces

any exposure as a result of AWMC’s claim against Novinger’s. Viewing the facts in

a light most favorable to AJD, the court finds a genuine dispute as to whether AJD

7 AJD also invokes Section 12.2 as authority to withhold payment. This

provision only applies to “known indebtedness.” (Subcontract, Art. 12 § 12.2).

Although AWMC has sought compensation from Novinger’s, the court is unaware of

any liability determination. Thus, we do not consider Section 12.2 to be presently

applicable.

will or might become liable, (see Rider C2, Art. 18 ¶¶ 18.8, 18.17), and we will deny

summary judgment.8

4. Close-Out Documents

Finally, the parties dispute whether AJD is contractually entitled to withhold

the balance of funds due and owing until Novinger’s executes certain close-out

documents. To complete the Journal Squared Project and receive “final payment,”

the subcontract requires Novinger’s to submit, inter alia, a “full and final release

and waiver of all liens and claims in connection with the” project. (Rider C2, Art. 18

¶¶ 18.11, 18.11.1; see also id. ¶ 18.17).

Based on the record before us, and the parties’ arguments, the court

concludes that a genuine dispute exists as to the applicability and effect of the

subcontract’s close-out provisions under the unique circumstances of this case—

with numerous outstanding claims that would be directly impacted by the

contemplated release language. A decision on the propriety of AJD’s action to

withhold payment must await the resolution of myriad disputes as set forth herein.

B. Quantum Meruit

In addition to its breach-of-contract claim, Novinger’s asserts a quantum

meruit claim to recover costs associated with the removal of certain safety cables

and cleaning. (See Doc. 1-2 ¶¶ 11-14). The quantum meruit doctrine permits a

8 We acknowledge that Novinger’s purports to disclaim AJD’s liability for this

dispute in a footnote in its summary judgment briefing. (See Doc. 79 at 17 n.10

(“AWMC logically has no claim against AJD, the owner, or the project, [and] AWMC

has undoubtedly executed a full and final release absolving all those entities of

liability.”)). A statement in a brief is not evidence, however, and the evidence that

Novinger’s has adduced does not foreclose AJD’s potential liability as to AWMC.

“performing party to recoup the reasonable value of services rendered,” Weichert

Co. Realtors v. Ryan, 608 A.2d 280, 285 (N.J. 1992), on the “equitable principle that a

person shall not be allowed to enrich himself unjustly at the expense of another,” id.

(citation and internal quotation marks omitted). To prove a quantum meruit claim, a

plaintiff must establish “(1) the performance of services in good faith, (2) the

acceptance of the services by the person to whom they are rendered, (3) an

expectation of compensation therefor, and (4) the reasonable value of the services.”

Starkey, Kelly, Blaney & White v. Est. of Nicolaysen, 796 A.2d 238, 242-43 (N.J. 2002)

(citations and internal quotation marks omitted). However, “the existence of an

express contract excludes the awarding of relief regarding the same subject matter

based on quantum meruit.” N.Y.-Conn. Dev. Corp. v. Blinds-To-Go (U.S.) Inc., 159

A.3d 892, 901 (N.J. Super. Ct. App. Div. 2017) (quoting Kas Oriental Rugs, Inc.

v. Ellman, 926 A.2d 278, 292 (N.J. Super. Ct. App. Div. 2007) (citing Moser v. Milner

Hotels, Inc., 78 A.2d 393, 280-81 (N.J. 1951))).

In the instant matter, an express contractual provision applies, (see Doc. 71 at

29 (“Section 5.3 of the subcontract . . . applies.”)), and we therefore find no basis for

a quantum meruit theory.9 Because its quantum meruit claim fails on this ground,

we need not consider whether Novinger’s released its removal and cleaning claims.

IV. Conclusion

We will deny Novinger’s’ motion and grant in part and deny in part AJD’s

motion. An appropriate order shall issue.

/S/ CHRISTOPHER C. CONNER

Christopher C. Conner

United States District Judge

Middle District of Pennsylvania

Dated: March 26, 2021

9 Novinger’s’ invocation of S.M. Electric Co., Inc. v. Torcon, Inc., No.

A-0846-15T3, 2016 WL 6091256 (N.J. Super. Ct. App. Div. Oct. 19, 2016), is

unavailing. The court in S.M. Electric interpreted whether, under its facts, the

substance of a letter constituted a “claim” and a “demand”—as opposed to a

“change order”—for insurance liability purposes, triggering a separate contractual

notice requirement. See S.M. Electric, 2016 WL 6091256, at *1, 4-5. The case does

not stand for the proposition that all post-completion claims for additional

compensation based on delays fall outside the scope of change order provisions.

(Doc. 71 at 23). But more importantly, S.M. Electric does not negate Novinger’s’

acknowledgment that a different contractual provision applies in this case,

effectively barring its quantum meruit claim under New Jersey law.