Opinion

DIAMOND BEACH, LLC VS. MARCH ASSOCIATES, INC. (L-0203-08, MONMOUTH COUNTY AND STATEWIDE)

Court: New Jersey Superior Court Appellate Division
Filed: Dec 24, 2018
Status: Published
Cited by: 0 cases
Authority: More cited than 8.7%

invalidating a lien signed by a lawyer without a A-1704-17T1 16 power of attorney (POA)

How later courts described this case

invalidating a lien signed by a lawyer without a A-1704-17T1 16 power of attorney (POA)
acknowledging that the 2011 amended CLL generally followed the recommendations of the NJLRC Report, which did not address the reason for dropping "duly authorized officer" from the text of Section 6

Written by the judges who cited it.

The opinion

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1704-17T1

DIAMOND BEACH, LLC,

Plaintiff,

APPROVED FOR PUBLICATION

v. December 24, 2018

APPELLATE DIVISION

MARCH ASSOCIATES, INC.,

LOUIS MARCH, SR. and JEWEL

CONTRACTING CO., INC., and

V.A. SPATZ & SONS, INC.,

Defendants.

________________________________

MARCH ASSOCIATES, INC., and

LOUIS MARCH, SR.,

Third-Party Plaintiffs,

STEWART KLEINER, EDWARD

KLEINER, LEON KLEINER, TKG

MANAGEMENT, LLC, THE KLEINER

GROUP, LLC, KNS BUILDING

RESTORATION, INC., ENVIROSCAPE,

INC., CITY/NEWARK GLASS

COMPANY, DORANT/TATROW

ASSOCIATES, INC., SEALTITE SYSTEMS,

INC., BRIAN TREMATORE PLUMBING

& HEATING, INC., ALLAN BRITEWAY

ELECTRICAL CONTRACTORS, INC.,

SLOAN & COMPANY, INC., C.A.W., LLC,

S.A. COMUNALE CO., INC., SPARTA

STEEL CORPORATION, K.F.

MECHANICAL, LLC, ADVANTAGE

SUPPLY CORPORATION, GRAFAS

PAINTING CONTRACTORS, INC.,

GIACOMELLI TILE, INC., and

INNOVATIVE CLOSET DESIGNS,

INC.,

Third-Party Defendants.

___________________________________

SLOAN & COMPANY, INC.,

Fourth-Party Plaintiff-Appellant,

DIAMOND BEACH, LLC and

FIRST INDEMNITY OF AMERICA

INSURANCE COMPANY,

Fourth-Party Defendants-Respondents.

_____________________________________

Argued telephonically November 29, 2018 –

Decided December 24, 2018

Before Judges Fasciale, Gooden Brown and Rose.

On appeal from Superior Court of New Jersey, Law

Division, Monmouth County, Docket No. L-0203-08.

Anthony J. Davis argued the cause for appellant

(Nicoll Davis & Spinella, LLP, attorneys; Anthony J.

Davis and Steven C. DePalma, on the briefs).

Bruce D. Meller argued the cause for respondents

(Peckar & Abramson, PC, attorneys; Bruce D. Meller

and Patrick T. Murray, on the brief).

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The opinion of the court was delivered by

FASCIALE, J.A.D.

In 2011, the Legislature substantially amended multiple sections of the

Construction Lien Law, N.J.S.A. 2A:44A-1 to -38 (the 2011 amended CLL).

This appeal requires us to decide whether N.J.S.A. 2A:44A-6(a)(1) and

N.J.S.A. 2A:44A-8 (the signatory-requirement amendments) apply

retroactively. We limit our holding to the retroactive effect of that part of the

signatory-requirement amendments that replaced the previous mandate that a

"duly authorized officer" sign a corporate construction lien. We do so because

the signatory-requirement amendments, and the 2011 amended CLL in general,

contain other significant changes, which potential retroactive effect are not at

issue in this appeal.

Sloan & Company, Inc. (Sloan) appeals from five orders entered after

Sloan filed its construction lien claim in 2008. 1 At that time, a corporate

claimant – like Sloan – had to show that it "duly authorized" an officer to sign

Sloan appealed from an October 25, 2013 order granting partial summary

judgment to Diamond Beach, LLC (Diamond Beach) and First Indemnity of

America Insurance Company (FIA) (collectively defendants). Sloan also

appealed from a June 6, 2014 judgment discharging Sloan's construction lien; a

September 26, 2014 revised order correcting clerical errors; a December 4,

2015 order awarding costs and counsel fees to Diamond Beach under N.J.S.A.

2A:44A-15; and a January 13, 2017 order denying Sloan's motion to vacate the

interlocutory orders. In November 2017, Diamond Beach dismissed its

remaining claim, which brought finality to the lawsuit.

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its lien-claim form. After conducting a plenary hearing in 2014, the judge

found that the individual who signed Sloan's lien-claim form – Robert Luderer

– was not a "duly authorized officer." Instead, he was an "Accounting &

Information Systems Manager," a position that Sloan maintains satisfies the

signatory requirements of the new law.

In early 2016, Sloan unsuccessfully attempted to vacate all the orders,

arguing for the first time that the signatory-requirement amendments applied

retroactively. Sloan contended that in so amending the CLL, the Legislature

was "clarifying" the meaning of "duly authorized officer." But in 2011, the

Legislature did not "clarify" what it meant by "duly authorized officer"; it

deleted the phrase altogether from the original text of N.J.S.A. 2A:44A-6, and

required compliance with a new claim form identified in N.J.S.A. 2A:44A-8

(the Section 8 claim form).

The Section 8 claim form changed who can now sign a corporate lien

claim. Under paragraph one, the signatory must be an "officer/member" of the

corporate entity. And under a section entitled "Suggested Notarial for

Corporate . . . Claimant," a notary must be satisfied that the signatory is a

"Secretary (or other officer/manager/agent) of the Corporation." The signatory

must now swear or affirm – unlike before – that he or she possesses authority

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to act on behalf of the corporate claimant by "virtue of its By[-]laws, or

Resolution of its Board of Directors."

We conclude that the signatory-requirement amendments at issue are not

"curative" for purposes of retroactivity analysis. There is no basis to conclude

that the Legislature eliminated the phrase "duly authorized officer" to cure

defects, inadvertence, or error in the CLL or in its administration; or did so to

explain the intent of that part of the CLL; or to clarify, rather than change, the

signatory requirement. Instead, it deleted "duly authorized officer" from the

text, and created new requirements for signing corporate construction lien

claims.2

In addition to removing the phrase "duly authorized officer," the Legislature

created the Section 8 claim form – which is substantially different than before

– by deleting the entirety of N.J.S.A. 2A:44A-6, which had read as follows:

A lien claim shall be signed, acknowledged and

verified by oath of the claimant or, in the case of a

partnership or corporation, a partner or duly

authorized officer thereof, and filed with the county

clerk not later than 90 days following the date the last

work, services, material or equipment was provided

for which payment is claimed. No lien shall attach,

or be enforceable under the provisions of this act and,

in the case of a residential construction contract,

compliance with sections 20 and 21 of this act, unless

the lien claim is filed in the form, manner and within

the time provided by this section and section 8 of this

act, and a copy thereof served on the owner and, if

any, the contractor and the subcontractor, against

(continued)

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We therefore reject Sloan's retroactivity argument, and hold that the

signatory section of the 2011 signatory-requirement amendments applies

prospectively. We defer to the judge's factual findings at the plenary hearing,

which are supported by substantial evidence in the record, and conclude that

the judge correctly applied the governing law. Accordingly, we affirm the

orders under review.

Diamond Beach originally owned several acres of vacant land (the

Property). It developed the Property as a condominium community, generally

consisting of almost 100 residential units, a nine-story building, and

recreational and parking facilities (the Project). Diamond Beach retained

March Associates, Inc. (March) as the general contractor, who subcontracted

carpentry work to Sloan. March filed a Chapter 11 Bankruptcy Petition and

did not pay Sloan for the work Sloan allegedly performed on the Project. First

Indemnity of America Insurance Company issued bonds to secure Sloan's lien.

When Luderer signed Sloan's lien-claim form in 2008, he did not

identify himself as Sloan's "duly authorized officer." Rather, in three separate

sections of the form, he referred to himself as an "Accounting & I[nformation]

(continued)

whom the claim is asserted, pursuant to section 7 of

this act.

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S[ystems] Manager." Defendants filed a motion for summary judgment and

argued that in 2008, N.J.S.A. 2A:44A-6 required a "duly authorized officer" to

sign a corporate lien claim. Defendants contended that Luderer was a

manager, not a "duly authorized officer," and therefore sought to discharge the

lien because he lacked authority to sign it.

In opposition to the motion, Sloan submitted a certification from Scott

Casabona, Sloan's President as of 2002. He certified that Luderer signed the

lien claim as Sloan's "duly authorized corporate officer." Casabona explained

further that

Mr. Luderer was acting in this capacity on behalf of

Sloan prior to the time I became President and a

member of the Board of Directors. Sloan had duly

authorized Mr. Luderer to act as an officer for

purposes of collecting monies owed to the company[,]

and [for] signing and filing construction liens on

behalf of the company prior to the time that I joined

Sloan.

[Emphasis added.]

According to Casabona, "Luderer . . . was duly authorized by the prior

President, Peter Shanley, and the Board of Directors[,] when he was [first]

hired to . . . sign[] and fil[e] [Sloan's] construction lien[s] . . . ." Shanley did

not produce his own certification in opposition to the motion – although he

could have – and he did not have an opportunity to testify at the hearing

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because he died three months after Sloan opposed the summary judgment

motion.

On the return date of the motion, the judge found that Casabona's

certification created a genuine issue of material fact about whether Luderer

was a "duly authorized officer," which precluded summary judgment. The

judge permitted the parties to engage in discovery on that issue. She then

conducted the plenary hearing.

At the plenary hearing, Casabona dealt head-on with the absence of any

written corroborative evidence that verified Luderer was a "duly authorized

officer." He explained that Sloan's Board of Directors did not issue written

resolutions or minutes memorializing its elections of officers. For example, he

testified that although Sloan "followed all of its corporate formalities in

holding [the] meeting [that elected Casabona as] [P]resident," there was no

written resolution reflecting that election. Likewise, when the Board first

elected Casabona as Vice President, there were no resolutions or minutes

confirming that election. He emphasized that this method of conducting

business was "just the way [Sloan] operated."

Casabona acknowledged that Sloan's by-laws required the Board to elect

officers. He testified that under Article 5, Section 1 of Sloan's by-laws – the

section relating to officers – Sloan's Board of Directors was required to "elect

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a president, a treasurer and a secretary, and it may elect such other officers

including one or more vice presidents as it shall deem necessary." According

to the by-laws, the election was to occur at Sloan's "regular meeting following

the annual meeting of shareholders." He stated that Sloan's by-laws and

certificate of incorporation did not require that the Board of Directors

memorialize those elections in writing. Without any personal knowledge

about the actual election, he explained that the Board elected Luderer as an

officer in accordance with these practices and procedures.

Casabona then described Luderer's role at Sloan, particularly the alleged

authority that Sloan had given Luderer as an officer to file and sign

construction liens. Casabona said Luderer was part of Sloan's "executive

team," which entitled him to participate in management, executive, and Board

meetings by making presentations to shareholders and other directors.

Casabona testified that Luderer reported directly to him. Casabona said that he

observed Shanley interact with Luderer and watched them working together on

accounts receivables, which Casabona believed led to Luderer signing Sloan's

liens under Shanley's supervision. Casabona testified that when he was elected

President, Shanley told him to "manage the company in the same manner."

Consequently, Luderer still had weekly meetings about accounts receivables,

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except he met with Casabona, who said he continued the practice of Luderer

signing Sloan's construction liens allegedly as a "duly authorized officer."

Luderer also testified at the hearing. He stated that Shanley hired him in

1995 to be Sloan's credit and collections manager. Approximately three years

later, he became the accounting manager. At some point before 2000, Luderer

learned that Sloan's Board had allegedly elected him as a "duly authorized

officer for signing and executing and pursuing construction liens." He said

Shanley told him that the Board authorized him to sign its liens (although he

provided no details as to the alleged conversation). 3 Luderer identified Sloan's

corporate officers, but he did not identify himself as such.4 He produced no

written proof, however, that he was a corporate officer.

Defendants objected to what Luderer said Shanley told him, but the judge

overruled that objection relying on N.J.R.E. 804(b)(6) (providing a hearsay

exception for "a statement made by a person unavailable as a witness because

of death if the statement was made in good faith upon declarant's personal

knowledge in circumstances indicating that it is trustworthy"). On appeal,

defendants argued in their merits brief that the judge abused her discretion on

this ruling. The judge however, stated she would admit the statements by

Shanley and give them the weight that they deserved. Her ruling reflects she

gave little, if any, weight to the statements. So therefore, even if there was an

abuse of discretion, it was harmless.

Sloan's interrogatory answers identified Luderer as an "Accounting &

I[nformation] S[ystems] Manager," which Luderer certified as true. Sloan

produced him for a deposition as a corporate designee – not an officer – where

he listed the names of all corporate officers, except himself.

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The judge rendered an oral opinion after the testimony concluded. To

determine whether Luderer was a "duly authorized officer," the judge relied in

part on D.D.B. Interior Contracting, Inc. v. Trends Urban Renewal Ass'n, Ltd.,

176 N.J. 164 (2003). Recognizing that D.D.B. was not directly on point, the

judge stated that

[a]lthough the Court permitted the exception of

validating the lien claim [in D.D.B.], it made it

explicitly clear that going forward, corporations must

comply with their certificates of incorporation and

by[-]laws to [e]nsure that the person executing the

duty of filing a construction lien must be a corporate

officer.

Here, again there is a dearth of supporting

evidence [that] this appointment or election, . . . took

place or was memorialized.

[Emphasis added.]

At the hearing, Sloan did not produce any Board member who participated in

the election of Luderer as a "duly authorized officer." Concluding that there

was "no [written] proof" and no "direct [credible] testimony" that an election

had been held giving Luderer "some sort of designation as a corporate officer,"

the judge granted summary judgment to defendants and discharged the lien. 5

Luderer testified that he remembered Shanley had written a letter to another

contractor in 1998, in which Shanley had stated that Luderer had authority to

sign lien waivers (not file lien claims). Although Sloan could not locate the

letter, Luderer said he remembered its contents, sixteen years later. The judge

(continued)

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In September 2014, the judge entered the order discharging the lien, and in

December 2015, she awarded costs, expenses, and counsel fees to Diamond

Beach.

Sloan did not file a timely motion for reconsideration under Rule 4:49-2.

Rather, three and one-half months later, Sloan filed a motion under Rule 4:42-

2, which permits the judge to certify interlocutory orders as final under certain

circumstances. Sloan's counsel certified that as of March 16, 2016, the orders

granting summary judgment to defendants, discharging the lien, and awarding

fees to defendants were interlocutory. But Sloan did not ask the judge to

certify the orders as final (for purposes of an appeal as Rule 4:42-2

contemplates).6 Instead, Sloan sought to vacate the orders by raising for the

first time its retroactivity argument.

Sloan argued the signatory-requirement amendments applied

retroactively because the Legislature purportedly clarified N.J.S.A. 2A:44A-6

by requiring the person signing the lien to be an "officer/member" of the

corporate claimant, instead of a "duly authorized officer." Sloan asserted that

(continued)

disbelieved Luderer's testimony about the letter and the purported authority

Sloan had granted under it.

We had already denied leave to appeal before Sloan had filed its Rule 4:42-2

motion.

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the Legislature further clarified N.J.S.A. 2A:44A-6 by creating the Section 8

claim form, which Sloan asserted required a notary be satisfied that the

signatory be a "[s]ecretary (or other officer/manager/agent) of the

[c]orporation." (Emphasis added). This was a new requirement in the 2011

claim form. The judge concluded that the Legislature did not intend to clarify

the term "duly authorized officer," declined to apply the signatory-requirement

amendments retroactively, and denied Sloan's motion.

II.

We begin by addressing Sloan's argument that the signatory-requirement

amendments – specifically that part dealing with the signing of a corporate-

construction lien claim form – apply retroactively. We review this contention

de novo, as the question of whether an amended statute applies retroactively is

purely a legal one. Ardan v. Bd. of Review, 231 N.J. 589, 608 (2018).

"Settled rules of statutory construction favor prospective rather than

retroactive application of new legislation." Id. at 609. We favor prospective

application "based on our long-held notions of fairness and due process." Id.

at 610. As to the standard for determining whether to apply a statute

retroactively, Justice Patterson writing for the Court stated:

We consider (1) whether the Legislature intended to

give the statute retroactive application and (2) whether

retroactive application will result in either an

unconstitutional interference with vested rights or a

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manifest injustice. Applying the first prong of the

retroactivity standard, we recognize three

circumstances that justify affording a statute

retroactive effect: (1) when the Legislature expresses

its intent that the law apply retroactively, either

expressly or implicitly; (2) when an amendment is

curative; or (3) when the expectations of the parties so

warrant.

[Ibid. (citations omitted).]

Here, it is undisputed that the Legislature did not "express[] its intent that the

[signatory change] apply retroactively, either expressly or implicitly," and

there is no suggestion at all that the parties expected retroactive application.

The parties focused – as we do – on whether that part of the signatory-

requirement amendments dealing with the signing of a corporate lien claim

were "curative." 7

A statutory provision is curative if it is "designed to remedy a perceived

imperfection in or misapplication of a statute." Id. at 611. "[A]n amendment

is curative if it does not alter the act in any substantial way, but merely

clarifie[s] the legislative intent behind the [previous] act." Ibid. (alterations in

original).

Because we have concluded that the Legislature did not intend to apply that

part of the signatory-requirement amendments under review retroactively, we

need not reach the question of whether retroactive application would give rise

to "either an unconstitutional interference with vested rights or a manifest

injustice."

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A curative act is a statute passed to cure defects

in prior law . . . . Generally, curative acts are made

necessary by inadvertence or error in the original

enactment of a statute or in its administration. . . .

Under the "curative" exception to the general rule

against retroactive application of statutes, an

amendment to a statute can be given retroactive effect

if it is designed merely to carry out or explain the

intent of the original legislation.

. . . [A]n amendment may be applied

retroactively if it is curative and it is intended to

clarify rather than change the law, and as long as there

is no interference with vested rights or contractual

obligations.

[2 Sutherland, Statutory Construction, § 41:11 at 503-

08 (7th ed. 2009) (emphasis added).]

Moreover, "a legislative amendment is not considered 'curative' merely

because the Legislature has altered a statute so that it better serves public

policy objectives." Ardan, 231 N.J. at 612.

We have previously stated "there is a clear and significant difference

between an amendment intended to correct a judicial misinterpretation of an

existing legislative act and one that simply improves upon an existing statutory

scheme, as a matter of public policy." Olkusz v. Brown, 401 N.J. Super. 496,

505 (App. Div. 2008).tute it acts in good faith and seeks, by the amendment, to

improve the scheme. If this was all that was required in order to meet the

curative exception, every amendment would automatically be subject to

retroactive application and the exception would engulf the rule of

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prospectivity. This cannot be countenanced. As we have observed, there are

reasons based on considerations of fairness for the rule of prospectivity. This

is why the exceptions to the rule have been carefully circumscribed. To

consider an enactment which 'improves' the statutory scheme (in itself a

painfully subjective determination) as meeting the curative exception is at odds

with the fundamental principal of fairness that new laws should not affect

situations which predated them."

[Ibid. (quoting Kendall v. Snedeker, 219 N.J. Super.

283, 289 (App. Div. 1987)).]

Defendants maintain that the sections of the signatory-requirement

amendments at issue do not cure a misinterpretation of the law. They argue

that the legislative history does not mention the courts have misinterpreted the

meaning of "duly authorized officer." Defendants contend that if there was

any confusion – which they say did not exist – five years before Luderer had

signed the lien, D.D.B. addressed, at least implicitly, the need to ensure

corporations elect officers following their by-laws and certificates of

incorporation. Sloan argues, however, that the signatory amendments were in

response to D.D.B. and Gallo v. Sphere Construction Corp., 293 N.J. Super.

558, 566 (Ch. Div. 1996) (invalidating a lien signed by a lawyer without a

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power of attorney (POA)), but there is nothing in the legislative history of the

2011 amended CLL to support Sloan's contention.

Determining retroactivity requires us to summarize briefly the evolution

of the CLL and the 2011 amended CLL. In 1993, the Legislature repealed the

Mechanics Lien Law, N.J.S.A. 2A:44-64 to -124, and replaced it with the CLL,

effective 1994. As part of the 2011 amended CLL – not just that part of the

signatory amendments at issue – the New Jersey Assembly Financial

Institutions and Insurance Committee and the Senate Commerce Committee

explained that the bill amending the CLL embodied the text of a 2009 New

Jersey Law Revision Commission Final Report on the CLL (the NJLRC

Report). Indeed, the 2011 amended CLL generally followed the substantial

recommendations contained in the NJLRC Report. See NRG REMA LLC v.

Creative Envtl. Sols. Corp., 454 N.J. Super. 578, 600-01 (App. Div. 2018)

(acknowledging that the 2011 amended CLL generally followed the

recommendations of the NJLRC Report, which did not address the reason for

dropping "duly authorized officer" from the text of Section 6). 8

The NJLRC Report thoroughly explained the overriding need for the

2011 amended CLL. The primary focus of the 2011 amended CLL was to

Whether the Legislature clarified other sections of the comprehensive 2011

amended CLL – beyond that part of the signatory amendments under review –

is not before us.

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address "the statute's residential construction provisions." NJLRC Report at 2.

Our case has nothing to do with residential construction provisions. The 2011

amended CLL provided much needed definitions for important terms that were

absent or problematic, such as "lien claim," "lien fund," "contract," and

"filing." Id. at 3. And it explained that the CLL omitted other provisions that

would have "improve[d] [the] application of the [CLL];" and the CLL

conflicted with "industry practice and [was] not workable or desirable." Ibid.

The 2011 amended CLL, therefore, added definitions; rearranged and

amplified provisions; adopted court pronouncements as to "concepts of

contract price, lien fund[,] and lien claim;" defined the role of arbitrators; and

modified time limits for residential construction lien claims. Id. at 4. As

reflected in the NJLRC Report, the 2011 amended CLL made "it easier for

participants in the construction industry to use the law." Ibid.

There is no basis to conclude that the Legislature clarified its intent as to

the meaning of the phrase "duly authorized officer." The Legislature did not

declare explicitly or implicitly that it intended to clarify that term. The

NJLRC Report recommendations – which relate to the need to amend N.J.S.A.

2A:44A-6 and N.J.S.A. 2A:44A-8 – pertain solely to recommendations

unrelated to signatory requirements for corporate construction lien claims.

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For example, as to N.J.S.A. 2A:44A-6, the NJLRC Report states that the

2011 amended CLL modified the definition of "filing" in N.J.S.A. 2A:44A -2 to

address "practical concerns, distinguishing 'lodging for record,' and making a

distinction, in [N.J.S.A.] 2A:44A-6, for purposes of enforcement of [a] lien

claim . . . ." Id. at 4. Along those lines, the revisions to N.J.S.A. 2A:44A-6

made "the lien claim filing procedure easier to understand [as to] [t]he

distinction between 'filing' and 'lodging for record' for purposes of

enforceability of the lien," and by extending the deadline for residential

construction lien claims. Id. at 5.

And the Legislature substantially revised the Section 8 claim form.

Under N.J.S.A. 2A:44A-6(a)(1), "[t]he lien claim form as provided by section

8 of P.L.1993, c.318 ([N.J.S.A] 2A:44A-8) shall be signed, acknowledged and

verified by oath of the claimant . . . ." The Legislature dropped "duly

authorized officer" from Section 6 and instead required compliance with the

new Section 8 claim form, which requires corporate authorization through by-

laws or board resolution. Under paragraph one of Section 8, the new form now

requires an "officer/member" to sign the form. In addition, the Section 8 form

now prescribes a new requirement.

The notary must be satisfied that the signatory is "the

Secretary (or other officer/manager/agent) of the

Corporation (partnership or limited liability

company)." N.J.S.A. 2A:44A-8 (Suggested Notarial

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for Corporate or Limited Liability Claimant). The

signatory must swear or affirm before a notary that he

or she possessed "authority to act on behalf of the

Corporation (partnership or limited liability company)

. . . ." Ibid. The signatory "by virtue of its By[-]laws,

or Resolution of its Board of Directors (or partnership

or operating agreement)" must have "executed" the

lien claim.[9] Ibid.

[NRG REMA LLC, 454 N.J. Super. at 599 (emphasis

added).]

Like our conclusion as to N.J.S.A. 2A:44A-6(a)(1), there is no basis to

conclude that the Legislature eliminated the phrase "duly authorized officer"

The prescribed notary's statement states in full:

SUGGESTED NOTARIAL FOR CORPORATE OR

LIMITED LIABILITY CLAIMANT:

On this ___ day of ____ 20__, before me, the

subscriber, personally appeared (person signing on

behalf of claimant(s)) who, I am satisfied is the

Secretary (or other officer/manager/agent) of the

Corporation (partnership or limited liability company)

named herein and who by me duly sworn/affirmed,

asserted authority to act on behalf of the Corporation

(partnership or limited liability company) and who, by

virtue of its By[-]laws, or Resolution of its Board of

Directors (or partnership or operating agreement)

executed the within instrument on its behalf, and

thereupon acknowledged that claimant signed, sealed

and delivered same as claimant's act and deed, for the

purposes herein expressed.

[N.J.S.A. 2A:44A-8 (emphasis added).]

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and required compliance with the Section 8 claim form as a means to cure

defects, inadvertence, or error in the CLL, or in the administration of the

signatory requirement. There exists no evidence that the Legislature did so to

carry out or explain its intent as to that part of the CLL.

III.

Sloan argues alternatively – for the first time – that the judge used the

wrong test to determine whether Luderer was a "duly authorized officer."

Sloan contends that the judge placed too much emphasis on the holding in

D.D.B. by focusing on whether the Board of Directors complied with its

certificate of incorporation or by-laws when it allegedly elected Luderer as a

"duly authorized officer." According to Sloan, the judge should have

considered the totality of the evidence rather than focusing on compliance with

the by-laws or certificate of incorporation.

The judge's findings are binding on appeal if they are supported by

"adequate, substantial and credible evidence." Rova Farms Resort, Inc. v.

Inv'rs Ins. Co. of Am., 65 N.J. 474, 484 (1974). We review a "trial [judge]'s

interpretation of the law and the legal consequences that flow from established

facts" de novo. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140

N.J. 366, 378 (1995). Applying this standard, we see no error, let alone error

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that is "clearly capable of producing an unjust result." See R. 2:10-2 (applying

the plain error standard to arguments not raised before the trial court).

The judge correctly applied the CLL as it existed in 2008. She

recognized that N.J.S.A. 2A:44A-6 required Luderer to sign Sloan's lien as a

"duly authorized officer." Acknowledging that the parties disputed whether

Sloan "duly authorized" Luderer to sign the lien as an officer, the judge and

parties focused the plenary hearing on whether he was such an officer,

especially and importantly, because of the specific language of the Sloan lien

form that he signed.

Sloan's construction lien-claim form consists of five pages. On page

five, Luderer signed an "Acknowledgment of Corporation" certifying that he

signed the lien as the "Accounting & I[nformation] S[ystems] Manager" (not

"duly authorized officer") of Sloan, and that Sloan authorized him to do so "by

a proper resolution of [Sloan's] Board of Directors." The judge focused,

although not exclusively, on the nature of that purported Board resolution.

In doing so, she recognized that D.D.B. was not directly on point. In

D.D.B., the Court held – under the unique facts of that case – that D.D.B.

satisfied the signatory requirements of N.J.S.A. 2A:44A-6 because its sole

owner executed a POA intending to confer authority to an attorney to sign its

construction lien. 176 N.J. at 169-70. Here, the disputed question of fact was

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whether Luderer was a "duly authorized officer," not whether Sloan signed a

POA giving Luderer authority to sign the lien. Regardless, the claim form that

Luderer signed necessitated consideration of whether the Board of Directors

issued a Resolution conferring the requisite authority to act as a corporate

officer.10

We reject Sloan's argument, raised for the first time on appeal, that the

judge should have concentrated more on whether Sloan conferred authority on

Luderer the way D.D.B. intended to confer authority on the attorney who

signed D.D.B.'s lien. Sloan contends that the judge placed too much emphasis

on its by-laws and certificate of incorporation by misinterpreting the following

language in the D.D.B. opinion, which the Court issued five years before

Luderer signed Sloan's lien:

Nonetheless, we recognize that harm to a corporation

or its shareholders or prejudice to interested parties

may result when an individual who signs a lien claim

form on behalf of a corporation is not an officer of

that corporation. Accordingly, in the future when a

corporation intends to appoint an attorney to sign,

acknowledge and verify a lien claim, that corporation

must comply with its certificate of incorporation and

by[-]laws to ensure that the attorney executing those

We note that even if the signatory requirement applied retroactively – which

is not the case – Sloan would still have to demonstrate that he acted "by virtue

of its By[-]laws, or Resolution of its Board of Directors." There exists

sufficient credible evidence in the record to support the judge's finding that

Luderer did not act accordingly.

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duties is a corporate officer. Execution of a power of

attorney will be deemed inadequate to vest an

attorney-in-fact with the authority of a "duly

authorized officer" pursuant to N.J.S.A. 2A:44A-6.

[Id. at 170.]

The judge considered Sloan's purported "resolution" not because of this

language (although she certainly considered it), but rather, because of the

reference to the resolution on page five of the lien itself. And she considered

all the other evidence to resolve whether the Board of Directors otherwise

elected Luderer as an officer and "duly authorized" him to sign the lien.

The evidence adduced at the plenary hearing demonstrated that Luderer

was an Accounting & Information Systems Manager.11 The Board of Directors

did not identify Luderer in any resolution, by-law provision, or other written

document as a corporate officer, or otherwise. Sloan did not memorialize in

writing that it authorized Luderer to execute lien claims. Sloan's documents

that required identification of corporate officers omitted Luderer's name.

Although requests for classification forms (needed for classification by the

Division of Property and Management) mandated identification of corporate

Sloan belatedly raised its retroactivity argument, because the Notarial

mandate in the 2011 Section 8 claim form refers to "Secretary (or other

officer/manager/agent) of the Corporation." As such, Sloan argued that under

that language, Luderer could sign the lien claim as a manager. But Sloan

would still need to show, under paragraph one of the Section 8 claim form, that

he was also an "officer/member," which it cannot do.

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officers, Luderer's name was missing. Sloan produced no credible evidence to

prove that the Board of Directors, as the "Acknowledgment of Corporation"

form says, authorized Luderer's authority in a Board resolution. Additionally,

Luderer is not listed as an officer in corporate meeting minutes, filing forms,

consents of shareholders in lieu of meetings, Luderer's personnel file , or any