In C.H.S. Construction Co., Inc. v. Mast Construction Services, Inc., 2012 N.J. Super. LEXIS 337 (App. Div. February 16, 2012), New Jersey’s Appellate Division upheld the dismissal of a construction manager’s claim under an alleged teaming agreement, due to the contractor’s failure to introduce evidence of the profits it would have earned on the portion of the contract that it was prevented from performing. Defendant Mast Construction Services, Inc. (“Mast”) submitted a proposal to provide certain work around the Prudential Center in Newark, New Jersey as part of the Downtown Core District Redevelopment Plan. In connection with Mast’s proposal, Mast and plaintiff C.H.S. Construction Co, Inc. (“CHS”) agreed that CHS would be a 35% participant in Mast’s contract. Mast’s initial proposals were rejected, however, and the size of the work that was eventually awarded to Mast was substantially scaled down. Thereafter, CHS refused to sign the teaming agreement with Mast, apparently because it did not specify the 35% participation previously agreed upon. Despite the absence of a signed teaming agreement, CHS performed services for which Mast paid over a period of approximately six months. Later, however, CHS filed suit claiming that it was prevented from participating to a 35% share, and that it was entitled to a 35% share regardless of the scaled down nature of the work. Mast moved for summary judgment, and the trial court, assuming there was a breach of contract despite debatable issues of fact, granted the motion due to CHS’s failure to enumerate its damages in response to the motion. The proper measure of CHS’s damages, the court held, would be the loss of profits on the work that CHS claimed it was prevented from performing. CHS was able through discovery, depositions and/or by way of affidavit in response to the summary judgment motion, to calculate its purported loss of profits, but did not do so. Similarly, CHS provided no expert report on its projected lost profits, and the court rejected CHS’s assertion that it could sustain its burden of proof by simply presenting the damages-related testimony of its owner at trial. Because proof of damages was an element of CHS’s claim, the Appellate Division upheld the trial court’s dismissal, as CHS failed to present evidence of what its loss of profits would have been.
Posted by Michael W. O'Hara
@ February 20, 2012 03:45 PM EST