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Bartolotta v. Perrone

A-6333-02T5 (N.J. Super. App. Div. 2005) (Unpublished)

CORPORATIONS; OFFICERS; CONSUMER FRAUD —A party who contracts with a corporation may not recover breach of contract damages from that corporation’s officer just because all of the dealings were with him or her.

A husband and wife entered into a contract with a contractor to build a deck on the side of their home. The start date in the contract was vague and provided that the work was to commence in “4 to 6 weeks.” The couple believed that the construction was to begin four to six weeks after the signing of the contract. Conversely, the construction company was under the assumption that the work was to commence four to six weeks from the date municipal permits were obtained for the project. The initial plans submitted to the municipality were rejected because of wetlands on the property and because the plans did not cover any electrical work. Revised plans were later submitted. They were approved six weeks after the contract was signed. Two weeks later, footing holes were dug on the property where the deck was to be built. Shortly thereafter, the holes were inspected and approved by the municipality. Within a week, cement was poured for the footings and the construction company’s president told the couple that the cement would take twenty-eight days to cure. After this time, support columns were installed and the couple was asked to choose decking material. The couple chose a material that the construction company did not have readily available and so there was a delay in shipping. Only some of the decking material was delivered a month later, and the rest of the material was delivered two weeks later. The couple then left a telephone message for the contractor’s president informing him that they wanted a start date within twenty-four hours or they would consider the contract null and void. The president never returned their phone call and assumed that the contract had been cancelled for his failure to respond. The couple later sent a letter to the contractor’s president regarding the project. He also did not respond. The couple then hired another contractor to finish the work and sued the original construction company and its president for breach of contract and violation of the Consumer Fraud Act (Act). They sought the return of their deposit and reimbursement for monies paid to the successor contractor. The construction company counterclaimed for breach of contract and sought payment for materials and labor it had provided. The lower court awarded damages to the couple based on their breach of contract claim and denied its claims under the Act and its claims against the company’s president. The couple appealed the lower court’s determination, asserting that the lower court erred in dismissing its complaint against the president.

The Appellate Division affirmed the lower court’s ruling. It found that there was no basis for the couple to have filed an action against the president of the company because the president was not a party to the contract. The contract was between the couple and the company only. It further found that there was no reason for the couple to believe that they were dealing with the president in any capacity outside of his role as an officer and representative for the company. It held that a corporation is an entity wholly separate and distinct from the individuals that comprise and control it, and as a result rejected the couple’s claim against the president. In addition, the Court further rejected the couple’s actions under the Act. In order for there to be a violation, the contract had to lack a start date and completion date for the project. The Court found that the start date of “4 to 6 weeks” in the contract was valid and that the construction company correctly assumed that the work would commence after all necessary permits were obtained.

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