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Sal Elec. Co. v. Pike Co.

Superior Court of New Jersey, Appellate Division

January 13, 2020, Argued; April 13, 2020, Decided

DOCKET NOS. A-5657-18T1, A-5658-18T1

Opinion

PER CURIAM

These appeals were argued back-to-back, and we consolidate them now in a single opinion because they involve the same parties and present common legal issues. Defendant, The Pike Company, Inc. (Pike), a New York general contractor, entered into contracts (the Prime Contracts) with Wegmans Food Markets, Inc. (Wegmans), to construct two supermarkets in Montvale and Hanover, New Jersey. Pike, in turn, executed a master subcontractor agreement (MSA) with plaintiff, SAL Electric Company, Inc. (SAL), to perform electrical work at both locations. Pike and SAL executed a "[w]ork [o]rder" for each location under the terms of the MSA.

The Prime Contract included a forum selection clause by which Pike and Wegmans [*2]  "consent[ed], with respect to any litigation arising out of or related to [the Prime Contract], to the exclusive jurisdiction and venue of the Supreme Court, Monroe County, New York[,] or the United Federal District Court in Rochester, New York." Pike and Wegmans agreed to follow the dispute resolution procedures thereafter outlined in the Prime Contract prior to commencing any litigation.

The MSA contained no forum selection clause. However, it required all disputes to be submitted first to mediation in Monroe County, New York, and, failing resolution, all disputes were to be "settled according to the disputes resolution procedures in the Prime Contract."

As we discuss more fully below, SAL claimed payments were due and owing under the MSA, and it eventually filed construction liens against both projects and complaints in two vicinages alleging, among other causes of action, breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and claims under the Construction Lien Law (CLL), N.J.S.A. 2A:44A-1 to - 38, and the Prompt Payment Act (PPA), N.J.S.A. 2A:30A-1 to - 2. Representing all defendants,1 Pike moved to dismiss the complaints, arguing the Law Division lacked subject matter [*3]  jurisdiction because the forum selection clause in the Prime Contracts required any litigation be brought in New York state. The two Law Division judges took different paths, but each denied Pike's motion.

In whole or in part, both judges relied upon N.J.S.A. 2A:30A-2(f), that provision of the PPA which states, "In any civil action brought to collect payments pursuant to this section, the action shall be conducted inside of this State and the prevailing party shall be awarded reasonable costs and attorney fees." (emphasis added). And, relying on a recently issued unpublished opinion of this court, both judges concluded that because N.J.S.A. 2A:30A-2(f) reflected the strong public policy of this state, the forum selection provision in the Prime Contracts violated that public policy and was unenforceable. We granted Pike's motions for leave to appeal.

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2020 N.J. Super. Unpub. LEXIS 658 *

SAL ELECTRIC COMPANY, INC., Plaintiff-Respondent, v. THE PIKE COMPANY, INC., WEGMANS FOOD MARKETS, INC., THE FIDELITY AND DEPOSIT COMPANY OF MARYLAND, Defendants-Appellants.

Notice: NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION.

PLEASE CONSULT NEW JERSEY RULE 1:36-3 FOR CITATION OF UNPUBLISHED OPINIONS.

Prior History:  [*1] On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1169-19, and Morris County, Docket No. L-0347-19.

CORE TERMS

mediation, forum selection clause, Contracts, disputes, dispute resolution, arbitration, forum selection, parties, public policy, provisions, appeals, subcontractor, ambiguous, venue, Documents, commence, binding, terms