New Jersey Court Rules That Invalidity of Architect’s Certification Does Not Preclude Owner From Terminating Contract for Material Breach

Ingrassia Constr. Co., Inc. v. Vernon Township Bd. of Educ.
No. A-3954-00T2F, 2001 N.J. Super. LEXIS 411 (N.J. Super. App. Div. Nov. 8, 2001)

Ingrassia Construction Co., Inc. (“Ingrassia”) entered into a contract with the Vernon Township Board of Education (“Board”) pursuant to which Ingrassia agreed to perform renovations of and additions to the Vernon Township High School. Ingrassia’s performance of its work scope was subject to several milestone dates. Despite this obligation, Ingrassia consistently failed to perform in accordance with the project schedule.

The contract provided that the Board could terminate Ingrassia for cause upon certification by the Architect that sufficient cause did, in fact, exist. The Board’s Architect, who was not licensed in the United States, provided a certificate stating only that Ingrassia missed the project’s milestone dates. Relying on this certification, the Board terminated Ingrassia for cause.

Ingrassia responded by filing a claim and asserting that the Board improperly based its termination decision on a defective architect’s certificate. The trial court agreed, concluding as a matter of law that the certification by an unlicensed architect failed to meet the requirements of the contract. The Court granted Ingrassia’s motion for summary judgment, awarded Ingrassia its requested damages, and dismissed the Board’s counterclaims.

On appeal, the Appellate Division agreed that the Architect’s certification failed to meet the requirements of the parties’ contract. It disagreed, however, as to the effect of the invalid certification. According to the Court, a proper certification was not a condition precedent to the Board’s right to terminate the contract. A proper certification served only to provide the owner with a conclusive presumption (subject to only limited review) that its decision to terminate was correct. Even without such a certification, however, the Board still maintained its common law right to demonstrate that Ingrassia committed a material breach of the parties’ agreement. Accordingly, the appellate court reversed the trial court’s award of summary judgment, and remanded the matter so that the Board could attempt to prove a material breach at trial.

For full text of decision, click here.

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