Pelaez Construction, LLC performed drywall, insulation, and related construction services on a mixed-use development project known as The Lofts at Pier Village in Long Branch, New Jersey. The work was connected to a construction project managed by Green Field Construction Group, LLC. Sean Brennan and Michael Tennyson were principals involved in Green Field Construction Group, LLC, and later in Green Field Builders Group, LLC, which was formed as a successor entity.
Pelaez Construction was initially retained as a subcontractor through Hevy Construction. After Hevy Construction was terminated from the project, Pelaez Construction entered into an oral agreement with Sean Brennan to complete remaining work on the project. Pelaez Construction completed the requested work and additional tasks at Brennan’s direction. Invoices were submitted for the services performed, and partial payments were made, but a substantial balance remained unpaid.
Pelaez Construction filed suit seeking recovery of unpaid amounts. During discovery, Pelaez Construction requested financial records and documents relevant to payment, corporate structure, and the handling of project funds. Green Field Construction Group, LLC, Green Field Builders Group, LLC, Sean Brennan, and Michael Tennyson asserted that many responsive documents had been deleted or were otherwise unavailable.
The trial court issued multiple discovery orders compelling production. When the required documents were not produced, the court struck the answers and defenses of Green Field Construction Group, LLC, Green Field Builders Group, LLC, Sean Brennan, and Michael Tennyson, first without prejudice and later with prejudice. The court ultimately entered default judgment against all four parties, jointly and severally, based on continued noncompliance with discovery obligations.
Following entry of default, the court conducted a proof hearing. At the outset, the court stated that liability had already been determined and that the hearing would be limited to damages. Pelaez Construction presented testimony and invoices detailing the work performed and the amounts billed. The court found the testimony credible and determined that Pelaez Construction completed the work satisfactorily.
The court calculated damages based on unpaid invoices and payments already made. It entered judgment against Green Field Construction Group, LLC and Green Field Builders Group, LLC in the amount of $202,500. The court declined to enter damages against Sean Brennan and Michael Tennyson, concluding that the evidence did not establish personal responsibility for payment.
Pelaez Construction moved for reconsideration, asserting that the prior default judgment imposed joint and several liability on all parties and that the proof hearing had been limited to damages only. The court denied reconsideration.
On appeal, the Appellate Division reviewed whether Pelaez Construction had fair notice of the proof required at the hearing. The court concluded that the trial court’s initial statements limited the scope of the hearing to damages and reasonably led Pelaez Construction to believe that individual liability was not at issue.
The Appellate Division held that the trial court’s later decision to deny damages against Sean Brennan and Michael Tennyson could not be reconciled with the hearing parameters previously set. Because Pelaez Construction was not given notice that it needed to prove individual responsibility for damages, the Appellate Division determined that the ruling deprived Pelaez Construction of a fair opportunity to present its case.
The Appellate Division affirmed the damages award against Green Field Construction Group, LLC and Green Field Builders Group, LLC. It vacated the portion of the judgment denying damages against Sean Brennan and Michael Tennyson and remanded the matter for further proceedings consistent with the prior default judgment and discovery rulings.
If you’re dealing with unpaid work, breach of construction agreements, or disputes arising from discovery noncompliance, Whitcomb Selinsky PC handles contract dispute matters. Reach out to our team to schedule a consultation and learn how our team can assist with your situation.