SHERMAN ZALENKO LLC v. SPYSTEF LLC SOFIA KALIAKATSOU STEVEN TSOUKAS (2010)

Before us is, hopefully, the final chapter in the long, protracted dispute between these parties.   Defendants Sophia Kaliakatsou and Steven Tsoukas are the principals of defendant Spystef, LLC.¹ Spystef contracted with Sherman and Zalenko, LLC (S & Z), a commercial and residential construction company, to construct a seven-townhouse development known as the Tara Greens project, for $125,000 per unit.   The contract also included the following:

 $185,095 for added site work plus twenty percent more for overhead and profit from site-clearing work;

 $118,000 for added water and sewer hookups (including $30,000 extra profit);

 $80,000 for added work on basements;  and

 $74,000 for added air conditioning work.

In addition to this project, Spystef invested $97,500 in a separate real estate venture with S & Z, known as the Bloomfield Avenue project;  Spystef also advanced a short-term loan to S & Z in the amount of $9000.

S & Z did not complete the Tara Greens project.   A dispute arose, resulting in litigation.   Following a five-day trial, the judge entered judgment awarding S & Z $225,485.   Included in the judge's calculations leading to this award were credits to Spystef for the $97,500 Bloomfield Avenue business venture investment and the $9000 short-term loan.   Spystef appealed, claiming several errors in the trial judge's calculation of damages.

We remanded the matter to have the judge address the following two issues:  (1) the discrepancy in the contract amount previously paid by Spystef, which one of the principals of S & Z testified was $1,194,529, as contrasted with the construction lien filed by S & Z reflecting a “[c]ontract amount paid to date” of $1,254,529.91;  and (2) to re-calculate the twenty percent allowance for overhead and profit according to the terms set by the parties.  Sherman & Zalenko, LLC v. Spystef, LLC, No. A-6305-06 (App.Div. December 11, 2008) (slip op. at 5, 8).

On March 13, 2009, the trial judge entered an amended decision, (1) reflecting that the twenty percent allowance for overhead and profit applied only to the $185,095 site work contract price;  and (2) adjusting the credit for payments previously made to the amount set forth in S & Z's construction lien, namely $1,254,529.91.   The judge entered an amended judgment in favor of S & Z for $54,584.09.

Spystef now appeals from that amended judgment, claiming that the trial judge failed to apply the credits totaling $106,500 ($97,500 plus $9000) which were previously applied to offset Spystef's outstanding obligation to S & Z. We concur.   Nowhere in her calculations on remand did the trial judge address the $106,500 in credits that had been granted to Spystef at trial.

The trial judge properly determined that the $1,254,529.91 amount reflected in the construction lien filed by S & Z was the “[c]ontract amount paid to date”.   However, that amount did not include the two non-construction related amounts at issue.   Thus, contrary to S & Z's contention, the trial judge did not “account for the $106,500 sought by defendants in the $1,254,529.91 offset given to them.”

Applying the credit of $106,500 against the March 13, 2009 amended judgment for $54,584.09 in favor of S & Z, results in a net judgment of $51,915.91 in favor of Spystef.   Accordingly, an amended judgment must be entered reflecting that award.   The matter is therefore remanded to the trial judge for entry of an amended judgment in conformity with this opinion.   See Mengle v. Shields, 53 N.J.Super. 76, 83 (App.Div.1958) (a judgment modified on appeal shall be remanded to the trial court “for the entry of an amended judgment in the proper amount”).

Reversed and remanded.

FOOTNOTES

FN1. Defendants will be referred herein collectively as “Spystef.”.  FN1. Defendants will be referred herein collectively as “Spystef.”

PER CURIAM