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Costello v. Schmidlin

decided: November 1, 1968.

MILTON COSTELLO, APPELLANT,
v.
EMIL A. SCHMIDLIN, DEFENDANT AND THIRD-PARTY PLAINTIFF, V. THE TOWNSHIP OF MAPLEWOOD, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, THIRD-PARTY DEFENDANT



Hastie, Chief Judge, and Kalodner and Staley, Circuit Judges.

Author: Kalodner

Opinion OF THE COURT

KALODNER, Circuit Judge.

Is a professional engineer's claim for consulting engineering services, rendered in New Jersey, to a New Jersey licensed architect, pursuant to contract, unenforceable as a matter of law by reason of the fact that the claimant was not licensed by the State of New Jersey as a professional engineer under N.J.S.A. 45:8-27 et seq.?

The District Court, in the instant diversity action, first answered the question in the negative in its Oral Decision at the conclusion of a three-day non-jury trial, and then answered it in the affirmative in a written Opinion presently unreported. This appeal followed.

The facts relevant to our disposition may be stated as follows:

The plaintiff, Milton Costello, is a professional engineer, specializing in the design and supervision of construction of swimming pools. He is licensed as a professional engineer in New York, where he resides and has his place of business, and in the states of Maryland, Illinois, and New Mexico. He is not licensed as a professional engineer in New Jersey.

The defendant, Emil A. Schmidlin, resides and has his place of business in New Jersey and is a licensed architect in that State.

The third-party defendant, the Township of Maplewood, is a New Jersey municipality.

On August 18, 1965, defendant entered into a written contract with the Township for the installation and construction of a municipal swimming pool complex. At the Township's request, he thereafter, in October 1965, entered into a written contract with plaintiff for his performance of certain engineering and other services in connection with the swimming pool project. This contract provided as follows: plaintiff would receive $15,000 as compensation; $3,000 as a retainer; $6,000 upon completion of plans; $3,000 upon award of contract or 60 days after issuance of plans and specifications for bidding, whichever occurred earlier; and $3,000 progress payments, pro rata, during the course of construction.

The Township, by a Supplemental Contract with defendant, agreed to reimburse him for one-half of plaintiff's $15,000 compensation. In accordance with that contract it reimbursed defendant for one-half of the $3,000 retainer fee he paid to plaintiff.

The plaintiff-defendant contract was captioned "Consulting Engineering Services Agreement." It expressly stated that defendant had a contract with the Township for furnishing complete professional services with respect to the construction of the swimming pool project, and that plaintiff's relationship to defendant should "* * * at all times be that of an Associate Consultant * * *." It described defendant as "Client" of plaintiff and stated that "* * * the Client shall, without limit, have final right of review and approval of all plans and specifications which shall be the essence of this contract."

The plans and specifications were completed and issued for bidding on January 12, 1966, and plaintiff, the next day, unsuccessfully billed defendant for the $6,000 which then became due, in accordance with the provisions of their contract. When the bids were received they were substantially higher than the Township's estimate and available funds, and plaintiff was requested by defendant to revise the plans and specifications to fit the available appropriation in contemplation of a re-invitation for bids. Plaintiff, in collaboration with defendant's staff, prepared and submitted changes to that end. During the preparation of these revisions, the Township invited plaintiff to attend a meeting of its governing body at which a different type of pool was considered and recommended by the Township's governing body and engineer. Plaintiff disapproved the suggested substitute but it was nevertheless approved and the bid of the manufacturer of the substituted pool was accepted by the Township.

On March 12, 1966, plaintiff unsuccessfully billed defendant for the $3,000 payment due 60 days after the issuance, on January 12, 1966, of the plans and specifications for bidding. Later, he billed defendant for the unpaid installments of $6,000 and $3,000 due on his contract, and an additional $8,000 for professional services not called for in the contract. Still later, he submitted an additional bill for the $3,000 final payment provided by his contract.

None of the stated bills were paid, and plaintiff then instituted the instant action against the defendant for the $12,000 billed under his contract and for $8,000 extra services.

Defendant, in his "Answer and Counterclaim" alleged that "plaintiff was in fact not able, competent, duly qualified and licensed to perform" the services specified by his contract, and that he "did not in fact perform in accordance with all of the material terms and conditions of his agreement." He also filed a two-count counterclaim against plaintiff; in Count I he sought recovery of the $3,000 retainer fee paid to plaintiff, and in Count II he claimed plaintiff owed him $12,000 for services rendered to plaintiff which he alleged were plaintiff's responsibility under their contract.

Defendant also filed a third-party complaint against the Township alleging therein that if he were held liable to plaintiff for the $12,000 contractual balance, Township was liable to him for one-half of that amount under the Township-defendant contract.

Defendant's evidence at the trial established the plaintiff's billings pursuant to his contract had not been paid only because Township had not prior thereto paid defendant, even though their payment had not been conditioned by the contract upon Township's prior payment to defendant.

In its oral judgment, at the conclusion of the testimony, the District Court, after ruling that plaintiff was not barred by New Jersey law from prosecuting his action, awarded him a judgment of $9,000 which it found was due him under his contract, and an additional $350, in quantum meruit, for work done on revisions of plans.

In its subsequent written Opinion, the District Court ruled that the plaintiff-defendant contract was "unenforcible [sic] here as contrary to the laws of New Jersey" by reason of the fact that plaintiff did not have a New Jersey professional engineer's license, and held seriatim (1) plaintiff could not maintain his action; (2) defendant was entitled to recover the $3,000 retainer he had paid plaintiff; and (3) "with respect to the second count of defendant's counterclaim against plaintiff [for $12,000], there is an absence of evidence supportive of any right to recover thereunder."

In its "Order for Judgment" the District Court (1) entered judgment, with costs, in favor of defendant and against plaintiff, and dismissed plaintiff's complaint "with prejudice"; (2) entered judgment in favor of the third-party defendant Township against defendant, and dismissed the latter's third party complaint "with prejudice"; (3) entered judgment in favor of defendant against plaintiff on the first count of defendant's counterclaim in ...


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