In a recent unpublished decision of the Appellate Division, a construction management company was seeking to recover 50% of the profits from the construction of two new buildings in Montclair. The Plaintiff claimed that he had brought the Defendant into the project because the Plaintiff did not have the bonding capacity or experience needed in order to be awarded the project, and also participated in some of the pre-construction services. While there appears to have been some verbal discussions regarding a possible joint venture, nothing was ever put in writing and the Plaintiff did not actually participate in the construction of the buildings.
In finding that there was no joint venture created, the court found that the Plaintiff was, "unable to contribute money, property, effort, knowledge, skill or other asset to the common undertaking. Plaintiff's contribution to the joint venture seems to have been simply connecting [the owner and the Defendant] to perform the necessary work." The panel affirmed the trial court and found that the Plaintiff did not make any substantial contribution to the venture, and lacked the relevant construction experience and bonding capacity for the project. Finally, the court cited Supreme Court authority for the proposition that there cannot be joint venture unless there is an agreement to share not just profits, but also losses, and that was not present here. Consequently, the mere referral of a customer was found to be an insufficient basis to form a joint venture. (The Holder Group, Inc. v. Pike Construction Co., LLC, et. al.)
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Peter J. Vazquez, Jr.