Tocci Building Corporation v. Trane U.S. Inc.

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
TOCCI BUILDING CORPORATION,
Plaintiff,
v.
TRANE U.S. INC. a/k/a TRANE COMPANY,
Defendant.
OPINION and ORDER
23-cv-110-jdp
Plaintiff Tocci Building Corporation and defendant Trane U.S. Inc. were both involved
in the construction of a new hotel owned by Connell Hospitality LLC. Tocci was the general
contractor; Trane was a subcontractor that was hired to design and manufacture the hotel’s
HVAC system. Tocci and Trane did not deal with each other directly. Rather, Tocci paid
another subcontractor, Quality Construction Heating and Air, Inc., which was supposed to pay
Trane. But Quality Construction did not pay Trane, leading Trane to file a lien against the
construction project. That led to trouble for Tocci.
Tocci says that Trane harmed Tocci in two main ways. First, Tocci says that it only
continued to pay Quality Construction because Trane represented that it was receiving
payments and waived its lien rights. Second, Tocci says that Trane agreed to allow Tocci to
purchase the 	HVAC 	equipment 	directly from 	Trane 	after Tocci learned that Quality
Construction was not making payments, but Trane then reneged on that agreement by
negotiating directly with Connell while also making misrepresentations to Connell about Tocci.
This, Tocci says, led to Connell terminating its contract with Tocci. Tocci asserts claims against
Trane for tortious interference with a contract, breach of implied contract, promissory estoppel,
and indemnity.
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Trane moves to dismiss each of Tocci’s claims for multiple reasons, including that they
are untimely, fail to state a claim, and are barred by an arbitration proceeding between Tocci
and Connell. The court agrees with Trane that the tortious interference and implied contract
claims are untimely and that Tocci has not stated a claim for indemnity. The case will proceed
on the promissory estoppel claim.
ALLEGATIONS OF FACT
The following allegations are taken from the complaint, attached documents, and
supplemental allegations in Tocci’s brief. The court accepts the allegations as true for the
purpose of Trane’s motion to dismiss.
In 2015, Connell Hospitality LLC hired Tocci to serve as the general contractor for the
construction of a hotel in Berkely Heights, New Jersey. Tocci hired Quality Construction
Heating and Air, Inc. as the subcontractor for the HVAC systems. Quality Construction hired
Trane “to design, fabricate, furnish, and test the HVAC equipment,” including the chillers.
Dkt. 1, ¶ 8.
Trane was supposed to deliver the chillers in August 2016, but Trane had not yet
delivered the chillers by early February 2017. At that time, Trane told Tocci that Quality
Construction had not made the downpayment for the chillers, and Trane would not make and
deliver the chillers until it received the down payment. “Tocci then requested, and Trane
agreed, that Tocci could acquire the Chillers and remaining equipment needed for the Project
directly from Trane.” Id. ¶ 28.
On February 21, Trane filed a construction lien against the hotel project, alleging that
it was owed $469,667.15. The following week, Connell issued a notice of termination to Tocci.
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The notice included allegations based on statements from Trane that Tocci had overbilled for
Trane’s work and that Tocci had failed to contact Trane about purchasing the chillers.
In May 2017, Tocci initiated arbitration proceedings against Connell. Other contractors
were part of that arbitration, but Trane was not one of them. (The parties do not say why
Trane was excluded.)
In 2023, while the arbitration was pending, Tocci filed this lawsuit against Trane.
Shortly thereafter, the court stayed the case at the parties’ request pending a decision in the
arbitration. Earlier this year, the arbitration panel found that Connell had wrongfully
terminated its contract with Tocci, awarding Tocci more than $11 million in damages and more
than $2 million in attorney fees. This court then lifted the stay, and Trane moved for judgment
on the pleadings.
Tocci is incorporated in Massachusetts, and its principal place of business is also in
Massachusetts. Trane is incorporated in Delaware, and its principal place of business is in
North Carolina.1 Tocci seeks more than $1 million in damages, so it is reasonable to infer that
more than $75,000 is in controversy.
1 Trane’s state of incorporation is not identified in the complaint, Trane’s answer, or Trane’s
corporate disclosure form. However, other cases state that Trane is incorporated in Delaware,
see, e.g., Montgomery Bank, N.A. v. Alico Rd. Bus. Park, LP, No. 2:13-CV-802-FTM-29, 2013 WL
6231363, at *2 (M.D. Fla. Dec. 2, 2013), and that is confirmed by the website for the Delaware
Secretary 	of 	State, 	see 	https://icis.corp.delaware.gov/ecorp/entitysearch/NameSearch. 	aspx.
Neither party is incorporated in Wisconsin, neither party is headquartered here, and the hotel
project is in New Jersey, raising the question of why the lawsuit was filed here. The parties do
not answer this question directly, but Tocci says in its brief that Trane’s “administrative offices
were based in Wisconsin, and its administrative processes for issuing invoices and lien waivers
were undertaken in Wisconsin.” Dkt. 28, at 38. Regardless, personal jurisdiction and venue are
waivable issues. See York Group, Inc. v. Wuxi Taihu Tractor Co., Ltd., 632 F.3d 399, 403 (7th Cir.
2011); Auto. Mechanics Local 701 Welfare & Pension Funds v. Vanguard Car Rental USA, Inc., 502
F.3d 740, 746 (7th Cir. 2007). Trane does not seek dismissal or transfer for lack of jurisdiction
or improper venue, so the court does not consider those issues.
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The court will discuss additional allegations as they become relevant to the analysis.
ANALYSIS
Tocci asserts four claims against Trane: (1) tortious interference with Tocci’s contract
with Connell; (2) breach of an implied contract to sell the HVAC equipment directly to Tocci;
(3) promissory estoppel based on a promise not to file a lien; and (4) indemnity for damages
caused by Trane’s construction lien. Trane seeks dismissal of all these claims, contending that
all of them are untimely, Tocci has not stated a claim for some of the claims, and the arbitration
proceeding bars the tortious interference claim. Trane also contends that issue preclusion bars
Tocci “from seeking the same damages sought, litigated, and considered by the arbitration
panel.” Dkt. 27, at 57.2
To state a claim, the plaintiff must provide fair notice of its claim and “plead a plausible
claim for relief,” Balle v. Kennedy, 73 F.4th 545, 557 (7th Cir. 2023), which means that the
allegations in the complaint raise a right to relief above the speculative level, McCray v. Wilkie,
966 F.3d 616, 620 (7th Cir. 2020). Stated another way, the plaintiff must “present a story
that holds together” under the relevant law. Taylor v. Salvation Army National Corp., 110 F.4th
1017, 1028 (7th Cir. 2024). The court may not dismiss a claim based on an affirmative defense
such as the statute of limitations or issue preclusion unless it is clear from the face of the
complaint that the defense applies. See Hyson USA, Inc. v. Hyson 2U, Ltd., 821 F.3d 935, 939
(7th Cir. 2016).
2 Citations to documents filed on the docket reflect the page numbers as they appear on the
headers in the court’s electronic case file, not the page numbers on the documents themselves.
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A. Tortious interference
Tocci alleges that Trane made various misrepresentations about Tocci to Connell,
causing Connell to terminate its contract with Tocci. Specifically, Tocci alleges that Trane told
Connell that “Tocci had not contacted Trane or made any arrangements to hire Trane to
complete Trane's Work for the Project” and that Trane “misrepresent[ed] the value of Trane’s
Work completed and the balance owed to Trane in its Construction Claim for Lien.” Dkt. 1,
¶ 56. Trane contends that Tocci’s tortious interference claim fails for two reasons: (1) the
statute of limitations has run; and (2) the claim is barred under the doctrine of issue preclusion
because the arbitration panel determined that Trane’s conduct did not cause the termination
of Tocci’s contract with Connell. The court agrees with the first contention, so it is not
necessary to consider the second. 3
The parties agree that Wisconsin’s three-year statute of limitations for tortious
interference with a contract should apply. Dkt. 27, at 18–19 and Dkt. 28, at 40. Trane says
that the statute of limitations began running as early as February 2017 and no later than
January 2020; Tocci says that the limitations period did not begin until February 2022. Tocci
filed the lawsuit in February 2023, so the claim is untimely if either of the dates asserted by
Trane is correct.
In Wisconsin, the statute of limitations for tortious interference begins to run when the
cause of action accrues, which is when “the plaintiff discovers, or with reasonable diligence
should have discovered, the injury and that the defendant’s conduct probably caused that
3 In its reply brief, Trane contends for the first time that Tocci’s complaint does not state a
claim for tortious interference. Dkt. 36, at 23–26. The court is dismissing this claim on other
grounds, so the court need not decide whether Trane forfeited that argument by failing to raise
it in the opening brief.
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injury.” Munger v. Seehafer, 2016 WI App 89, ¶ 20, 372 Wis. 2d 749, 890 N.W.2d 22. In this
case, the alleged injury is Connell’s termination of its contract with Tocci, and the alleged cause
of that injury is misrepresentations made by Trane to Connell about Tocci. Dkt. 1, ¶ 56. In its
complaint, Tocci admits that Connell informed Tocci in February 2017 both that Connell was
terminating its contract and that Trane had made allegations against Tocci, including that
Tocci had not had any contact with Trane about the chillers and that Tocci had overbilled for
Trane’s work. Id. ¶ 39. These alleged misrepresentations are the basis for Tocci’s tortious
interference clam, see id. ¶ 56, so Tocci’s own allegations show that it had notice in February
2017 of both its injury and that Trane’s conduct probably caused the injury.
Tocci’s only response to this is that it “did not learn about how and when Trane and
Connell entered into their contract until testimony of Trisha Mehis [Connell’s senior project
manager] during the Arbitration on February 11, 2022.” Dkt. 28, at 47. Tocci does not explain
what it means by this or why it matters “how and when Trane and Connell entered into their
contract.” Tocci’s claim is that Trane interfered with Tocci’s contract with Connell. According
to Tocci’s own allegations, Connell and Trane entered into their own contract after Connell
had already terminated its contract with Tocci, see Dkt. 1, ¶¶ 39–47, so the contract between
Connell and Trane could not have caused the termination. And even if it had, Tocci admits
that it learned about Connell’s contract with Trane in January 2020, id. ¶ 47, which is still
more than three years before Tocci filed this lawsuit. The details about how or why Connell
and Trane made their own arrangements were not necessary to give Tocci notice of its injury
or its cause.
The allegations in the complaint show that the statute of limitations ran on Tocci’s
tortious interference claim before Tocci filed this lawsuit. So the court will dismiss this claim.
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B. Breach of implied contract
Tocci contends that it had an implied contract with Trane related to Tocci purchasing
the chillers directly from Trane and that Trane breached that contract by entering into a
different contract to sell the chillers directly to Connell. Dkt. 1, ¶¶ 50–53. Trane contends that
the contract claim should be dismissed on three grounds: (1) the statute of limitations has run;
(2) Tocci has not alleged the existence of an implied contract with Trane; and (3) any contract
is barred by the statute of frauds. This claim is also untimely, so the court need not consider
the other issues.
The parties agree that New Jersey law provides the statute of limitations for the contract
claim. See Dkt. 27, at 22–23 and Dkt. 28, at 32–36. The dispute is whether the appropriate
limitations period is six years, which applies to services contracts, N.J.S.A. 2A:14-1, or four
years, which applies to contracts for goods, N.J.S.A. 12A:2-725(1). When a contract involves
both goods and services, the question is which aspect of the contract is predominant. Quality
Guaranteed Roofing, Inc. v. Hoffmann-La Roche, Inc., 694 A.2d 1077, 1079 (N.J. Super. Ct. App.
Div. 1997). In other words, the question is whether the contract is accurately characterized as
one for the sale of goods with incidental services, or as one for services in which materials are
provided as part of the service. Id. For example, in Quality Guaranteed, the court held that a
contract to install a new roof was a predominantly a contract for services. But in Docteroff v.
Barra Corp. of America, the court held that a contract to supply roofing materials with a
guarantee to repair defective materials was predominantly a contract for goods. 659 A.2d 948,
949 (N.J. Super. Ct. App. Div. 1995).
Tocci points out that it is a question of fact whether a contract is predominantly for
goods or services, see Integrity Material Handling Sys., Inc. v. Deluxe Corp., 722 A.2d 552, 555
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(N.J. Super. App. Div. 1999), so the court should not decide this issue without discovery. But
even questions of fact can be decided at the pleading stage when the plaintiff alleges facts
showing that it cannot succeed or if it otherwise fails to state a plausible claim. See O’Boyle v.
Real Time Resols., Inc., 910 F.3d 338, 342 (7th Cir. 2018); Thomson v. Washington, 362 F.3d
969, 970 (7th Cir. 2004). That is what has happened here.
Tocci’s complaint includes two sentences about the nature and scope of its alleged
contract with Trane. In the first sentence, Tocci alleges that it “requested, and Trane agreed,
that Tocci could acquire the chillers and remaining equipment needed for the project directly
from Trane.” Dkt. 1, ¶ 28. The second sentence is virtually identical: “Trane agreed that Tocci
could acquire the Chillers and remaining undelivered equipment for the Project from Trane.”
Id. ¶ 50. The court will assume for the purpose of the motion to dismiss that Tocci’s allegations
adequately allege the formation of a contract with Trane. But the scope of any contract was
limited to providing “the chillers and remaining equipment;” there is no reference to any
services.
Tocci cites cases involving installation or engineering of a product in which courts have
concluded that the predominant purpose of the contract was to provide a service. See, e.g.,
DiIorio v. Structural Stone & Brick Co., 845 A.2d 658, 662 (N.J. Super. Ct. App. Div. 2004)
(contract for construction of home was a services contract despite incidental sale of stone); but
see Meyers v. Henderson Constr. Co., 370 A.2d 547 (N.J. Super. Ct Law Div. 1977) (UCC
governed purchase and installation of overhead doors because installation services were
“incidental” to the sale aspects of the contract). Tocci then cites a proposal and a payment
application from Trane discussing services such as installation and design engineering. Dkt. 32
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and Dkt. 33.4 But Trane submitted the proposal and payment application to Connell, not
Tocci. Tocci does not allege that it had any agreement with Trane to install or design anything.
Perhaps it could be inferred that design was implicit in any agreement with Tocci
because the chillers were being custom made for Connell. See Dkt. 1, ¶ 8 (Quality Construction
originally hired Trane to “design, fabricate, and furnish” the HVAC equipment). But that
would not make the contract between Tocci and Connell predominantly one for services. The
cases that Tocci cites involved companies that were responsible for designing or engineering
only. See Bd. of Trs. of Union Coll. v. Kennerly, Slomanson & Smith, 400 A.2d 850, 852 (N.J.
Super. Ct. Law. Div. 1979) (defendant was responsible for “designing and furnishing
specifications for the lighting system”; another party was responsible for manufacturing); R.J.
Longo Const. Co. v. Transit Am., Inc., 921 F. Supp. 1295, 1298 (D.N.J. 1996) (defendant was
responsible 	for 	designing 	a 	“specialized 	rail 	car”; 	third 	party 	was 	responsible 	for
manufacturing). Tocci cites no authority for the view that a contract to buy equipment becomes
a contract for services simply because it was custom made. Rather, a federal court applying
New Jersey law recently rejected that view, observing that “courts have found that contracts,
like the one here, for custom-designed manufactured equipment which also provide for services
like testing and training are goods contracts governed by the UCC.” Talon Indus., LLC v. Rolled
Metal Prods., Inc., No. CV 15-4103 (CCC), 2022 WL 3754800, at *5 (D.N.J. Aug. 30, 2022)
(citing Propulsion Techs. Inc. v. Attwood Corp., 369 F.3d 896, 901 (5th Cir. 2004); KSW Mech.
Servs. v. Johnson Controls, Inc., 992 F. Supp. 2d 135, 141 (E.D.N.Y. 2014); Machine-Outils Henri,
4 Trane asks the court to strike the documents that Tocci filed with its opposition brief on the
ground that they are outside the scope of the pleadings. The court need not decide that issue
because the contract claim is untimely even if the documents are considered.
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Ltee v. Morey Machinery, Inc., No. 94-cv-880, 1996 WL 254863, at *6 (S.D.N.Y. May 14,
1996)).
The Court of Appeals for the Seventh Circuit adopted a similar view in Micro Data Base
Sys., Inc. v. Dharma Sys., Inc., concluding that custom-made software was a good under the
UCC:
It’s no different than if [the plaintiff] were buying an automobile
from [the defendant], and [the defendant] invoiced [plaintiff]
$20,000 for the car and $1,000 for labor involved in customizing
it for [the plaintiff’s] special needs. It would still be the sale of a
good within the meaning of the UCC. We doubt that it should
even be called a “hybrid” sale, for this would imply that every sale
of goods is actually a hybrid sale, since labor is a service and labor
is an input into the manufacture of every good.
148 F.3d 649, 655 (7th Cir. 1998). That reasoning applies in this case as well. The chillers and
other equipment that Tocci wanted to purchase from Trane are still goods, even if they were
custom made. In fact, New Jersey defines “goods” under the UCC as including “specially
manufactured goods.” N.J.S.A. 12A:2-105(1).
Even if the court were to consider Trane’s contractual relationships with Quality
Construction or Connell as indicative of the scope of Tocci’s contract with Trane, those
relationships would not be helpful for Tocci. The affidavits from Trane attached to Tocci’s
complaint refer to Trane as the “supplier.” Dkt. 1-3. The complaint similarly refers to Trane
this way. Dkt. 1, ¶ 8. The complaint also repeatedly refers to Tocci making payments to Quality
Construction “for Trane’s Chillers,” not for a service. Dkt. 1, ¶ 16; see also id. ¶ 21. Trane’s
proposal to Connell focuses on the “mechanical equipment” that Connell will be providing.
Dkt. 32, at 3. Even the references to services are noted in the context of providing a finished
product. For example, the proposal states that “Trane has included factory-trained BAS Project
Management, Design Engineering, and Field Engineering labor required to deliver a functional
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control system as specified.” Id. at 5. More than 75 percent of Trane’s approximately $500,000
request for payment to Connell is for “equipment” or “material.” Dkt. 33, at 4. This shows that
that even Trane’s contracts with Quality Construction and Connell were primarily for goods
rather than services. See Integrity, 722 A.2d at 555 (in deciding whether goods or services
predominate, court considers language used in the contract, surrounding circumstances, and
the compensation structure of the contract).
Tocci also repeatedly states in its brief that the chillers were to be a “permanent
improvement” to real property, Dkt. 28, at 34–35, but Tocci does not explain the significance
of that observation. It is true that the UCC does not apply to real property, see DiIorio, 845
A.2d at 662, but the definition of “goods” includes “all things . . . which are movable at the
time of identification to the contract for sale.” N.J.SA. 12A:2-105(1). There is no dispute that
the chillers were movable at the time of sale, so they qualify as goods, even if they were going
to be part of a permanent improvement.
The court concludes that the UCC applies to the alleged contract between Tocci and
Trane. This means that a four-year statute of limitations applies to Tocci’s contract claim. See
N.J.S.A. 12A:2-725(1). The discovery rule does not apply to UCC claims; rather, the statute
of limitations begins to run when the alleged breach occurs, “regardless of the aggrieved party’s
lack of knowledge of the breach.” N.J.S.A. 12A:2-725(2). Tocci contends that the breach
occurred when Trane entered into its contract with Connell in 2017, and this lawsuit was not
filed until 2023, so the court will dismiss the implied contract claim as untimely.
C. Promissory estoppel
Tocci asserts two promissory estoppel claims in its complaint. First, it asserts a claim
based on the same facts as the implied contract claim, alleging that Trane promised to sell the
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chillers directly to Tocci. Dkt. 1, ¶ 64. Trane moves to dismiss that estoppel claim on the same
grounds as the contract claim, and Tocci does not respond to that argument or otherwise
discuss that estoppel claim in its brief. So the court will construe’s Tocci silence to mean that
Tocci concedes that that promissory estoppel claim rises and falls with the implied contract
claim, and the court will dismiss that claim. See Wojtas v. Capital Guardian Trust Co., 477 F.3d
924, 926 (7th Cir. 2007) (the plaintiffs’ “failure to offer any opposition to [the defendants’]
statute of limitations argument constituted a waiver”).
Second, Tocci alleges that Trane made representations that it had been paid for the
chillers and that it waived its lien rights. Dkt. 1, ¶ 66. Tocci also alleges that it relied on those
representations by continuing to make payments to Quality Construction for the chillers. Trane
seeks dismissal of this claim on two grounds: (1) the statute of limitations has run; and
(2) Tocci has not alleged a broken promise.
1. 	Statute of limitations
The parties agree that New Jersy law governs the promissory estoppel claim. Trane
contends that the court should apply the four-year limitations period for UCC claims, see
N.J.S.A. 12A:2-725(1); Tocci contends that the court should apply the six-year limitations
period that applies to most other contract claims, see N.J.S.A. 2A:14-1. The parties agree that
the choice is dispositive. If the six-year limitations period applies, the claim is timely; if the
four-year limitations period applies, the claim must be dismissed.
Neither party cites a New Jersey statute that expressly establishes a limitations period
for promissory estoppel claims. Tocci cites Kopin v. Orange Products., Inc., which holds that the
six-year limitations period for most contract claims in N.J.S.A. 2A:14-1 also applies to quantum
meruit claims. 688 A.2d 130, 141 (N.J. Super. Ct. App. Div. 1997). Trane cites no authority
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but contends that the UCC should apply because the estoppel claim “involves the sales of the
chillers to Quality Construction and then to Tocci.” Dkt. 27, at 24.
The court concludes that the six-year limitations period applies. The promise at issue
was not for the sale of chillers. Rather, the alleged promise was to waive Trane’s lien rights.
Trane does not explain why the UCC should apply to a promise simply because there was a
related but separate contract for the sale of goods.
In the absence of a statute that applies to promissory estoppel specifically, it makes
sense to apply the limitations period for general contract claims because “promissory estoppel
is a cause of action closely related to breach of contract.” Leonardis v. Burns Int’l Sec. Servs., Inc.,
808 F. Supp. 1165, 1182 (D.N.J. 1992). Courts interpreting New Jersey law have consistently
applied the six-year limitations period in N.J.S.A. 2A:14-1 to promissory estoppel claims. See
Motamed v. Chubb Corp., No. CV 15-7262, 2020 WL 7227254, at *6 (D.N.J. Apr. 7, 2020);
Richer Mktg. Inc. v. Fairfield Gourmet Foods Corp., No. 15-CV-6793, 2017 WL 3641742, at *2
(D.N.J. Aug. 24, 2017); Gashlin v. Prudential Ins. Co. of Am. Ret. Sys. for U.S. Emps. & Special
Agents, 286 F. Supp. 2d 407, 421 (D.N.J. 2003). Courts in other states, including in Wisconsin,
have done the same thing. See Sweeney v. Frank Liquor Co. Inc., 2021 WI App 67, ¶ 17, 2021
WL 3412757 (non-precedential) (citing Boldt v. State, 101 Wis. 2d 566, 578, 305 N.W.2d 133
(1981)).
Trane’s statute of limitations argument is based on its contention that the limitations
period is four years, so the court will not dismiss this claim as untimely.
2. 	State a claim
Promissory estoppel applies when the plaintiff suffers a detriment because the
defendant broke a promise on which the plaintiff reasonably relied. See Toll Bros. v. Bd. of Chosen
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Freeholders of Cnty. of Burlington, 944 A.2d 1, 19 (N.J. 2008). In this case, the alleged promises
not to file a lien were included in “supplier affidavits” that Trane submitted to Quality
Construction. Tocci contends, and Trane does not dispute, that the supplier affidavits qualify
as promises to Tocci as well as Quality Construction.
Trane contends that Tocci has not stated a claim for promissory estoppel because it has
not identified a promise in the supplier affidavits that Trane broke. Rather, Trane contends
that the promise in the supplier affidavits not to file a lien were contingent on Trane being
paid for its work, and Tocci does not allege that Trane had been paid for its work at the time
Trane filed the lien. Tocci does not directly respond to this argument but instead says that
Trane represented in its affidavits that it had been paid, and Tocci was entitled to rely on those
representations.
Each party relies on different portions of the supplier affidavits, which appear to be
boilerplate documents. Trane is correct that the affidavits state that Trane will waive its lien
rights “except for any portion of the above amount due not received.” See, e.g., Dkt. 1-3, at 3, ¶ 5
(emphasis added). But it is not clear what “the above amount” is referring to. Some of the
affidavits do not include dollar amounts. Some (but not all) of the affidavits are stamped with
the statement, “This waiver is contingent upon the Trane Company receiving a check in the
amount of,” followed by a dollar amount. See, e.g., Dkt. 1-3, at 4. But even those stamps are at
the bottom of the document, not “above” the statement about Trane’s lien rights.
For its part, Tocci cites the statement, “all labor, services, materials, fixtures, apparatus
and/or equipment, and all appliable taxes, fees, and benefits, have been paid in full through the
above Application for Payment.” That statement is included in paragraph four of each of the
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supplier affidavits. Tocci says it was entitled to rely on that statement as a representation that
Trane was waiving its lien rights because it had been paid.
The different provisions cited by the parties offer different ways of interpreting the
affidavits. The provisions cited by Trane suggest that Trane was still waiting for payment; the
provisions cited by Tocci suggest that Trane had already received payment. Neither party
acknowledges the language in the affidavits cited by the other party. Rather, both sides contend
that that the affidavits unambiguously show that Trane did or did not waive its lien rights. So
the parties failed to address the key issue raised by the affidavits: in light of the seemingly
inconsistent language in the affidavits, was it reasonable for Tocci to rely on the statements
that Trane had already been paid?
The court won’t decide a disputed issue that the parties failed to brief. The bottom line
is that one possible reading of the affidavits is that Trane was waiving its lien rights for work
that had been performed up to the date in the affidavit. If that reading was reasonable under
the circumstances, Trane could be held liable for promissory estoppel, so the court will deny
the motion to dismiss. The parties are free to seek summary judgment on the issue of reasonable
reliance if they believe that issue can be decided as a matter of law on the basis of undisputed
facts.
D. Indemnity
Tocci says that Trane agreed in its supplier affidavits to indemnify Tocci for all liens
and claims arising out of Trane’s work and that Trane breached that agreement by filing a
construction lien. The parties agree that New Jersey law governs the indemnity claim.
Trane seeks dismissal of this claim on two grounds: (1) the statute of limitations has
run; and (2) the indemnity agreement applied only to work that was paid for, and it is
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undisputed that Trane did not receive payment for the chillers. The court agrees with the
second argument, so it is not necessary to consider the first.
Each of Trane’s supplier affidavits included the following language: “The undersigned
agrees to waive, indemnify, defend, and save harmless . . . Tocci Building Corporation . . . from
all liens, claims and demands, and all expenses incurred, including attorneys’ fees and costs of
defense, for or on account of or in any way arising out of the work of the undersigned.” See,
e.g., Dkt. 1-3, at 5, ¶ 6. Tocci says that the duty to indemnify was triggered by “claims asserted
by Connell against Tocci related to Trane’s Work furnished for the Project and the filing of its
Construction Lien Claim.” Dkt. 1, ¶ 71.
Trane says that the duty to indemnify was triggered only if Trane received payment. It
cites the following language at the beginning of the affidavits: “The undersigned, for and in
consideration of the payments made to it by Tocci Building Corporation or to a subcontractor,
materialman or supplier of the undersigned, for labor, services, materials, fixtures. Apparatus
and/or 	equipment 	furnished 	for 	the 	Project 	warrants, 	represents 	and 	guarantees 	as
follows . . . .” Dkt. 1-3, at 3. Trane says that Tocci does not allege that Trane received payment,
so Trane had no duty to indemnify.
Tocci’s only response to this is the same one Tocci asserted in support of its promissory
estoppel claim: Trane represented in the supplier affidavits that it had received payment, and
Tocci was entitled to rely on those representations. But as Tocci acknowledges, an indemnity
claim has the same requirements as any other contract claim. Dkt. 28, at 63. The key difference
between a contract claim and a promissory estoppel claim is that a contract claim requires
consideration. See Fazio v. Altice USA, 337 A.3d 304, 311 (N.J. 2025). Under a promissory
estoppel theory, reliance is a substitute for consideration. Goldfarb v. Solimine, 245 A.3d 570,
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577 (N.J. 2021). For the purpose of Tocci’s indemnity claim, it does not matter whether Trane
told Tocci that Trane had received consideration; the question is whether Trane did receive
consideration. Tocci does not allege that Trane received payment before Trane filed the lien,
so Tocci’s indemnity claim fails.
E. Limitations on damages
Trane contends that the doctrine of issue preclusion bars Tocci from seeking “the same
damages sought, litigated, and considered by the Panel as part of the arbitration.” Dkt. 27, at
57. The court is dismissing all of Tocci’s claims except the promissory estoppel claim, so it is
not necessary to consider Tocci’s arguments about those other claims. As for the estoppel claim,
Trane includes the following paragraph in its brief:
Tocci seeks to recover the amount Connell paid Trane to satisfy
Trane’s lien. This theory of recovery and damages claim is not
recognized at law or in equity and is utterly without merit. Tocci
also once again seeks the full value of the remainder of its contract
with Connell, which the Panel already awarded.
Dkt. 27, at 58. Trane does not elaborate, but its argument seems to have two parts: (1) the
amount Connell paid to Trane is not a proper measure of Tocci’s damages; and (2) Tocci may
not recover damages in this case that were already awarded in the arbitration.
Neither of the issues Trane raises are about issue preclusion. Rather, the first issue is
about the scope of relief available for promissory estoppel; the second is about double recovery.
Tocci concedes that it is not entitled to double recovery and that it will have the burden to
show that any damages sought in this case were not previously awarded. Dkt. 28, at 79. But
Tocci says that it is premature to consider damages issues now.
The court agrees that it is not necessary now to identify all categories of damages that
Tocci may or may not be entitled to recover. The general rule is that a plaintiff who prevails
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on a promissory estoppel claim is limited to reliance damages, which are “measured by the
extent of the promisee’s reliance,” or, in other words, “what losses plaintiff suffered as a result
of his relying on defendant’s later-broken promise.” Goldfarb, 245 A.3d at 572, 578. In this
case, those damages would likely include the money Tocci paid to Quality Construction for the
chillers in reliance on Trane’s alleged promise not to file a lien. Trane does not contend that
Tocci recovered that money in the arbitration proceedings, and Trane does not otherwise
identify any reason such damages would be precluded in this case. 5 So the court cannot dismiss
the promissory estoppel claim on the ground that Tocci has not identified any potentially
recoverable damages. Any arguments about the precise scope of damages that are available to
Tocci can wait for summary judgment or trial.
ORDER
IT IS ORDERED that defendant Trane U.S. Inc.’s motion to dismiss is GRANTED in
part and DENIED in part. Tocci Building Corporation’s claims for tortious interference, breach
of implied contract, indemnity and its promissory estoppel claim based on Trane’s alleged
promise to sell the chillers directly to Tocci are DISMISSED with prejudice for failure to state
5 In a footnote, Trane says that any claim “seeking to recover from Trane the money it paid
Quality . . . should also be dismissed as insufficiently pled and precluded.” Dkt. 27, at 58. But
Trane does not explain the basis for this contention, so it is forfeited for the purpose of Trane’s
motion to dismiss. In a different part of its brief, Trane cites a default judgment that Tocci
obtained against Quality Construction. Dkt. 27, at 49 (citing Tocci Building Corp, Inc. v. Quality
Construction Heating & Air, Inc., No. 17-cv-3764 (D.N.J. Feb. 26, 2018), Dkt. 8. But Trane does
not contend that the default judgment has any effect on Tocci’s right to recover damages in
this case, so the court does not consider that issue.
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a claim upon which relief may be granted. The motion is DENIED as to Tocci’s promissory
estoppel claim based on Trane’s alleged promise not to file a lien.
Entered November 14, 2025.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge
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