Lexington Properties NJ LLC 诉 S R Renovations LLC 案

Lexington Properties NJ LLC, a New Jersey property owner, contracted with S.R. Renovations LLC for the substantial renovation of 200 apartment units to rent-ready status and up to Alabama building codes.Shortly after beginning work, S.R. Renovations fell behind schedule and the quality of work was problematic; only 18 units were renovated and were not rent ready due to incomplete plumbing and electrical work and poor workmanship.S.R. Renovations also failed to forward payments to vendors and subcontractors.Lexington Properties filed suit on July 27, 2023, in the U.S. District Court for the Northern District of Alabama, asserting claims including negligence, fraudulent misrepresentation, and conversion.After the Clerk entered default against S.R. Renovations, Lexington Properties moved for default judgment.On October 28, 2024, the court issued a memorandum opinion and order granting liability on the negligence claim but deferring damages determination pending a hearing.

On April 3, 2025, the court held a hearing and vacated its previous order.The court granted default judgment on the negligent construction/renovation claim (Count One) but denied liability on all other claims, finding them not well-pleaded.Final default judgment was entered in favor of Lexington Properties and against S.R. Renovations in the amount of $156,549.56.

The central dispute is whether S.R. Renovations LLC breached its contractual duty to perform quality renovations and whether it is liable for negligent construction. Key issues include the scope of renovation work, the quality and completeness of the work performed, and the amount of damages suffered by Lexington Properties. The court also had to determine which of the plaintiff's multiple claims were sufficiently pleaded to support a default judgment.

This case highlights the risks property owners face when contracting with renovation companies that fail to perform quality work or manage subcontractor payments. The decision underscores the importance of well-pleaded complaints in default judgment proceedings, as courts will not automatically grant judgment on all claims even when a defendant defaults.The case also illustrates how federal courts exercise diversity jurisdiction in contract disputes between parties from different states.