NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1377-12T3
CUMBERLAND COUNTY BOARD OF CHOSEN FREEHOLDERS, APPROVED FOR PUBLICATION
Plaintiff-Appellant, July 30, 2013
v. APPELLATE DIVISION
VITETTA GROUP, P.C., ARTHUR J. OGREN, INC., CONTINENTAL CAST STONE EAST, BY RUSSELL, INC., and E.P. HENRY CORPORATION,
Defendants,
and
GILBANE BUILDING COMPANY,
Defendant-Respondent. _______________________________
Argued June 4, 2013 - Decided July 30, 2013
Before Judges Messano, Lihotz and Ostrer.
On appeal from the Superior Court of New Jersey, Law Division, Cumberland County, Docket No. L-962-07.
Steven L. Rothman argued the cause for appellant (Lipman, Antonelli, Batt, Gilson, Rothman & Capasso, attorneys; Mr. Rothman, of counsel and on the briefs; Jane B. Capasso, on the briefs).
Tracy L. Burnley argued the cause for respondent (Marshall, Dennehey, Warner, Coleman & Goggin, attorneys; Ms. Burnley, on the brief).
The opinion of the court was delivered by
LIHOTZ, J.A.D.
Defendant Gilbane Building Company (Gilbane) was retained
by plaintiff, the Cumberland County Board of Chosen Freeholders,
in the early 1990's to supervise construction of the expansion
and remodeling of the Cumberland County Courthouse (the
Courthouse Project). Thereafter, leaking caused water damage,
but Gilbane was neither notified of nor involved in repair
attempts. When plaintiff initiated this action against Gilbane
and other construction professionals involved in the Courthouse
Project, more than ten years had passed since Gilbane completed
its services. The Law Division dismissed plaintiff's complaint
as untimely under the applicable ten-year statute of limitations
for civil actions commenced by governmental bodies. On appeal,
plaintiff argues the judge erred as a matter of law by applying
the wrong legal standard when determining whether its action was
untimely. We are not persuaded and affirm.
The facts, taken from the summary judgment record, are
tailored to address only those issues raised by plaintiff with
respect to its claims against Gilbane, omitting facts concerning
the other defendants.
2 A-1377-12T3 In May 1993, plaintiff and Gilbane executed an agreement
for construction services (the Agreement). Under the Agreement,
Gilbane was to provide construction management services as
plaintiff's on-site field representative, overseeing the
architect, contractors, and other construction professionals
involved in the Courthouse Project. In this role, Gilbane had
specific supervisory responsibilities, including: providing at
least one qualified and experienced full-time field
representative on-site during each work day to "assur[e] day-to-
day, on-schedule and under-budget performance of the
construction work in accordance with the contract documents";
"[r]eview[ing] all work in progress on the project's site to
assure the highest quality in accordance with design plans and
other contract documents"; and regularly communicating and
interacting with the general contractor, architect, engineer,
plaintiff, and others involved in the project, to assure
compliance with all design requirements.
On August 17, 1995, Gilbane issued a Substantial Completion
Notice, and agreed to correct a final punchlist of items. The
notice transferred full possession to plaintiff and triggered
the commencement of the warranty provisions. On behalf of
plaintiff, John Kenneth Mecouch, a Cumberland County Purchasing
Office representative, along with the project construction
3 A-1377-12T3 manager, certified the project had been inspected and it was
accepted as "substantially completed." Plaintiff began to
occupy the courthouse in August or September 1995, following
receipt of a certificate of occupancy. Gilbane had no further
involvement with the Courthouse Project or the building as
renovated.
In November 1995, plaintiff observed "manifestations of
leaks" and resultant water damage throughout the renovated
courthouse area. Although the general contractor attempted
subsequent repairs, Gilbane was not contacted regarding or
involved in these problems.
Plaintiff filed this complaint on September 18, 2007.
Count three alleged plaintiff's damages were directly and
proximately caused by Gilbane's "negligence, lack of care,
willful misconduct and gross negligence in connection with the
supervision of the construction[,]" and "began to accrue shortly
after completion of the Courthouse Project when pervasive,
ongoing water leakage occurred throughout the four walls of the
new construction and the renovation portions . . . [,] resulting
in exterior and interior damage, including mold, cracking of
cast stone window sills, cornices and coping units and failed
masonry."
4 A-1377-12T3 In lieu of filing an answer, Gilbane moved to dismiss the
complaint, arguing plaintiff's claims were "barred" by the
statute of repose, N.J.S.A. 2A:14-1.1, because suit was not
commenced within ten years of completion of Gilbane's services
on the project. Plaintiff responded, arguing the statute of
repose did not preclude its claims against Gilbane because
subpart b(2) of section 1.1 states the statute does not time bar
an action by a government unit "based on willful misconduct,
gross negligence or fraudulent concealment in connection with
. . . supervision . . . of an improvement to real property[.]"
Gilbane's motion was denied and plaintiff's request to amend its
complaint to add allegations of fraud and fraudulent concealment
against Gilbane was granted.
Plaintiff filed its second amended complaint on September
29, 2008, adding allegations of fraud and fraudulent
concealment. Gilbane answered and included among its
affirmative defenses an assertion plaintiff's claims were barred
by the statute of limitations and the statute of repose.
Following discovery, Gilbane moved for summary judgment. A
different judge granted partial summary judgment and dismissed
plaintiff's negligence claims, finding them time-barred. The
balance of the motion, with respect to the claims alleging
willful misconduct, gross negligence or fraudulent concealment,
5 A-1377-12T3 was denied, as the judge found disputed facts concerning whether
Gilbane committed "gross negligence" so as to trigger the b(2)
exception to the statute of repose. N.J.S.A. 2A:14-1.1b(2).
The judge was not asked to determine whether plaintiff's claims
were barred by the statute of limitations or laches. Following
the motion, the case was referred to mediation, pursuant to
which plaintiff settled all claims against all defendants except
Gilbane.
Plaintiff filed a third amended complaint and Gilbane again
moved for summary judgment, this time asserting the remaining
claims were barred by the applicable statute of limitations —
either N.J.S.A. 2A:14-1 (providing a six-year period of
limitations for tort or contract claims) or, alternatively,
N.J.S.A. 2A:14-1.2 (providing a ten-year period of limitations
for actions commenced by the State). Plaintiff opposed the
motion, arguing the statute of limitations did not apply to
actions by governmental units seeking damages resulting from
willful misconduct, gross negligence, or fraudulent concealment
in connection with construction of an improvement to real
property, because these actions were governed by the statute of
repose. In an oral decision, the judge rejected plaintiff's
argument and granted summary judgment, dismissing plaintiff's
complaint. Plaintiff appealed.
6 A-1377-12T3 In a motion for summary judgment under Rule 4:46-2(c), a
judge is required to analyze and sift through evidential
materials, including "pleadings, depositions, answers to
interrogatories and admissions on file, together with the
affidavits, if any," R. 4:46-2(c), to determine whether there
exists "a genuine issue as to any material fact challenged,"
ibid., and "determine 'the range of permissible conclusions that
might be drawn,'" Brill v. Guardian Life Ins. Co. of Am., 142
N.J. 520, 531 (1995) (quoting Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 596, 106 S. Ct. 1348, 1361, 89
L. Ed. 2d 538, 558 (1986)). See also Tomeo v. Thomas Whitesell
Constr. Co., 176 N.J. 366, 370 (2003) (stating summary judgment
necessitates some weighing of the evidence); Millison v. E.I. du
Pont de Nemours & Co., 101 N.J. 161, 167 (1985) (requiring a
motion judge to make a "discriminating search" of the evidence).
If no genuine issue of material fact exists, the judge then
considers whether the moving party is entitled to judgment as a
matter of law. Brill, supra, 142 N.J. at 540. Inevitably, the
judge must consider not just the quantum of proof, but the
quality of evidence as well. Costello v. Ocean Cnty. Observer,
136 N.J. 594, 614 (1994) (citing Schiavone Constr. Co. v. Time,
Inc., 847 F.2d 1069, 1089 (3d Cir. 1988)).
7 A-1377-12T3 Guided by the same standards, Prudential Prop. & Cas. Ins.
Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif.
denied, 154 N.J. 608 (1998), we review a grant or denial of
summary judgment de novo. We determine whether the moving party
demonstrated there were no genuine disputes as to any material
facts, and then whether the motion judge's application of the
law was correct. Atl. Mut. Ins. Co. v. Hillside Bottling Co.,
387 N.J. Super. 224, 230-31 (App. Div.) (citations omitted),
certif. denied, 189 N.J. 104 (2006).
Here, distilled to its essence, we are asked to determine
whether plaintiff's claims are time-barred. Plaintiff's
argument demands interpretation of two statutes — N.J.S.A.
2A:14-1.2, which is a statute of limitations governing civil
actions commenced by the State or its political subdivisions,
and N.J.S.A. 2A:14-1.1, which is a statute of repose governing
recovery of damages for any deficiency in the design, planning,
surveying, supervision or construction of an improvement to real
property. The question is a legal one, subject to plenary
review. Estate of Hainthaler v. Zurich Commercial Ins., 387
N.J. Super. 318, 325 (App. Div.) (citations omitted), certif.
denied, 188 N.J. 577 (2006). See also Manalapan Realty, L.P. v.
Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) (holding
8 A-1377-12T3 appellate courts accord no deference to a trial judge's
conclusions on issue of law).
We first consider the applicable statutes. Gilbane's
motion and the motion judge's ruling relied upon N.J.S.A. 2A:14-
1.2a, which states:
Except where a limitations provision expressly and specifically applies to actions commenced by the State or where a longer limitations period would otherwise apply, and subject to any statutory provisions or common law rules extending limitations periods, any civil action commenced by the State shall be commenced within ten years next after the cause of action shall have accrued.
As used in the statute, the term "State" also includes "its
political subdivisions, any office, department, division,
bureau, board, commission or agency of the State or one of its
political subdivisions, and any public authority or public
agency[.]" N.J.S.A. 2A:14-1.2c.1
Enacted in 1991, the statute is one of limitation, fixing
the time within which an injured person must institute an action
seeking redress, typically measured from the time the cause of
action accrues. A statute of limitations is a procedural device
1 Although amended, effective July 1, 2013, the statute merely deleted the former inclusion of the University of Medicine and Dentistry of New Jersey previously included within the definition of a political subdivision.
9 A-1377-12T3 operating as a defense to limit the remedy available upon proof
of an existing cause of action. See E.A. Williams, Inc. v.
Russo Dev. Corp., 82 N.J. 160, 167 (1980); Rosenberg v. Town of
N. Bergen, 61 N.J. 190, 199 (1972). The purpose behind statutes
of limitations "embodies important public policy
considerations." Martinez v. Cooper Hosp.-Univ. Med. Ctr., 163
N.J. 45, 51 (2000). Such statutes are designed "to protect
defendants from unexpected enforcement of stale claims by
plaintiffs who fail to use reasonable diligence in prosecuting
their claims." LaFage v. Jani, 166 N.J. 412, 423 (2001)
(citation omitted). See also Hein v. GM Constr. Co., 330 N.J.
Super. 282, 286 (App. Div. 2000) (reciting the purposes of a
statute of limitations as stimulating diligent prosecution of
claims, protecting against the litigation of stale claims by
penalizing dilatoriness, and serving as a measure of finality).
Expiration of a statute of limitations operates to bar the
filing and prosecution of what is deemed a stale suit. See,
e.g., Burd v. N.J. Tel. Co., 149 N.J. Super. 20, 28 (App. Div.
1977), aff'd, 76 N.J. 284 (1978). The Court has explained:
When a plaintiff knows or has reason to know that he has a cause of action against an identifiable defendant and voluntarily sleeps on his rights so long as to permit the customary period of limitations to expire, the pertinent considerations of individual justice as well as the broader considerations of repose, coincide to bar
10 A-1377-12T3 his action. Where, however, the plaintiff does not know or have reason to know that he has a cause of action against an identifiable defendant until after the normal period of limitations has expired, the considerations of individual justice and the considerations of repose are in conflict and other factors may fairly be brought into play.
[Farrell v. Votator Div. of Chemetron Corp., 62 N.J. 111, 115 (1973) (citations omitted).]
Plaintiff argues the limitations bar of N.J.S.A. 2A:14-1.2a
does not affect its action against Gilbane, because it falls
within the statute's exception. As plaintiff asserts, the ten-
year limitations period applies "[e]xcept where a limitations
provision expressly and specifically applies to actions
commenced by the State or where a longer limitations period
would otherwise apply." N.J.S.A. 2A:14-1.2a. Plaintiff
maintains N.J.S.A. 2A:14-1.1, the statute of repose, expressly
and specifically applies to this case. Since another statute
applies, plaintiff urges the exception renders the statute of
limitations inapplicable to its action.
To provide context to plaintiff's argument, we recite the
statute of repose, which states in pertinent part:
a. No action . . . to recover damages for any deficiency in the . . . supervision or construction of an improvement to real property, or for any injury to property, real or personal, . . . arising out of the defective and unsafe condition of an
11 A-1377-12T3 improvement to real property, . . . shall be brought against any person performing or furnishing the . . . supervision of construction or construction of such improvement to real property, more than 10 years after the performance or furnishing of such services and construction. This limitation shall serve as a bar to all such actions[,] both governmental and private . . . .
b. This section shall not bar an action by a governmental unit:
. . . .
(2) based on willful misconduct, gross negligence or fraudulent concealment in connection with performing or furnishing the . . . supervision or construction of an improvement to real property[.]
[N.J.S.A. 2A:14-1.1.]
Plaintiff asserts its claims against Gilbane are solely
governed by N.J.S.A. 2A:14-1.1b(2), not the statute of
limitations. Further, because its suit alleges "willful
misconduct, gross negligence or fraudulent concealment, in
connection with performing or furnishing the . . . supervision
or construction of an improvement to real property[,]"
plaintiff reasons the ten-year period of repose does not operate
to bar its action. Accordingly, plaintiff asserts no time
limitation bars a governmental subdivision seeking to recover
damages resulting from such conduct. We reject this syllogism
as flawed.
12 A-1377-12T3 Although some jurisprudence uses the terms statute of
limitations and statute of repose interchangeably, they are
different. "The basic feature of a statute of repose is the
fixed beginning and end to the time period a party has to file a
complaint." R.A.C. v. P.J.S., Jr., 192 N.J. 81, 96 (2007)
(citing Lieberman v. Cambridge Partners, L.L.C., 432 F.3d 482,
490 (3d Cir. 2005)). "Unlike a conventional statute of
limitations, the statute of repose does not bar a remedy but
rather prevents the cause of action from ever arising." Port
Imperial Condo. Ass'n v. K. Hovnanian Port Imperial Urban
Renewal, Inc., 419 N.J. Super. 459, 469 (App. Div. 2011) (citing
Rosenberg, supra, 61 N.J. at 199). See also Daidone v. Buterick
Bulkheading, 191 N.J. 557, 565 (2007) (same).
The time within which an action may be brought under
N.J.S.A. 2A:14-1.1 "'is entirely unrelated to the accrual of any
cause of action[,]'" Daidone, supra, 191 N.J. at 564 (quoting
Rosenberg, supra, 61 N.J. at 199), and the cause of action
specifically "ceases to exist" after ten years, id. at 566.
"The statute cuts off all claims after ten years . . . ,
irrespective of the date of injury." Ramirez v. Amsted Indus.,
Inc., 86 N.J. 332, 355 (1981) (citation omitted). "Thus injury
occurring more than ten years after the negligent act allegedly
responsible for the harm, forms no basis for recovery. The
13 A-1377-12T3 injured party literally has no cause of action." Rosenberg,
supra, 61 N.J. at 199.
The Supreme Court has considered the legislative purpose in
adopting the statute of repose. "The Court perceived the
statute as a legitimate legislative reaction to judicial
decisions expanding the period of liability under certain
statutes of limitations." Ebert v. S. Jersey Gas Co., 157 N.J.
135, 138 (1999) (citing Rosenberg, supra, 61 N.J. 190). Earlier
court decisions had extended a contractor's liability exposure
for defective materials, equipment, and workmanship. Rosenberg,
supra, 61 N.J. at 194-98 (determining the statute of repose was
likely adopted as "a legislative response seeking to delimit
th[e] greatly increased exposure" facing construction
professionals as a result of the judicial expansion of the
period of liability under certain statutes of limitations).
This defined purpose, as first expressed in Rosenberg, has
thereafter been reinforced by the Court. Most recently, the
Court has noted,
the Legislature enacted the statute [of repose] in response to the expanding application of the discovery rule to new types of tort litigation, the abandonment of the 'completed and accepted rule' . . . and the expansion of strict liability in tort for personal injuries caused by defects in new homes to builder/sellers of those homes[.]
14 A-1377-12T3 [Town of Kearny v. Brandt, __ N.J. __, __ (2013) (slip op. at 16) (internal quotation marks and citations omitted).]
Also, in Russo Farms, Inc. v. Vineland Bd. of Educ., the Court
stated:
Before the statute was enacted, the development of several trends in the common law created the possibility that architects and contractors could be sued for injuries long after a project was completed, and the statute meant to cut back on the potential of this group to be subject to liability for life.
[144 N.J. 84, 116 (1996) (internal quotation marks and citations omitted).]
Consequently, it is now well-accepted that N.J.S.A. 2A:14-
1.1 was specifically "intended to limit the time within which a
cause of action may arise against an architect or builder to ten
years from the date construction is substantially completed[,]"
such that "injuries sustained or suits filed after the ten-year
period are barred." Greczyn v. Colgate-Palmolive, 183 N.J. 5,
18 (2005). See also E.A. Williams, supra, 82 N.J. at 167.
Courts have consistently construed the statute broadly to
"achieve the legislative goal of providing a reasonable measure
of protection against expanding liability for design and
construction professionals[.]" Newark Beth Israel Med. Ctr. v.
Gruzen & Partners, 124 N.J. 357, 363 (1991). See also Brandt,
supra, __ N.J. at __ (slip op. at 18) (same); Daidone, supra,
15 A-1377-12T3 191 N.J. at 567 (same); Russo Farms, supra, 144 N.J. at 116
(same). "The primary consideration underlying a statute of
repose is fairness to a defendant, the belief that there comes a
time when the defendant ought to be secure in his reasonable
expectation that the slate has been wiped clean of ancient
obligations[.]" R.A.C., supra, 192 N.J. at 96-97 (internal
quotation marks and citations omitted).
"Because of the deference owed to a legislative enactment,
courts generally do not expand the limitations period defined by
a statute of repose unless the Legislature carved out exceptions
that permit for tolling." Id. at 97 (citing Lieberman, supra,
432 F.3d at 490). The statute of repose, in fact, includes
exemptions. By its express terms, the statute "shall not bar an
action by a governmental unit" if the action is "based upon
willful misconduct, gross negligence or fraudulent concealment
in connection with performing or furnishing the . . .
supervision or construction of an improvement to real
property[.]" N.J.S.A. 2A:14-1.1b(2). Although we discovered no
opinions discussing application of this provision, we are
confident the general rules of statutory construction, designed
to determine the Legislature's intent, easily guide our review.
Looking at the plain language of N.J.S.A. 2A:14-1.1b(2), we
give the words used their ordinary meaning, Merin v. Maglaki,
16 A-1377-12T3 126 N.J. 430, 434-35 (1992) (citations omitted). We find the
language clear on its face and, therefore, easily enforced
according to its terms. Hubbard v. Reed, 168 N.J. 387, 392
(2001) (citations omitted). The exemption at issue provides a
public entity's cause of action will not be barred by N.J.S.A.
2A:14-1.1a if the defendant engaged in willful misconduct, gross
negligence or fraudulent concealment. N.J.S.A. 2A:14-1.1b(2).
The exemption meshes with the general purpose of the statute of
repose to allow a construction professional "'to be secure in
his reasonable expectation that the slate has been wiped clean
of ancient obligations, and he ought not to be called on to
resist a claim when evidence has been lost, memories have faded,
and witnesses have disappeared,'" Cyktor v. Aspen Manor Condo.
Ass'n, 359 N.J. Super. 459, 470 (App. Div. 2003) (quoting
Rosenberg, supra, 61 N.J. at 201), unless a defendant engaged in
untoward conduct.
We agree the allegations in plaintiff's amended complaint
are drawn to fit within subsection b(2) of the statute of
repose, with an eye at exempting its claims from the ten-year
bar of subsection a. N.J.S.A. 2A:14-1.1.
That said, plaintiff cannot proceed with its complaint by
ignoring its obligation to timely file claims pursuant to the
applicable statute of limitations. The statue of repose,
17 A-1377-12T3 N.J.S.A. 2A:14-1.1, may sometimes preclude an action that
otherwise would be timely under the statute of limitations,
N.J.S.A. 2A:14-1.2. For example, the ten-year statute of repose
would preclude suit even if the statute of limitations had not
run on a claim in which the discovery rule was applied.
However, the statute of repose, N.J.S.A. 2A:14-1.1, will not
save a claim otherwise barred by the applicable statute of
limitations, N.J.S.A. 2A:14-1.2. See O'Connor v. Altus, 67 N.J.
106, 122-23 (1975).
The uniform ten-year limitations period for actions
commenced by the State, set forth in N.J.S.A. 2A:14-1.2, was
passed by the Legislature in response to a trio of 1991 Supreme
Court decisions abolishing the long-standing common law doctrine
of "nullum tempus occurrit regi" — "no time runs against the
king" — under which the State and its agencies were exempt from
statutes of limitations generally applicable to civil actions.
N.J. Transit Corp. v. Borough of Somerville, 139 N.J. 582, 586
(1995). See also Statement to Senate Bill No. 3741 (1991)
(explaining the bill proposed a uniform ten-year limitations
period for "actions commenced by governmental entities formerly
protected by the nullum tempus doctrine" "[i]n order to strike a
better balance between the competing interests furthered by the
nullum tempus doctrine and statutory limitations periods, and in
18 A-1377-12T3 order to avoid potential disputes over applicable limitations
periods").
Contrary to plaintiff's contention, the provision of
N.J.S.A. 2A:14-1.2a, identifying the applicability of "another
limitations period," does not impliedly refer to the statute of
repose. Limitations statutes are separate and distinct from the
statute of repose.2 In fact, the statute of repose "impliedly
incorporates" the applicable statute of limitations for
particular actions. O'Connor, supra, 67 N.J. at 122.
Consequently, a plaintiff's claim is subject to the ten-year
statute of absolute repose, as well as the separate and distinct
statute of limitations. See, e.g., Russo Farms, supra, 144 N.J.
115-19 (noting the defendants could defeat the plaintiff's claim
on either basis under the facts of the case); E.A. Williams,
supra, 82 N.J. at 164, 172 (same).
In O'Connor, supra, the Court explained the interaction of
the statute of limitations for tort actions, applicable in that
case, N.J.S.A. 2A:14-2, and the statute of repose, N.J.S.A.
2A:14-1.1, noting both statutes were
2 We note, at the time N.J.S.A. 2A:14-1.2 was enacted, the statute of repose did not expressly apply to governmental actions, making it clear the Legislature did not intend the statute of repose to operate in place of the statute of limitations under N.J.S.A. 2A:14-1.2.
19 A-1377-12T3 at work in that situation. The latter [statute of repose] does not expand the two- year period of the personal injury statute. It simply provides that in any event the suit must be started within ten years of the construction, regardless of when the cause of action accrues. The two-year period of N.J.S.A. 2A:14-2 controls to the extent that it "fits" within the ten years.
[67 N.J. at 122.]
Accordingly, if an action is barred by the statute of
limitations, it cannot be saved by the statute of repose. Once
a plaintiff is aware of the facts giving rise to the cause of
action, the statute of repose does not relieve the plaintiff of
the obligation to file the cause within the period defined by
the applicable statute of limitations. The timeliness of the
plaintiff's claim remains dependent on the applicable statute of
limitations.
Here, plaintiff had ten years from the date it discovered
the water leakage problem to file its suit against Gilbane. It
failed to do so, delaying initiation of suit for more than
twelve years after Gilbane received the certificate of occupancy
and turned over the property to plaintiff. The motion judge
applied the law correctly and properly dismissed plaintiff's
complaint.
Affirmed.
20 A-1377-12T3