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Salesian Society v. Formigli Corp.

Decided: July 27, 1972.


Botter, J.s.c.


Defendants and plaintiff have moved for summary judgment to determine whether this action is barred by N.J.S.A. 2A:14-1.1; L. 1967, c. 59. Under this statute no action may be brought against contractors, architects and the like grounded in contract, tort or otherwise, to recover damages for deficiencies or defects in the design, planning, supervision, or construction of an improvement to real property after ten years from the date when the services were rendered or the construction performed. On July 19, 1972, our Supreme Court upheld the constitutionality of this statute. Rosenberg v. North Bergen Tp. , 61 N.J. 190 (1972).

Plaintiff, Salesian Society, is a religious corporation. In 1956 or 1957 plaintiff contracted with Edward Reihl Co., Inc. (Reihl) for the construction of a large building in Newton, New Jersey, at the site of Don Bosco College. Construction commenced in July 1957 and the building was completed and occupied on May 3, 1958.

Plaintiff asserts that the Reihl company was paid $519,000 for the construction work, of which approximately $108,000 was paid to defendant Formigli Corporation, a subcontractor, for its role in designing, fabricating and installing concrete beams supporting the walls and roof of the structure. If the case were tried, Formigli would dispute that it designed the beams, and both Formigli and Reihl would contend that all construction was done in accordance with plans and specifications

submitted by plaintiff. However, for the purpose of this motion, all facts alleged by plaintiff were accepted as true.

Plaintiff asserts that in early 1969 water leaks began to appear in the building. In April 1969 plaintiff contracted for the repair of leaks around window frames in the dormitory section at a cost of $59,000. Plaintiff asserts that in the course of that repair work, in April and May 1969, it was discovered that the water leaks were related to serious cracks in the concrete beams supporting the building. Plaintiff thereafter engaged an engineer and architect to study the problem. In February 1970 plaintiff received a report that the structure was unsound and dangerous. A second study was commissioned, and a similar report was received in June 1970. Accordingly, the building was shut down and the September 1970 class of students was transferred to a location in Massachusetts. Thereafter, on May 27, 1971 this action was commenced, approximately 13 years after the building had been completed and occupied and four years after N.J.S.A. 2A:14-1.1 became effective. By then, specifically in 1969, the Reihl corporation had been dissolved.

Defendants contend that this action is expressly proscribed by N.J.S.A. 2A:14-1.1, which is as follows:

No action whether in contract, in tort, or otherwise to recover damages for any deficiency in the design, planning, supervision or construction of an improvement to real property, or for any injury to property, real or personal, or for an injury to the person, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained on account of such injury, shall be brought against any person performing or furnishing the design, planning, supervision of construction or construction of such improvement to real property, more than 10 years after the performance or furnishing or such services and construction. This limitation shall not apply to any person in actual possession and control as owner, tenant, or otherwise, of the improvement at the time the defective and unsafe condition of such improvement constitutes the proximate cause of the injury or damage for which the action is brought.

Plaintiff has attacked the constitutionality of the statute and has asserted also that, in any event, it does not apply to this action because (a) the statute, by the terms of its second sentence, does "not apply" to an owner in actual possession and control; (b) this statute should be interpreted to apply prospectively only, to construction or services performed after its effective date, namely, May 18, 1967; (c) the defects were unknown and undiscoverable prior to the spring of 1969 and the "discovery rule" should except plaintiff from the operation of the statute; and (d) the claim is grounded in breach of warranty and strict liability in tort, and is therefore not affected by the statute.

The constitutional infirmities charged here by plaintiff are similar to those urged in Rosenberg v. North Bergen Tp., supra. In that case (although not raised before me in the trial court on the motion to dismiss) a broad constitutional attack was raised, namely, that the law was arbitrary, violated equal protection and due process rights, and created an immunity for a special class in violation of fundamental law. It was argued that it contravenes traditional notions of fair play and the broad public policy principles underlying the "discovery rule" to cut off a cause of action before it is discovered.

As stated above, the Supreme Court upheld the constitutionality of the statute. While acknowledging the desirability of affording a remedy in certain cases by extending the period of limitations through the "discovery" rule, the court also recognized the right of the Legislature to set a terminal date for claims that might otherwise threaten with liability a given class of persons for an unlimited period of time. The court held that the statute is not a statute of limitations which fixes a time period for the commencement of an action after it accrues. ...

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