Before Judges King, Newman and Fall. On appeal from the Superior Court of New Jersey, Law Division, Somerset County.
The opinion of the court was delivered by: Newman, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
The appeal in this complex construction litigation involves application of the claim-joinder component of the entire controversy doctrine. We granted leave to defendant, James W. Broscious, Esq., to appeal from a November 20, 1998 order denying in part and granting in part his application requesting the motion Judge to reconsider his August 16, 1996 order dismissing the amended complaint against defendants Faridy Thorne Fratak, Wagner-Hohns-Inglis, Inc., Middle State Engineering, Inc., Biehn Construction Company, and E.P. Donnelly, Inc. The November 20, 1998 order granted relief, reinstating the action against defendants Middle State, Biehn and Donnelly, but denied the motion as to Faridy and Wagner. We now reverse, holding that the claim-joinder component of the entire controversy doctrine does not bar subsequent design defect claims against architect and construction manager where equitable considerations weigh in favor of an adjudication of these claims on the merits and where the claims are separate and discrete from the negligent supervision claim dismissed during the first action.
The procedural history and facts surrounding this appeal may be summarized as follows. In 1989, the Hillsborough Township Board of Education (Hillsborough) entered into contracts for the construction of the Amsterdam Elementary School (school). These contracts called for the completion of the school for student occupancy by September 1990. The construction of the school proceeded under several general contracts, including plumbing contracts with J.W. DiNatale Mechanical Contracts (DiNatale or the plumber), and a general construction contract with Biehn Construction, Inc. (Biehn or general contractor). The architect on the project was Faridy Thorne Fraytak (Faridy or the architect) and the construction manager was Wagner-Hohns-Inglis (Wagner or the construction manager).
In 1990, after the school had been completed and occupied, Hillsborough discovered three construction defects: (1) use of lead-containing solder in the drinking water; (2) improper installation of ceiling fans; and (3) water infiltration through the roof and windows.
On November 4, 1992, Hillsborough filed a complaint alleging defects resulting from the use of lead-solder in the drinking water naming DiNatale and others as defendants. The construction plans, specifications and applicable codes called for the use of non-lead solder. In the meantime, Hillsborough negotiated directly with the contractors and their sureties as to the water leaks and improper installation of the ceiling fans. Paul E. Griggs (Griggs) represented Hillsborough during the filing of this complaint.
DiNatale declared bankruptcy. As a result, in February 1993, Hillsborough amended the complaint to add International Fidelity Insurance Company (International Fidelity), the surety company for the plumbing contractor, as a defendant. The complaint was also amended to include Faridy, the architect, and Wagner, the construction manager, as defendants based upon their alleged failure to supervise the plumber's work.
In December 1993, International Fidelity filed a motion for summary judgment based upon Hillsborough's failure to commence suit within two years from the date DiNatale completed the work pursuant to a provision in the performance bond. During the pendency of International Fidelity's motion, Griggs resigned as Hillsborough's counsel. James W. Broscious (Broscious) was subsequently retained to prosecute the lead-solder claim. International Fidelity was granted summary judgment on March 18, 1994. On May 13, 1994, Hillsborough disposed of the lead-solder lawsuit with Faridy and Wagner through voluntary stipulations of dismissal with prejudice. The entire lead-solder case was dismissed without the payment of any consideration by any of the defendants. Subsequently, on August 25, 1995, Hillsborough, through the law firm of Fogarty & Hara, filed a second complaint against Faridy, Wagner, DiNatale, and Middle State, the consulting engineer for the architects, and others, alleging negligence in design, installation and specifications of ceiling fans. Faridy and Wagner moved to dismiss the complaint against them under the entire controversy doctrine.
On December 1, 1995, the motion Judge granted summary judgment, dismissing with prejudice the complaint against Faridy and Wagner relying on the bar of the entire controversy doctrine. Hillsborough filed a motion for leave to file an interlocutory appeal which was denied by this court on March 28, 1996.
Hillsborough observed water entering the building through the roof and/or window in 1990 immediately after occupancy had been permitted. In January 1996, after ascertaining through an independent expert that water leaks may be the result of design deficiencies, Hillsborough amended the second complaint to add roof design defect claims against Faridy, Wagner, and Middle State. In addition, Hillsborough added Biehn, the general contractor, and Donnelly, the roofing subcontractor, as defendants. Alleging legal malpractice, the amended complaint also named Hillsborough's former attorneys, Griggs and Broscious as defendants for their failure to join all claims and parties in the initial suit.
Middle State, Biehn and Donnelly moved to dismiss the claims in the amended complaint under the party-joinder component of the entire controversy doctrine because they were not named as defendants in the lead-solder litigation. Similarly, Faridy and Wagner moved to dismiss the amended complaint, arguing that the new roof claims were barred because they should have been joined in the prior litigation. By letter opinion dated August 16, 1996, the motion Judge dismissed the complaint as against defendants Faridy, Wagner, Middle State, Biehn and Donnelly based upon the entire controversy doctrine, leaving only the legal malpractice claims against Broscious and Griggs.
On October 19, 1998, Broscious filed a motion for reconsideration. Hillsborough and Griggs joined in the motion filed by Broscious. On November 20, 1998, the motion Judge granted in part and denied in part the motion. The Judge ordered that the complaint be reinstated nunc pro tunc as to defendants Middle State, Biehn and Donnelly, who were not named as defendants in the ...