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Society Hill Condominium Association, Inc. v. Society Hill Associates

January 30, 2002

SOCIETY HILL CONDOMINIUM ASSOCIATION, INC., PLAINTIFF-APPELLANT/ CROSS-RESPONDENT
v.
SOCIETY HILL ASSOCIATES, A NEW JERSEY LIMITED PARTNERSHIP, AMS ASSOCIATES, INC., GENERAL PARTNER OF SOCIETY HILL ASSOCIATES, STEIN BUILT HOMES, INC., A NEW JERSEY CORPORATION, ARTHUR M. STEIN, AND ALBERT L. STEIN, DEFENDANTS-RESPONDENTS/ CROSS-APPELLANTS, AND TRIAD ASSOCIATES, INC., MARK F. TACONITA, DAVID M. STEIN, JOSEPH ALBERT AND JUNE BALDWIN, DEFENDANTS



On appeal from Superior Court of New Jersey, Law Division, Camden County, L-9369-89.

Before Judges Havey, Braithwaite and Coburn.

The opinion of the court was delivered by: Coburn, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted January 7, 2002

Plaintiff, a condominium association, sued the developer and related individuals and entities pursuant to the Condominium Act, N.J.S.A. 46:8B-1 to -38 (the "Act"). The suit was for damages to common elements resulting from various construction defects.

The condominium project was built in five phases and ultimately consisted of 375 residential units in forty-three buildings in Cherry Hill.

During a bench trial on liability, the trial court ruled against plaintiff on the ground of lack of standing with respect to damages that it determined were to individual units rather than to the common elements. It also ruled against plaintiff with respect to the first two phases on the basis of a release plaintiff gave to the developer long before this suit was filed and further ruled that the evidence of construction defects regarding those phases was inadmissible. In addition, the trial court ruled that the developer was not liable for certain site conditions and dismissed plaintiff's consumer fraud claim. Ultimately, the court found defendants liable for a number of construction defects that need not be detailed since they are not contested. A liability judgment was entered on June 22, 1998. Thereafter, a jury determined that the common-element construction defects had caused plaintiff damages amounting to $600,000. Interest was allowed and on February 9, 2000, final judgment was entered in favor of plaintiff and against the developer, "defendants Society Hill Associates, Ltd., AMS Associates, Inc., and Stein Built Homes, Inc., jointly, severally, and in the alternative, in the amount of" $935,776.

Plaintiff's appeal focuses on the liability judgment of June 22, 1998, taking issue with each of the trial court's adverse rulings noted above. Defendants filed a cross-appeal raising three points, none bearing directly on the jury's determination of damages. They contend that the trial court erred (1) in failing to give defendants credit against the award for insurance proceeds received by plaintiff for the same claims; and (2) in granting plaintiff interest on the jury award. They also appeal from an earlier ruling by another judge denying their motion for summary judgment on the basis of the entire controversy doctrine.

Because of the nature of the points raised, we will describe the relevant facts bearing on each point as we reach it, rather than following the usual course of setting forth all the facts now.

I. Plaintiff's Lack of Standing

At the beginning of the trial, defendants filed a motion in limine to bar plaintiff from pursuing certain specific construction-damage claims. Defendants argued that plaintiff lacked standing as to those claims because they involved damage to individual units rather than to common elements. Plaintiff conceded that the damages related to individual units but claimed that in each case either the nature of the damage or its specific location made it a common element damage under the Act and the master deed. The parties and the trial court treated the matter as if defendants had filed a motion for summary judgment, and the trial court ruled for defendants.

For purposes of the motion, the trial court accepted plaintiff's description of the damages in question as follows: unit doors and window frames were out of square and binding; interior unit drywall ceilings and walls were damaged by water infiltration and had cracks; interior unit floors had "settled," and stairs were "unlevel," "bouncy" and "creaky"; unit "garage man doors" (referring to the door leading from a unit to its garage) had defective door frames; and interior unit walls had "nail pops" and were loose and bulged.

Under the Act, a condominium association may sue the developer for construction defects related to the common elements, Siller v. Hartz Mountain Assoc., 93 N.J. 370, 377, cert. denied, 464 U.S. 961, 104 S. Ct. 395, 78 L. Ed. 2d 337 (1983), and a unit owner may sue the developer "to safeguard his interests in the unit he owns." Id. at 382. While there are occasions when a unit owner may sue the developer with respect to common elements, id. at 381-82, the association may not sue the developer for damages to a unit. N.J.S.A. 46:8B-12 and -14. There is no dispute with respect to those fundamental propositions. Rather, the question is whether the identified damages excluded by the trial court were damages to common elements or damages to a unit. In other words, the question becomes what is the physical extent of a unit.

"The physical extent of [a unit] depends on what has been included in the common elements." Siller, supra, 93 N.J. at 382. Whether an item is a common element "may be ascertained by examination of the statutory definition and the master deed." Ibid. The Siller Court also recognized that

defective conditions in the common elements may also result in injury to the unit owner and damages to his personal property and the unit. . . . The unit owner's right to maintain an action for compensation for that loss against the wrongdoer is not extinguished or abridged by the association's exclusive right to seek compensation for damage to the common element[s]. [Ibid.]

The Act defines common elements as follows:

(i) the land described in the master deed;

(ii) as to any improvement, the foundations, structural and bearing parts, supports, main walls, roofs, basements, halls, corridors, lobbies, stairways, elevators, entrances, exits and other means of access, excluding any specifically reserved or limited to a particular unit or group of units;

(iii) yards, gardens, walkways, parking areas and driveways, excluding any specifically reserved or limited to a particular unit or group of units;

(iv) portions of the land or any improvement or appurtenance reserved exclusively for the management, operation or maintenance of the common ...


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