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Quincy Mutual Fire Insurance Co. v. Blackman and Co.

February 25, 2008


On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-003810-06.

Per curiam.


Submitted February 4, 2008

Before Judges Stern and C.L. Miniman.

Plaintiff, Quincy Mutual Fire Insurance Company, appeals from a judgment based on two orders, entered on November 17, 2006, granting summary judgment to defendant Blackman and Company, Inc., and defendant MAC Sprinkler, Inc. Plaintiff also appeals from the denial of its motion for reconsideration on January 5, 2007. The motion judge concluded that the Pennsylvania two-year statute of limitations, as opposed to New Jersey's six-year statute of limitations, applied to the case, and dismissed the complaint.

Plaintiff asserts that "the motion court erred by granting . . . summary judgment motions based on Pennsylvania's statute of limitations when the statute of limitations is a procedural rule governed by the forum state." We disagree, and affirm substantially for the reasons stated by Judge Michael J. Kassel in his oral opinion of November 17, 2006, as supplemented herein.

Plaintiff filed this action as subrogee of Fifth Avenue KOP, its insured. The insured is a New Jersey company with its principal place of business in New Jersey. It had entered into an agreement with defendant Blackman to do remodeling work at KOP's facility in Pennsylvania. Blackman is a New Jersey company which subcontracted with defendant MAC, a Pennsylvania company, to install a sprinkler system at the KOP facility.*fn1 The sprinkler pipe froze, causing serious water damage which was attributable to the improper installation of the pipes. Defendants in the subrogation matter filed a motion for summary judgment based on Pennsylvania's two year statute of limitations. The trial court agreed with their contention, and dismissed the case.

The motion judge relied on Heavner v. Uniroyal Tires, 63 N.J. 130 (1973), which plaintiff asserts to be outdated by Gantes v. Kason Corp., 145 N.J. 478 (1996), in which the New Jersey statute of limitations was deemed applicable because the defendant was the New Jersey manufacturer and George's statute of repose had passed. Further, plaintiff argues that the Pennsylvania defendant, "when engaged in contracts with a New Jersey company, knew or should have known that he was subjecting himself to New Jersey's jurisdiction and therefore to New Jersey's forum rules." Therefore, plaintiff asserts our six-year statute of limitations, as opposed to Pennsylvania's two-year statute of limitations, applies.

The forum choice-of-law principles govern this decision, and in this regard New Jersey follows the "governmental interest" test. See Gantes, supra, 145 N.J. at 485. See also Rowe v. Hoffman-LaRoche, Inc., 189 N.J. 615, 621-22 (2007); Erny v. Estate of Merola, 171 N.J. 86, 94-95 (2002).

The work was to be performed and was actually performed in Pennsylvania. The accident and damage occurred there, and the repairs had to be performed there. As a result, we see no paramount or prevailing governmental interest in the State of New Jersey. There is no injury to a New Jersey entity other than any non-covered out of pocket expenses to KOP, whose facility was also in Pennsylvania. Under the governmental interest test, choice-of-law principles would point to Pennsylvania.

Heavner abandoned "the mechanical rule that the limitations law of this state must be employed in every suit on a foreign cause of action." 63 N.J. at 140-41. It recognized that "when the cause of action arises in another state, the parties are all present and amenable to jurisdiction in that state, New Jersey has no substantial interest in the matter." Id. at 141. In Heavner, New Jersey had "no substantial interest in the matter," notwithstanding the fact that defendant was a New Jersey corporation, because the accident occurred in North Carolina, and the vehicle with the defective tire was purchased in North Carolina by a North Carolina resident. Id. at 133-34.

There is no need in this case to either protect an injured New Jersey victim or to deter any action by a New Jersey defendant. Compare Gantes, supra; Rowe v. Hoffman LaRoche, supra, 189 N.J. at 619. The recent Rowe opinion points to application of the Pennsylvania statute of limitations in this case. While choice-of-law rules of the forum control, the controlling statute of limitations is based on a comparison of the relative governmental interests. See also Restatement 2d Conflict of Laws, §§ 142-143. Here, the damage was caused in Pennsylvania and the State of Pennsylvania has a greater interest in deterring any negligent conduct in that state by its corporations.


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