July 3, 2008
MARCIE LOPEZ, PLAINTIFF-APPELLANT,
B & J CRAFTSMEN, INC., JAMES BECHTLE, AND ARTHUR MANNS HARDEN AIA, DEFENDANTS-RESPONDENTS, AND B & J CRAFTSMEN, INC. AND JAMES BECHTLE, THIRD-PARTY PLAINTIFFS-RESPONDENTS,
BAINE CONTRACTING, INC., THIRD-PARTY DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Law Division, Ocean County, No. L-3499-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 2, 2008
Before Judges Wefing, R. B. Coleman, and Lyons.
Plaintiff appeals from trial court orders granting summary judgment to defendants. After reviewing the record in light of the contentions advanced on appeal, we affirm.
The dispute between the parties revolves around the design and construction of plaintiff's ocean-front home in Bay Head. Plaintiff retained defendant Arthur Manns Harden, AIA, as the architect for the project and defendant B & J Craftsmen, Inc. as the builder. Defendant James Bechtle is the principal of B & J.
Plaintiff's contract with Harden was executed in July 1992.*fn1
Harden's plans were approved by the Bay Head building department in January 1993. Construction commenced apace and a certificate of occupancy was issued on August 10, 1993. The total cost of construction was $398,277 and Harden's fee was $31,862.16. This fee included his services both for designing the residence and supervising its construction.
Almost immediately after moving into the house in August 1993, plaintiff began to experience a problem with water entering the house around sliding glass doors that entered onto a deck. Later, water got into the house at various points. Plaintiff testified that between 1995 and 1998 Harden and Bechtle returned several times to try to solve the problem but that their efforts were unsuccessful. The record indicates that Harden or individuals from his office visited the premises on various occasions between 1995 and 2003. According to plaintiff, the initial efforts involved putting in new flashing and progressed to replacing some shingles and then replacing and recaulking some windows.
In 1999 to 2000, the water infiltration increased. In September 1999 Bechtle made certain repairs for which he charged $750. These also did not solve the problem. Plaintiff testified that on one New Year's Eve water poured into the dining room. The sliding glass doors entering onto the deck above the dining room were replaced in an attempt to solve the problem. At several points, attempts were made to repair the deck, even to the point to try to change the pitch of the deck to direct water away from the house. This could not be achieved, however, because the deck was part of the original structure of the building.
According to plaintiff, none of the repairs were successful. She testified that the constant leaks required continued repairs inside the house to the walls and the floors. Plaintiff also maintained that the interior of the house was contaminated by mold as a result of the continuing incursions of water into the premises. Mold remediation was undertaken in the fall of 2003. She estimated that as of 2003, she had spent more than $100,000 in repairs and would have to spend nearly $140,000 more in future repairs.
In December 2004 plaintiff commenced this action. She included in her complaint counts for breach of contract, negligence, breach of warranty, common law fraud, and consumer fraud. Defendants moved for summary judgment on the basis of N.J.S.A. 2A:14-1.1, the ten year statute of repose. The trial court denied the motions without prejudice to permit the parties to conduct discovery. After the parties completed discovery, defendants renewed their motions for summary judgment. Plaintiff has appealed from the trial court's order granting those motions.
N.J.S.A. 2A:14-1.1 provides in pertinent part:
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, . . . 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 of such services and construction.
"The purpose of the statute of repose was to limit the expanding liability of contractors, builders, planners and designers." Horosz v. Alps Estates, Inc., 136 N.J. 124, 128 (1994).
Although N.J.S.A. 2A:14-1.1 is designed to limit the time during which one can sue design and construction professionals, it is not a conventional statute of limitations at all, at least in the traditional understanding of that term. The statute does not bar a remedy in the sense of providing an injured person a certain time to institute suit after the accrual of a cause of action. Rather, injuries occurring more than ten years after the completion of services simply form no basis for recovery.
The statute prevents what could have been a cause of action related to those services from ever arising. [Newark Beth Israel v. Gruzen, 124 N.J. 357, 363 (1991) (internal citations omitted).]
The statute begins to run upon "substantial completion" of the building. In Russo Farms v. Vineland Board of Education, 144 N.J. 84, 117 (1996), the Supreme Court adopted the definition of "substantial completion" utilized by the American Institute of Architects: "the date when 'construction is sufficiently complete . . . so the owner can occupy or utilize' the building." The Court stated "Substantial completion occurs when the architect certifies such to the owner and a certificate of occupancy is issued attesting to the building's fitness."
Id. at 117. It is clear that plaintiff's home was substantially completed on August 10, 1993, when the municipality issued a certificate of occupancy.
Defendants maintain that plaintiff's complaint, having been filed well beyond ten years from that date, is barred. Plaintiff argues that because defendants were involved in repair efforts after the certificate of occupancy issued, and her complaint was filed within ten years of the last of defendants' repairs, her complaint is not barred.
All parties point to Horosz v. Alps Estates, Inc., 136 N.J. 124 (1994), to support their positions on appeal. Plaintiff argues that Horosz demonstrates why the trial court was incorrect in granting summary judgment to these defendants while defendants, in turn, contend that the analysis the Court employed in Horosz leads to the conclusion that the summary judgments in their favor should be affirmed.
In that case, defendant Alps constructed a home in Wayne, New Jersey; when the construction was completed in 1977, the plaintiffs Horosz purchased the home. 136 N.J. at 126. In 1981 plaintiffs noticed cold air entering the house at its right rear and they contacted the defendant. Ibid. In 1982, Alps commenced some repair work. After performing test borings, it was determined that this portion of the house was built on fill and that it had begun to sink. Id. at 124. Alps put concrete and steel under that section of the house and replaced that portion of the foundation. The plaintiffs testified that they asked the defendant to perform similar work under the entire house, but it refused to do so, saying it was unnecessary.
In 1989, the plaintiffs again noticed cold air entering the house and discovered one of the windows would not close properly. In addition, the garage doors were not properly aligned and two of the bedroom floors sloped from right to left. The plaintiffs again contacted the defendant, who promised to have the house inspected. Ibid.
When the defendant did not follow through on its assurance of an investigation, the plaintiffs retained another company to look into the situation. That company jacked-up the house and learned that the entire house had been built on fill, not just the portion that the defendant had repaired several years earlier. Ibid. The plaintiffs commenced suit against the builder in 1989, twelve years after the house was completed.
The trial court dismissed the plaintiffs' complaint, finding it was barred because it had been filed more than ten years after plaintiffs purchased the home from the defendant. This court reversed. The Supreme Court affirmed our analysis and returned the matter to the trial court for trial.
The Court agreed that "[w]ith respect to any deficiency in the original design, planning, supervision, or construction of the house, the statute began to run on the 'final date the person claiming repose and immunity from suit furnished any and all services or construction that it had undertaken at the job site." Id. at 131 (quoting Welch v. Engineers, Inc., 202 N.J. Super. 387, 397 (App. Div. 1985)). The Court noted, however, the plaintiffs' complaint related to the 1983 repair work, alleging it had been negligently performed in that the entire foundation had not been underpinned at that time. The Court summarized its holding:
Any deficiency regarding the initial design or construction of the house may not now form the basis of a lawsuit. Yet, any deficiency related to a subsequent improvement of the property may form the basis of a lawsuit, provided that the property owner commences such an action within ten years of the completion of that improvement.
[Id. at 132.]
In response to the defendant's argument that the Court was, in effect, tolling the statute of repose, the Court stressed the limited nature of its ruling.
When a builder-developer performs repairs that constitute an improvement to real property after the initial construction has been completed, the owner has ten years from completion of the repair work to file an action against the builder-developer for defects relating solely to that repair work.
With respect to defects unrelated to such repairs (defects resulting from the original construction), however, N.J.S.A. 2A:14-1.1 runs from the date of the completion of the initial construction of the home. [Id. at 133.]
Based upon Horosz, the trial court concluded that all of plaintiff's claims with respect to the original design and construction of her home were barred under N.J.S.A. 2A:14-1.1, but her claims with respect to the subsequent attempts at repair were not barred by the statute. The trial court then proceeded to carefully analyze the two expert reports that plaintiff had submitted.*fn2 Because those reports failed to distinguish between claims related to the original construction and claims related to the subsequent efforts at repair, the trial court concluded defendants' motions for summary judgment should be granted.
We concur in this analysis and conclusion. We note at the outset that the parties did not address before the trial court or before us whether the subsequent efforts by defendants constituted "an improvement to real property" for purposes of the statute. We, therefore, do not address that question and confine our analysis, as did the trial court, to the sufficiency of plaintiff's case, assuming that these efforts were indeed "an improvement to real property."
We have conducted our own review of plaintiff's expert reports and agree with the trial court that even applying the standards set forth in Brill v. Guardian Life Ins. Co. of America, 142 N.J. 520 (1995), plaintiff failed to create a material question of fact with respect to the "completion of an improvement to real property" within ten years of the filing of her complaint. The defects in performance cited with respect to defendant Harden all relate to the original design and the manner in which he supervised the construction of the residence. As such, plaintiff's claims against Harden are barred by the statute.
The same obtains with respect to defendants B & J and Bechtle. To the extent these reports mention return visits by Bechtle and Harden in an effort to cure the problems of leaking, the reports make no delineation in terms of plaintiff's damages between the original design and construction and these subsequent efforts.
We reject plaintiff's contention that defendants have the burden of establishing that delineation. The burden of proof with respect to all of her claims rested upon plaintiff at all times. It was not up to defendants to establish that they were not liable.
The order under review is affirmed.