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Evesham Township Board of Education v. Vitetta Group

October 30, 2008

EVESHAM TOWNSHIP BOARD OF EDUCATION, PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
v.
VITETTA GROUP, DEFENDANT-RESPONDENT/CROSS-APPELLANT, AND ROLAND ARISTONE, INC., DEFENDANT/THIRD-PARTY PLAINTIFF, AND NEW ROAD CONSTRUCTION MANAGEMENT CO., INC. AND HARTFORD FIRE INSURANCE COMPANY, DEFENDANTS,
v.
ERTLE ROOFING & SHEET METAL, INC., THIRD-PARTY DEFENDANT/ CROSS-APPELLANT, AND PATRIOT ROOFING, INC., CERTAINTEED CORP., THIRD-PARTY DEFENDANTS, AND DANIEL S. FALASCA PLUMBING, HEATING, COOLING, INC., THIRD-PARTY DEFENDANT/ CROSS-APPELLANT/FOURTH-PARTY PLAINTIFF,
v.
SHARON SHEET METAL, ATLANTIC MILLER SERVICES AND SOUTH JERSEY AIR BALANCING CO., INC., FOURTH-PARTY DEFENDANTS, AND BARBER COLEMAN AND INVESYS BUILDING SYSTEMS, FOURTH-PARTY DEFENDANT/RESPONDENT.
RONALD ARISTONE, INC., PLAINTIFF,
v.
PENNSYLVANIA MANUFACTURERS ASSOCIATION INSURANCE CO. (PMA), ROYAL INSURANCE COMPANY OF AMERICA, ABC INSURANCE CO., DEF INSURANCE CO., DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. 10565-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: March 5, 2008

Before Judges Axelrad, Payne and Sapp-Peterson.

Plaintiff Evesham Township Board of Education ("Board") sought damages based on negligence and breach of contract for faulty design and construction of the Frances S. DeMasi School. The defendants were the project architect and engineer, the Vitetta Group ("Vitetta"), the general contractor, Roland Aristone, Inc. ("Aristone"), the construction manager, New Road Construction Management Company, Inc. ("New Road"), and the general contractor's performance bond surety, Hartford Fire Insurance Company ("Hartford"). Aristone impleaded several third-party defendants, including Ertle Roofing & Sheet Metal, Inc. ("Ertle") and the heating, ventilation and air conditioning (HVAC) contractor, Daniel S. Falasca Plumbing, Heating, Cooling, Inc. ("Falasca"). Falasca, in turn, impleaded several fourth-party defendants, including Barber Coleman and Invesys Building Systems ("Barber Coleman").

The Board, by leave granted, appeals from the March 2, 2007 amended order of the Camden County Superior Court motion judge granting partial summary judgment to Vitetta and Falasca dismissing the Board's HVAC and mold claims and the March l6, 2007 order for summary judgment to Barber Coleman dismissing all HVAC claims as barred by the statute of repose, N.J.S.A. 2A:14-1.1. The court held the complaint, filed within the ten-year period, which generally alleged "defects and deficiencies" in the school but did not specifically allege a deficient HVAC system or a mold problem, did not sufficiently raise the HVAC and mold claims.

Vitetta, Ertle, and Falasca cross-appeal from the January 27, 2005 order of the Burlington County Superior Court motion judge*fn1 striking all statute of limitations defenses, N.J.S.A. 2A:14-1, asserted by defendants, third-party defendants and fourth-party defendants on equitable estoppel grounds, and from the latter judge's determination that the 2005 order constituted the law of the case regarding the statute of limitations defense.*fn2 We reverse on both the appeal and the cross-appeal, concluding the HVAC and mold claims were not barred by the ten-year statute of repose but the Board's roof and HVAC claims, and resulting mold damage claims, were barred by the six-year statute of limitations.

I.

During the years 1989 to l99l, the Board contracted with Vitetta to perform architectural services in connection with the DeMasi School construction, New Road to perform construction management services as the Board's agent, and Aristone to work as general contractor. Construction occurred from l99l to l993. Evesham Township issued temporary Certificates of Occupancy on July 22, 1993*fn3 and September 7, 1993. The Board took occupancy of the building on September 7, 1993 and has continuously used the building since then. On October 11, 1993, Vitetta issued a letter establishing September 7, 1993 as the date of "substantial completion."*fn4 The Board accepted the DeMasi School as substantially complete by resolution on December l3, 1994 and executed a Certificate of Completion and Acceptance of the project on February l4, 1995. Evesham Township issued a final Certificate of Occupancy on February 10, 1995. From l993 through l995, the Board identified and consolidated an extensive series of punch list items, including those relating to the roof and HVAC system.

In October 1993 water leaks were discovered in the building originating from the roof, and during the l993-1994 school year, the Board complained of ongoing concerns with the HVAC system. Defendants made repairs through l995, and at the time the general contractor received final payment in June, it was believed all roof leaks and HVAC issues had been corrected. However, significant additional roof leakage occurred following a major snowstorm in January 1996. The Board's last contact with Aristone occurred in May l996, when the contractor apparently indicated it saw no further problems with the roof. The Board, however, still experienced roof leaks as late as l999 and 2000, which it had addressed by its maintenance staff.

On February l2, 2001, a teacher in the school complained of respiratory illness and reported worsening roof leaks and mold in the ceiling and rug. The principal responded by having the maintenance staff replace ceiling tiles and spray for mold.

On December 20, 2001, the Board filed a complaint in Burlington County against Vitetta, Aristone, New Road and Hartford seeking damages for negligent design and construction and breach of contract arising from "water leakage and other problems principally, although not exclusively, related to the roof." Vitetta and New Road asserted the statute of repose and statute of limitations as affirmative defenses in their answers to the complaint. Aristone asserted the statute of limitations as an affirmative defense in its answer. At some point prior to June 26, 2003, Aristone filed a third-party complaint against several roofing companies, including Ertle, and against Falasca, the HVAC contractor.*fn5 Falasca also asserted the statute of limitations as an affirmative defense in its answer.*fn6

In late 2002 through 2003, several defendants filed motions for summary judgment to dismiss the Board's complaint based on the six-year statute of limitations bar, and the Board filed a cross-motion. Following oral argument in February 2004, the court concluded the statute of limitations defenses presented factual issues that necessitated a Lopez*fn7 hearing to determine under the "discovery rule" when the Board became aware of the defects on which it based the suit. The hearing was scheduled for July 2004.

While the motions were pending, the Board served a January 8, 2003 expert report on all parties, focusing on two principal design and construction deficiencies: a defective roofing system resulting in persistent leaks and the absence of mechanical ventilation and thermostatic controls in the HVAC system in Area 5 of the school resulting in an inability to control the temperature and overall environment of the corridor. After detecting substantial mold growth in the school in August, the Board engaged experts to conduct tests to determine its cause and extent. The mold issue was discussed at a Case Management Conference in September 2003, and scheduling orders were established. On March 12, 2004, the Board served supplemental expert reports attesting to pervasive mold growth in the school that had begun to infect the classroom air, and opining that the mold was caused, over a period of years, by a combination of water leakage from the defective roof and excessive humidity from the defectively designed and built HVAC system. The experts further faulted the HVAC system for failing to bring sufficient fresh air into the school.

Several defendants then moved to bar these expert reports as untimely. By order of May 28, 2004, the court barred the reports and the testimony based on them, permitted the Board to introduce at trial only mold evidence as previously provided in discovery prior to March 12, 2004, and "permitted [defendants] to offer expert testimony on the mold issue." The Board filed an interlocutory appeal, and by order of September l6, 2004, we granted leave to appeal and "summarily reverse[d] the order of May 28, 2004, which barred the [three] expert reports . . . and precluded testimony as to [their] contents" and further provided that all other parties be given ample opportunity to secure their own experts and inspect the school. We also remanded for the "fixing of an appropriate discovery order."

In the interim, on May 11, 2004, the Board filed another complaint against defendants specifically alleging HVAC problems causing the mold. Defendants filed motions to dismiss the new action based on the statute of repose. The Board withdrew the second action by stipulation of dismissal without prejudice filed on December 2, 2004, stating such dismissal was based on our reversal of the order barring the Board's supplemental experts' reports.

In July 2004, the court conducted a Lopez hearing over seven days, during which nine witnesses testified and in excess of sixty-nine exhibits were placed into evidence regarding the roof, HVAC and mold claims.*fn8 On January 14, 2005, the court issued an oral ruling striking all statute of limitations defenses, memorialized in a January 25, 2005 order and February 16, 2005 written opinion. In its written opinion the court found, among other facts, that: (1) plaintiff first noted leaks originating from the roof sometime in l993; (2) roof-related problems were reflected in the punch lists from l993 to l995; (3) on June l9, 1995, there was an indication the roof was repaired and no problems were noted; (4) substantial leaks occurred on January 7, 1996 as a result of a significant snowstorm; (5) after investigating leaks in the valley areas of the roof in May l996, the Board was informed through Vitetta that Aristone saw no further problem with the roof and would not be doing any further work; and (5) there were further roof repairs performed by the Board's maintenance personnel in l999 and 2000.

The court acknowledged that the "discovery rule encompasses injured parties['] knowledge regarding the origin and existence of his injuries as related to the conduct of another" and found "plaintiff was aware the deficiencies existed before the certificate of substantial completion [and] [f]urther, there is no question plaintiff had knowledge that the injuries were caused by the contractors, as there were numerous communications between plaintiff's representatives and the contractor between l993 through l996." The court then concluded that despite no evidence of misrepresentation or concealment of a material fact by defendants, the Board was permitted to invoke the doctrine of equitable estoppel to toll the statute of limitations until January 7, 1996, the date of the snowstorm, based on its reliance upon the contractor's completion of performance of items on the punch list as part of its "continual contractual obligation." The court stated:

The Court finds the plaintiff[] relied upon the defendant to cure these [roof-related] problems [contained in the punch lists]. . . . The Court finds that the tolling of the statute ran from the cessation of the contract performance until the last defect came to the plaintiff's attention

The Court finds based upon equitable principles that the school district accepted Aristone's assurance and confirmation that the roof was fixed, that the items on the punch list were corrected. Leaks were assumed corrected until the problem arose in January l996. Based upon the ruling of the Appellate Division,*fn9 as this Court understands it, the mold issue remains a viable issue. Although there was evidence that mold could have been detected as early as 2001, the plaintiff contends that by way of scientific analysis, mold was definitely present September 2003. Further the plaintiff alleges the leaky roof, HVAC problems and air flow system all contributed to the mold issue. In that regard, plaintiff is left to it[]s proofs.

It is this Court's opinion that a global approach must be exercised along with public policy consideration.

Accordingly, this Court finds that the statute of limitation[s] on the plaintiff's claim for the design construction defects did not begin to run until January l996, accordingly the Complaint that was filed in December 200l is within the six (6) years statute of limitation[s]. The Court finds ...


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