April 9, 2009
DANIELLE MCGINTY, CANDACE MCGINTY, DANIEL MCGINTY, AND KATHRYN MCGINTY, PLAINTIFFS-APPELLANTS,
K. HOVNANIAN COMPANIES OF NEW JERSEY, INC., DEFENDANT-RESPONDENT, AND SOCIETY HILL AT SOMERSET CONDOMINIUM ASSOCIATION, INC., NASTUS BROS., INC., HOMEOWNERS WARRANTY CORPORATION, AND DUAL PLUMBING, INC., DEFENDANTS.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-8833-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 17, 2009
Before Judges Wefing, Yannotti and LeWinn.
Plaintiffs Danielle McGinty, Candace McGinty, Daniel McGinty, and Kathryn McGinty appeal from an order entered by the trial court on March 4, 2005, granting summary judgment in favor of defendant K. Hovnanian at Somerset (Hovnanian), which had been improperly pled as K. Hovnanian Companies of New Jersey, Inc. Candace McGinty also appeals from orders entered on May 12, 2006, which granted summary judgment in favor of defendants Nastus Brothers, Inc. (Nastus) and Society Hill at Somerset Condominium Association, Inc. (Society Hill). For the reasons that follow, we affirm.
On May 7, 2004, plaintiffs filed this action in the Law Division against Hovnanian, Nastus and Society Hill. In their complaint, plaintiffs alleged that in November 1985, Daniel and Kathryn purchased a condominium unit in the Society Hill development in Franklin Park Township (Township), Somerset County. Society Hill was the condominium association for the development. Hovnanian constructed and sold the unit to Daniel and Kathryn and, in November 1985, they moved in with their two children. At the time, Candace was six years old, and Danielle was eighteen months old.
Plaintiffs alleged that, shortly after they moved into the condominium and until the time they were "forced to move," they suffered from "various illnesses" that were "directly related to and proximately caused by toxic exposure due to various environmental contaminants in the home[.]" Plaintiffs asserted that they had been diagnosed with "sick building syndrome." They alleged that they suffered from multiple allergies, including severe mold allergy; chronic fatigue; depression; and abnormal blood cultures. Plaintiffs claimed that they were exposed to certain bacteria that required medical treatment and monitoring.
When the complaint was filed, Candace was twenty-four and Danielle was nineteen years old. Both Candace and Danielle alleged that, when they were minor children, they became "sick, sore and disabled" as a result of the "wrongful exposure to toxic substances." Both Candace and Danielle said that they had been diagnosed as suffering from "chronic neurotoxicity with associated attention and cognitive problems." Candace asserted that she became aware of her injuries in March 2004.
In counts one and two of the complaint, Candace and Danielle sought compensatory damages for their personal injuries, future medical expenses, emotional distress, pain and suffering, and loss of earning capacities. In count three, Candace and Danielle sought punitive damages. In count four, Kathryn and Daniel asserted claims for the medical expenses they had incurred and would incur in the future for their daughters' care and treatment. Plaintiffs all sought pre- and post-judgment interest, attorneys fees, and costs of suit.
Sometime in the fall of 2004, defendants filed motions for summary judgment, which the trial court denied without prejudice by orders entered on January 7, 2005, because discovery was not complete. On January 11, 2005, Hovnanian again filed a motion for summary judgment. Society Hill filed a cross-motion for partial summary judgment on February 7, 2005. Hovnanian and Society Hill argued that plaintiffs' claims are barred by the Statute of Repose, N.J.S.A. 2A:14-1.1(a) because their claims had not been brought within ten years after construction of the unit was completed.
In response to the motions, Kathryn filed an affidavit in which she asserted that, in the spring of 1986, plaintiffs first detected a foul odor in the unit. Kathryn said that plaintiffs did not become aware of the full extent of the "problem" in the unit until July of 1988, when they found water in the linen closet. Kathryn said that a complaint regarding the plumbing was registered with Society Hill.
Society Hill called in Nastus, a plumbing contractor, to follow-up on the complaint. According to Kathryn, Nastus detected methane gas in the unit and determined that the source of the problem was under the kitchen sink and inside the walls. Nastus cut a hole in a wall and through the kitchen cabinet, which exposed the area beneath the bathtub.
Kathryn asserted that Nastus found a disconnected plumbing trap "laying in a bog of moldy muddy water" beneath the slab foundation, where water had been draining. Nastus temporarily re-connected the trap and advised that additional repair work was required to address the problem.
Nastus informed Society Hill of the problem but did not make any additional repairs. Kathryn asserted that the leaks from the pipes continued. The entire area was left exposed, which Kathryn said "exacerbated the dangerous condition in [the] unit[.]" She stated that plaintiffs had been exposed to "toxins." Kathryn also stated that Society Hill took no action to address the problem.
Kathryn and Daniel filed a claim under their homeowner's insurance policy but the claim was denied. Kathryn asserted that, in July 1988, the Township's Board of Health inspected the dwelling and found water pooled below the bathtub, mold growth and a musty odor. In August 1988, Princeton Testing Labs performed air quality testing in the unit and allegedly found high concentrations and levels of bacteria and fungi. Kathryn stated that Hovnanian and Society Hill were informed of the alleged "serious condition" in the unit.
Hovnanian sent a plumber from Dual Plumbing, Inc. (Dual) to the unit.*fn1 According to Kathryn, Dual's plumber acknowledged that water was leaking from the pipes into the sub-floor and foundation of the unit. The plumber allegedly stated that "a major rip out" was required to address the problem. Kathryn asserted that the recommended repairs were not performed. Instead, Hovnanian and Society Hill only made what Kathryn said were "temporary and cosmetic" repairs.
Kathryn additionally stated that repeated attempts were made to have Hovnanian and Society Hill repair the unit's plumbing. By letters dated March 8, 1990 and July 30, 1990, Hovnanian refused to perform any further repair work in the unit. Plaintiffs alleged that the "serious problem" in the unit remained until Kathryn and Daniel sold the unit. Plaintiffs vacated the premises in October 1990.
The trial court considered Hovnanian's and Society Hill's motions for summary judgment on March 4, 2005. The court found that plaintiff's claims against Hovnanian were barred by the Statute of Repose because their complaint had been filed after the ten-year limitations period in the statute had run. The court further found that the Statute of Repose did not bar the claims against Society Hill because the statute does not apply to condominium associations. The court entered orders dated March 4, 2005, memorializing its decisions.
In February 2006, Society Hill and Nastus filed motions for summary judgment. Society Hill and Nastus argued that Candace's and Danielle's claims had been filed beyond the time prescribed by N.J.S.A. 2A:14-2. The statute provides that "[e]very action at law for an injury to the person caused by the wrongful act, neglect or default of any person within this State shall be commenced within two years next after the cause of any such action shall have accrued[.]"
Society Hill and Nastus also argued that Candace's and Danielle's claims also had been filed beyond the time permitted by N.J.S.A. 2A:14-21, which generally permits a minor to sue for personal injuries within two years after reaching the age of majority. Society Hill and Nastus further maintained that the "discovery rule" did not toll the statute of limitations.
The motions were granted in part and denied in part by orders entered by the trial court on May 12, 2006. The court determined, among other things, that Danielle's claims were timely filed, whereas Candace's claims were not.
On May 27, 2008, a stipulation was filed dismissing with prejudice plaintiffs' claims against Dual. On July 10, 2008 and July 17, 2008, stipulations were filed dismissing plaintiffs' claims against Society Hill and Nastus, respectively.
Plaintiffs thereafter filed this appeal and argue that the trial court erred by finding that the Statute of Repose barred them from pursuing their claims against Hovnanian. The statute provides in pertinent part that:
[n]o action, whether in contract, in tort, or otherwise, to recover damages for any deficiency in the design, planning, surveying, supervision or construction of an improvement to real property, or for any injury to property, real or personal, or for an injury to the person, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained on account of such injury, shall be brought against any person performing or furnishing the design, planning, surveying, supervision of construction or construction of such improvement to real property, more than [ten] years after the performance or furnishing of such services and construction. . . . [N.J.S.A. 2A:14-1.1a.]
The Statute of Repose "'is unlike the typical statute of limitations [because t]he time within which suit may be brought under [the statute of repose] is entirely unrelated to the accrual of any cause of action.'" Daidone v. Buterick Bulkheading, 191 N.J. 557, 564 (2007) (quoting Rosenberg v. Town of N. Bergen, 61 N.J. 190, 199 (1972)). Thus, "[u]nlike a statute of limitations, the Statute of Repose 'does not bar a cause of action; its effect, rather, is to prevent what might otherwise be a cause of action from ever arising.'" Id. at 564-65 (quoting Rosenberg, supra, 61 N.J. at 199).
Consequently, an "'injury occurring more than ten years after the negligent act allegedly responsible for the harm forms no basis for recovery.'" Ibid. (quoting Rosenberg, supra, 61 N.J. at 199). Moreover, the ten-year limitations period in the Statute of Repose is not tolled because a cause of action arising from the construction of an improvement to real property accrues during a plaintiff's infancy. O'Connor v. Abraham Altus, 67 N.J. 106, 123 (1973).
The words of the Statute of Repose "are clear and therefore deserving of enforcement as written[.]" Daidone, supra, 191 N.J. at 566. The statute provides that: a cause of action for construction or design defects ceases to exist ten years and one day after the designer or contractor has performed or furnished his or her design or construction services. Thus, if a designer's or contractor's services continue up to and including the date the certificate of occupancy is issued for the improvements made, then the start date for Statute of Repose purposes is the date of the certificate of occupancy. If, however, the design or construction services are completed before a certificate of occupancy is issued and the designer or contractor has no further functions to perform in respect of that construction project, then the start date for Statute of Repose purposes is the date on which the designer or contractor has completed his or her portion of the work. [Ibid.]
See also Russo Farms, Inc. v. Vineland Bd. of Educ., 144 N.J. 84, 117 (1996) (holding that time limitations under the Statute of Repose begin to run upon "substantial completion" of the improvements, which is the time when the certificate of occupancy is issued).
Here, it is undisputed that Hovnanian was the contractor for the unit that Kathryn and Daniel purchased in November 1985. It is also undisputed that a certificate of occupancy was issued for the unit on January 23, 1985. Plaintiffs did not file their complaint in this case until May 7, 2004. It is clear, therefore, that plaintiffs filed their complaint more than ten years after the date when Hovnanian substantially completed the construction of the unit. Thus, the Statute of Repose barred plaintiffs' claims against Hovnanian.
Plaintiffs argue, however, that the ten-year time bar under the statute did not begin to run in this case until Hovnanian's construction work on the entire condominium development of some 2,664 units was completed. Plaintiffs maintain that the development was constructed in several stages and the construction of the last stage of the development was not completed until December 13, 1994, which was apparently the date when the performance bonds for the entire project were released. Plaintiffs thus argue that the ten-year period under the Statute of Repose should run from that date, not the date when the certificate of occupancy was issued for their unit.
We disagree. Plaintiffs' arguments are inconsistent with the principles enunciated by the Supreme Court in Daidone and Russo Farms. Under those decisions, the Statute of Repose began to run upon "substantial completion" of their unit, which occurred when the certificate of occupancy was issued for the unit, not when Hovnanian substantially completed work on the other 2,663 units in the Society Hill development.
Moreover, even though Hovnanian performed certain repairs to the unit's plumbing after the certificate of occupancy was issued, plaintiff's claims were not brought within the time required by the Statute of Repose. In Horosz v. Alps Estates, Inc., 136 N.J. 124 (1994), the Court held that:
[w]hen 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.
[Id. at 133.]
In this case, plaintiffs allege that Hovnanian made "temporary and cosmetic" repairs to the defective plumbing in their unit. Those "temporary and cosmetic" repairs did not constitute a separate and distinct "improvement" to the property. Even if they did, plaintiffs' claims regarding those repairs were not filed within ten years after the repairs were completed.
Plaintiffs also argue that the Statute of Repose was never intended to deny recovery to a person who is in direct privity with the negligent party. Plaintiffs argue that the statute was meant to apply to a situation in which a third-party social guest, with no direct privity to the owner-builder, is injured long after the owner-builder has relinquished ownership and control of the building. Suffice it to say, there is no language in the statute that limits its application in the manner suggested by plaintiffs.
In addition to appealing the trial court's order of March 4, 2005, dismissing her claims on the basis of the Statute of Repose, Candace also has appealed from the orders entered by the trial court on May 12, 2006, which granted Society Hill's and Nastus' motions for summary judgment. Because the claims against Society Hill and Nastus have been settled, there is no basis for any appeal by Candace from the orders granting summary judgment in favor of those defendants. Indeed, in their brief, plaintiffs do not seek reversal of the trial court's May 12, 2006 orders.
Candace argues, however, that her claims against Hovnanian are not barred by the two-year statute of limitations for personal injury claims in N.J.S.A. 2A:14-2, as tolled by N.J.S.A. 2A:14-21. In view of our determination that the trial court correctly found that Candace's claims against Hovnanian are barred by the Statute of Repose, we need not address this contention.