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Miles v. Deluxe Building Systems

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 28, 2009

BLAINE MILES, AND HIS WIFE, LESLIE MILES, PLAINTIFFS-APPELLANTS,
v.
DELUXE BUILDING SYSTEMS, INC., FORMERLY DELUXE HOMES OF PA, INC., T/A DELUXE BUILDING SYSTEMS, DEFENDANT-RESPONDENT, AND ENCOMPASS INSURANCE, FORMERLY KNOWN AS CNA PERSONAL INSURANCE, T/A ENCOMPASS; AND ANTONINI BROTHERS CONSTRUCTION CO., INC., T/A ANTONINI BROTHERS, DEFENDANTS.

On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-379-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 11, 2009

Before Judges Carchman and Sabatino.

Plaintiffs, Blaine and Leslie Mills, husband and wife, appeal the Law Division's order granting summary judgment to defendant, Deluxe Building Systems, Inc. ("Deluxe"), the manufacturer of their modular home. The husband was injured when a deck attached to the second story of his house collapsed, nearly eighteen years after it was built. The order dismissed plaintiffs' various claims for damages against Deluxe, based upon the court's determination that those claims were barred by the ten-year Statute of Repose, N.J.S.A. 2A:14-1.1. We affirm.

I.

The record contains the following facts germane to our analysis of the legal issues.

Deluxe*fn1 designs and manufactures prefabricated modular, single-family homes. The modular homes have several variations of standardized floor plans. Deluxe also offers "special personalized features," in which a buyer can "modify existing designs or... create personal floor plans from scratch." The modular homes are built in a factory and then shipped to the customer's building site, generally in about eighty-five to ninety percent complete condition. The homes are then finished by independent builders and contractors. According to Deluxe's marketing brochures, each modular home is inspected by "full-time" quality control engineers, "inspected and approved by an independent state licensed agency," and is "constructed to [comply with] state, county, and local codes[.]"

At some point in the mid 1980s, plaintiffs contacted Deluxe, expressing an interest in purchasing a modular home. Deluxe's representative informed plaintiffs that they could not order a house directly from the company, but instead had to purchase it through a "certified" builder who was part of a network associated with the company. According to plaintiffs, the only approved builder available in their area was co-defendant, Antonini Brothers Construction Company ("Antonini").*fn2

Subsequently, plaintiffs contracted with Antonini to build the modular home. Plaintiffs allege that Blaine Miles, Antonini, and Deluxe's representatives had several conference calls discussing the specifications of the modular home.

Plaintiffs chose a split-level design, Model No. 1704-SL. Although plaintiffs recall that they signed a contract with Deluxe, neither they nor Deluxe have been able to locate a copy of such a written agreement.*fn3

The modular home arrived at plaintiffs' property in Williamstown on September 25, 1986, in four segments. The segments were then assembled and constructed on site by Antonini in approximately forty-five days.

In or about the fall of 1986, the deck was attached to plaintiffs' modular home. Plaintiffs state that they specifically contracted with Deluxe to have the deck added to their home. According to Blaine Miles, he had discussed the design options with Antonini. Plaintiffs chose French doors, one of the options shown on the floor plan, for the second-floor master bedroom, so as to accommodate a deck attached to those doors. Blaine Miles recalled that, consistent with those specifications, Deluxe built the home "in the factory with the intentions of having his deck installed" adjacent to the French doors.

The deck was not pre-fabricated. As Blaine Miles recalls it, Antonini "brought [the deck] in pieces" and then built and attached the deck onto the modular home.

Deluxe's representative presented a different factual version concerning the deck. He stated that, to his knowledge, Deluxe has never "offered to ship a deck separate from the house." According to Deluxe's brochures, builders are "typically" responsible for supplying porches and decks. In the atypical instance where Deluxe agrees to supply the deck, it builds and attaches the deck onto the home while it is still in the factory.

More than seventeen years after plaintiffs purchased and moved into the home, on March 20, 2004, Blaine Miles was injured when he was standing on the wooden deck and the deck tore away from the house structure. As the deck pulled away from the house, it allegedly "flipped," and Mr. Miles was pinned underneath. He sustained serious injuries as a result of the accident.

According to a liability expert retained by plaintiffs, "the deck, as constructed, was not properly or sufficiently attached to the residence." Among other things, plaintiffs expert faulted the use of nails, rather than bolts or log screws, to connect the deck to the joists. The deck also apparently was not sufficiently "flashed" to guard against water infiltration, resulting in decay that weakened the structure.

Consequently, on March 8, 2006, plaintiffs filed a complaint in the Law Division for the injuries arising out of the 2004 deck accident. Plaintiff sued Deluxe, Antonini, and Encompass Insurance Company ("Encompass"), which was plaintiffs' homeowners' insurance carrier. Deluxe and Encompass each filed answers denying liability. Antonini did not file any responsive pleadings.

Before discovery was complete, Deluxe and Encompass moved for summary judgment. After considering the opposing papers and oral argument, the trial judge issued a written decision on June 18, 2007, granting Encompass's motion.*fn4 In that same decision, the judge also granted Deluxe's motion in part, specifically dismissing plaintiffs' claims against Deluxe with respect to the design of the house and the deck under the Statute of Repose, N.J.S.A. 2A:14-1.1. However, the judge initially denied, without prejudice, plaintiffs' claims against Deluxe arising out of the Products Liability Act, N.J.S.A. 2A:58C-1 to -11 ("the PLA").

Once discovery was completed, Deluxe renewed its summary judgment motion. It again relied on the Statute of Repose, seeking dismissal of the balance of plaintiffs' claims against it. Following oral argument, the trial judge granted Deluxe's motion. In her accompanying written opinion, dated June 30, 2008, the judge found that the Statute of Repose foreclosed the remainder of plaintiffs' claims against Deluxe, including those under the PLA, because "the modular home with [the] deck was a permanent improvement to real estate within the protection of the [Statute of Repose.]"

Plaintiffs now appeal the grant of summary judgment to Deluxe. In essence, they argue that the deck was not an "improvement to real estate" within the scope of the Statute of Repose, and therefore their complaint was not time-barred. They maintain that the modular home and deck should both be viewed as "products" under the PLA; that the Statute of Repose does not apply because Deluxe allegedly manufactured those items and did not assemble or install them; that Deluxe had at least a "dual" status as manufacturer and assembler that makes the Statute of Repose inapplicable; and that policy considerations weigh against enforcement of the ten-year repose period here. Plaintiffs raise other related sub-issues, all of them challenging the trial court's application of the Statute of Repose.

II.

N.J.S.A. 2A:14-1.1, also known as the Statute of Repose, prescribes, in relevant part, that:

a. No 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 10 years after the performance or furnishing of such services and construction. This limitation shall serve as a bar to all such actions, both governmental and private, but shall not apply to actions against any person in actual possession and control as owner, tenant, or otherwise, of the improvement at the time the defective and unsafe condition of such improvement constitutes the proximate cause of the injury or damage for which the action is brought. [N.J.S.A. 2A:14-1.1(a) (emphasis added).]

"Unlike 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.'"

Daidone v. Buterick Bulkheading, 191 N.J. 557, 565 (2007) (quoting Rosenberg v. Town of N. Bergen, 61 N.J. 190, 199 (1972)). The statute commands that "injury occurring more than ten years after the negligent act allegedly responsible for the harm[] forms no basis for recovery." Ibid. (internal quotations omitted). The enactment "reflects the legislative preference, from a public policy standpoint, for finality in construction-related claims." Id. at 567. Consequently, our courts "have read the statute broadly to accomplish this purpose[.]" Ibid. (internal quotations and citations omitted).

To receive the protection of the Statute of Repose, a defendant must show that:

(1) the injury sustained by plaintiff resulted from a defective and unsafe condition of an improvement to real property;

(2) [defendant was] responsible for performing or furnishing the design, planning, surveying, supervision of construction, or construction of the improvement; and

(3) the injury occurred more than ten years after the performance or furnishing of the services. [Dziewiecki v. Bakula, 180 N.J. 528, 531-32 (2004); see also N.J.S.A. 2A:14-1.1(a).]

Applying these well-established standards, the trial court concluded that plaintiffs' lawsuit arising out of the collapsed deck was time-barred, because the suit was filed more than ten years after the deck was built.

Having fully considered the contentions raised on appeal by plaintiffs, we affirm the entry of summary judgment in favor of Deluxe, substantially for the cogent reasons expressed by Judge Anne McDonnell in her successive letter opinions of June 18, 2007 and June 30, 2008. We add only a few comments.

As to the first element of the statutory test, i.e., whether plaintiff's injury resulted from a defective condition of "an improvement to real property," we agree with the motion judge and defendant that the modular home and the deck attached to it were such "improvements." An improvement to real property is one that "'enhances the use of the property, involves the expenditure of labor or money, is more than mere repair or replacement, adds to the value of the property, and is permanent in nature.'" Ebert v. S. Jersey Gas Co., 157 N.J. 135, 139 (1999) (quoting Van Den Hul v. Baltic Farmers Elevator Co., 716 F.2d 504, 508 (8th Cir. 1983)). Unquestionably, houses are improvements to real property. See Stix v. Greenway Dev. Co., 185 N.J. Super. 86, 88 (App. Div. 1982) (holding that a house built seventeen years prior to the collapse of a basement foundation wall was covered by the Statute of Repose).

Plaintiff stresses that their home was mass-produced by Deluxe. Even so, we perceive no reason to exclude modular or mass-produced homes from the meaning of "improvements to real property." In Frankenmuth Mut. Ins. Co. v. Marlette Homes, 573 N.W.2d 611 (Mich. 1998), the Supreme Court of Michigan similarly held that the Michigan Statute of Repose, Mich. Comp. Law Serv. § 600.5839(1) (2009), which likewise covers "improvement[s] to real property," protected the manufacturer of an allegedly defective modular home. As the Michigan court observed, "we can identify no bright line that causes a traditional home, constructed on the property where it will remain, to be so fundamentally different from a 'manufactured' home that is largely constructed off-site. Technologies change over time, and even conventional on-site construction involves the use of important elements fabricated elsewhere[.]" Id. at 614. We concur with that reasoning. See also Koester v. Hunterdon County Bd. of Taxation, 79 N.J. 381, 384 (1979) (holding that mobile homes located in a development "specifically designed as a 'permanent community' of mobile homes" were taxable as real property); Diana v. Russo Development Corp., 352 N.J. Super. 146, 153 (App. Div. 2002) (applying the Statute of Repose to a house's defective roof hatch and ladder, despite the fact that the hatch and ladder were "mass-marketed items," noting that "much construction in a home" involves such mass-produced features).

We agree with the motion judge that plaintiffs' invocation of the PLA does not take their modular home and deck outside the scope of the Statute of Repose. Even if, for the sake of argument, we were to consider the house and deck as "products" subject to the PLA, they still would be "improvements to real property" situated on plaintiffs' residential block and lot. Nothing in the PLA creates an exception to the strict time limits of the Statute of Repose for realty improvements. In addition, we must bear in mind the Supreme Court's consistent guidance that the Statute of Repose must be broadly construed. Daidone, supra, 191 N.J. at 567; see also Russo Farms v. Bd. of Educ. of Vineland, 144 N.J. 84, 116 (1996); Newark Beth Israel Med. Ctr. v. Gruzen & Partners, 124 N.J. 357, 363 (1991).

The second element of the statutory test is also satisfied here. The record amply shows that Deluxe was a party "responsible for performing or furnishing the design, planning, surveying, supervision of construction of the improvement." N.J.S.A. 2A:14-1.1; Dziewiecki, supra, 180 N.J. at 531-32. That is clearly so as to plaintiffs' modular home. We recognize that it is uncertain whether Deluxe fabricated the deck or whether Antonini or some other third party did. But that uncertainty does not affect the propriety of dismissing the claims against Deluxe. If Deluxe did not have anything to do with the creation of the deck, then it is not legally responsible for its structural integrity. Alternatively, if Deluxe did design and/or specially fabricate the deck, its endeavors in that regard are clearly protected by the Statute of Repose.

The cases cited by plaintiffs on this point are inapposite. For example, in Dziewiecki, supra, 180 N.J. at 528, the Court held that the manufacturer and seller of an in-ground swimming pool was not protected by the Statute of Repose. The Court noted that the manufacturer's pool kit was a "stock item" that had no "changes or alterations," "no different than a stock item that one pulls off the shelf at a store." Id. at 532 n.2. Here, by contrast, plaintiffs' modular home was customized to their preferences from Deluxe's floor plans. We also find distinguishable Wayne Twp. Bd. of Educ. v. Strand Century, Inc., 172 N.J. Super. 296 (App. Div. 1980), where we held that the manufacturer of a dimmer panel installed in a high school was not covered by the Statute of Repose. The panel manufacturer "merely sold a stock or shelf item out of its regular inventory or fabricated a product as designed and specified by the electrical engineer or the electrical contractor for [the] project." Id. at 303. The customized home and attached deck in this case are nothing like the dimmer panel in Wayne. Finally, Santos v. Hubey Corp. 236 N.J. Super. 608, 611 (Law Div. 1989), does not apply here. There, plaintiffs sued elevator manufacturers for damages arising out of two separate elevator accidents. The Law Division agreed that the elevators were "improvements to real property" under the Statute of Repose but denied summary judgment because plaintiffs had not yet received a full opportunity to explore in discovery the manufacturers' roles in the building process. Id. at 611-12. Here, discovery is complete, and Deluxe's participation in the customization of plaintiffs' house is a matter of record.

Lastly, plaintiffs do not contest that the third prong of the Statute of Repose, i.e., the expiration of the ten-year period, applies because the house and deck were built in 1986, and the subject accident did not occur until 2004. Principles of equitable tolling cannot suspend the ten-year statutory period of repose, even if the alleged defect is latent and not discovered until after the ten years has run. Russo, supra, 144 N.J. at 116; see also Trinity Church v. Lawson-Bell, 394 N.J. Super. 159, 176-77 (App. Div. 2007).

We have fully considered all of plaintiffs' remaining points, and conclude that they lack sufficient merit to be discussed in this opinion. R. 2:11-3(e)(1)(E).

Affirmed.


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