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Port Imperial Condominium Association, Inc v. K. Hovnanian Port Imperial Urban Renewal

May 2, 2011

PORT IMPERIAL CONDOMINIUM ASSOCIATION, INC., PLAINTIFF-APPELLANT,
v.
K. HOVNANIAN PORT IMPERIAL URBAN RENEWAL, INC., DEFENDANT-APPELLANT, AND U.S. WICK DRAIN, INC., NEW JERSEY DRILLING CO., AND DRAINAGE AND GROUND IMPROVEMENT, INC., DEFENDANTS-RESPONDENTS, AND BARTON & ASSOCIATES, INC., PAULUS, SOKOLOWSKI & SARTOR, INC., ADDABLOCK LIMITED, INC., ALL-TECH CARPENTRY CONTRACTORS, BREESE CORPORATION, CHARLES KANE, INC., QUALITY NORTH, BLUE RIBBON ROOFING AND SIDING, DENSIFICATION, INC., AND WEINTRAUB ORGANIZATION, LTD., DEFENDANTS.
K. HOVNANIAN PORT IMPERIAL URBAN RENEWAL, INC., THIRD-PARTY PLAINTIFF-APPELLANT,
v.
ADDABLOCK LIMITED, INC., ALLTECH CARPENTRY CONTRACTORS, BREESE CORPORATION, CHARLES KANE, INC., COMPONENT TECHNOLOGY, AND QUALITY NORTH, THIRD-PARTY DEFENDANTS. ALL-TECH CARPENTRY CONTRACTORS, LLC, FOURTH-PARTY PLAINTIFF,
v.
ABC CARPENTRY, JMP CARPENTRY A/K/A JMP CONSTRUCTION, LLC, PREFERRED NATIONAL INSURANCE COMPANY, PEDRO M. SOUZA, FARMERS MUTUAL INSURANCE CO., LUIS M. GUALLPA D/B/A GUALLPA'S CARPENTRY, COLONY NATIONAL INSURANCE CO., LLOYDS OF LONDON A/K/A UNDERWRITERS OF LLOYDS, TERRA NOVA INSURANCE CO., BURLINGTON INSURANCE COMPANY, N&C CARPENTRY, SUL-MINAS CONSTRUCTION, INC., THUNDER COMPANY, PRESERVER NATIONAL INSURANCE CO., MARCO A. GUALLPA, SELECTIVE INSURANCE, MARINGA CONSTRUCTION CO., CALVERT INSURANCE CO., PORTECH CONTRACTOR CORP., ALEA LONDON, LTD, SKYLINE FRAMING, INC., TRAVELERS INSURANCE CO., FAIRBANKS SERVICE CO., QUINCY MUTUAL, GLOBTECH, AND ANGLO AMERICAN LTD., FOURTH-PARTY DEFENDANTS. SELECTIVE INSURANCE COMPANY OF AMERICA, FIFTH-PARTY PLAINTIFF,
v.
MARKEL INSURANCE COMPANY, FIFTH-PARTY-DEFENDANT.
PORT IMPERIAL PROPERTY OWNERS ASSOCIATION, INC., PLAINTIFF,
v.
HOVNANIAN ENTERPRISES, INC., DEFENDANT/THIRD-PARTY PLAINTIFF, AND K. HOVANANIAN PORT IMPERIAL URBAN RENEWAL, INC., DEFENDANT/THIRD-PARTY PLAINTIFF-APPELLANT,
v.
PAULUS, SOKOLOWSKI AND SARTOR, INC., PORT IMPERIAL CONDOMINIUM ASSOCIATION, INC., DENSIFICATION, INC., ADDABLOCK LIMITED, INC., BREESE CORPORATION, AND ALBERT MARINE CONSTRUCTION, INC., THIRD-PARTY DEFENDANTS, AND NEW JERSEY DRILLING, U.S. WICK DRAIN, INC., AND DRAINAGE & GROUND IMPROVEMENT, THIRD-PARTY DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-2054-08, L-1988-10 and L-2677-10.

The opinion of the court was delivered by: Parrillo, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Submitted March 29, 2011

Before Judges Parrillo, Skillman and Roe.

The opinion of the court was delivered by PARRILLO, P.J.A.D.

We granted leave to appeal to determine whether N.J.S.A. 2A:14-1.1's statute of repose operates to preclude construction defect claims against various subcontractors who completed work on the construction project more than ten years before the filing of complaints against them. For the following reasons, we affirm the Law Division's grant of summary judgment in their favor.

This defective construction litigation involves the 445-unit residential condominium community of Port Imperial along the banks of the Hudson River in Guttenberg and West New York (Port Imperial, project or site) developed by defendant-third party plaintiff K. Hovnanian Port Imperial Urban Renewal, Inc.

(K. Hovnanian). Construction spanned several years from 1996 until its completion in 2002. Port Imperial is split into three communities: Jacob's Ferry, Harbor Place and Bull's Ferry. The Avenue at Port Imperial runs the length of Port Imperial along the Hudson River, dividing these communities in half. Those units on the east or Hudson River side of the Avenue are referred to as view units. None of the units in Port Imperial have basements, but rather were constructed on slab foundations.

K. Hovnanian hired Barton & Associates, Inc. (Barton), Paulus, Sokolowski & Sartor, Inc. (PS&S) and Weintraub Organization, Ltd. (Weintraub) to design the project. As a result of unsuitable soil conditions at the site, PS&S designed and implemented a ground improvement plan, which consisted of deep dynamic compaction that included the dropping of a heavy weight from a crane onto loose soil, the drilling of holes in the soil and installation of wick drains to allow for removal of water from the soil, and surcharging - a process of piling rock and other debris onto the soil and monitoring the rate of settlement.

In order to implement this plan, K. Hovnanian contracted with defendants U.S. Wick Drain, Inc. (U.S. Wick), Drainage and Ground Improvement, Inc. (DGI), and New Jersey Drilling Co. (N.J. Drilling). Specifically, N.J. Drilling pre-drilled the holes for wick drains at the Bull's Ferry section of the project, which it completed on May 4, 1998. That same month, DGI completed the actual wick drain installation at Bull's Ferry. Meanwhile, U.S. Wick performed both pre-drilling and installation of wick drains at Jacob's Ferry, which it completed, at the latest, in February 1998.

Upon completion of the project, K. Hovnanian transferred maintenance and control of the Port Imperial development to plaintiff Port Imperial Condominium Association (PICA), an entity created for this purpose. During the transition process, PICA hired Falcon Engineering (Falcon) to evaluate the development for any construction defects requiring remedy prior to transition. Falcon uncovered numerous defects, including cracked foundations and problems with certain of the units' roofs and windows, which led PICA, on April 22, 2008, to file a complaint against K. Hovnanian and the design professionals (Burton and PS&S) alleging numerous claims, including negligence, breach of contract, breach of express and implied warranties, and fraud.*fn1 On July 2, 2008, K. Hovnanian filed an answer to the PICA complaint along with a third-party complaint, naming several subcontractors as third-party defendants, although not U.S. Wick, DGI or N.J. Drilling.

During the ensuing discovery, PICA's geotechnical expert, Pillori Associates (Pillori), produced reports in November 2008 and December 2009 indicating that improper design and implementation of the ground improvement plan was causing settling of the soil under the view units, resulting in damage to the buildings. Specifically, the December 2009 report attributed the settling to defective surcharging and wick drain installation:

We believe that the incomplete wick drain installation beneath the view units at Jacobs Ferry and beneath building 25 at Bulls Ferry has prevented proper drainage of the organic stratum and is directly related to the steady rate of lateral and vertical strains induced by sustained loadings from the fill placement and building construction on the sites. Additional monitoring and further evaluation will be required for an extended period of time to determine if creep induced changes in pore ...


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