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Joseph M. Maloney and Griselda Maloney v. Khawaja A. Ali and Shamin A. Ali

October 17, 2011


On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-2121-09.

Per curiam.


Argued telephonically September 30, 2011

Before Judges Messano and Yannotti.

Plaintiffs Joseph M. Maloney and Griselda Maloney appeal from an order entered by the Law Division on October 8, 2010, granting summary judgment in favor of defendants Khawaja A. Ali and Shamin A. Ali, t/a Guldberg Builders. We affirm.

This appeal arises from the following facts. Plaintiffs entered into a contract with defendants for the purchase of a single-family dwelling that was then under construction. The closing took place on February 2, 2006, at which time defendants provided plaintiffs with a certificate of participation in the new home warranty security fund, which is administered by the New Jersey Department of Community Affairs (DCA).

On October 3, 2007, plaintiffs submitted a claim to the DCA under the warranty. In support of the claim, plaintiffs provided the DCA with a copy of a home inspection report. In their cover letter, plaintiffs identified certain defects discussed in the report that defendants had not addressed.

Plaintiffs also submitted to the DCA a completed Appendix D to the claim, which included the following statement:

I/We the above named homeowners(s) do hereby request the New Home Warranty Program to begin the Dispute Settlement Process. I/We understand that I/we will first submit to conciliation our disputes with the above named Builder prior to the election of either arbitration or Bureau Decision. I/We also understand that arbitration shall follow conciliation in the event the Builder and I/we fail to resolve our differences, unless we elect a Bureau Decision. I/we have previously contacted the Builder concerning the defect(s) described above and the Builder has failed to correct such defect(s). I/we are attaching a copy of the list of defect(s) that I/we forwarded to the Builder. I/we also certify that the information provided in the Disclosure Statement above is truthful and accurate, and [I/we] understand that failure to disclose will result in the Program closing the claim and not being liable for further payments, reimbursements, and/or repairs.

By letter dated October 11, 2007, the DCA informed plaintiffs that their claim had been "closed[.]" The DCA stated that plaintiffs had not submitted "a concise list of [the] defects" they were claiming. In addition, the DCA stated that the warranty was in its second year, and many of the defects which were listed in the claim were covered only in the first year of the warranty. The DCA noted that the commencement date of the warranty was February 1, 2006.

The DCA additionally stated that nothing in its letter should be construed as extending the filing deadline for a notice of claim under the warranty. The DCA said that in order to maintain the claim date, the information it had requested must be received and the claim "perfected" within ten days of the date of the letter. The DCA added, "Failure to submit the requested information and perfect the claim within this time period could result in the [DCA] assigning a new claim date to your claim."

Plaintiffs did not submit any further information to the DCA. Instead, on March 12, 2009, plaintiffs filed this action in the Law Division. In their complaint, plaintiffs alleged that defendants had constructed their home in a defective and negligent manner. Plaintiffs asserted claims for breach of contract, breach of the covenant of good faith and fair dealing, negligence, promissory estoppel, unjust enrichment and consumer fraud.

In August 2010, defendants filed a motion for summary judgment, arguing that plaintiffs' lawsuit was barred by the election of remedies provision in The New Home Warranty and Builders' Registration Act, N.J.S.A. 46:3B-1 to -20 (the Act), and specifically N.J.S.A. 46:3B-9. Plaintiffs opposed the motion. Neither party requested oral argument on the motion, and the court considered the motion on the papers. The court entered an order dated October 8, 2010, granting defendants' motion and dismissing plaintiffs' complaint with prejudice.

Plaintiffs filed a notice of appeal on October 25, 2010. On October 29, 2010, the trial court filed a written opinion with this court setting forth the reasons it granted defendants' motion, citing Rule 2:5-1(b). In the opinion, the court noted that, under N.J.S.A. 46:3B-9, a homeowner has the opportunity to pursue any remedy available to it; however, the statute provides that "initiation of procedures to enforce a remedy shall constitute an election which shall bar the owner from all other remedies." The court found that, by submitting their claim to the DCA on ...

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