Cumberland County Board of Chosen Freeholders Vs. vitetta Group, P.C.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1377-12T3

CUMBERLAND COUNTY BOARD

OF CHOSEN FREEHOLDERS, APPROVED FOR PUBLICATION

Plaintiff-Appellant, July 30, 2013

v. APPELLATE DIVISION

VITETTA GROUP, P.C., ARTHUR J.

OGREN, INC., CONTINENTAL CAST

STONE EAST, BY RUSSELL, INC.,

and E.P. HENRY CORPORATION,

Defendants,

and

GILBANE BUILDING COMPANY,

Defendant-Respondent.

_______________________________

Argued June 4, 2013 - Decided July 30, 2013

Before Judges Messano, Lihotz and Ostrer.

On appeal from the Superior Court of New

Jersey, Law Division, Cumberland County,

Docket No. L-962-07.

Steven L. Rothman argued the cause for

appellant (Lipman, Antonelli, Batt, Gilson,

Rothman & Capasso, attorneys; Mr. Rothman,

of counsel and on the briefs; Jane B.

Capasso, on the briefs).

Tracy L. Burnley argued the cause for

respondent (Marshall, Dennehey, Warner,

Coleman & Goggin, attorneys; Ms. Burnley, on

the brief).

The opinion of the court was delivered by

LIHOTZ, J.A.D.

Defendant Gilbane Building Company (Gilbane) was retained

by plaintiff, the Cumberland County Board of Chosen Freeholders,

in the early 1990's to supervise construction of the expansion

and remodeling of the Cumberland County Courthouse (the

Courthouse Project). Thereafter, leaking caused water damage,

but Gilbane was neither notified of nor involved in repair

attempts. When plaintiff initiated this action against Gilbane

and other construction professionals involved in the Courthouse

Project, more than ten years had passed since Gilbane completed

its services. The Law Division dismissed plaintiff's complaint

as untimely under the applicable ten-year statute of limitations

for civil actions commenced by governmental bodies. On appeal,

plaintiff argues the judge erred as a matter of law by applying

the wrong legal standard when determining whether its action was

untimely. We are not persuaded and affirm.

The facts, taken from the summary judgment record, are

tailored to address only those issues raised by plaintiff with

respect to its claims against Gilbane, omitting facts concerning

the other defendants.

2 A-1377-12T3

In May 1993, plaintiff and Gilbane executed an agreement

for construction services (the Agreement). Under the Agreement,

Gilbane was to provide construction management services as

plaintiff's on-site field representative, overseeing the

architect, contractors, and other construction professionals

involved in the Courthouse Project. In this role, Gilbane had

specific supervisory responsibilities, including: providing at

least one qualified and experienced full-time field

representative on-site during each work day to "assur[e] day-to-

day, on-schedule and under-budget performance of the

construction work in accordance with the contract documents";

"[r]eview[ing] all work in progress on the project's site to

assure the highest quality in accordance with design plans and

other contract documents"; and regularly communicating and

interacting with the general contractor, architect, engineer,

plaintiff, and others involved in the project, to assure

compliance with all design requirements.

On August 17, 1995, Gilbane issued a Substantial Completion

Notice, and agreed to correct a final punchlist of items. The

notice transferred full possession to plaintiff and triggered

the commencement of the warranty provisions. On behalf of

plaintiff, John Kenneth Mecouch, a Cumberland County Purchasing

Office representative, along with the project construction

3 A-1377-12T3

manager, certified the project had been inspected and it was

accepted as "substantially completed." Plaintiff began to

occupy the courthouse in August or September 1995, following

receipt of a certificate of occupancy. Gilbane had no further

involvement with the Courthouse Project or the building as

renovated.

In November 1995, plaintiff observed "manifestations of

leaks" and resultant water damage throughout the renovated

courthouse area. Although the general contractor attempted

subsequent repairs, Gilbane was not contacted regarding or

involved in these problems.

Plaintiff filed this complaint on September 18, 2007.

Count three alleged plaintiff's damages were directly and

proximately caused by Gilbane's "negligence, lack of care,

willful misconduct and gross negligence in connection with the

supervision of the construction[,]" and "began to accrue shortly

after completion of the Courthouse Project when pervasive,

ongoing water leakage occurred throughout the four walls of the

new construction and the renovation portions . . . [,] resulting

in exterior and interior damage, including mold, cracking of

cast stone window sills, cornices and coping units and failed

masonry."

4 A-1377-12T3

In lieu of filing an answer, Gilbane moved to dismiss the

complaint, arguing plaintiff's claims were "barred" by the

statute of repose, N.J.S.A. 2A:14-1.1, because suit was not

commenced within ten years of completion of Gilbane's services

on the project. Plaintiff responded, arguing the statute of

repose did not preclude its claims against Gilbane because

subpart b(2) of section 1.1 states the statute does not time bar

an action by a government unit "based on willful misconduct,

gross negligence or fraudulent concealment in connection with

. . . supervision . . . of an improvement to real property[.]"

Gilbane's motion was denied and plaintiff's request to amend its

complaint to add allegations of fraud and fraudulent concealment

against Gilbane was granted.

Plaintiff filed its second amended complaint on September

29, 2008, adding allegations of fraud and fraudulent

concealment. Gilbane answered and included among its

affirmative defenses an assertion plaintiff's claims were barred

by the statute of limitations and the statute of repose.

Following discovery, Gilbane moved for summary judgment. A

different judge granted partial summary judgment and dismissed

plaintiff's negligence claims, finding them time-barred. The

balance of the motion, with respect to the claims alleging

willful misconduct, gross negligence or fraudulent concealment,

5 A-1377-12T3

was denied, as the judge found disputed facts concerning whether

Gilbane committed "gross negligence" so as to trigger the b(2)

exception to the statute of repose. N.J.S.A. 2A:14-1.1b(2).

The judge was not asked to determine whether plaintiff's claims

were barred by the statute of limitations or laches. Following

the motion, the case was referred to mediation, pursuant to

which plaintiff settled all claims against all defendants except

Gilbane.

Plaintiff filed a third amended complaint and Gilbane again

moved for summary judgment, this time asserting the remaining

claims were barred by the applicable statute of limitations —

either N.J.S.A. 2A:14-1 (providing a six-year period of

limitations for tort or contract claims) or, alternatively,

N.J.S.A. 2A:14-1.2 (providing a ten-year period of limitations

for actions commenced by the State). Plaintiff opposed the

motion, arguing the statute of limitations did not apply to

actions by governmental units seeking damages resulting from

willful misconduct, gross negligence, or fraudulent concealment

in connection with construction of an improvement to real

property, because these actions were governed by the statute of

repose. In an oral decision, the judge rejected plaintiff's

argument and granted summary judgment, dismissing plaintiff's

complaint. Plaintiff appealed.

6 A-1377-12T3

In a motion for summary judgment under Rule 4:46-2(c), a

judge is required to analyze and sift through evidential

materials, including "pleadings, depositions, answers to

interrogatories and admissions on file, together with the

affidavits, if any," R. 4:46-2(c), to determine whether there

exists "a genuine issue as to any material fact challenged,"

ibid., and "determine 'the range of permissible conclusions that

might be drawn,'" Brill v. Guardian Life Ins. Co. of Am., 142

N.J. 520, 531 (1995) (quoting Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 596, 106 S. Ct. 1348, 1361, 89

L. Ed. 2d 538, 558 (1986)). See also Tomeo v. Thomas Whitesell

Constr. Co., 176 N.J. 366, 370 (2003) (stating summary judgment

necessitates some weighing of the evidence); Millison v. E.I. du

Pont de Nemours & Co., 101 N.J. 161, 167 (1985) (requiring a

motion judge to make a "discriminating search" of the evidence).

If no genuine issue of material fact exists, the judge then

considers whether the moving party is entitled to judgment as a

matter of law. Brill, supra, 142 N.J. at 540. Inevitably, the

judge must consider not just the quantum of proof, but the

quality of evidence as well. Costello v. Ocean Cnty. Observer,

136 N.J. 594, 614 (1994) (citing Schiavone Constr. Co. v. Time,

Inc., 847 F.2d 1069, 1089 (3d Cir. 1988)).

7 A-1377-12T3

Guided by the same standards, Prudential Prop. & Cas. Ins.

Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif.

denied, 154 N.J. 608 (1998), we review a grant or denial of

summary judgment de novo. We determine whether the moving party

demonstrated there were no genuine disputes as to any material

facts, and then whether the motion judge's application of the

law was correct. Atl. Mut. Ins. Co. v. Hillside Bottling Co.,

387 N.J. Super. 224, 230-31 (App. Div.) (citations omitted),

certif. denied, 189 N.J. 104 (2006).

Here, distilled to its essence, we are asked to determine

whether plaintiff's claims are time-barred. Plaintiff's

argument demands interpretation of two statutes — N.J.S.A.

2A:14-1.2, which is a statute of limitations governing civil

actions commenced by the State or its political subdivisions,

and N.J.S.A. 2A:14-1.1, which is a statute of repose governing

recovery of damages for any deficiency in the design, planning,

surveying, supervision or construction of an improvement to real

property. The question is a legal one, subject to plenary

review. Estate of Hainthaler v. Zurich Commercial Ins., 387

N.J. Super. 318, 325 (App. Div.) (citations omitted), certif.

denied, 188 N.J. 577 (2006). See also Manalapan Realty, L.P. v.

Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) (holding

8 A-1377-12T3

appellate courts accord no deference to a trial judge's

conclusions on issue of law).

We first consider the applicable statutes. Gilbane's

motion and the motion judge's ruling relied upon N.J.S.A. 2A:14-

1.2a, which states:

Except where a limitations provision

expressly and specifically applies to

actions commenced by the State or where a

longer limitations period would otherwise

apply, and subject to any statutory

provisions or common law rules extending

limitations periods, any civil action

commenced by the State shall be commenced

within ten years next after the cause of

action shall have accrued.

As used in the statute, the term "State" also includes "its

political subdivisions, any office, department, division,

bureau, board, commission or agency of the State or one of its

political subdivisions, and any public authority or public

agency[.]" N.J.S.A. 2A:14-1.2c.1

Enacted in 1991, the statute is one of limitation, fixing

the time within which an injured person must institute an action

seeking redress, typically measured from the time the cause of

action accrues. A statute of limitations is a procedural device

1

Although amended, effective July 1, 2013, the statute

merely deleted the former inclusion of the University of

Medicine and Dentistry of New Jersey previously included within

the definition of a political subdivision.

9 A-1377-12T3

operating as a defense to limit the remedy available upon proof

of an existing cause of action. See E.A. Williams, Inc. v.

Russo Dev. Corp., 82 N.J. 160, 167 (1980); Rosenberg v. Town of

N. Bergen, 61 N.J. 190, 199 (1972). The purpose behind statutes

of limitations "embodies important public policy

considerations." Martinez v. Cooper Hosp.-Univ. Med. Ctr., 163

N.J. 45, 51 (2000). Such statutes are designed "to protect

defendants from unexpected enforcement of stale claims by

plaintiffs who fail to use reasonable diligence in prosecuting

their claims." LaFage v. Jani, 166 N.J. 412, 423 (2001)

(citation omitted). See also Hein v. GM Constr. Co., 330 N.J.

Super. 282, 286 (App. Div. 2000) (reciting the purposes of a

statute of limitations as stimulating diligent prosecution of

claims, protecting against the litigation of stale claims by

penalizing dilatoriness, and serving as a measure of finality).

Expiration of a statute of limitations operates to bar the

filing and prosecution of what is deemed a stale suit. See,

e.g., Burd v. N.J. Tel. Co., 149 N.J. Super. 20, 28 (App. Div.

1977), aff'd, 76 N.J. 284 (1978). The Court has explained:

When a plaintiff knows or has reason to know

that he has a cause of action against an

identifiable defendant and voluntarily

sleeps on his rights so long as to permit

the customary period of limitations to

expire, the pertinent considerations of

individual justice as well as the broader

considerations of repose, coincide to bar

10 A-1377-12T3

his action. Where, however, the plaintiff

does not know or have reason to know that he

has a cause of action against an

identifiable defendant until after the

normal period of limitations has expired,

the considerations of individual justice and

the considerations of repose are in conflict

and other factors may fairly be brought into

play.

[Farrell v. Votator Div. of Chemetron Corp.,

62 N.J. 111, 115 (1973) (citations

omitted).]

Plaintiff argues the limitations bar of N.J.S.A. 2A:14-1.2a

does not affect its action against Gilbane, because it falls

within the statute's exception. As plaintiff asserts, the ten-

year limitations period applies "[e]xcept where a limitations

provision expressly and specifically applies to actions

commenced by the State or where a longer limitations period

would otherwise apply." N.J.S.A. 2A:14-1.2a. Plaintiff

maintains N.J.S.A. 2A:14-1.1, the statute of repose, expressly

and specifically applies to this case. Since another statute

applies, plaintiff urges the exception renders the statute of

limitations inapplicable to its action.

To provide context to plaintiff's argument, we recite the

statute of repose, which states in pertinent part:

a. No action . . . to recover damages for

any deficiency in the . . . supervision or

construction of an improvement to real

property, or for any injury to property,

real or personal, . . . arising out of the

defective and unsafe condition of an

11 A-1377-12T3

improvement to real property, . . . shall be

brought against any person performing or

furnishing the . . . 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

. . . .

b. This section shall not bar an action by

a governmental unit:

. . . .

(2) based on willful misconduct, gross

negligence or fraudulent concealment in

connection with performing or furnishing the

. . . supervision or construction of an

improvement to real property[.]

[N.J.S.A. 2A:14-1.1.]

Plaintiff asserts its claims against Gilbane are solely

governed by N.J.S.A. 2A:14-1.1b(2), not the statute of

limitations. Further, because its suit alleges "willful

misconduct, gross negligence or fraudulent concealment, in

connection with performing or furnishing the . . . supervision

or construction of an improvement to real property[,]"

plaintiff reasons the ten-year period of repose does not operate

to bar its action. Accordingly, plaintiff asserts no time

limitation bars a governmental subdivision seeking to recover

damages resulting from such conduct. We reject this syllogism

as flawed.

12 A-1377-12T3

Although some jurisprudence uses the terms statute of

limitations and statute of repose interchangeably, they are

different. "The basic feature of a statute of repose is the

fixed beginning and end to the time period a party has to file a

complaint." R.A.C. v. P.J.S., Jr., 192 N.J. 81, 96 (2007)

(citing Lieberman v. Cambridge Partners, L.L.C., 432 F.3d 482,

490 (3d Cir. 2005)). "Unlike a conventional statute of

limitations, the statute of repose does not bar a remedy but

rather prevents the cause of action from ever arising." Port

Imperial Condo. Ass'n v. K. Hovnanian Port Imperial Urban

Renewal, Inc., 419 N.J. Super. 459, 469 (App. Div. 2011) (citing

Rosenberg, supra, 61 N.J. at 199). See also Daidone v. Buterick

Bulkheading, 191 N.J. 557, 565 (2007) (same).

The time within which an action may be brought under

N.J.S.A. 2A:14-1.1 "'is entirely unrelated to the accrual of any

cause of action[,]'" Daidone, supra, 191 N.J. at 564 (quoting

Rosenberg, supra, 61 N.J. at 199), and the cause of action

specifically "ceases to exist" after ten years, id. at 566.

"The statute cuts off all claims after ten years . . . ,

irrespective of the date of injury." Ramirez v. Amsted Indus.,

Inc., 86 N.J. 332, 355 (1981) (citation omitted). "Thus injury

occurring more than ten years after the negligent act allegedly

responsible for the harm, forms no basis for recovery. The

13 A-1377-12T3

injured party literally has no cause of action." Rosenberg,

supra, 61 N.J. at 199.

The Supreme Court has considered the legislative purpose in

adopting the statute of repose. "The Court perceived the

statute as a legitimate legislative reaction to judicial

decisions expanding the period of liability under certain

statutes of limitations." Ebert v. S. Jersey Gas Co., 157 N.J.

135, 138 (1999) (citing Rosenberg, supra, 61 N.J. 190). Earlier

court decisions had extended a contractor's liability exposure

for defective materials, equipment, and workmanship. Rosenberg,

supra, 61 N.J. at 194-98 (determining the statute of repose was

likely adopted as "a legislative response seeking to delimit

th[e] greatly increased exposure" facing construction

professionals as a result of the judicial expansion of the

period of liability under certain statutes of limitations).

This defined purpose, as first expressed in Rosenberg, has

thereafter been reinforced by the Court. Most recently, the

Court has noted,

the Legislature enacted the statute [of

repose] in response to the expanding

application of the discovery rule to new

types of tort litigation, the abandonment of

the 'completed and accepted rule' . . . and

the expansion of strict liability in tort

for personal injuries caused by defects in

new homes to builder/sellers of those

homes[.]

14 A-1377-12T3

[Town of Kearny v. Brandt, __ N.J. __, __

(2013) (slip op. at 16) (internal quotation

marks and citations omitted).]

Also, in Russo Farms, Inc. v. Vineland Bd. of Educ., the Court

stated:

Before the statute was enacted, the

development of several trends in the common

law created the possibility that architects

and contractors could be sued for injuries

long after a project was completed, and the

statute meant to cut back on the potential

of this group to be subject to liability for

life.

[144 N.J. 84, 116 (1996) (internal quotation

marks and citations omitted).]

Consequently, it is now well-accepted that N.J.S.A. 2A:14-

1.1 was specifically "intended to limit the time within which a

cause of action may arise against an architect or builder to ten

years from the date construction is substantially completed[,]"

such that "injuries sustained or suits filed after the ten-year

period are barred." Greczyn v. Colgate-Palmolive, 183 N.J. 5,

18 (2005). See also E.A. Williams, supra, 82 N.J. at 167.

Courts have consistently construed the statute broadly to

"achieve the legislative goal of providing a reasonable measure

of protection against expanding liability for design and

construction professionals[.]" Newark Beth Israel Med. Ctr. v.

Gruzen & Partners, 124 N.J. 357, 363 (1991). See also Brandt,

supra, __ N.J. at __ (slip op. at 18) (same); Daidone, supra,

15 A-1377-12T3

191 N.J. at 567 (same); Russo Farms, supra, 144 N.J. at 116

(same). "The primary consideration underlying a statute of

repose is fairness to a defendant, the belief that there comes a

time when the defendant ought to be secure in his reasonable

expectation that the slate has been wiped clean of ancient

obligations[.]" R.A.C., supra, 192 N.J. at 96-97 (internal

quotation marks and citations omitted).

"Because of the deference owed to a legislative enactment,

courts generally do not expand the limitations period defined by

a statute of repose unless the Legislature carved out exceptions

that permit for tolling." Id. at 97 (citing Lieberman, supra,

432 F.3d at 490). The statute of repose, in fact, includes

exemptions. By its express terms, the statute "shall not bar an

action by a governmental unit" if the action is "based upon

willful misconduct, gross negligence or fraudulent concealment

in connection with performing or furnishing the . . .

supervision or construction of an improvement to real

property[.]" N.J.S.A. 2A:14-1.1b(2). Although we discovered no

opinions discussing application of this provision, we are

confident the general rules of statutory construction, designed

to determine the Legislature's intent, easily guide our review.

Looking at the plain language of N.J.S.A. 2A:14-1.1b(2), we

give the words used their ordinary meaning, Merin v. Maglaki,

16 A-1377-12T3

126 N.J. 430, 434-35 (1992) (citations omitted). We find the

language clear on its face and, therefore, easily enforced

according to its terms. Hubbard v. Reed, 168 N.J. 387, 392

(2001) (citations omitted). The exemption at issue provides a

public entity's cause of action will not be barred by N.J.S.A.

2A:14-1.1a if the defendant engaged in willful misconduct, gross

negligence or fraudulent concealment. N.J.S.A. 2A:14-1.1b(2).

The exemption meshes with the general purpose of the statute of

repose to allow a construction professional "'to be secure in

his reasonable expectation that the slate has been wiped clean

of ancient obligations, and he ought not to be called on to

resist a claim when evidence has been lost, memories have faded,

and witnesses have disappeared,'" Cyktor v. Aspen Manor Condo.

Ass'n, 359 N.J. Super. 459, 470 (App. Div. 2003) (quoting

Rosenberg, supra, 61 N.J. at 201), unless a defendant engaged in

untoward conduct.

We agree the allegations in plaintiff's amended complaint

are drawn to fit within subsection b(2) of the statute of

repose, with an eye at exempting its claims from the ten-year

bar of subsection a. N.J.S.A. 2A:14-1.1.

That said, plaintiff cannot proceed with its complaint by

ignoring its obligation to timely file claims pursuant to the

applicable statute of limitations. The statue of repose,

17 A-1377-12T3

N.J.S.A. 2A:14-1.1, may sometimes preclude an action that

otherwise would be timely under the statute of limitations,

N.J.S.A. 2A:14-1.2. For example, the ten-year statute of repose

would preclude suit even if the statute of limitations had not

run on a claim in which the discovery rule was applied.

However, the statute of repose, N.J.S.A. 2A:14-1.1, will not

save a claim otherwise barred by the applicable statute of

limitations, N.J.S.A. 2A:14-1.2. See O'Connor v. Altus, 67 N.J.

106, 122-23 (1975).

The uniform ten-year limitations period for actions

commenced by the State, set forth in N.J.S.A. 2A:14-1.2, was

passed by the Legislature in response to a trio of 1991 Supreme

Court decisions abolishing the long-standing common law doctrine

of "nullum tempus occurrit regi" — "no time runs against the

king" — under which the State and its agencies were exempt from

statutes of limitations generally applicable to civil actions.

N.J. Transit Corp. v. Borough of Somerville, 139 N.J. 582, 586

(1995). See also Statement to Senate Bill No. 3741 (1991)

(explaining the bill proposed a uniform ten-year limitations

period for "actions commenced by governmental entities formerly

protected by the nullum tempus doctrine" "[i]n order to strike a

better balance between the competing interests furthered by the

nullum tempus doctrine and statutory limitations periods, and in

18 A-1377-12T3

order to avoid potential disputes over applicable limitations

periods").

Contrary to plaintiff's contention, the provision of

N.J.S.A. 2A:14-1.2a, identifying the applicability of "another

limitations period," does not impliedly refer to the statute of

repose. Limitations statutes are separate and distinct from the

statute of repose.2 In fact, the statute of repose "impliedly

incorporates" the applicable statute of limitations for

particular actions. O'Connor, supra, 67 N.J. at 122.

Consequently, a plaintiff's claim is subject to the ten-year

statute of absolute repose, as well as the separate and distinct

statute of limitations. See, e.g., Russo Farms, supra, 144 N.J.

115-19 (noting the defendants could defeat the plaintiff's claim

on either basis under the facts of the case); E.A. Williams,

supra, 82 N.J. at 164, 172 (same).

In O'Connor, supra, the Court explained the interaction of

the statute of limitations for tort actions, applicable in that

case, N.J.S.A. 2A:14-2, and the statute of repose, N.J.S.A.

2A:14-1.1, noting both statutes were

2

We note, at the time N.J.S.A. 2A:14-1.2 was enacted, the

statute of repose did not expressly apply to governmental

actions, making it clear the Legislature did not intend the

statute of repose to operate in place of the statute of

limitations under N.J.S.A. 2A:14-1.2.

19 A-1377-12T3

at work in that situation. The latter

[statute of repose] does not expand the two-

year period of the personal injury statute.

It simply provides that in any event the

suit must be started within ten years of the

construction, regardless of when the cause

of action accrues. The two-year period of

N.J.S.A. 2A:14-2 controls to the extent that

it "fits" within the ten years.

[67 N.J. at 122.]

Accordingly, if an action is barred by the statute of

limitations, it cannot be saved by the statute of repose. Once

a plaintiff is aware of the facts giving rise to the cause of

action, the statute of repose does not relieve the plaintiff of

the obligation to file the cause within the period defined by

the applicable statute of limitations. The timeliness of the

plaintiff's claim remains dependent on the applicable statute of

limitations.

Here, plaintiff had ten years from the date it discovered

the water leakage problem to file its suit against Gilbane. It

failed to do so, delaying initiation of suit for more than

twelve years after Gilbane received the certificate of occupancy

and turned over the property to plaintiff. The motion judge

applied the law correctly and properly dismissed plaintiff's

complaint.

Affirmed.

20 A-1377-12T3