Opinion
Civil Action No. 97-4189 (NHP).
July 6, 1999
Gregory E. Ronan, Esq., GODDARD, RONAN DINENN, P.C., New York, NY, Attorneys for Plaintiff.
David B. Kosakoff, Esq., L'ABBATE, BALKAN, COLAVITA CONTINI, LLP, Livingston, N.J., Attorneys for Defendants.
LETTER OPINION ORIGINAL ON FILE WITH CLERK OF THE COURT
Dear Counsel:
This matter comes before the Court on two motions: (1) the motion by defendants Hertzberg Sanchez, P.C. and A. Hertzberg, P.C. for summary judgment and (2) the motion by plaintiff 400 Kelby Associates for summary judgment. This Court heard oral argument on May 3, 1999. For the reasons stated more particularly herein, defendants Hertzberg Sanchez, P.C. and A. Hertzberg, P.C.'s Motion for Summary Judgment is GRANTED and plaintiff 400 Kelby Associates's Complaint is hereby DISMISSED WITH PREJUDICE. Plaintiff 400 Kelby Associates's Motion for Summary Judgment is DISMISSED AS MOOT.
STATEMENT OF FACTS PROCEDURAL HISTORY
In 1983, plaintiff 400 Kelby Associates ("plaintiff") entered into an agreement with defendants Hertzberg Sanchez, P.C. and Abraham Hertzberg, a principal of Hertzberg Sanchez, P.C. ("defendants"). See Plaintiff's Statement of Undisputed Material Facts, ¶ 1. Pursuant to that agreement, defendants promised to prepare structural engineering designs for the parking garage of a new building to be known as, "Parker Plaza" located in Fort Lee, New Jersey. At that time, plaintiff had already retained an architect, Henry Horowitz, to provide architectural services in connection with the premises. See Affidavit of Abraham Hertzberg, ¶ 3.
As set forth more particularly in Abraham Hertzberg's affidavit, the retainer was made pursuant to an agreement between Jack Parker, a principal of the Jack Parker Corporation. While the contractual relationship between Jack Parker Corporation and the plaintiff is unclear, the parties agree that the entities are related and that there was, in fact, an agreement which governed the professional relationship between plaintiff and defendants. See Affidavit of David B. Kosakoff, ¶ 4; see also Affidavit of Abraham Hertzberg, ¶ 3; Affidavit of Martin Schwartz, ¶ 2.
In 1985 or 1986, defendants completed their engineering project at the subject premises. Shortly thereafter, a Certificate of Occupancy was issued and tenants began occupying the premises. See Deposition of Martin Schwartz, dated August 17, 1998, pages 42-44, annexed to the Affidavit of David B. Kosakoff, Exhibit A.
In September 1988 and May 1991, plaintiff contacted defendants to inspect the parking garage as a result of water leakage in the concrete slabs located at the P-4 level of the garage. See Affidavit of Abraham Hertzberg, ¶ 5,6. Defendants complied with the requests and made certain recommendations regarding the water leakage. See id., ¶ 6. Plaintiff, however, did not retain defendants to repair the concrete slabs subsequent to the initial construction. See Affidavit of Abraham Hertzberg, ¶ 5.
On August 21, 1997, plaintiff filed a Complaint against defendants alleging breach of contract and negligence. See Complaint dated August 21, 1997.
On March 30, 1999, both plaintiff and defendants filed motions for summary judgment.
DISCUSSION
I. Standard of Review for Summary Judgment
The standard governing a summary judgment motion is set forth in Fed.R.Civ.P. 56(c), which provides, in pertinent part, that:
[t]he judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c). A fact is material if it might affect the outcome of the suit under the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
Procedurally, the movant has the initial burden of identifying evidence that it believes shows an absence of genuine issues of material fact.Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). When the movant will bear the burden of proof at trial, the movant's burden can be discharged by showing that there is an absence of evidence to support the non-movant's case. Id. at 325. If the movant establishes the absence of a genuine issue of material fact, the burden shifts to the non-movant to do more than "simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
In this matter, there are no genuine issues of material fact and therefore, summary judgment is appropriate.
II. Statute of Repose
Plaintiff contends that defendants breached their contractual obligations and otherwise were negligent in performing their structural engineering services when they failed to provide for waterproofing in connection with the construction of the P-4 level of the parking garage by decreasing the concrete slab's thickness to increase headroom in order to accommodate a possible drive-in bank. See Complaint; see also Affidavit of Schwartz, ¶ 5-7.
Defendants first contend that they were not retained to perform the waterproofing of the garage and, therefore, owed no duty, either contractually or otherwise, to perform or oversee the waterproofing of the structure. Assuming arguendo that defendants did owe a duty of care to plaintiff to perform or oversee the waterproofing of the garage, defendants assert that plaintiff's cause of action is barred by the applicable statute of repose because the project for which they were hired to complete was "substantially completed" in 1985 or 1986, the time period during which tenants began occupying the subject premises and the Certificate of Occupancy was issued.
In rebuttal, plaintiff maintains the position that the statute of repose does not bar plaintiff's cause of action. Plaintiff argues that the cause of action did not arise until 1996, when the building manager of Parker Plaza informed Jean Pierre Vaganay, the Executive Vice President of Parman Corp., that there were structural problems at the P-4 level of the parking garage, thereby making the filing of the Complaint on August 21, 1997 timely.
The New Jersey statute of repose provides, in pertinent part:
a. No action whether in contract, in tort, or otherwise to recover damages for any deficiency in the design, planning, 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, 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 . . .
N.J. Stat. Ann. § 2A:14-1.1 (West 1999).
The legislative history of the statute of repose reveals that the statute was enacted in response to the broadening application of the "discovery rule" to novel types of tort litigation, the abandonment of the "completed and accepted rule" (by which liability for contractors and architects ceased upon completion of the work and the acceptance by the owner), and the increase of strict liability in tort cases for personal injuries caused by defects in new homes to builders and sellers of those homes. See Newark Beth Israel Hosp. v. Gruzen, 124 N.J. 357, 362 (1991) (citing O'Connor v. Altus, 67 N.J. 106, 117-19 (1975)).
The New Jersey Supreme Court succinctly stated that the enactment of this statute was "`meant to cut back on the potential of this group to be subject to liability for life.'" Ramirez v. Amsted Indus., 86 N.J. 332, 356 (1981) (quoting County of Hudson v. Terminal Constr. Corp., 154 N.J. Super. 264, 268 (N.J.Super.Ct. App. Div. 1977), certif.denied, 75 N.J. 605 (1978)).
In order to achieve what the New Jersey Supreme Court believed was the legislative goal of this statute, the Court has opined that the statute applies broadly to "all [persons] who can, by a sensible reading of the words of the act, be brought within its ambit." Rosenberg v. Town of North Bergen , 61 N.J. 190, 198 (1972).
Although the practical effect of the statute is to limit the time period within which one can sue for defective design it "is not a conventional statute of limitations. In fact, it is not really a statute of limitations at all, at least in the traditional understanding of that term." Newark Beth Israel Hosp. v. Gruzen, 124 N.J. 357, 362 (1991) (quoting E.A. Williams v. Russo Dev. Corp., 82 N.J. 160, 167 (1980)). The New Jersey Supreme Court explained that:
[t]he statute of repose "does not `bar' a remedy in the traditional sense of providing an injured person a certain time to institute suit after the `accrual' of a `cause of action'" . . . Rather, injuries occurring more then ten years after the completion of services simply form no basis for recovery. The statute prevents what could have been a cause of action related to those services from ever arising . . .Id. at 363 (citations omitted). In other words, the statute of repose does not limit the time within which a claim can be brought. Instead, the statute "confers immunity ten years after the performance of services or construction when an injury occurs due to a defect or unsafe condition . . ." Van Slyke v. Worthington, 265 N.J. Super. 603, 608 (N.J.Super.Ct. Law Div. 1992).
"The statute was intended to terminate the liability of all persons who might be responsible for the existence of `defective and unsafe' conditions through their negligent design, plan or construction of an improvement to real property." Newark Beth Israel Hosp. v. Gruzen, 124 N.J. 357, 366 (1991) (citing E.A. Williams, 82 N.J. at 169)). Similar to the overall interpretation of the statute, an "improvement" to real property has been construed broadly. The general definition of an "improvement" has been defined as applications "which are required for the structure to actually function as intended." Ebert v. South Jersey Gas Company, 307 N.J. Super. 127, 132 (N.J.Super.Ct. App. Div. 199 8),aff'd, 157 N.J. 135 (1999) (citing Brown v. Jersey Central Power Light Co., 163 N.J. Super. 179 (N.J.Super.Ct. App. Div. 197 8), certif.denied, 79 N.J. 489 (1979)). "If improvements to property made in accordance with a defective design would render that property unable to be used for the purpose for which it was designed, without being or becoming unsafe, the statute is triggered." Newark Beth Israel Medical Center v. Gruzen and Partners, 124 N.J. 357, 365 (1991).
The statute of repose is applicable in this matter because plaintiff is alleging that the design and construction of an improvement to the subject premises, namely the parking garage, were defective and, therefore, rendered the premises unsafe. More specifically, plaintiff alleges that the concrete slabs of the parking garage were "less functional than those for which it contracted with Defendant . . . [and plaintiff] was required to tear out and replace completed work . . . [and that the premises] were functionally impaired." See Plaintiff's Answers to Interrogatories, ¶¶ 12-15. Moreover, Michael Schwartz testified that the conditions at the parking garage caused plaintiff to be concerned about the safety of the occupants of the premises. See Deposition of Michael Schwartz, pages 60-61. Since plaintiff is alleging that the "deficient" concrete slabs prevent the parking garage and the premises from being used for its intended purpose, the statute of repose clearly applies to this matter.
With respect to any deficiency in the original design, planning or construction of an improvement, the statute of repose begins to run upon "substantial completion" of the project. See Russo Farms, Inc. v. Vineland Board of Education, 144 N.J. 84, 118 (1996) (holding that substantial completion occurred when the certificate of occupancy was issued and the architect certified to the owner of the building that the building was substantially completed). The New Jersey Supreme Court reasoned that it was appropriate to adopt the "substantially completed" standard because the term has a specific meaning in the construction industry. See id. Relying upon various pamphlets and forms issued by the American Institute of Architects, the Supreme Court found that substantial completion is defined in the industry as "the date when `construction is sufficiently complete . . . so the owner can occupy or utilize' the building. Substantial completion occurs when the architect certifies such to the owner and a certificate of occupancy is issued attesting to the building's fitness." Id. at 117.
If, after the completion of additional work, the engineer/architect renders services such as repairs that further an improvement to the property, then the owner of the property has until ten years from the completion of the additional work to file an action in connection with that improvement. See Horosz v. Alps Estate, Inc., 136 N.J. 124, 133 (1994).
The determination whether N.J.S.A. § 2A:14-1.1 bars plaintiff's claims against defendants in this matter depends upon when the statute began to run which, in turn, depends on whether plaintiff's claim relates to the defects in the original construction or in subsequent repair work.
Here, plaintiff is claiming that the structural defects occurred as a result of the design and construction of the parking garage. The factual record reveals, however, that defendants substantially completed the parking garage in or about 1985 or 1986 when tenants began occupying the premises and the Certificate of Occupancy was issued. Accordingly, to the extent that plaintiff's cause of action alleges any deficiency in the initial design and construction of the parking garage, the statute of repose would bar it because their claim was filed on August 21, 1997, more than ten years after the completion of the construction.
The factual record is clear that defendants did not render any engineering services beyond 1985 or 1986. Although defendants were contacted in September 1988 and May 1991 to inspect the premises as a result of water leakage, plaintiff does not allege that defendants rendered any services which would constitute an improvement to the parking garage thereby "independently implicating" the statute of repose. See Horosz v. Alps Estate, Inc . 136 N.J. 124 (1994). When counsel for plaintiff was asked during oral argument to clarify the services which defendants rendered after 1985 or 1986, counsel could not identify for the Court any specific instances where defendants performed subsequent repair work.
CONCLUSION
For the foregoing reasons, defendants Hertzberg Sanchez, P.C. and A. Hertzberg, P.C.'s Motion for Summary Judgment is GRANTED and plaintiff 400 Kelby Associates's Complaint is hereby DISMISSED WITH PREJUDICE. Plaintiff 400 Kelby Associates's Motion for Summary Judgment is DISMISSED AS MOOT.
An appropriate Order accompanies this Letter Opinion.