Court Permits Construction Defect Litigation Suit to Continue Against Subcontractor

The New Jersey Superior Court recently found that under New Jersey law, when used properly, the fictitious party practice allows a plaintiff to join a specific subcontractor more than 10 years from the date of its work. In Society Hill at University Heights III Condominium Association, Inc. v. K. Hovnanian at Newark Urban Renewal Corp., III, Inc. et al, ESX-L-5867-03, the court permitted a construction defect claim against a contractor that had allegedly completed its work in 1994 but was not joined until 2008 to proceed.

New Jerseys Statute of Repose N.J.S.A. §2A:14-1.1 provides in pertinent part that:

No action . . . 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.

[N.J.S.A. § 2A:14-1.1]

The statute applies to, among others, building contractors, whose professional work is functionally related to, and integrated with, a building plan or design, which gives rise or contributes to construction defects and an unsafe condition. E.A. Williams Inc. v. Russo Development Corp., 82 N.J. 160, 169; (1980). However, the New Jersey Supreme Court, in Greczyn v. Colgate-Palmolive, 183 N.J. 5 (2005), addressed the interplay between the fictitious party practice and the Statute of Repose. In doing so, the court allowed plaintiffs to join defendants in a lawsuit after the expiration of the statute of repose as long as the plaintiff was diligent in determining the identity of the responsible party. In Society Hill, supra, the New Jersey Superior Court relied upon the Greczyn case in allowing the Condominium Association to continue its case against one of the contractors, in part, because the Association relied upon another defendant, the Developer K. Hovnanian, for information and documents related to the construction of the buildings. Given that the Association did not construct the buildings, it was at the mercy of the Developer and others as to information related to construction. Once that information was provided and thoroughly reviewed by the Association, the contractor was joined by name in the lawsuit. The Judge found that it is at least a question of fact as to whether or not the Association was diligent in joining the contractor, thereby leaving the issue to be determined by the jury.

If your association has building issues and have been told that your construction defect claims are barred by either the statute of limitations or statute of repose, contact my office to discuss. Your common interest community may have options and other means of recovery for construction defects caused by negligent construction.