Commencing sometime prior to February 1993, plaintiffs John and Laura Daidone took steps
to build their home in Lacey Township. Acting as their own general contractor,
they hired defendants Scott Lepley, Lepley Design Group, and Lepley-McCorry Architects AIA, P.C.
(collectively, Lepley) to provide the architectural design for the home. Lepley prepared and
certified the architectural plans, which included a foundation piling system to support the
house. The Lacey Township Construction Official approved the plans on June 23, 1993.
Once the plans were approved, Lepley had no further role in the design
or construction of the Daidones home. The Daidones also contracted with defendant Buterick
Bulkheading to install the foundation pilings. Buterick completed installation of the pilings and
invoiced the Daidones for its work. On May 24, 1994, the Daidones paid
Butericks invoice in full. Once its piling services were completed, Buterick performed no
further work on the Daidones home. Construction of the home was completed, and
a certificate of occupancy was issued on June 14, 1994. The Daidones then
moved in to their home.
Beginning in 1999, the Daidones experienced many problems caused by the home settling
on its foundations. For example, there was stress on the natural gas line
and electrical panel, the hot water heater pipes ripped through the ceiling, and
the sewerage waste pipe ripped out of the floor. The Daidones did not
seek expert assistance until late 2001. They retained an expert to perform a
subsurface investigation and geotechnical evaluation of their home. In a report dated January
2, 2002, the expert stated that the basement structure settled due to the
underlying soft soils and that the length of the pilings may not be
enough based on the information available from the soil borings. The report did
not state that the design or installation of the pilings was deficient.
Based on their experts advice, the Daidones made repairs to their home that
cost about $90,000. The repairs were completed by July 2002. The Daidones filed
their complaint against Lepley and Buterick on June 2, 2004. That date was
within ten years of the date they obtained a certificate of occupancy for
their home, but it was over ten years after both Lepley and Buterick
had completed their services.
Lepley and Buterick filed a motion to dismiss, arguing that the Statute of
Repose barred the complaint. The trial court granted the motion, finding that Lepley
and Buterick completed their work more than ten years before the Daidones filed
their complaint. In an unpublished opinion, the Appellate Division affirmed, holding that the
ten-year statutory period begins when the architect or contractor completes its work relating
to the property. The Supreme Court granted plaintiffs petition for certification.
188 N.J. 572 (2006).
HELD: If design or construction services relating to an improvement to real property
are completed before a certificate of occupancy is issued, and the designer or
contractor has no further work to perform on that construction project, then the
start date for purposes of the Statute of Repose, N.J.S.A. 2A:14-1.1(a), is the
date on which the designer or contractor has completed his or her portion
of the work. The complaint against Lepley and Buterick was properly dismissed because
it was filed more than ten years after they completed their work.
1. The Statute of Repose, N.J.S.A. 2A:14-1.1(a), provides that no action to recover
damages for any deficiency in the design or construction of an improvement to
real property shall be brought more than 10 years after the performance or
furnishing of such services and construction. As the Court explained in Rosenberg v.
Town of North Bergen,
61 N.J. 190 (1972), the Statute of Repose is
different than a statute of limitations. The Statute of Repose prevents what might
be a cause of action from ever arising. For that reason, an injury
that occurs more than ten years after the allegedly negligent act forms no
basis for recovery. (pp. 8-9)
2. Because the language used in the Statute of Repose is clear, the
Court does not look to outside evidence to decide its meaning. Ten years
and one day after the designer or contractor has performed his or her
services, a cause of action for design or construction defects ceases to exist.
Thus, if the services are completed before a certificate of occupancy is issued
and the designer or contractor has no further work on that construction project,
then the start date for the Statute of Repose is the date when
the designer or contractor completed his or her portion of the work. (pp.
10-11)
3. In this case, Lepley and Buterick completed their work more than ten
years before the Daidones filed their complaint. Under the Statute of Repose, the
Daidones causes of action are deemed to have never arisen. (pp. 11-12)
4. The Daidones argue that it would be too burdensome for a homeowner
to determine the dates that each designer or contractor completed its services. They
assert that a uniform date -- the date the certificate of occupancy is
issued -- should be the start date under the Statute of Repose for
all aspects of a construction project. The Court disagrees. The Statute of Repose
reflects the Legislatures public policy preference for finality in construction-related claims. If a
plaintiff wants to sue an individual subcontractor, the plaintiff will have to track
when that subcontractors services were completed and must file a complaint within ten
years of that date. The Daidones acted as their own general contractor, assuming
responsibility for the overall project. They chose to obtain services from subcontractors on
a piecemeal basis. They became aware of the defects that are the subject
of their complaint and corrected those defects well within the period of the
Statute of Repose. Their unexplained delay in filing suit undermines their attempt to
avoid the consequences of the Statute of Repose. (pp. 12-15)
The judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE ZAZZALI and JUSTICES LONG , LaVECCHIA, ALBIN, WALLACE, and HOENS join in
JUSTICE RIVERA-SOTOs opinion.
SUPREME COURT OF NEW JERSEY
A-
60 September Term 2006
JOHN DAIDONE and LAURA DAIDONE, his wife,
Plaintiffs-Appellants,
v.
BUTERICK BULKHEADING, SCOTT LEPLEY, LEPLEY DESIGN GROUP and LEPLEY-MCCORRY ARCHITECTS AIA, P.C.,
Defendants-Respondents,
and
JOHN DOE, A Fictitious Name Representing A Licensed Professional Engineer Responsible For Reviewing
And Certifying Construction And Certain Records,
Defendant.
Argued March 5, 2007 Decided June 26, 2007
On certification to the Superior Court, Appellate Division.
Richard J. Allen, Jr., argued the cause for appellants (Kipp & Allen, L.L.P.,
attorneys).
Richard J. Shackleton argued the cause for respondent Buterick Bulkheading (Shackleton
& Hazeltine, attorneys).
Daniel J. Cogan argued the cause for respondents Scott Lepley, Lepley Design
Group, and Lepley-McCorry Architects AIA,
P.C. (Hoagland, Longo, Moran, Dunst &
Doukas, L.L.P., attorneys; Mr. Cogan and Richard W. Gaeckle, on the brief).
JUSTICE RIVERA-SOTO delivered the opinion of the Court.
This appeal addresses a discrete issue: whether, under the circumstances present in this
matter, the Statute of Repose, N.J.S.A. 2A:14-1.1, should not commence until the issuance
of a certificate of occupancy notwithstanding the completion of work by subcontractors at
an earlier date. In this case, plaintiffs John and Laura Daidone acted as
their own general contractor and sub-contracted with several contractors to perform specific portions
of the work in respect of the design and construction of their home.
Among those, defendants Scott Lepley, Lepley Design Group, and Lepley-McCorry Architects AIA, P.C.
(collectively, Lepley) designed plaintiffs home, and defendant Buterick Bulkheading, Inc. installed the pilings
for the homes foundation. More than ten years after both Lepley and Buterick
completed their respective portions of the work, but less than ten years after
a certificate of occupancy was issued for plaintiffs home, plaintiffs sued Lepley and
Buterick alleging negligence and other claims. Plaintiffs claim that the relevant start date
for Statute of Repose purposes must be the date on which the certificate
of occupancy issues; Lepley and Buterick assert that the start date must be
when they completed their work.
The plain language of N.J.S.A. 2A:14-1.1(a) is clear: no action for deficient design
or construction of an improvement to real property may be brought more than
10 years after the performance or furnishing of such services and construction. (Emphasis
supplied). If the design or construction services provided continue up to and including
the date the certificate of occupancy is issued for the improvements made, then
the start date for Statute of Repose purposes is the date of the
certificate of occupancy. However, if the design or construction services are completed before
a certificate of occupancy is issued and the designer or contractor has no
further functions to perform in respect of that construction project, then the start
date for Statute of Repose purposes is the date on which the designer
or contractor has completed his or her portion of the work.
Q. What do you mean slabs should not settle as they settled?
A. . . . . Because the utilities, the boiler and the hot water
heater are on a platform that sits on the slab. . . .
. But whats happening, as the slab was settling all the pipes and
everything else are ripping out of the ceiling. The natural gas pipe coming
in from the meter was being stressed. You could still see the marks
in the ceiling. . . . . We had to shim up basically
the platform two inches to relieve that stress, all right.
The sewerage waste pipe which goes through the floor out, that was ripping
through. That was just coming down too because of the settlement. So we
had to cut that and put a rubber gasket. The rubber gasket is
still there. We had to do that in two places. The electrical panel
had to be lifted up because it was being stressed.
Q. . . . . You said if you didnt take these precautions that
you could not live in the house. The house would have been uninhabitable?
A. Yeah, cause the furnace wouldnt have worked, the boiler, the hot water, everything
was ripping out of the ceilings, the pipe, the heating. Its all hot
water baseboard. They were all ripping out of the ceiling and bending.
Q. You said natural gas was pulling too?
A. The natural gas pipe. You could see it till today. When it was
put in it was horizontal. Now its pitched down because it was being
dragged down.
Although plaintiffs noticed these changes as early as 1999, they did not seek
any expert assistance until late 2001, when they retained an expert to perform
a subsurface investigation and geotechnical evaluation of their home. In a report dated
January 2, 2002, the expert opined that the basement structure has settled due
to the underlying soft soils and organics present. Significantly, after describing the length
of the pilings installed, plaintiffs expert did not conclude that the design or
installation of the pilings was deficient. The most the expert would say is
that [t]he length of these timber pilings below the ground surface may not
be enough based on the information available from the soil borings. (Emphasis supplied).
Based on their experts advice, plaintiffs undertook repairs to their home, which repairs
cost approximately $90,000 and were completed by July 2002. Plaintiffs, however, did not
file their complaint against either Lepley or Buterick until June 2, 2004. Although
that date was within ten years after plaintiffs secured a certificate of occupancy
for their home, it was more than ten years after both Lepley and
Buterick had performed and completed their services.
Lepley and Buterick moved to dismiss plaintiffs complaint as barred by the Statute
of Repose, which the trial court granted. After noting that plaintiffs acted as
the general contractor for their home, the trial court found that
plaintiff[s] also slumbered on [their] rights. [They] had an engineering report that was
dated 1/2/02 showing the footing defects, but [they] never brought a suit until
6/24/04. I think for purposes of this case the bulkheader [Buterick] was substantially
complete when he did his work as a sub[-contractor], got out, and was
paid. It was done, and I think the designer [Lepley] similarly completed his
work when this plan was approved by the Construction Official. So thats my
interpretation of substantial completion for purposes of this case.
The trial court concluded that the bulkheader [and the] designers are entitled to
the protection of the Statute of Repose and that the claimed defects constitute
defective and unsafe conditions covered by the Statute. It underscored that [t]here was
no diligence in bringing the suit and the Complaint was outside of the
ten-year Statute[.]
Plaintiffs appealed, and the Appellate Division affirmed the judgment of the trial court.
In an unpublished opinion, the panel explained that [t]he purpose of the statute
[of repose] is to protect architects and contractors from never-ending liability for their
work on construction projects. Concluding that the Statute of Repose is an affirmative
defense, imposing the burden of proving it on defendants[,] the Appellate Division held
that the ten-year Statute of Repose commences when the architect or contractor completes
its task with respect to the property involved in the claim (quoting Hopkins
v. Fox & Lazo Realtors,
242 N.J. Super. 320, 328 (App. Div. 1990)).
Referring to language we too have cited with approval, the panel quoted Hopkins
for the proposition that when an architect . . . completes the work
for which he was commissioned, he should be able to look back ten
years and one day after the completed performance of his work and know
there is repose from liability (Quoting id. at 327; see Newark Beth Israel
Med. Ctr. v. Gruzen & Partners,
124 N.J. 357, 366 (1991) (same)). Affirming
the trial courts entry of judgment in favor of Lepley and Buterick, the
Appellate Division concluded as follows:
We see no reason for extending the commencement date for the Statute of
Repose to the issuance of the certificate of occupancy under the circumstances here,
where the architect and the bulkheader completed their work more than a year
before the certificate of occupancy was issued and plaintiffs failed to file a
timely complaint when they had notice of their injury five years after the
certificate of occupancy was issued.
We granted plaintiffs petition for certification, Daidone v. Buterick Bulkheading,
188 N.J. 572
(2006), and now affirm the judgment of the Appellate Division.
[N.J.S.A. 2A:14-1.1(a).]
We have explained that [i]n an important respect, [a statute of repose] is
unlike the typical statute of limitations [because t]he time within which suit may
be brought under [the statute of repose] is entirely unrelated to the accrual
of any cause of action. Rosenberg v. Town of N. Bergen,
61 N.J. 190, 199 (1972). Unlike a statute of limitations, the Statute of Repose does
not bar a cause of action; its effect, rather, is to prevent what
might otherwise be a cause of action[] from ever arising. Ibid. For that
reason, injury occurring more than ten years after the negligent act allegedly responsible
for the harm[] forms no basis for recovery. Ibid. The starkness of its
application is intended:
The injured party literally has no cause of action. The harm that has
been done is damnum absque injuria a wrong for which the law affords
no redress. The function of the statute [of repose] is thus rather to
define substantive rights than to alter or modify a remedy. The Legislature is
entirely at liberty to create new rights or abolish old ones as long
as no vested right is disturbed.
[Id. at 199-200.]
See Greczyn v. Colgate-Palmolive,
183 N.J. 5, 14 (2005) (explaining that statute of
repose, by its very terms -- no action . . . shall be
brought . . . more than ten years after . . . construction
-- bars [] claims [older than ten years]).
With those principles as our guide, we address the certified issue in this
appeal, that is, whether the start of the time period under the Statute
of Repose should be delayed until the issuance of a certificate of occupancy
even though the designer or contractor completed his or her work at an
earlier date.
SUPREME COURT OF NEW JERSEY
NO. A-60 SEPTEMBER TERM 2006
ON CERTIFICATION TO Appellate Division, Superior Court
JOHN DAIDONE and LAURA
DAIDONE, his wife,
Plaintiffs-Appellants,
v.
BUTERICK BULKHEADING, SCOTT
LEPLEY, LEPLEY DESIGN GROUP
and LEPLEY-MCCORRY ARCHITECTS
AIA, P.C.,
Defendants-Respondents.
DECIDED June 26, 2007
Chief Justice Zazzali PRESIDING
OPINION BY Justice Rivera-Soto
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY
CHECKLIST
Footnote: 1
Plaintiffs dispute the trial courts description of them as the general contractor on
this construction project. Plaintiff John Daidone, however, testified in his deposition that he
was doing the work. [He] was the principal contractor. Further, in response to
the question whether he acted as a general contractor on this project[,] plaintiff
John Daidone responded, [t]hats correct.
The trial court found that [t]he facts show that plaintiff was the contractor
for his own house. The trial court rejected plaintiffs claim that plaintiff John
Daidone is only a computer expert, not a builder[,] finding that plaintiff John
Daidone built this house. He took out the construction permit and he apparently
had a construction company . . . and his wife [plaintiff Laura Daidone]
is the one that paid Buterick on that building company[s] check. Although, in
this summary judgment context, we view the facts in the light most favorable
to [] plaintiff[s,
]
Soto v. Scaringelli,
189 N.J. 558, 564 (2007), we see
no reason to disturb those findings. Rova Farms Resort, Inc. v. Investors Ins.
Co.,
65 N.J. 474, 484 (1974) (holding that we do not disturb the
factual findings and legal conclusions of the trial judge unless we are convinced
that they are so manifestly unsupported by or inconsistent with the competent, relevant
and reasonably credible evidence as to offend the interests of justice (quoting Fagliarone
v. Twp. of N. Bergen,
78 N.J. Super. 154, 155 (App. Div.), certif.
denied,
40 N.J. 221 (1963))).
Footnote: 2
Furthermore, the logic undergirding plaintiffs suggestion for a fixed start date for
Statute of Repose purposes stirs echoes of the now-rejected completed and accepted rule
[which] provided that an architects or a builders liability for negligent design or
construction of a structure terminated upon the completion of the professionals work and
its acceptance by the property owner. Greczyn, supra, 183 N.J. at 10 (citation
omitted). However, [w]e repudiated the completed and accepted rule outright in Totten v.
Gruzen,
52 N.J. 202 (1968), a year after the enactment of N.J.S.A. 2A:14-1.1[,]
because the tendency away from the completed and accepted rule was so clearly
established as to make it reasonable to assume that the Legislature took that
trend into account in enacting the statute. Ibid. (citation omitted). We described the
Statute of Repose as a legislative response seeking to delimit that greatly increased
exposure, and to prevent liability for life against contractors and architects. Id. at
10-11 (citations, internal quotation marks, and editing marks omitted).
Footnote: 3
Indeed, that process usually includes the general contractor remaining on the job
after the certificate of occupancy is issued in order to complete punch-list items.