(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in
the interests of brevity, portions of any opinion may not have been summarized).
(NOTE: The Court wrote no full opinion in this case. Rather, the Court's affirmance of the judgment of the Appellate Division is based substantially on the reasons expressed in Judge Wefing's opinion below.)
Argued January 3, 2001 -- Decided April 30, 2001
PER CURIAM
This appeal concerns the applicability of the defenses of the New Jersey Tort Claims Act to a public
housing authority that functioned in the capacity of a general contractor; the applicability of the Consumer Fraud
Act to the actions of a public entity; and the applicability of the doctrine of an implied warranty of reasonable
workmanship to contract actions against public housing authorities.
The Housing Authority of Bergen County (the Authority), a public entity, was established to provide
assistance to those who need it to secure safe, decent and affordable housing for residents of the County. In
furtherance of that purpose, the Authority began the development project of Ramapo Brae Condominiums on
Authority-owned land in Mahwah, New Jersey. The Authority acted as general contractor for the development,
which ultimately consisted of eighty-nine condominium units, thirty-five of which were sold to qualified low- and
moderate-income purchasers.
The development project was completed in early 1989. Problems in the various units surfaced almost
immediately after the project completion, some of which were corrected by the Authority. However, the persistence
of the problems led the Ramapo Brae Condominium Association (the Association), which controlled the common
areas and managed the condominium development, along with numerous individual unit owners, to file suit against
various defendants, including the Authority. Twelve of the twenty-seven counts of the complaint were directed
against the Authority and included allegations of breach of fiduciary duty; economic duress; negligent design,
manufacture and assemblage; negligent oversight of repairs; breach of contract; strict liability; breach of warranty;
fraudulent misrepresentation; and a violation of
42 U.S.C. §1983.
The Authority subsequently filed third-party complaints against certain subcontractors involved in the
construction of the project. Later, the Authority and Residential Warranty Corporation, which had issued a ten-year
limited warranty agreement to the Authority for the development, filed motions for summary judgment, which the
trial court granted. Subsequent motions for summary judgement made by some of the other defendants were
similarly granted. The Association and the various individual unit owners (collectively referred to as “plaintiffs”)
appealed.
In its opinion, reported at
328 N.J. Super. 561 (App. Div. 2000), the Appellate Division affirmed in part
and reversed in part the actions of the trial court, and remanded for further proceedings. The Appellate Division
reached various conclusions regarding the viability of plaintiffs' action against the Authority. Specifically, the
panel determined that the Authority had not lost its public entity defenses by undertaking the development as a
general contractor, citing several public policy considerations.
The panel then concluded that the trial court correctly dismissed the tort claims of the individual plaintiffs
against the Authority for failure to comply with the notice of claim provisions of the Tort Claims Act (TCA).
However, it remanded to the trial court the issue of the dismissal of the Association's claims on that ground to
determine which of the Association's claims accrued within two years before its notice of claim was filed. That
remand notwithstanding, the Appellate Division concluded that certain counts of the complaint were insufficient as
a matter of law under the TCA, without regard to whatever notice may have been given to the Association and
without regard to the date on which the claims allegedly accrued. Specifically, the Appellate Division determined
that the trial court correctly had granted summary judgment on the claims of infliction of emotional distress, implied
warranty, and strict liability.
A majority of the Appellate Division concluded that the Authority also was not subject to suit under the
Consumer Fraud Act for its activities in connection with the project. While recognizing decisions holding public
entities liable for punitive damages under the Law Against Discrimination, it did not consider those cases to indicate
that public entities can be exposed to the treble damage and attorneys fee provisions of the consumer fraud statute.
The majority specifically concluded that it would be contrary to the expressed policies of the TCA if it were to find
that the Authority could be held responsible under that act.
The Appellate Division held that the trial court erred when it dismissed plaintiffs' claim against the
Authority for breach of contract and breach of express warranty, finding that even in the absence of an express
contractual provision concerning workmanship, the law implies a covenant that the contract will be performed in a
reasonably good and workmanlike manner. However, the panel determined that the trial court properly had
dismissed the 1983 claim against the Authority, finding that the plaintiffs had failed to demonstrate what official
policy of the Authority gave rise to the complained of conduct.
Finally, the Appellate Division determined that the trial court had erred when it dismissed plaintiffs' claims
against various other individual defendants on the ground that they were entitled to share in the Authority's public
entity defenses under the principle of derivative immunity, finding that there was no evidence that those defendants
acted in accordance with plans and specifications developed and prepared by the Authority or that their specific
functions otherwise were directed and controlled by the Authority. Thus, the Appellate Division determined that the
plaintiffs could continue to press their individual claims against the private defendants.
The Supreme Court granted plaintiffs' petition for certification and the Authority's cross-petition for
certification. Because there was a partial dissent in the Appellate Division, the issue of the applicability of the
Consumer Fraud Act was before the Court on appeal as of right.
HELD: The judgment of the Appellate Division is affirmed substantially for the reasons expressed in Judge
Wefing's opinion below. The Housing Authority of Bergen County, although acting as a general contractor in a
construction project, is entitled invoke the protections of the Tort Claims Act; the Housing Authority is not subject
to suit under the New Jersey Consumer Fraud Act for its activities in connection with the construction project; the
trial court committed error when it dismissed the plaintiffs' claim against the Housing Authority for breach of
contract.
CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, LONG, VERNIERO, LaVECCHIA, and
ZAZZALI join in this PER CURIAM opinion.
SUPREME COURT OF NEW JERSEY
A-143/
144 September Term 1999
RAMAPO BRAE CONDOMINIUM
ASSOCIATION, INC.; DIANE
BENNETT; ZACHARY & ANNE
ALLEGRETTI; ILEEN CHANNER;
JOSEPH & LESLIE DE MEO;
DOROTHY NATALE; PAUL & LUCINE
BAUMGART; HERMAT & ROLA
BARKHO; VOJTECH & JUDY CERNY;
FERMIN & NANCY DIAZ; ALICE
BOYD-WILLIAMS; RAJENDRA &
SURYA R. PATEL; DAVID & NANCY
VIOLETTE; JAMES & DEBRA
BURNETTE; HENRY & SHOW-LING
HO; THOMAS & JANET HAMILL;
ROBERT & RHONDA SMITH; PETER
& MARYJANE DURANTE; HAROLD &
TAMMY BRENDEL; SCOTT & LINDA
GOODWIN; RAYMOND & LAURA MC
DONALD; STEVEN & VERONICA
MARINO; CARL & JANICE ARNOLD;
SANDRA BOYD; VICTOR &
KATHLEEN VELASQUEZ; DINESH &
BAHRTI SANGHVI; GLORIA
MELENDEZ; ENRIQUE & ALBA
VITERY; GUILLERMO & MARIA
ESCOBAR; JO ANN WARGO; JOHN &
ROSE MARIE ADAMKOVICH; THOMAS
& NANCY VETTER; CHARLES &
DIANNE MC CREADY; STEVEN &
SHARLENE SCHERER; KAMPI &
TARA PRAGDAT; JIRINA MANDIC
and ALBERT & SARAH YIP,
Plaintiffs-Appellants
and Cross-Respondents,
v.
BERGEN COUNTY HOUSING
AUTHORITY, properly
identified as HOUSING
AUTHORITY OF BERGEN COUNTY,
Defendant-Respondent
and Cross-Appellant,
and
NORTH AMERICAN HOUSING
CORPORATION; T.R. ARNOLD &
ASSOCIATES; RESIDENTIAL
WARRANTY CORPORATION and
MERCHANTS AND BUSINESS MENS
INSURANCE COMPANY,
Defendants-Respondents,
and
E. O. D'ALESSANDRO, INC.,
a/k/a E. O. D'ALESSANDRO
GARDEN CENTER; ABC CORP.; XYZ
CORP.; TARQUINI &
ELKIN/SOBOLTA, Architects and
Planners; ZZZ ARCHITECTS,
INC.; JOHN DOES, as
fictitious names for unknown
members of the Bergen County
Housing Authority and
TOWNSHIP OF MAHWAH,
Defendants,
and
UFHEIL CONSTRUCTION, CO.,
INC.; JOSEPH FERRANTE D/B/A
J.F. CONSTRUCTION; G. & M
ROOFING SERVICE, INC.; JASLO
CORPORATION T/A GIORDANO
PLUMBING AND HEATING, INC.;
TEK ELECTRIC, INS.; WILLIAM
L. WISSING, P.E., L.S.;
WISSING ENGINEERING
ASSOCIATES; COSTIC BALUT &
ASSOCIATES; HOOVER TREATED
WOOD PRODUCTS, INC.; ABC
CORPORATION 1 THROUGH X; and
XYZ CORPORATION 1 THROUGH X
(said name being fictitious
and presently unknown and
undetermined),
Third-Party Defendants
and
MERIDIAN CONSTRUCTION, CO.,
INC.,
Third-Party Defendant-
Respondent
Argued January 3, 2001 -- Decided April 30, 2001
On appeal from and certification to the
Superior Court, Appellate Division, whose
opinion is reported at
328 N.J. Super. 561
(App. Div. 2000).
John F. Darcy argued the cause for
appellants and cross-respondents (McElroy
Deutsch & Mulvaney, attorneys. Mr. Darcy
and Kevin P. Harkins on the briefs).
Terrence J. Corriston argued the cause for
respondent and cross-appellant (Breslin &
Breslin, attorneys).
Thomas J. Perry argued the cause for
respondents Residential Warranty Corporation
and Merchants and Business Mens Insurance
Company (Riker, Danzig, Scherer, Hyland &
Perretti, attorneys).
Frank M. Coscia argued the cause for
respondents North American Housing
Corporation and T.R. Arnold & Associates
(Gallo Geffner Fenster, attorneys).
John G. Tinker, Jr., argued the cause for
respondent Meridian Construction Co., Inc.
(Leary, Bride, Tinker & Moran, attorneys).
PER CURIAM
The judgment is affirmed, substantially for the reasons
expressed in Judge Wefing's opinion of the Appellate Division,
reported at
328 N.J. Super. 561 (App. Div. 2000).
CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, LONG,
VERNIERO, LaVECCHIA and ZAZZALI join in this opinion.
NO. A-143/144 SEPTEMBER TERM 1999
ON APPEAL FROM Appellate Division, Superior Court
ON CERTIFICATION TO
RAMAPO BRAE CONDOMINIUM
ASSOCIATION, INC., et al.,
Plaintiffs-Appellants
and Cross-Respondents,
v.
BERGEN COUNTY HOUSING
AUTHORITY, properly identified as
HOUSING AUTHORITY OF
BERGEN COUNTY,
Defendant-Respondent
and Cross-Appellant.
DECIDED April 30, 2000
Chief Justice Poritz PRESIDING
OPINION BY Per Curiam
CONCURRING OPINION BY
DISSENTING OPINION BY