A Two-fer: Contribution, and the Statute of Repose

Cherilus v. Federal Express, 435 N.J. Super. 172 (App. Div. 2014).  Plaintiff Joseph Cherilus was injured while working on a Federal Express loading dock.  A “cargo lift” was the cause of his injury.  He and his wife sued Linc Facilities Services (“LFS”), which was responsible for maintaining the cargo lift.  LFS then filed a third-party complaint against Columbus McKinnon Corporation, also known as American Lifts, which manufactured the cargo lift.

American Lifts won summary judgment based on the ten-year construction statute of repose, N.J.S.A. 2A:14-1.1(a).  LFS then settled with plaintiffs, took an assignment of plaintiffs’ tort claim, and appealed the summary judgment in favor of American Lifts.  LFS did that so that it could pursue a contribution claim, under the Joint Tortfeasors Contribution Act, N.J.S.A. 2A:53A-3 (“the Act’), against American Lifts.  However, the Appellate Division affirmed the summary judgment for American Lifts.  Judge Ashrafi wrote the panel’s opinion.

Judge Ashrafi first observed that plaintiffs’ assignment of their tort claims to LFS was ineffective.  “A tort claim is not subject to assignment prior to judgment.”  The question remained, however, whether LFS had a valid contribution claim under the Act.  The Act requires a “money judgment” in order for a party to obtain contribution.  LFS contended that because its settlement with plaintiffs “resulted from a conference before a Superior Court judge, thus invoking the court’s participation and the approval of the settlement in judicial proceedings,” that was enough to constitute a “money judgment.”  Judge Ashrafi disagreed.  Though a consent judgment can suffice as a “money judgment” for contribution purposes, the Act “does not apply to contribution where the payment is made in fulfillment of a voluntary compromise or settlement of a claim for damages attributed to a joint tortfeasor.”  The panel relied on Polidori v. Kordys, Puzio & DiTomasso, 217 N.J. Super. 424 (App. Div. 1987), for that conclusion.

Judge Ashrafi also concluded that summary judgment was correctly entered for American Lifts under the statute of repose.  The panel’s review of that purely legal issue was de novo.

“[T]he statute applies to bar a claim after ten years if a defendant can show three things: (1) that the injury was caused by an ‘improvement to real property,’ (2) that the defendant ‘designed, planned … supervised, or constructed’ the improvement, and (3) that the improvement was not a standardized building product, but was specially-designed and fabricated to be an improvement to the real property” (citations omitted).  An “improvement to real property” is something that adds permanent value to that property.  The cargo lift– a permanently-affixed, integral feature of the property– “facilitated movement of cargo containers and enhanced the functioning of the warehouse facility.”  Therefore, it was an “improvement to real property.”  American Lifts designed the lift, and though it was not “one of a kind,” the cargo lift was designed “especially for the Federal Express facility and in accordance with the specifications and approval of Federal Express.”  There was no evidence that this particular design was “generally available to other industrial or commercial buyers.”  Thus, it was not a standardized building product.  Since American Lifts satisfied all three prongs of the statute of repose, Judge Ashrafi affirmed the summary judgment.

This is at least the second published opinion about the statute of repose that Judge Ashrafi has written.  The statute of repose has been the subject of much litigation.  This opinion clarifies another aspect of that statute, while also reaffirming Polidori on the contribution issue.