Two Issues Under the Construction Statute of Repose

Town of Kearny v. Brandt, 214 N.J. 76 (2013).  Deciding when the ten-year construction statute of repose, N.J.S.A. 2A:14-1.1, begins to run is often a difficult issue for courts.  In this case, the Supreme Court faced that issue in the context of defendants whose responsibilites continued throughout the entire project (as opposed to some subcontractors, who work on a discrete task and for whom the statute of repose begins to run when that task is completed). 

In a comprehensive opinion by Justice Patterson, the Court held, unanimously, that the trigger date for the statute of repose as to those defendants was the date that the first Temporary Certificate of Occupancy was issued for the property.  That date represented “substantial completion,” which Justice Patterson showed was the criterion to start the statute of repose running. 

Affirming both the Law Division and the Appellate Division on this point, the Court rejected both earlier and later events as the trigger date.  After exhaustively examining prior case law from the Supreme Court and the Appellate Division, Justice Patterson observed that the date on which absolutely every last bit of work was completed was not the proper date, citng Russo Farms, Inc. v. Vineland Bd. of Educ., 144 N.J. 84, 117-18 (1996).  She also declined to use a not-fully-completed Certificate of Substantial Completion or a stipulation by the defendant Town with another defendant as to a substantial completion date.  The incompleteness of the Certificate disqualified it, and the stipulation, with a different party, and which did not constitute an architect’s certification of substantial completion, did not cut the mustard either.

The Court reiterated the standard of review of decisions on summary judgment.  But Justice Patterson also emphasized that the statute of repose “is construed broadly to serve its legislative objective of providing a reasonable measure of protection against expanding liability for design and construction professionals.”  To the extent that the courts below based their rulings on factual findings, those findings were entitled to deference if supported by “adequate, substantial, and credible evidence.”  Applying those tests together, the Court affirmed on the trigger date issue.

The other issue involved whether defendants who had obtained dismissals previously, pursuant to the statute of repose, were to be considered for purposes of allocation of fault at trial under the Joint Tortfeasors Contribution Law, N.J.S.A. 2A:53A-2, and the Comparative Negligence Act, N.J.S.A. 2A:15-5.2.  After recognizing that the goal was to ascertain the Legislature’s purpose in adopting the statutes at issue, and to harmonize the statute of repose with those statutes, Justice Patterson carefully canvassed cases that had addressed allocation issues in circumstances where dismissals were obtained for reasons other than the statute of repose.  She concluded that “[t]he goals of our comparative fault statutory are advanced” if the jury assesses the comparative fault of the previously dismissed defendants.  That result would not “subvert the statute of repose’s purpose to give construction defendants the right not to have to defend ancient claims or obligations,” since the dismissed defendants would not have to be present at a trial no matter what.

The Law Division had ruled that the dismissed defendants could not be considered in the allocation of fault.  The Appellate Division reversed.  Because the Supreme Court agreed that those defendants should be in the mix, the Court affirmed the Appellate Division and remanded for a new trial on liability, including apportionment of fault among all defendants that had originally been named.