Daily Development for Monday, October 15, 2007
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

CONSTRUCTION; STATUTE OF REPOSE:  The ten year statute of repose on construction projects begins when the protected professional or contractor completes its work relating to the property, not necessarily when a certificate of occupancy for the project is issued. 

Daidone v. Buterick Bulkheading, 191 N.J. 557, 924 A.2d 1193 (2007)

In anticipation of building a new home, a landowner hired an architect, who prepared and certified architectural plans, including for a foundation piling system to support the house.  Once the plans were approved, the architect had no further role in the design or construction of the home.  A year later, construction of the home was completed, and a certificate of occupancy was issued.

Five years later, the homeowner experienced many problems caused by settling.  The homeowner did not seek expert assistance immediately, but rather waited three years to get an expert's report.  The report did not conclude that there was any defect in the design or installation of the pilings, but did opine that the pilings may not have been long enough.  The homeowner had the home repaired, but then waited another two years to sue the architect and piling contractor.  By the time suit was filed, ten years had passed since both professionals had completed their services.  But ten years had not elapsed since the certificate of occupancy had been issued.

TheNew Jersey Statute of Repose for construction services provides that no action for deficient design or construction of an improvement to real property may be brought more than ten years after the performance or furnishing of such services and construction.

The defendants filed a motion to dismiss, arguing that the Statute of Repose barred the complaint.   The lower court granted the motion, finding that the architect and the piling contractor completed their work more than ten years before the complaint was filed against them.  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 New Jersey Supreme Court granted the homeowner's petition for certification, but proceeded to affirm the judgment for the defendant architect and contractor.

The Supreme Court held that the start date for the Statute of Repose would be the date on which the designer or contractor had completed his or her portion of work on a construction project, and not the date that the certification of occupancy was issued.  The Court concluded that the language of the statute was clear, and that ten years and one day after a designer or contractor has performed his or her services, a cause of action for design or construction defects ceases to exist.  According to the Court, the Statute of Repose reflects the Legislature's public policy preference for finality in construction-related claims.  It noted that if a claimant wants to sue an individual subcontractor, the claimant will have to track when that subcontractor's services were completed and must file a complaint within ten years of that date.

Comment:  This obviously is a tremendously important issue for those in construction services, and the language of the New Jersey statute struck the editor as likely to be similar to that in many other jurisdictions, so he thought the case worthy of note.

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