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The Palisades At Ft. Lee Condominium Association, Inc. v. 100 Old Palisade, LLC

Supreme Court of New Jersey

April 25, 2017, Argued; September 14, 2017, Decided

A-101/102/103/104 September Term 2015, 077249

Opinion

 [**477]  [*434]   JUSTICE ALBIN delivered the opinion of the Court.

Plaintiff, The Palisades at Fort Lee Condominium Association, [***10]  Inc., filed lawsuits alleging that defendants, the general contractor and three subcontractors, defectively constructed a building complex that is now under the Condominium Association's control. The issue before us is whether plaintiff filed the lawsuits before the expiration of the statute of limitations.

N.J.S.A. 2A:14-1 ] is a statute of limitations generally governing tort-based property-damage claims. Under that statute, a construction-defect action must be commenced within six years "after the cause of any such action shall have accrued." Ibid. The heart of the controversy in this case is the point at which plaintiff's causes of action "accrued."

The trial court determined that the six-year statute of limitations began to run in May 2002, when the building was substantially complete. Applying its conception of the discovery rule, the court found that the building's owners knew or reasonably should have known of any defects within the six-year period and therefore should have filed the lawsuits by May 2008. Because the Condominium Association did not initiate the first lawsuit until after that date, the court dismissed the actions against all defendants.

The Appellate Division reversed, concluding [***11]  that the Condominium Association's claims accrued in June 2007, when it undertook full unit-owner control of the building and became "reasonably aware" of actionable claims of construction defects based on the report of a construction expert it had retained. The Condominium  [*435]  Association filed all complaints against defendants within six years of that date.

We now hold that neither the trial court nor the Appellate Division applied the correct legal standard for determining when the construction-defect actions accrued pursuant to N.J.S.A. 2A:14-1. ] Although  [**478]  N.J.S.A. 2A:14-1's six-year statute of limitations typically commences upon substantial completion of a structure, the discovery rule applies to the accrual of a claim under N.J.S.A. 2A:14-1. Under that rule, the limitations clock does not commence until a plaintiff is able to discover, through the exercise of reasonable diligence, the facts that form the basis for an actionable claim against an identifiable defendant. Caravaggio v. D'Agostini, 166 N.J. 237, 246, 765 A.2d 182 (2001).

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230 N.J. 427 *; 169 A.3d 473 **; 2017 N.J. LEXIS 845 ***

THE PALISADES AT FORT LEE CONDOMINIUM ASSOCIATION, INC., PLAINTIFF-RESPONDENT, v. 100 OLD PALISADE, LLC, CRESCENT HEIGHTS OF AMERICA, INC., CRESCENT HEIGHTS ACQUISITIONS, LLC, 100 OLD PALISADE HOLDINGS, LLC, 100 OLD PALISADE HOLDINGS II, LLC, 100 OLD PALISADE HOLDINGS III, LLC, EREZ BASHARI, PEIRU WEN, LENNY WARSHAW, NISSIM LANCIANO, SHARON CHRISTENBURY, JOSEPH ZDON, PABLO DE ALMAGRO, EPHRAIM BASHARI, SONNY KAHN, INDIVIDUALLY AND AS TRUSTEE OF THE SK BUSINESS TRUST, SK BUSINESS TRUST, RUSSELL W. GALBUT, INDIVIDUALLY AND AS TRUSTEE OF THE RF BUSINESS TRUST, RF BUSINESS TRUST, BRUCE A. MENIN, INDIVIDUALLY AND AS TRUSTEE OF THE MENIN 1998 FAMILY TRUST, MENIN 1998 FAMILY TRUST, F & G MECHANICAL CORP., MANNIX EXTERIOR WALL SYSTEMS, INC., SOUTH SHORE CONTRACTING, INC., PATWOOD CONTRACTING CO INC., D/B/A PATWOOD ROOFING, MTA CORP., MAARV WATERPROOFING, B & B IRON WORKS, INC., RAY ENGINEERING, INC., STEVEN W. RAY, P.E., METRO GLASS, INC., AND ROMITCH CO., DEFENDANTS-APPELLANTS, AND AJD CONSTRUCTION CO., INC., LUXURY FLOORS, INC., BENFATTO MASONRY, INC., AND FORSA CONSTRUCTION, INC., DEFENDANTS-APPELLANTS. 100 OLD PALISADE, LLC, CRESCENT HEIGHTS OF AMERICA, INC., CRESCENT HEIGHTS ACQUISITIONS, LLC, 100 OLD PALISADE HOLDINGS, LLC, 100 OLD PALISADE HOLDINGS II, LLC, 100 OLD PALISADE HOLDINGS III, LLC, EREZ BASHARI, PEIRU WEN, LENNY WARSHAW, NISSIM LANCIANO, SHARON CHRISTENBURY, JOSEPH ZDON, PABLO DE ALMAGRO, EPHRAIM BASHARI, SONNY KAHN, INDIVIDUALLY AND AS TRUSTEE OF THE SK BUSINESS TRUST, SK BUSINESS TRUST, RUSSELL W. GALBUT, INDIVIDUALLY AND AS TRUSTEE OF THE RF BUSINESS TRUST, RF BUSINESS TRUST, BRUCE A. MENIN, INDIVIDUALLY AND AS TRUSTEE OF THE MENIN 1998 FAMILY TRUST, MENIN 1998 FAMILY TRUST, DEFENDANTS/THIRD-PARTY PLAINTIFFS, v. APPLIED PROPERTY MANAGEMENT CO., INC., A/K/A APPLIED DEVELOPMENT COMPANY, IRONSTATE DEVELOPMENT COMPANY, A/K/A IRONSTATE DEVELOPMENT, LLC, IRONSTATE HOLDINGS, LLC, COSTAS KONDYLIS & ASSOCIATES, P.C., COSTAS KONDYLIS & PARTNERS, LLP, CONSTANTINE A. KONDYLIS, A/K/A COSTAS KONDYLIS, GOLDSTEIN ASSOCIATES CONSULTING ENGINEERS, P.C., DEFENDANTS/THIRD-PARTY DEFENDANTS. AJD CONSTRUCTION CO., INC., THIRD-PARTY PLAINTIFF, v. PATWOOD CONTRACTING CO., INC., D/B/A PATWOOD ROOFING, MTA CORP., MAARV WATERPROOFING, INC., BENFATTO CONSTRUCTION CORP., B & B IRON WORKS, INC., THIRD-PARTY DEFENDANTS. SOUTHSHORE CONTRACTING, INC., THIRD-PARTY PLAINTIFF, v. ARQ PAINTING & CONTRACTING, INC., THIRD-PARTY DEFENDANT APPLIED PROPERTY MANAGEMENT CO., INC., THE PALISADES AN COMPANY, LLC, APPLIED PALISADES, LLC, APPLIED DEVELOPMENT COMPANY, INC., IMPROPERLY PLEADED AS D/B/A APPLIED DEVELOPMENT COMPANY, IRONSTATE DEVELOPMENT, LLC, IRONSTATE HOLDINGS, LLC, FOURTH-PARTY PLAINTIFFS, v. WENTWORTH PROPERTY MANAGEMENT CORPORATION, WORTHMORE CONSTRUCTION & MAINTENANCE CO., INC., FOURTH-PARTY DEFENDANTS.

Prior History:  [***1] On certification to the Superior Court, Appellate Division.

CORE TERMS

cause of action, accrued, limitations period, statute of limitations, condominium association, accrual, construction-defect, discovery rule, six-year, actionable claim, contractors, Condominium, construction defect, lawsuit, substantial completion, trial court, discovery, clock, exercise of reasonable diligence, two-year, construct, unit owner, two year, defendants', ownership, Floors, calculated, complaints, qualifying, substantially complete

Governments, Legislation, Statute of Limitations, Time Limitations, Torts, Begins to Run, Actual Injury, Real Property Law, Torts, Construction Defects, Tolling, Tolling, Discovery Rule, Common Interest Communities, Condominiums, Condominium Associations, Purchase & Sale, Civil Procedure, Appeals, Standards of Review, De Novo Review, Interpretation, Questions of Fact & Law, Statute of Repose, Procedural Matters, Statute of Repose, Products Liability, Evidence, Burdens of Proof, Allocation