The effects of the statute of repose on the allocation of fault amongst joint tortfeasors.

This matter arose out of claims involving the alleged structural failures of the plaintiff’s public safety facility. Construction began in the fall of 1994 and on November 24, 1995, a Certificate of Substantial Completion was issued. On April 9, 1996, the first Temporary Certificate of Occupancy (TCO) was issued. It wasn’t until April 7, 2006, that the plaintiff brought suit against the architect, BKA, along with their sub-consultants, including SESI, the soils engineer, and HH, the structural engineer, under theories of negligence and breach of contract.

The trial court dismissed the plaintiff’s claims against SESI and HH based upon the New Jersey statute of repose and statute of limitations as the ten-year period set forth in the statute of repose commenced for SESI and HH on the date that their individual involvement in the project ended. However, the trial court denied BKA’s motion for summary judgment on the basis that the ten-year period for purposes of the statute of repose began on the date of substantial completion of the project, April 9, 1996, when the first TCO was issued. Because the plaintiff filed its complaint on April 7, 2006, the trial court concluded that the plaintiff had timely filed this action. After an initial appeal, this matter was remanded to the trial court for reconsideration. The court again denied BKA’s motion and further held that a jury could not allocate liability against SESI and HH, who were no longer parties in this matter.

BKA appealed, and the Appellate Division reversed the trial court’s determination on the issue of apportionment and held a jury should be permitted to allocate fault to SESI and HH. However, the appellate panel affirmed the trial court ruling that substantial completion occurred when the first TCO was issued and the statute of repose did not bar the claim against BKA.

The matter went to the New Jersey Supreme Court who determined that, for professionals like BKA whose responsibilities continue through design and construction, the ten-year period commences on the date of the project’s substantial completion, which was when the first TCO was issued.

With respect to the allocation issue, which was a matter of first impression as to whether the Comparative Negligence Act and the Joint Tortfeasors Contribution Law authorize allocation of fault to a defendant who obtains a dismissal by virtue of the statute of repose, the Court held that a jury’s assessment of SESI’s and HH’s fault promoted fair allocation of responsibility and avoided “creating an incentive for a plaintiff to strategically target only one of a range of culpable defendants.” As a result, the Court affirmed the Appellate Division’s ruling and found that fault may be apportioned to defendants who obtained dismissals under the statute of repose.

Case Law Alert, 4th Quarter 2013