Stark & Stark Shareholders Randy Sawyer and Andrew Podolski have successfully settled the Lakeside at North Haledon Condominium construction defect case for $7.4 Million.

The case involved serious design and construction defect claims which caused damage to common elements from water infiltration through and around stucco, manufactured stone veneer (MSV) and other exterior cladding systems, plus roofs, windows and balconies. This is an impressive result because the case involved challenging insurance coverage issues related to policy exclusions for synthetic stucco trim and the lack of proof of consequential damage to sheathing and framing.

Continue Reading Lakeside at North Haledon Condominium Construction Defect Case Successfully Settled for $7.4 Million

Stark & Stark Shareholders Thomas J. Pryor and Donald B. Brenner have successfully settled the Bay View Condominium construction defect case for $3.1M. Shareholder Randy Sawyer, along with Associates Gene Markin, John Prisco, and Tara Speer were all part of the team effort that achieved this settlement.

The case involved design and construction defect claims which caused damage to common elements from water infiltration through and around brick and other exterior cladding systems, plus roofs, windows and a plaza over a parking garage. Stark & Stark is particularly proud of this result because the case involved challenging insurance coverage issues related to the lack of proof of consequential damage to sheathing and framing.

Continue Reading Bayview Condominium Construction Defect Case Successfully Settled for $3.1 Million

Stark & Stark’s nationally recognized Construction Litigation group has scored some recent victories, advocating for community association and condo community clients while negotiating two major settlements in complex construction defect litigation claims for nearly $10 Million.

Most recently, the group skillfully negotiated a settlement on behalf of a Condominium Association in excess of $5.75 Million for a complex construction defect case against more than 45 defendants involving damages from water infiltration to 188 condominium units spread over 26 buildings. Stark & Stark Shareholder Andrew Podolski took the case from inception, developed and implemented the strategy, and otherwise put the case together for a jury trial. Trial was scheduled to begin on May 23, and was expected to run more than 2 months. The ramp up of trial prep activity and the looming trial date ultimately brought the defendants to the table for rigorous settlement negotiations. Drew was ably assisted in the litigation of the case by Associate John Prisco, who took some of the depositions, helped plow through a mountain of discovery materials, and did outstanding work on numerous motions and assisted with trial preparation.

Continue Reading Stark & Stark Scores Recent Settlement Victories for Condo Communities Totaling Nearly $10 Million

Gene Markin, member of Stark & Stark’s Construction Litigation Group, authored the article, Construction Defect Plaintiffs: Be Aware of the Statute of Repose, for the March 19, 2012 edition of the New Jersey Law Journal.

The article discusses the fact that in New Jersey, litigations need to be aware of the “statue of repose” in addition to the statue of limitations. Mr. Markin states that statute of repose issues will most commonly arise in the area of construction defect litigation, when a lawsuit is filed more than 10 years after the construction of a building.

You can read the full article online here. (PDF)

Gene Markin, member of Stark & Stark’s Construction Litigation Group, authored the article, Buyer Beware of Defects in New Construction, for the January 30, 2012 edition of the New Jersey Law Journal. The article discusses why the remedy under the homeowner warranty program, may not be a remedy at all.

In the article, Mr. Markin states, “Since its inception, the New Jersey Home Warranty and Builders’ Registration Act, N.J.S.A. 46:3B-1 to -20, has proven to be more of a trap for new homeowners than the safety net it was purported to be. The purpose of the act is to establish a program requir¬ing that newly constructed homes con¬form to certain construction and quality standards, as well as to provide buyers of new homes with insurance-backed warranty protection in the event such standards are not met. While the intent of the act is to provide homeowners with a prompt, convenient and cost-saving means of resolving disputes con¬cerning construction defects, in reality, its effect has been, in many cases, to strip homeowners of any meaningful means of recovery for discovered con¬struction defects.”

Donald B. Brenner, Chair of Stark & Stark’s Construction Litigation Group, presented a seminar at the 2010 New Jersey Cooperator Expo. The expo was held in Secaucus, New Jersey on May 5, 2010. Mr. Brenner presented a seminar entitled, Legal and Legislative Update: Important Decisions, New Laws, and how they Impact Your HOA, Condo. and/or Co-Op, in conjunction with Stark & Stark Community Association Group Co-Chairs, David J. Byrne and A. Christopher Florio.

Mr. Brenner discussed two key Appellate Division decisions published in 2009, both of which relate to the ‘economic loss doctrine’ and homeowners’ claims against sellers of defective building materials that were incorporated into the construction of their homes (Marrone v. Greer & Polman Constr. Inc., 405 N. J. Super. 288 (App. Div. 2009) & Dean v. Barrett Homes, Inc., 406 N. J. Super. 453 (App. Div. 2009)) Mr. Byrne discussed the United States Fair Housing Act and a recent decision regarding its application to ‘companion animals’. Mr. Florio discussed two recent cases involving the fiduciary duties of board members and the business judgment rule.

You can listen to the full presentation online here.

Stark & Stark recently joined forces with the consumer advocacy group, Homeowners Against Deficient Dwellings (HADD), to file an amicus curiae brief urging the New Jersey Supreme Court to uphold a homeowner’s right to pursue tort remedies against manufacturers of defective building components in Dean v. Barrett Homes, Inc., 406 N.J.Super. 453, 202 (2009) cert. granted, 200 N.J. 207, 976 (2009). Oral argument was heard on January 4 of this year; a decision has yet to issue. Dean centers upon the interaction between, on the one hand, a judicial construct known as the “economic loss doctrine,” which bars the tort recovery of “purely economic loss,” and, on the other, the New Jersey Product Liability Act (the “Act” or “NJPLA”), N.J.S.A. 2A:58C-1 to –7, which prescribes a statutory remedy for “harm caused by a product.” N.J.S.A. 2A:58C-1. Recently, the Third Circuit Court of Appeals had occasion to address that interaction in Travelers Indem. Co. v. Dammann & Co., Inc., — F.3d —-, 2010 WL 395915 (3d Cir. 2010). Although, factually, Travelers arose in a context that is distinguishable from Dean (the former involved a commercial sale of defective goods, the latter a consumer transaction in residential realty), the Third Circuit’s decision of February 5, 2010, predicting how the New Jersey Supreme Court will approach the interplay of judicial policy and legislative enactment, has profound implications for the legislative protection of both consumers and commercial interests alike. In that respect, the decision is deeply troubling.

It is well-settled that the drafting of statutory language to carry out prevailing policy preferences is a legislative, not a judicial, function. Yet, in Travelers, the Third Circuit Court appeared to substitute the judicial policy pronouncements embodied in the economic loss doctrine for the plain language of the NJPLA. At issue was whether a commercial purchaser of a defective product could sue under the NJPLA for “physical damage to property, other than to the product itself,” N.J.S.A. 2A:58C-1(b)(2), when the “other property” damage was a reasonably foreseeable result of a breach at the time of the original contracting. While acknowledging that “the NJPLA clearly permits a plaintiff to pursue a tort remedy in the event of harm to ‘other property,'” Id. at *6, the Third Circuit nevertheless predicted that the New Jersey Supreme Court would apply the common-law construct of the economic loss doctrine to preclude such a recovery. “After surveying the law in other jurisdictions,” the court explained, “we predict that the New Jersey Supreme Court would interpret the doctrine to bar tort claims where a plaintiff seeks economic damages for foreseeable losses for which the plaintiff could have contractually allocated risk[,] . . . without reference to whether the loss stems from damage to ‘the product itself’ or ‘other property.'” Id. at *2, 6 (emphasis added).

Applying this test to the facts before it, the court concluded that the sale of mercury-tainted vanilla beans to International Flavors & Fragrances Inc. (IFF), a manufacturer of vanilla extract, did not give rise to a cognizable tort claim against the bean supplier, Dammann & Co., Inc., even though the adulterated beans allegedly caused damage to the other ingredients in the manufacturer’s flavoring extract and the equipment used in the extraction process. The controlling inquiry, the court explained, is “not whether the damage extends beyond the physical dimensions of the purchased product,” but whether the “property damage experienced by the owner. . . was a foreseeable result of a defect at the time the parties contractually determined their respective exposure to risk.” Id. at *8, 9 (internal quotation marks and citations omitted). The manufacturer’s losses were “purely economic” because, in the court’s assessment, they were “within the contemplation of sophisticated business entities with equal bargaining power and. . . could have been the subject of their negotiations.” Id. at 8. Thus, IFF was precluded from seeking a tort recovery under the doctrine.

The Third Circuit’s holding achieves a result that the New Jersey Supreme Court has time and again admonished courts to avoid-the judicial rewriting of a plainly worded statute. The NJPLA, by its terms, encompasses “any claim or action brought by a claimant for harm caused by a product.” N.J.S.A. 2A:58C-1 (emphasis added), including “physical damage to property other than to the product itself[.]” N.J.S.A. 2A:58C-1(b)(2) (emphasis added). It prescribes a single, statutorily defined theory of recovery for any such claim, adopting, generally, the methods of proof recognized for strict liability in tort. “The language chosen by the Legislature in enacting [the statute] was both expansive and inclusive, encompassing virtually all possible causes of action relating to harms caused by consumer and other products.” In re Lead Paint Litigation, 191 N.J. 405, 436-37 (2007). As the New Jersey Supreme Court recently observed in Rowe v. Hoffman-La Roche, Inc., 189 N.J. 615 (2007), the NJPLA “was intended ‘to establish clear rules with respect to specific matters as to which the decisions of the courts in New Jersey have created uncertainty.'” Id. at 624 (quoting Senate Judiciary Committee, Statement to Senate Committee Substitute for S.B. No. 2805, at 1 (Mar. 23, 1987)).

In Travelers, the Third Circuit gave short shrift to this legislative prerogative. While acknowledging the NJPLA’s remedial purpose of “establish[ing] clear rules” with respect to product liability claims, the court found the Legislature’s efforts wanting. “The statute,” the court opined, “obscures more than it elucidates, especially when juxtaposed with other elements of New Jersey law.” Id. at *15 n. 5. Yet, the only “juxtaposition” presented in the court’s opinion is to extra-jurisdictional case law limiting, or abrogating, the “other property” exception of the economic loss rule. The court readily acknowledged that “[n]o New Jersey court has delineated the contours of ‘the product itself’ and ‘other property'” and that “[n]either the Supreme Court of New Jersey nor any other New Jersey court has directly clarified the interaction between the NJPLA and the economic loss doctrine.” Id. at *3.

Addressing the “apparent tension” between its formulation of the doctrine and the plain language of the NJPLA, the court stated:

It might be argued, of course, that a court is more at liberty to work around a judicially-created doctrine than a legislative act, which a court must do its utmost to respect and enforce. Whatever the merit of that argument, it is not relevant here, as we are not ignoring the NJPLA’s “other property” exception. Instead, we seek to reconcile two seemingly conflicting strains of New Jersey law to the best of our ability given all available, relevant data.

Id. at *15 n. 8. In view of the acknowledged absence of New Jersey precedent directly on point, it is not entirely clear what “seemingly conflicting strains of New Jersey law” informed the court’s construction in this case. Id. However, the effect of that construction is unmistakable; it imposes additional requirements on a statutory remedy where they are not plainly expressed.

The court, evidently, saw “no principled reason. . . why a legislatively-created ‘other property’ exception should be interpreted any differently from its judicially-created counterpart.” Id. at *9. An examination of the statute, however, discloses at least two reasons. First, the presumed “exception” for “other property” is found nowhere in the provisions of the Act. Rather, the Act excepts “damage to the product itself” from the general rule that “physical damage to property” caused by a product is a “harm” actionable in strict liability. N.J.S.A. 2A:58C-1(b)(2). Second, if the Legislature intended to incorporate the judicial construct of the economic loss doctrine, it easily could have done so by including a provision that explicitly forecloses the recovery of purely “economic loss.” A number of state legislatures have done just that in their product liability statutes. See, e.g., R.C. Wa. 7.72.010(6); La. R.S. 9:2800.53(5). The New Jersey Legislature, advisedly, did not.

The Third Circuit’s use of the economic-loss doctrine as a policy-construction tool led it to conclude that “harm” under the NJPLA does not mean what the statute plainly says, but rather is code for the prevailing common-law view of tort damages. New Jersey law, however, presumes that Legislative enactments are written in plain English, not code. Recognizing the consequences of unbridled judicial forays into the legislative sphere, the New Jersey Supreme Court has cautioned courts to “enforce the legislative will as written and not according to some unexpressed intention,” Dacunzo v. Edgye, 19 N.J. 443, 451 (1955), and, further, to avoid “extending judicial doctrines that might dislocate the legislative structure.” Spring Motors Distributors, Inc. v. Ford Motor Company, 98 N.J. 555, 557 (1985).

The Third Circuit’s opinion represents not only a judicial abrogation of a statutory remedy but also a troubling extension of one of the most “quickly and confoundingly expanding legal doctrine[s.]” Paul J. Schwiep, The Economic Loss Rule Outbreak: The Monster That Ate Commercial Torts, Fla. B.J., Nov. 1995, at 34. As one jurist colorfully put it:

Like the ever-expanding, all-consuming alien life form portrayed in the 1958 B-movie classic The Blob, the economic loss doctrine seems to be a swelling globule on the legal landscape of this state.

Grams v. Milk Products, Inc., 283 Wis.2d 511, 540 (2005) (Abrahamson, C.J., dissenting). Previously well-established remedies under the common law have already succumbed to the rapidly expanding doctrine, as demonstrated most recently by the New Jersey Appellate Division’s decision in Dean v. Barrett Homes, Inc., 406 N.J.Super. 453, 202 (2009) cert. granted, 200 N.J. 207, 976 (2009). It now appears that even plainly worded enactments of the Legislature are not immune.

The law firm of Stark & Stark, P.C. has joined forces with Homeowners Against Deficient Dwellings (HADD) to file an amicus curiae (friend of the court) brief urging the New Jersey Supreme Court to allow homeowners to pursue tort remedies against manufacturers of defective building components. The case, Dean v. Barrett Homes, Inc., will mark the first time the New Jersey Supreme Court has directly addresses whether and to what extent the so-called economic loss rule, originating in the law of product liability, applies to residential construction. Stark & Stark Construction Litigation attorney, John Randy Sawyer, is representing HADD pro bono as amicus curiae in the appeal. You can read more about the case, and access a PDF copy of the brief, online at Stark & Starks New Jersey Law Blog.

Stark & Stark is pleased to announce the launch of its newly designed website at www.stark-stark.com. The design of the new site is intended to make it easier for visitors to access information, find attorney biographies, and research information on the many services Stark & Stark offers. The new home page offers easy access to information on individual offices, a sign-up page for industry specific newsletters and updates on the firm’s active involvement in local community organizations.

Please visit the new website for additional information on all of Stark & Stark’s attorneys and for a full list of the services we provide.

Donald B. Brenner, Shareholder and Chair of Stark & Stark’s Construction Litigation Group, presented materials related to minimizing acrimony and conflict while preserving an Association’s rights with respect to construction defects and/or repairs, in conjunction with David J. Byrne, Esquire, during a seminar entitled “Managing Costs and Risks in Challenging and Uncertain Economic Times”. The presentation was held at the Meadowlands Exposition Center in Secaucus, New Jersey on Wednesday, May 13, 2009.

Mr. Brenner focused his presentation on transition, building defects, alternative dispute resolution and how associations should review insurance policies for recovery and/or possible settlement prior to litigation.