Articles Posted in Legislation

In a decision that has renewed the faith of condominium law practitioners in our state’s judicial system, the New Jersey Appellate Division recently issued a strongly worded opinion in Port Liberte II Condo. Ass’n v. New Liberty Residential Urban Renewal Co. et. al., 2014 N.J. Super. LEXIS 19 (App. Div. Jan. 21, 2014) (approved for publication on January 31, 2014), that has prevented a grave injustice and allowed unit owners to control their own fates by having the power to validate unauthorized decisions of the board.

In what has been exclaimed as a “big win” for condominium associations and unit owners, the Appellate Division has determined that a condominium board’s decision to file suit without taking a pre-litigation vote, required by the association’s bylaws, can be affirmed at a later time by the membership and cannot be challenged by the defendants. Designed to protect the financial interests of the unit owners, the bylaws cannot be used by defendant developers and contractors to suppress those very same interests. Non-homeowners, therefore, do not have standing to challenge unauthorized or procedurally defective decisions of the board to start suit.

Faced with widespread construction defects in the common elements of its 225-unit community with a price tag in excess of thirty million dollars for repairs, the Port Liberte II Condominium Association filed suit in 2008 against those responsible, the Developer and the contractors that built the development. Several years into the law suit, the defendants sought dismissal of the entire action because the Association had not obtained a community vote to approve the filing of the suit, as required by a provision of the bylaws drafted by the Developer. To rectify that oversight, the Association held two separate votes to ratify the original filing of the suit, the first in October of 2009, which was approved by the community 72 votes to 3, and a second in October of 2011, which was approved by a vote of 65 to 1. Armed with these two examples of overwhelming support in the community for the lawsuit, the Association opposed the defendants’ motions to dismiss the case arguing that the defendants, as outsiders who owned no units in the community, had no standing to enforce the bylaws, and, even if they had such standing, the original filing of the suit was overwhelmingly ratified by the unit owners.

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In early April, a Bergen County judge dismissed a construction defect complaint filed by a mammoth 40-story condominium complex known as the Palisades, located along the Hudson River in Fort Lee, based on the statute of limitations. While dismissal for filing suit outside the statute of limitations is nothing new or surprising, the way in which the judge reached that conclusion and applied the “law” is. According to Judge Robert C. Wilson, the six-year statute of limitations begins to run upon “substantial completion,” is not subject to the discovery rule, and is not tolled until the association is created and subsequently controlled by the homeowners. Not only does this decision render the ten-year statute of repose meaningless, it unduly prejudices the rights of condominium associations whose legislatively granted six-year window to file suit can seemingly be judicially dwindled down to two years or one year or less.
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Until now, owners of single-family homes were left to their own devices and resources in seeking redress for construction defects. Class suits were thought to be unavailable to homeowners despite their homes having been built by the same builder and suffering from the same general defects. The differences in subcontractors used, methods of construction, location of defects, time built and nature of resulting damages defeated class certification and deterred law firms from bringing class action lawsuits alleging construction defects. The economics of bringing an individual construction defect suit weighed heavily against litigation and, as a result, homeowners ended up either living with the defects or paying for repairs out of pocket.

Fortunately for homeowners, a recent decision from the Appellate Division captioned D’Andrea v. Hovnanian, 2013 N.J. Super. Unpub. LEXIS 1484 (App. Div. June 18, 2013) has changed that landscape. According to the Appellate Division, the four prerequisites for bringing a class action lawsuit – numerosity, commonality, typicality, and adequate representation – were met by a class of plaintiffs who sued developer K. Hovnanian (“Hovnanian”) for fire safety hazards in the HVAC system installed in their homes.

Arguing against class certification, Hovnanian contended that the individualized nature of home construction made such causes of action unsuitable for class certification. Hovnanian pointed out, and Plaintiffs agreed, that there was no single deviation common to each class member’s home. Nevertheless, despite the significant differences among the construction defects, there remained a “strong commonality in the nature of the claimed defect – fire safety hazards in HVAC return systems.” Seeing the forest instead of the trees, the court focused on whether construction of the HVAC cavities met the applicable code rather than on the differences in materials and construction methods used.

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Until now, owners of single-family homes were left to their own devices and resources in seeking redress for construction defects. Class suits were thought to be unavailable to homeowners despite their homes having been built by the same builder and suffering from the same general defects. The differences in subcontractors used, methods of construction, location of defects, time built and nature of resulting damages defeated class certification and deterred law firms from bringing class action lawsuits alleging construction defects. The economics of bringing an individual construction defect suit weighed heavily against litigation and, as a result, homeowners ended up either living with the defects or paying for repairs out of pocket.

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All too often homeowners engage a contractor to perform certain home improvements and/or maintenance functions and end up in a fight with the contractor either over the work or amount of payment or both.  Recognizing the disparity in leverage and technical knowledge, the Legislature and the New Jersey Division of Community Affairs have promulgated laws and regulations designed to give homeowners powerful rights to protect them when they undertake maintenance and improvement projects.  With these enactments, the onus is placed where it belongs, on the shoulders of the home improvement contracts to insure they act fairly and honestly when performing projects that affect a person’s home.
 
Deception, fraud and misrepresentation are not tolerated.  Every home improvement contractor doing business in New Jersey is obligated to comply with New Jersey law, even if they are not aware of the law’s requirements.  The Consumer Fraud Act and the Home Improvement Act are designed to protect the rights of homeowners and to provide an effective way for homeowners to combat deceptive and inequitable practices.  The hallmark of these laws is to impose strict liability upon the contractor for any violations of the Acts’ myriad provisions.
 
Inside the Consumer Fraud Act and Home Improvement Practices Regulations
The Consumer Fraud Act (“CFA”) gives New Jersey one of the strongest consumer protection laws in the country.  The CFA protects the general public by providing consumers a private cause of action for violations of the Act and allowing for recovery of treble damages, attorneys’ fees and costs.  See N.J.S.A. § 56:8-19.  To violate the Act, a person must commit an “unlawful practice,” which may fall into one of three general categories: 1) affirmative acts; 2) knowing omissions; or 3) regulation violations.  The third category is based on violations of regulations enacted under N.J.S.A. § 56:8-4, the Home Improvement Act (“HIA”).
 
The impetus behind enacting the HIA was to protect unknowing homeowners from predatory and deceptive tactics of contractors as well as to provide standards for the terms and criteria by which home improvement work should be done.  In this regard, the regulations apply to any persons holding themselves out as contractors in New Jersey.  N.J.S.A. § 56:8-139.  Contract is defined as any person engaged in the business of making or selling home improvements, and includes corporations, partnerships, associations and any other form of business organization or entity, and its officers, representatives, agents and employees.  N.J.S.A. § 56:8-137.  Notably, the Act does not apply to architects, professional engineers or other licensed professionals.  N.J.S.A. § 56:8-140.  The regulations broadly define “home improvement” to cover nearly every conceivable type of residential improvement or repair, including, but not limited to:
 
construction, installation, replacement, improvement, or repair of driveways, sidewalks, swimming pools, terraces, patios, landscaping, fences, porches, windows, doors, cabinets, kitchens, bathrooms, garages, basements and basement waterproofing, fire protection devices, security protection devices, central heating and air conditioning equipment, water softeners, heaters, and purifiers, solar heating or water systems, insulation installation, siding, wall-to-wall carpeting or attached or inlaid floor coverings, and other changes, repairs, or improvements made in or on, attached to or forming a part of the residential or noncommercial property . . . 
 
[N.J.A.C. § 13:45A-16.1A.]
 
Therefore, the reach of the regulations is expansive and almost all dealings between consumers and contractors related to home improvement will fall within their purview.
 
Practices Required By The Home Improvement Regulations
Generally, a home improvement contractor must obtain all necessary permits prior to commencing work, secure final inspection certificates before demanding final payment and ensure that all agreements for improvements in excess of $500.00 be in writing as well as any changes in the terms and conditions of such contracts.  N.J.A.C. § 13:45A-16.2(a).  More importantly, the regulations require that contracts must be signed by all parties to the contract, not just the customer or contractor, and detail the parties’ obligations and rights under the contract.  Specifically, the contract must accurately set forth in legible form all terms and conditions of the contract, including, but not limited to, the following:
  1. The legal name and business address of the seller, including the legal name and business address of the sales representative or agent who solicited or negotiated the contract for the seller;
  2. The contractor’s Division of Consumer Affairs registration number and the DCA’s toll free telephone number must be prominently displayed on the first page of the contract;
  3. A copy of the Certificate of Commercial General Liability Insurance required of a contractor under the Act and the telephone number of the insurance company issuing the Certificate;
  4. A description of the work to be done and the principal products and materials to be used or installed in performance of the contract;
  5. The total price, including all finance charges and, where applicable, the hourly rate for labor;
  6. The start date and completion date;
  7. A description of any mortgage or security interest to be taken in connection with the financing or sale of the home improvement; 
  8. A statement of any guarantee or warranty with respect to any products, materials, labor or services made by the contractor; and
  9. A precise and conspicuous notice of cancellation provision informing the customer of his or her right to cancel the contract by the end of the third business day after having received a copy of the contract.
Case law makes clear that proof of even a single violation of these regulations is sufficient to establish unlawful conduct under the Act.  See Cox v. Sears Roebuck & Co., 138 N.J. 2, 18 (1994).  Notably, intent to comply or not comply with the Act is not a requirement as the Act imposes strict liability for even the most minimal of violations such as not including a start/finish date on the contract or asking for final payment prior to completing the work and/or furnishing copies of the inspection certificates.
 
What Can A Homeowner Recover When A Contractor Violates the Act
The Legislature intended the Act to be both remedial and punitive in nature.  Therefore, the remedial aspect of the Act compensates for a homeowner’s loss, yet at the same time punishes the transgressor by allowing the homeowner to recover treble damages, attorney’s fees, filing fees and other related costs.  See N.J.S.A. 56:8-29.
 
Since the contractor is subject to strict liability under the Act, the homeowner is entitled to an award of actual damages when he or she has suffered an ascertainable loss as a direct result of the contractor’s violation.  These damages are then trebled and reasonable attorneys’ fees and costs are awarded.  Notably, the Act mandates an award of attorneys’ fees and costs when the homeowner is successful in proving the contractor committed a technical violation of the Act, even if no ascertainable loss is shown.  See BJM Insulation v. Evans, 287 N.J. Super. 513, 516 (App. Div. 1996).  This means that even if the homeowner has not suffered any consequential losses as a result of the contractor’s violation of the Act, he or she is still entitled to attorney’s fees and costs upon a showing that a violation has occurred.  See Performance Leasing Corp. v. Irwin Lincoln-Mercury, 262 N.J. Super. 23, 34 (App. Div.), certif. denied, 133 N.J. 443 (1993) (holding that a plaintiff proving a violation of the act but unable to demonstrate a causal connection between the violation and his damages was nevertheless entitled to attorneys’ fees).  
 
The threat of recovering attorneys’ fees is a powerful tool the homeowner has in negotiating a fair resolution of whatever dispute may arise with the contractor.  Therefore, it is important for homeowners to be familiar with the Act and the home improvement regulations in order to recognize contractor violations and build leverage in dealing with unscrupulous contractors. 

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.”

An action for trespass arises upon the unauthorized entry onto another’s property, real or personal. A trespass on property, whether real or personal, is actionable, irrespective of any appreciable injury. Under a trespass theory, a plaintiff may “assert a claim for whatever damages the facts may lawfully warrant.” Thus, a plaintiff may claim damages from the loss in value to the land trespassed upon, as well as consequential damages such as property taxes and loss of profits.

While a municipality enjoys immunity for its exercise of discretion and judgment in the development of a sewer and drainage plan, such immunity does not protect it from liability for the creation of a nuisance or actual trespass.

An action for nuisance may be brought against a public entity unhampered by the TCA. Private nuisance is but one possible theory for recovery of damages caused by the invasion of one’s interest in the private use and enjoyment of land. That interest may be invaded by more than one type of conduct, i.e., the conduct may be intentional, it may be unintentional but caused by negligent or reckless conduct, or it may result from an abnormally dangerous activity for which there is strict liability. One is subject to liability for private nuisance if the invasion is either:
(a) intentional and unreasonable, or
(b) unintentional and otherwise actionable under the rules controlling liability for negligent or reckless conduct, or for abnormally dangerous conditions or activities.

[Restatement (Second) of Torts, § 822 (1979).]

The conduct necessary to make the actor liable for a private nuisance may consist of an act or a failure to act under circumstances in which the actor is under a duty to take positive action to prevent or abate an interference. Restatement (Second) of Torts, § 824 (1979). An invasion is intentional if the actor purposely causes it or knows that the invasion is substantially certain to result from his conduct. An intentional invasion of another’s use is unreasonable if:
(a) the gravity of the harm outweighs the utility of the actor’s conduct, or
(b) the harm caused by the conduct is serious and the financial burden of compensating for this and similar harm to others would not make the continuation of the conduct not feasible.

[Restatement (Second) of Torts, § 826.].

Water discharge from a broken storm drain pipe is most likely an actionable nuisance. See, e.g., City of Oxford v. Spears, 228 Miss. 433 (1956) (There is no question that an invasion of one’s interest in the use of downstream waters may constitute a nuisance); Sterling Iron and Zinc Co. v. Sparks Manufacturing Co., 55 N.J.Eq. 824 (E. & A. 1896) (New Jersey long ago recognized that the pollution of a watercourse may constitute an actionable nuisance); Bengivenga v. Plainfield, 128 N.J.L. 418 (E. & A. 1942) (municipalities were held liable for nuisance resulting in water pollution, although the legal analysis upon which liability was based, active wrongdoing, is now outdated); Borough of Westville v. Whitney Home Builders, 40 N.J. Super. 62, 68 (App. Div. 1956) (Our courts have held that the discharge of treated sewage effluent into a running stream is not necessarily an unreasonable riparian use in today’s civilization, but that it may be unreasonable if the harm from doing so outweighs the benefit).

Presented with the question of whether a public entity can be liable for a nuisance as recognized by the TCA, our Supreme Court concluded that it is for two reasons: First, sections of the Tort Claims Act may be interpreted as making public entities liable for nuisance under the standards provided by the Act, and second, in light of the history of municipal liability in this area, the Supreme Court perceived no intent to eliminate this liability.

With respect to the statutory recognition and continuation of the nuisance cause of action, the two sections of the act implicated are N.J.S.A. 59:4-2 and N.J.S.A. 59:2-2. The former creates liability for injury caused by the dangerous condition of a public entity’s property. Nothing in this section has been construed to impose liability upon a public entity for a dangerous condition of its public property if the action the entity took to protect against the condition or the failure to take such action was not palpably unreasonable. Thus, this section imposes liability upon a municipality in its status as property owner for nuisance where its actions can be found to be “palpably unreasonable.”

In sum, an action in nuisance may be maintained against a municipality under and subject to the standards of the Tort Claims Act, so long as Plaintiff shows that the action taken or failure to act by the public entity was palpably unreasonable. See, e.g., Lyons v. Twp. of Wayne, 185 N.J. 426, 434 (2005) (“When analyzing a nuisance . . . wrongful conduct is not limited to the creation of the condition. Rather, a failure to physically remove or legally abate that condition, resulting in the physical invasion of another’s property, also constitutes wrongful conduct.”); Gould & Eberhardt, Inc. v. City of Newark, 6 N.J. 240, 243 (1951) (“[A] municipality does not have the right to collect surface water and discharge it upon private property in greater quantity and with greater force than would occur from natural flow, so as to cause substantial injury.”); Sheppard v. Twp. of Frankford, 261 N.J. Super. 5, 8 (App. Div. 1992) (noting that injunctive relief was appropriate because unreasonable discharge of storm waters by township onto plaintiffs’ property created continuing nuisance); Black v. Borough of Atlantic Highlands, 263 N.J. Super. 445, 453 (App. Div. 1993) (allowing nuisance cause of action for failing to prune crab apple trees creating dangerous condition on adjacent private property).

In Russo Farms v. Vineland Bd. of Educ., 144 N.J. 84 (N.J. 1996), the Plaintiffs brought a lawsuit against, inter alia, the Vineland Board of Education (the Board) and the City of Vineland (the City) for damages to their crops and farmland from flooding that resulted from the improper siting and construction of a public school located across the street from their property and by an inadequate drainage system on a bordering street. Plaintiffs claimed that the Board and City were liable under a nuisance theory because the Board and City’s use of their property invaded plaintiffs’ use and enjoyment of their land. The Court noted that invasion was a physical invasion, which ordinarily sounds in trespass, but “the flooding of the plaintiff’s land, which is a trespass, is also a nuisance if it is repeated or of long duration.” See also Hennessy v. Carmony, 50 N.J. Eq. 616, 618 (Ch. 1892) (throwing water on another’s property once constitutes a trespass, “to continue to do so constitutes a nuisance”).

When a court finds that a continuing nuisance has been committed, it implicitly holds that the defendant is committing a new tort, including a new breach of duty, each day, triggering a new statute of limitations. That new tort is an “alleged present failure” to remove the nuisance, and since this failure occurs each day that the defendant does not act, the defendant’s alleged tortious inaction constitutes a continuous nuisance for which a cause of action accrues anew each day. See also Sheppard v. Township of Frankford, 261 N.J. Super. 5, 8-9 (App. Div. 1992) (noting that disposal of water runoff onto plaintiff’s property created continuing nuisance).

It is pretty well settled that periodic flooding due to defective construction of a drainage system constitutes a continuing tort. The Russo Farms court held that a nuisance is continuing when it is the result of a condition that can be physically removed or legally abated. In such a case, it is realistic to impute a continuing duty to the defendant to remove the nuisance, and to conclude that each new injury includes all elements of a nuisance, including a new breach of duty. On the other hand, when the nuisance cannot physically be removed, it is unfair to impose a continuing, impossible to fulfill duty to remove the nuisance.

Accordingly, the continued flooding of a landowner’s property would be considered an actionable continuous nuisance. See Russo Farms, supra, 144 N.J. at, 97-105 (holding that TCA permits nuisance and negligence causes of action for damages caused on private property by dangerous condition on public entity’s property created by school drainage and municipal storm-water drainage system); Medford Lakes, supra, 90 N.J. at 591-96 (allowing action for nuisance for damage to lake caused by discharge from municipally owned and operated sewage treatment plant); Saldana v. DiMedio, 275 N.J. Super. 488, 499 (App. Div. 1994) (allowing cause of action against municipality for dangerous condition on its property for fire that spread from city-owned abandoned building to privately-owned property); Sheppard v. Township of Frankford, 261 N.J. Super. 5 (App. Div. 1992) (in a nuisance case that involved a public entity’s disposal of storm-water runoff onto private property the court found a continuous nuisance existed where the storm-water drainage system at issue “enhanced, concentrated, and sped up the flow of the storm water into the drainage ditch,” thereby causing flood damage on the plaintiff’s property).

Public entities, however, are not liable for discretionary activities. The section that confers immunity based upon discretionary activities reads as follows:

(a) A public entity is not liable for an injury resulting from the exercise of judgment or discretion vested in the entity;

(b) A public entity is not liable for legislative or judicial action or inaction, or administrative action or inaction of a legislative or judicial nature;

(c) A public entity is not liable for the exercise of discretion in determining whether to seek or whether to provide the resources necessary for the purchase of equipment, the construction or maintenance of facilities, the hiring of personnel and, in general, the provision of adequate governmental services;

(d) A public entity is not liable for the exercise of discretion when, in the face of competing demands, it determines whether or how to utilize or apply existing resources, including those allocated for equipment, facilities and personnel unless a court concludes that the determination of the public entity was palpably unreasonable. Nothing in this section shall exonerate a public entity for negligence arising out of acts or omissions of its employees in carrying out their ministerial functions.

[N.J.S.A. 59:2-3.]

Subsection (a) concerns the “exercise of judgment or discretion” in making basic policy — the type made at the planning, rather than the operational level of decision-making. Moreover, immunity is contingent upon proof that discretion was actually exercised at that level by an official who, faced with alternative approaches, weighed the competing policy considerations and made a conscious choice.

In Birchwood Lakes Colony Club v. Medford Lakes, 90 N.J. 582, 601 (N.J. 1982) our Supreme Court acknowledged the validity of a pre-Tort Claims Act case, Barney’s Furniture Warehouse v. Newark, 62 N.J. 456, 467-68 (1973), which held that although a municipality is not liable for the gradually increasing functional incapacity of its sewer system, it remains liable for negligent operation or repairs and would be liable if in actual operation the system expels artificially collected sewage upon a claimant’s property (Barney’s Warehouse, supra, involved claims of damage by property owners whose premises were periodically flooded by water backup following rainfall. The Court concluded that “by far, the greater portion of the floodwaters . . . consists of either precipitation or back-flow of surface water. . . .” Id. at 462. The Court held there was no affirmative municipal duty to keep its storm water system abreast of municipal growth and no showing that “collected waters” were cast upon plaintiffs’ lands. Id. at 468. The court distinguished from the matter before it such cases as those of private damage resulting from lack of repair or from the connection of additional laterals to a sewer whose existing incapacity was already demonstrated, or from the casting into a sewer of “sewage beyond its capacity to conduct to the common outlet so that it must empty itself upon the private property” and the case of a common sewer outlet emptying directly on private property. It was said that in all of such instances the public body is generally held responsible.).

Accordingly, the Medford Lakes court held that a public entity will be immune from liability for claims of damages from public sewer discharges when the amount of discharge is incorporated into the plan and design “approved in advance” by the body exercising “discretionary authority to give such approval,” N.J.S.A. 59:4-6, so long as the works are thereafter operated with reasonable care and in accordance with the permit requirements.

As the Barney’s Furniture court acknowledged, the duties of the municipal authorities in adopting a general plan of drainage and in determining when and where sewers shall be built, of what size and at what level, are of a quasi-judicial nature, involving the exercise of deliberate judgment and discretion, and depending upon considerations affecting the public health and general convenience throughout an extended territory; and the exercise of such judgment and discretion in the selection and adoption of the general plan or system of drainage is not subject to revision by a court or jury in a private action for not sufficiently draining a particular lot of land. However, the construction and repair of sewers, according to the general plan so adopted, are simply ministerial duties, and for any negligence in so constructing a sewer or keeping it in repair, the municipality which has constructed and owns the sewer may be sued by a person whose property is thereby injured.

The view that liability does not attach for defects in the general plan of a municipal sewerage system is generally held. A few jurisdictions, however, have followed a minority rule to the effect that if a sewer system as established proves inadequate “to keep pace with the increasing demands upon the resources of the artificial channels it has established” it must be changed to accommodate such demands at peril of liability. See, e.g., City of Louisville v. Cope, 296 Ky. 207 (Ct. App. 1943); City of Macon v. Cannon, 89 Ga. App. 484 (Ct. App. 1954); City of Holdenville v. Griggs, 411 P.2d 521 (Okl. Sup. Ct. 1966). More frequently, however, it is held that if a sewer is adequate when constructed the municipality is not liable because of subsequent inadequacy occasioned by the growth of the municipality and the increased demands made upon the sewer. This position is qualified to the extent that liability will follow if in actual operation the system expels artificially collected sewage, whether sanitary or storm or both, into plaintiff’s home or onto his land.

Thus, flooding of a plaintiff’s property as a result of waters cast upon it out of sewer lines would be a basis for imposing liability on the public entity in control of the sewer lines through application of the doctrine of the “collected water” cases cited above. Moreover, liability attaches when damage results because of a public entity’s failure to remedy a condition of disrepair.

Accordingly, public entities remain liable for negligent operation or construction. In our State, the operation of a sewer system by a municipality is held to be the exercise of a proprietary function, and liability is determined under ordinary principles of negligence, without regard to the municipal character of the tortfeasor.

When a municipality constructs and operates a sewer system it becomes its duty to keep it in repair and free from conditions that will cause damage to private property. Its duty to keep its sewers in repair is not performed by waiting to be notified by citizens that they are out of repair, and repairing them only when the attention of municipal officials is called to the damage they have occasioned by having become dilapidated and defective. Its duty involves the exercise of a reasonable degree of watchfulness in ascertaining their condition from time to time, and preventing them from becoming dilapidated and defective. Where dilapidation and defects are the ordinary result of the use of the sewer which ought to be anticipated and could be guarded against by an occasional examination by tests or otherwise, the failure to make such examinations is a neglect of duty which renders the municipality liable for damage proximately caused thereby.

The rule of damages applicable to damage sustained to real property of a plaintiff allows recovery based upon the diminution in value of said property caused by the defendant public entity’s negligence. Additionally, evidence of the reasonable cost of repairs necessary to restore such property to its former condition may be considered in determining such loss.

The New Jersey Tort Claims Act (the “TCA” or the “Act”) provides that “a public entity is not liable for an injury” caused by an act or omission “[e]xcept as otherwise provided by this act.” N.J.S.A. 59:2-1a. Under the TCA, immunity is the rule and liability is the exception. The TCA defines public entities to include counties and municipalities, and therefore townships also fall within the scope of the TCA. N.J.S.A. 59:1-3.

One relevant exception to the general rule of immunity covers dangerous conditions on public property. N.J.S.A. 59:4-2. That section provides:

A public entity is liable for injury caused by a condition of its property if the plaintiff establishes that the property was in dangerous condition at the time of the injury, that the injury was proximately caused by the dangerous condition, that the dangerous condition created a reasonably foreseeable risk of the kind of injury which was incurred, and that either:

(a) a negligent or wrongful act or omission of an employee of the public entity within the scope of his employment created the dangerous condition; or
(b) a public entity had actual or constructive notice of the dangerous condition under section 59:4-3 a sufficient time prior to the injury to have taken measures to protect against the dangerous condition.

Nothing in this section shall be construed to impose liability upon a public entity for a dangerous condition of its public property if the action the entity took to protect against the condition or the failure to take such action was not palpably unreasonable.

[N.J.S.A. 59:4-2.]

Chapter 4 of the Act, specifically N.J.S.A. 59:4-2, imposes liability on a public entity for injury caused by a condition of its property if the plaintiff establishes that the property was in dangerous condition at the time of the injury, that the injury was proximately caused by the dangerous condition, and that the dangerous condition created a reasonably foreseeable risk of the kind of injury incurred. The plaintiff must also establish that the public entity was responsible either through its employees for creating the dangerous condition or had actual or constructive notice of the condition sufficiently before the injury to have taken measures to protect against the dangerous condition, provided that the entity will not be liable if the action taken to protect against the condition was not “palpably unreasonable.” N.J.S.A. 59:4-1(a) defines “dangerous condition” as “a condition of property that creates a substantial risk of injury when such property is used with due care in a manner in which it is reasonably foreseeable that it will be used.”

The TCA defines “public property” as property that is “owned or controlled by the public entity.” N.J.S.A. 59:4-1c. However, liability is not limited to an event occurring on public property. In fact, our Supreme Court has concluded that public entities may be liable for creating a dangerous condition on private property that is under the “control” of the public entities.

Nevertheless, whether a dangerous condition exists is ultimately a question for the jury. In order for plaintiffs to be successful at trial, they must not only prove that public property created a dangerous condition, but that the condition created a foreseeable risk of the kind of injury that occurred, that the condition proximately caused the injury and that the action the public entities took to protect against the dangerous condition or the failure to take such action was palpably unreasonable. The term “palpably unreasonable” connotes “behavior that is patently unacceptable under any given circumstance.” A dangerous condition under the TCA relates to the physical condition of the property itself and not to activities on the property. See Roe ex rel. M.J. v. New Jersey Transit Rail Operations, Inc., 317 N.J. Super. 72 (App. Div. 1998), certif. denied, 160 N.J. 89 (1999) (held that a permanently bolted-open gate on New Jersey Transit’s property constituted a dangerous condition under N.J.S.A. 59:4-2 because it invited the public to enter a high-crime area).

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