In New Jersey, in addition to the statute of limitations, litigants need to be conscious of the statute of repose as well. Statute of repose issues most often arise in the construction defect setting where suit is brought more than ten years after the construction of the subject building or development.
The Statute of Repose provides, in relevant part, that:
[n]o action … to recover damages for any deficiency in the design, … or construction of an improvement to real property, … shall be brought against any person performing or furnishing the design, … or construction of such improvement to real property, more than 10 years after the performance or furnishing of such services and construction.
[N.J.S.A. § 2A:14-1.1.]
New Jersey courts have explained that in an important respect, a statute of repose is unlike the typical statute of limitations because the time within which suit may be brought under the statute of repose is entirely unrelated to the accrual of any cause of action. Unlike a statute of limitations, the statute of repose “does not bar a cause of action; its effect, rather, is to prevent what might otherwise be a cause of action from ever arising. For that reason, injury occurring more than ten years after the negligent act allegedly responsible for the harm forms no basis for recovery.
Notably, the statute requires that the complaint be filed within ten years after the completion of the work done. In reviewing the history of the statute and the reasons behind it, New Jersey courts have determined that the Legislature most likely meant that when a person rendered any construction-related services on a particular job, finished them and walked away from the job-site with the work accepted, that person could look back ten years and one day “after the performance or furnishing of such services and construction,” and know there was repose from liability. Welch v. Engineers, Inc., 202 N.J. Super. 387, 396 (App. Div. 1985). The Welch court went on to conclude that the Legislature did not intend to let repose turn on serial cut-off dates accruing through various stages of the work, turning on fact-sensitive determinations and various analytic approaches to construction staging. The Court fashioned a clear and simple rule for determining when the statute of repose starts to run against a contractor who performed work on a project: the date when the ten-year time-bar matures under the statute of repose and the period of repose begins must be measured from the final date the person claiming repose and immunity from suit furnishes any and all services or construction which it has undertaken at the job site.
The Welch court specifically rejected the parsing of work in order to make the statute of repose applicable to various parts or stages of work by stating that it did not condone a piece-meal concept of repose where the contractor is involved in multiple phases of the undertaking.
The importance of prohibiting piece-meal application of the statute of repose cannot be understated. Should it be allowed, contractors would overwhelm courts and plaintiffs with motions seeking to definitively parse their work into those items that were completed more than ten-years before the date of the complaint and those that were completed after. In many instances, there are conflicting construction documents and lack of evidence to allow for an accurate division. Moreover, that difficulty is compounded in those instances where an item, such as a balcony or lake, is partially constructed at the ten-year relation back date. The door would be opened for contractors to argue down to the nail what portion of a partially constructed item should be excluded from plaintiff’s case by operation of the statute of repose.
Luckily, that is not the state of the law and substantial completion is determined by the date upon which a contractor can leave the job site with all of his responsibilities completed. See, e.g., Daidone v. Buterick Bulkheading, 191 N.J. 557 (2007) (if the contractor has no further functions to perform in respect of that construction project, then the start date for Statute of Repose purposes is the date on which the contractor has completed his or her portion of the work); Hopkins v. Fox & Lazo Realtors, 242 N.J. Super. 320, 328 (App. Div. 1990) (the ten-year Statute of Repose commences “when the architect or contractor completes its task with respect to the property involved in the claim”).