Diamond v. New Jersey Bell Tel. Co.

• Citation: 242 A.2d 622,51 N.J. 594
• Decision Date: 20 May 1968
• Docket Number: No. A--97,A--97
• Parties: Howard and Dora DIAMOND t/a Morristown Picture Frame and Glass Company, Plaintiffs-Appellants, v. NEW JERSEY BELL TELEPHONE COMPANY, (a corporation of the State of New Jersey), and Gray Construction Company (a corporation of the State of New Jersey), Defendants-Respondents.
• Court: New Jersey Supreme Court

Page 594

51 N.J. 594

242 A.2d 622

Howard and Dora DIAMOND t/a Morristown Picture Frame and Glass Company, Plaintiffs-Appellants, v. NEW JERSEY BELL TELEPHONE COMPANY, (a corporation of the

State of New Jersey), and Gray Construction

Company (a corporation of the State of

New Jersey), Defendants-Respondents.

No. A--97.

Supreme Court of New Jersey.

Argued Feb. 19, 1968.

Decided May 20, 1968.

John S. Donington, Elizabeth, for plaintiffs-appellants (Weiner, Weiner & Glennon, Elizabeth, attorneys; John S. Donington, Elizabeth, of counsel and on the brief).

Joel A. Murphy, Morristown, for defendants-respondents (Mills, Doyle & Muir, Morristown, attorneys, Joel A. Murphy, Morristown, of counsel and on the brief).

The opinion of the court was delivered by

SCHETTINO, J.

This case requires another examination of when a cause of action 'accrues' for statute of limitations purposes. See also New Market Poultry Farms, Inc. v. Fellows, 51 N.J. 419, 241 A.2d 633 (1968); Rosenau v. City of New Brunswick, 51 N.J. 130, 238 A.2d 169 (1968); Fernandi v. Strully, 35 N.J. 434, 173 A.2d 277 (1961).

In 1957, defendant Bell Telephone Company installed an underground conduit on plaintiffs' property in Morristown. ¹ The conduit was installed over plaintiffs' sewer line and, allegedly, the work was performed in such a negligent manner as to break the 'clean-outs' on the sewer line. As a result, sediment gradually accumulated in the line until, on February 1, 1966, a back-up occurred and plaintiffs' property was flooded. Until that moment, plaintiffs had been unaware of any damage or malfunction in the sewer line. But after the back-up, plaintiffs caused excavations to be made which disclosed the condition of the sewer line and the cause of that condition.

In July 1966, approximately five months after the sewer line became clogged, plaintiffs instituted a negligence action against the two defendants. Defendants moved for judgment on the pleadings on the basis that the action was barred by the statute of limitations. The trial court denied the motion.

On appeal from this interlocutory order, the Appellate Division reversed in an opinion which held that the action had accrued in 1957 and, consequently, was barred by the six-year limitations period contained in N.J.S. 2A:14--1, N.J.S.A., 97 N.J.Super. 1, 234 A.2d 96 (1967). We granted certification. 50 N.J. 405, 235 A.2d 898 (1967).

Traditionally, 'a plaintiff's cause of action accrues for limitation purposes when he suffers actual consequential damage or loss from the defendant's negligence.' Rosenau v. City of New Brunswick, supra, 51 N.J. at p. 138, 238 A.2d at 173; see 'Developments in the Law--Statutes of Limitations,' 63 Harv.L.Rev. 1177, 1201 (1950). Were the plaintiffs' only injuries here those flood damages resulting from the sewer back-up, their claim might well fall within this 'actual damages' doctrine. The back-up did not occur until 1966 and the negligence suit was filed in that same year. At oral argument, however, it became evident that plaintiffs' damages consist primarily of the costs of repairing the broken sewer 'clean-outs'--harm sustained upon the installation of the underground conduit in 1957. Under the customary rule that ignorance of a claim does not toll the running of the limitations period (see Fernandi v. Strully, supra, 35 N.J. at p. 439, 173 A.2d 277), this suit would have been barred after 1963.

We must, therefore, consider the applicability of the recently evolved discovery rule. Under that doctrine, a cause of action accrues only when the plaintiff knows or should reasonably know of his injury. In that manner he is relieved of the impossible task of asserting a claim before its existence may reasonably be known to him.

In New Jersey, the discovery rule has, to date, been applied only in certain limited circumstances--in a foreign object malpractice case (Fernandi v. Strully, supra) and in the case of a negligent land survey (New Market Poultry Farms, Inc. v. Fellows, supra). We have recognized, however, that other situations may well be appropriate for extension of the same salutary rule. See Fernandi v. Strully, supra, 35 N.J. at p. 439, 173 A.2d 277. For reasons to be expressed, we are of the opinion that the case before us presents one such appropriate instance.

Many courts have recognized the obvious inequity of allowing a limitations period to expire while actionable harm is hidden beneath the surface of the earth, unascertainable either by ordinary observation or by special alertness on the part of a landowner. In the early case of Lewey v. H. C. Frick Coke Co., 166 Pa. 536, 31 A. 261 (1895), defendants had tunnelled deep under the plaintiff's adjacent property and removed 4,000 bushels of coal. Eleven years later plaintiff first became aware of the trespass and sued for damages. Defendants raised in opposition the statute of limitations normally applicable to trespass actions. In rejecting that defense, the Pennsylvania Supreme Court held that the statute of limitations did not commence against an underground trespass until the time of actual discovery of the trespass, or until the moment when discovery reasonably became possible. The court commented:

'To require an owner, under such circumtances, to take notice of a trespass upon his underlying coal at the time it takes place, is to require an impossibility; and to hold that the statute begins to run at the date of the trespass is in most cases to take away the remedy of the injured party before he can know that an injury has been done him. A result so absurd and so unjust ought not to be possible.' 31 A. at p. 263.

Since the Lewey decision, numerous cases have adopted the same rationale and applied a discovery rule to instances of 'subterranean trespass.' See, e.g., Cole v. Eastern Gas and Fuel Associates, 322 F.2d 506, 510--511 (4 Cir. 1963); Daniels v. Beryllium Corp., 227 F.Supp. 591, 594 (E.D.Pa.1964) (dictum); Petrelli v. West Virginia-Pittsburgh Coal Co., 86 W.Va. 607, 104 S.E. 103 (1920); Howard v. United Fuel Gas Co., 248 F.Supp. 527 (S.D.W.Va.1965); Annot., 37 A.L.R. 1182 (1925). That the doctrine has not previously found expression in New Jersey cases is not surprising, as the factual setting involved is found primarily in the mining areas of the nation. The underlying principle, that a cause of action for underground harm not susceptible to observation does not accrue until the harm can reasonably be ascertained, is equally valid in this jurisdiction. That this is not a mining area only ensures that this factual complex requiring application of the discovery rule is likely to recur infrequently. Moreover, we reject any theoretical distinctions based on totally secretive operations or active concealment by defendants in the mining cases. As the Lewey decision illustrates, it is not these considerations, but rather the helpless position of plaintiffs, which dictate application of a discovery rule in circumstances in which the dangers of fraud or imposition upon defendants are not excessive. ²

This broad view of the underground trespass cases is supported by examination of another case--remarkably similar to the one before us--adopting the rationale of the Lewey decision. In Smith v. Bell Telephone Co. of Pennsylvania, 397 Pa. 134, 153 A.2d 477 (1959), the defendant had, in 1948, installed telephone conduit under plaintiff's property. In 1951, plaintiff first noticed minor seepage in his basement resulting from blockage of the sewer line running in front of his house. But his effort to discover the cause of the back-up did not succeed until 1956 when he tunnelled under the sidewalk and found that defendant's phone conduit had crushed and blocked the sewer line. Suit was brought in 1957 seeking damages for defendant's negligent installation of conduit. After holding that a jury could reasonably infer that the installation had been responsible for the crushed sewer pipe, the Pennsylvania Supreme Court noted that the statute of limitations would not pose an absolute bar to the action:

'(T)he statute runs, on causes arising from sub-surface injury, from the time of discovery of the cause of the harm or the time when the cause of the harm reasonably should have been discovered, whichever is earlier.' 153 A.2d at p. 481.

Having determined that a 'discovery rule' was applicable, the court left to a jury the question of whether or not the plaintiff had exercised reasonable diligence in ascertaining his injury.

We are in agreement with the above decisions holding that to permit the running of the limitations period while a plaintiff's injury is hidden from observation beneath the ground would be overly harsh and unjust. We...