Hall v. Luby Corp.

Decision Date31 January 1989
Citation556 A.2d 1317,232 N.J.Super. 337
PartiesJoyce HALL, Individually, and as Administratrix ad Prosequendum and General Administratrix of the Estate of Sharonda Colwell, deceased; Hakim Colwell, an infant by his Guardian ad Litem, Joyce Hall: and Saleem Colwell, an infant by her Guardian ad Litem, Joyce Hall, Plaintiffs, v. LUBY CORPORATION, a corporation of the State of New Jersey; Larry Mc Neil, individually; Otis Elevator Company, a corporation of the State of New Jersey, Defendants.
CourtNew Jersey Superior Court

No appearance for plaintiffs.

Harold M. Davis, West Orange, for defendant Larry McNeil.

Abraham Kinstlinger, Hackensack, for defendant Luby Corp.

Howard I. Braff for defendant Otis Elevator Co. (Braff, Ertag, Wortmann, Harris & Sukoneck, Livingston, attorneys).

VILLANUEVA, J.S.C.

This is a personal injury action against the owner of an apartment building and the designer and installer of the elevator where the accident occurred.

Defendant Otis Elevator Company, who designed, constructed and installed the elevator 58 years before the accident in question, moves for summary judgment to dismiss the complaint and cross claims against it.

The issue is whether one who designs, fabricates and installs an elevator is entitled to the protection of the ten-year statute of limitations afforded in N.J.S.A. 2A:14-1.1. Although the plaintiffs have not opposed this motion, defendant McNeil contends that the statute was never intended to apply to the manufacturer of "stock" items, such as an elevator.

The court holds that the installation of an elevator is "an improvement to real property" because if it were to be removed it would materially damage the real property and subject the owner of the building to fines and penalties, and therefore, the statute applies to the designer, fabricator and installer of it. Accordingly, Otis has the benefit of the statute.

Statement of Facts.

The complaint, filed October 21, 1987, alleges that on May 24, 1986, Sharonda Colwell, was fatally injured on an elevator located in an apartment building where she lived at 49 South Clinton Street, East Orange. The complaint alleges that plaintiffs, Joyce Hall, Hakim Colwell and Saleem Colwell suffered emotional distress as a result thereof and that the accident occurred as a result of the elevator in question being negligently manufactured, assembled, designed, marketed, modified, installed, maintained, repaired, sold or caused to be sold, shipped and/or distributed component parts thereof, by defendant Otis Elevator Company.

The elevator in question was designed and manufactured prior to 1928 and was installed by Otis in January 1928, 58 years prior to this accident.

Otis did not own the property at the time of the accident. Otis did not have a contract to service or maintain the elevator involved at the time of this accident. Otis' contract for maintenance of this elevator was cancelled on February 1, 1981, when it ceased working in that building.

Plaintiffs allege that defendant Luby Corporation, the record owner of the property, is a "dummy" corporation, run solely by defendant Larry McNeil for his benefit and formed by him to avoid personal liability.

The action Against Otis Elevator Company is Barred by the

provisions of N.J.S.A. 2A:14-1.1

because it was commenced in 1987, 59 years after the

design, construction and installation of the elevator

involved in this suit.

Otis Elevator Company designed, constructed and installed the elevator 58 years prior to this occurrence. N.J.S.A. 2A:14-1.1 extinguishes any cause of action arising more than ten years after the performance of construction or services regarding improvements to real property, such as the elevator in question.

The pertinent statute, N.J.S.A. 2A:14-1.1, reads as follows:

10 years; damages for injury from unsafe condition of improvement to real property.

No action whether in contract, in tort, or otherwise to recover damages for any deficiency in the design, planning, supervision or construction of an improvement to real property, or for any injury to property, real or personal, or for an injury to the person, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor for any action for contribution or indemnity for damages sustained on account of such injury, shall be brought against any person performing or furnishing the design, planning, supervision of construction or construction of such improvement to real property, more than 10 years after the performance or furnishing of such services and construction. This limitation shall not apply to any person in actual possession and control as owner, tenant, or otherwise, of the improvement at the time the defective and unsafe condition of such improvement constitutes the proximate cause of the injury or damage for which the action is brought.

Although the available materials regarding the legislative history of N.J.S.A. 2A:14-1.1 are "meager and unrevealing," Rosenberg v. Town of North Bergen, 61 N.J. 190, 194, 293 A.2d 662 (1972), it is clear that the expanded application of the "discovery rule" to new types of tort litigation was a driving force behind the Legislature's adoption of the statute. E.A. Williams v. Russo Development Corp., 82 N.J. 160, 165, 411 A.2d 697 (1980). The discovery rule, first adopted in Fernandi v. Strully, 35 N.J. 434, 173 A.2d 277 (1961), holds that a cause of action does not accrue until the defect or negligence complained of is, or should have been, discovered. As Justice Handler observed in E.A. Williams, supra:

Because of the expansion of the discovery rule to new fields, those involved in the design and construction of buildings and other improvements to real property were concerned that their potential liability for injuries caused by defective workmanship would last indefinitely, inasmuch as many defects would often not be discovered or give rise to a claim for damages until an injury had in fact occurred. [82 N.J. at 165, 411 A.2d 697.]

In Welch v. Engineers, Inc., 202 N.J.Super. 387, 495 A.2d 160 (App.Div.1985), the date when the ten-year time bar matures under the statute "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." Id. at 397, 495 A.2d 160.

The Appellate Division in Welch, supra, stated:

... we think 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. [Id. at 396, 495 A.2d 160.]

N.J.S.A. 2A:14-1.1 was promulgated, in part, so that designers and builders of improvements to real property would know when their potential liability for an improvement was at an end. The Legislature set that time limitation at ten years. Plaintiffs instituted suit approximately 59 years after the elevator was installed. To permit this case to proceed against Otis would violate both the letter and the spirit of the statute.

The statute has been interpreted, not simply as being a statute of limitation, but, as one defining the substantive rights and abolishing a cause of action against designers, planners, supervisors or constructors of real property improvements ten years after the completion of the improvement. Hudson County v. Terminal Constr. Corp., 154 N.J.Super. 264, 381 A.2d 355 (App.Div.1977), certif. den. 75 N.J. 605, 384 A.2d 835 (1978).

The Appellate Division stated:

... Although this statute does set a time limitation on causes of action, it is not actually a statute of limitation. N.J.S.A. 2A:14-1.1 not only bars the institution of suit after the expiration of ten years for a cause of action arising within the ten-year period, but prevents a cause of action from ever arising after a ten-year period. Any harm resulting after that period of time is deemed to be damnum absque injuria. The function of the statute in the latter situation is to define a substantive right rather than to alter or modify a remedy. [154 N.J.Super. at 270, 381 A.2d 355.]

While discussing the legislative intent of N.J.S.A. 2A:14-1.1, Justice Handler concluded:

... the statute prevents what might otherwise be a cause of action from ever arising. Injury occurring more than ten years after the performance of the negligent act simply forms no basis for recovery. The injured party literally has no cause of action. [E.A. Williams, supra, 82 N.J. at 167, 411 A.2d 697.]

Clearly, Otis falls within a protected class intended to be benefited by the protection of the statute. The Court in Williams determined that even a surveyor falls within the protected class, stating that the statute was:

... intended to terminate the liability of all persons who might be responsible for the existence of "defective and unsafe" conditions through their negligent design, plan, or construction of an improvement to real property. [Id. at 169, 411 A.2d 697.]

The statute has withstood constitutional challenges. Rosenberg v. Town of North Bergen, supra; Salesian Soc. v. Formigli Corp., 124 N.J.Super. 270, 306 A.2d 466 (App.Div.1973). In Rosenberg, suit was brought for personal injuries sustained as a result of a fall on a street in 1968 against the company which had done some repaving work in 1935 and its successors in interest, among others. The court held that they were insulated from liability pursuant to the statute, stating:

... [T]here seems no reason not to include within the favor of the statute all to whom this condition [e.g., extension of potential liability] may adhere whether they be planners and builders of structures, roads, playing fields or aught else that by...

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