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Baum v. Nigro

BER-L-10169-04 (N.J. Super. Law Div. 2005) (Unpublished)

CONTRACTORS; STATUTE OF LIMITATIONS; EQUITABLE ESTOPPEL — The principle of equitable estoppel may bar a contractor from asserting the statute of limitations as a defense where the contractor, promising to make repairs, lulls its customer into delaying the filing of a suit.

A builder built a house for a homeowner. One year later, water began leaking into the front hallway. The homeowner hired a stucco inspector to identify the problem. The inspector issued a detailed report that listed serious defects in the stucco walls as well as a recommendation that they be remediated as soon as possible to prevent the problem from getting worse. The homeowner sent the builder a letter, along with a copy of the inspection report, and advised the builder that she was willing to settle it amicably without litigation if the builder responded and repaired the defects. The letter also advised the builder that if she did not hear from the builder within a few weeks, she would file suit. The builder agreed to remediate the problems and completed its work several months later. Six and a half years after she first discovered the water leaking into her hallway, she noticed black mold in her bedroom, which turned out to be toxic mold. She obtained expert reports which disclosed the installation of defective synthetic stucco as well as other construction defects. She discovered that the builder had not repaired the problems as he claimed to have done. The builder moved for summary judgment, claiming that the homeowner’s complaint was barred by the statute of limitations. The builder claimed that the six-year statute of limitations first began to accrue when she initially discovered the water leak, when she had sufficient fact to alert her to a potential lawsuit. The homeowner claimed that the “discovery rule” tolled the statute of limitations. By applying the “discovery rule,” the homeowner’s cause of action would not begin to accrue until she discovered, or by a reasonable exercise of due diligence would have discovered, that she had a basis for a lawsuit. The Court found that the statute of limitations was tolled and did not begin to accrue until after the builder unsuccessfully repaired the stucco. The Court also found that the builder was estopped from invoking the statute of limitation under principles of equitable estoppel. The principle of equitable estoppel bars a party from using a statute of limitations defense if it engaged in wrongful conduct which lulled the wronged party into a false sense of security that resulted in a late filing of the complaint. Here, the builder assured the homeowner that it would fix the leak and guarantee that it would not leak in the future. The builder lulled the homeowner into a sense of security that the problem was fixed and could not use the statute of limitation to bar her from suing once she discovered that the problem was not properly fixed.

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