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Ebert v. South Jersey Gas Company

157 N.J. 135, 723 A.2d 599 (1999)

CONTRACTORS; DAMAGES; STATUTE OF LIMITATIONS — A lateral gas line in the street qualifies as an improvement for determining applicability of the 10 year statute of repose accorded to contractors of improvements to real property.

In 1955, a utility company contracted to have gas service lines, or laterals, installed from its gas main in the street to adjacent homes. Thirty four years later, it contracted with a different company to install new service lines. When the new lines were installed, the old lines were capped. At one home, the old line burst and gas leaked into the home, causing an explosion resulting in damage to a living room wall. When the homeowner sued the utility company, the utility company sued the original (1955) contractor. The contractor asserted that the gas service line, which demonstrated the characteristics of “functional utility, permanency and value enhancement,” constituted an “improvement.” The Appellate Division agreed that the gas line was an improvement. As such, the original contractor could not be sued because a New Jersey statute provides that no action shall be brought against a person performing or furnishing the design, planning, supervision of construction or construction of an improvement to real property more than 10 years after the performance or furnishing of the services and construction. The New Jersey Supreme Court agreed, pointing out that the statute in question was a statute of repose. As such, “[i]t does not bar a cause of action; its effect, rather, is to prevent what might otherwise be the cause of action, from ever arising.” The purpose of the statute is “to limit the expanding liability of contractors, builders, and designers.” According to the Court, a gas line, although it serves as a conduit, is also a valuable improvement. Therefore, as a valuable improvement to a home, it comes within the meaning of the statute. As such, the utility’s claim against the original contractor was barred.


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