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Ebert v. South Jersey Gas Company

307 N.J. Super. 127, 704 A.2d 579 (App. Div. 1998)

CONTRACTORS; DAMAGES; STATUE 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.

A construction company was hired by South Jersey Gas Company to replace existing natural gas service lines (or lateral lines) to residences. Lateral lines go from a main gas line in a public street to a private residence. The old lateral lines were improperly closed off by the construction company, who left gas in them, and this caused an explosion in one of the houses. The residents sued the gas company and the construction company. The gas company joined the original construction company that installed the lateral lines in 1955, seeking contribution and indemnification. A jury verdict held the original construction company 50% liable. N.J.S. 2A:14-1.1 provides that no action for contribution or indemnification for a deficiency in the construction of an improvement to real property shall be brought more than 10 years after performance of the construction. Accordingly, the issue on appeal was whether an underground lateral line leading from a main gas line to a private residence was “an improvement to real property” for purposes of the statute.

The Appellate Division concluded that the lateral line was such an improvement, and therefore the claims for contribution and indemnification against the original construction installer should have been dismissed because of the 10 year statute of repose. First, the Court looked to prior interpretations of the statute and found that it must be read broadly and consistent with legislative intent. Citing other jurisdictions, it held that an underground gas pipeline connection to a house was not simply an extension of a utility distribution system, but an improvement to real property warranting protection of the statute. In support of this conclusion, the Court determined that the improvement was required for the house to function as a viable residential structure.


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