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Hein v. GM Construction Co., Inc.

330 N.J. Super. 282, 749 A.2d 422 (App. Div. 2000)

CONTRACTORS; STATUTE OF LIMITATION—The ten year statute of limitations for construction claims does not include the day the certificate of occupancy is issued.

A residence was erected by a contractor in 1987 and a certificate of occupancy was issued by the municipality on July 23, 1987. A buyer acquired the residence in 1994, and on July 23, 1997 filed a complaint against the contractor for building defects. The statute of limitations for the recovery of damages precludes actions made more than 10 years after the performance or furnishing of services or construction. This is a statute of repose which “commences with substantial completion,” which occurs when a certificate of occupancy is issued. If the issuance date was included in the computation of time prescribed by the statute, the complaint had been filed ten years and one day after the issuance of the certificate of occupancy. The lower court found that the cause of action was barred, but the Appellate Division concluded “that in the computation of the time prescribed by a statute of repose, the day of the ‘event’ shall not be included.” In reaching this conclusion, the Court followed what it characterized to be the “general rule followed by all but a few jurisdictions,” i.e., to exclude the day upon which the cause of action occurred. One reason advanced for excluding the day of issuance was “[o]ur law rejects fractions of a day.” Another reason cited by the Court was that a statute of limitations is “in derogation of abstract right,” and “thus should not be construed to prevent a forfeiture of that right.” The contractor argued that the common-law rule excluding the “day of the event” applies “only to statutes of limitations, and not to statutes of repose.” The Court recognized that the two served different purposes. In particular, “[s]tatutes of limitations serve to ‘protect against the litigation of stale claims, stimulating diligent prosecution of claims, penalizing deleteriousness, and serving as a measure of repose.” The purpose of a statute of repose “is to provide for a measure of repose and prevent ‘liability for life’ against contractors and architects.” The statute of repose does not actually “bar” a remedy. Rather, it “prevents what might otherwise be a cause of action from ever arising.” However, in the Court’s view, “the conceptual difference between the two statutes” was “no impediment to the application of the ‘excluding the day of the event’ rule to statutes of repose. Both impose limitation periods. In one instance, the judicial task is to determine the day a cause of action ‘accrued’ for the purpose of triggering a statute of limitations. The other is to determine the day a structure is ‘substantially complete’ and deciding whether the ten-year period under the statute of repose prevents a cause of action from ever arising. No legal or persuasive argument is advanced why these statutes should be treated differently.”


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