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Stahl v. Sybig C.F.S., Inc.

A-3582-06T2 (N.J. Super. App. Div. 2008) (Unpublished)

CONTRACTORS; STATUTE OF LIMITATIONS — Where a contractor’s customer knows of one aspect of a construction defect, but does not learn, until much later, as to other aspects of that defect, it should have a chance to avail itself of the discovery rule to toll the statute of limitations and should be afforded an evidentary hearing to show, under the circumstances, whether the statute should be tolled in its favor.

Shortly after moving in, homeowners of new residential construction noticed exterior blisters on the outside stucco finish of their home They notified the builder who responded that the blisters could be removed but that doing so could cause a problem with the color. The homeowners did not accept the builder’s invitation to remove the blisters and did not file a home warranty claim for the blistering. Eventually, portions of the home’s exterior became rotten and moldy. This was discovered when areas of the exterior were cut open. Seven years after their home purchase, the homeowners filed a major defect claim under their homeowners’ ten year warranty. Three months later, the homeowners sued the builder for defective workmanship, alleging that the stucco had been improperly applied. They submitted a certification from the husband that they had simply accepted the builder representations as to the blistering and, based on the builder’s explanation, they were willing to leave the blistering alone. The builder argued that any cause of action began to accrue seven years earlier when the homeowners contacted it about the exterior blistering. The lower court granted summary judgment to the builder, holding that the complaint was time-barred under the applicable six year statute of limitations. The lower court found that, from the beginning, the homeowners had some knowledge of the defect and knew a third party was involved. The homeowners appealed.

On appeal, the Appellate Division vacated the lower court’s order, and remanded the matter for an evidentiary hearing. It directed the lower court to reconsider whether the limitations period should have been extended under the discovery rule. It opined that in an appropriate case, a cause of action will not accrue until the injured party discovers its injury and identifies the party to whom the injury may be attributed. In such cases, a court must assess whether the facts presented would alert a reasonable person, exercising ordinary diligence, that he or she was injured due to the fault of another. The Court indicated that under New Jersey law, lower courts should conduct an evidentiary hearing to determine credibility when asked to toll a statute of limitations under the discovery rule. Here, it believed that the lower court should have conducted an evidentiary hearing to test the sincerity of the homeowners’ certification before concluding that the homeowners’ delay in filing suit was inexcusable. The Court surmised that the rot and mold may have amounted to a latent defect or masked condition and that the homeowners could reasonably not have known about it even after receiving the builder’s letter concerning the surface blistering.


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