ELAR REALTY CO. VS. ENVIRONMENTAL RISK LIMITED(L-0709-11, ESSEX COUNTY AND STATEWIDE)
A-2201-15T3
| N.J. Super. Ct. App. Div. | Oct 11, 2017Background
- In 2000 Elar Realty (plaintiff) contracted with Environmental Risk Limited (ERL) for remediation services; the written contract—negotiated with counsel—contained a one‑year limitations clause for any claim arising from the services and allowed assignment to successors/assigns.
- In 2006 ERL sold its assets and open contracts to GZA Geoenvironmental, Inc. (GZA); plaintiff was not a party to that asset purchase but was notified and thereafter accepted and paid for GZA's services without objection.
- Plaintiff terminated GZA's services on December 24, 2008 after a consultant reported deficiencies; GZA stopped work and no suit was filed for roughly two years.
- Plaintiff filed suit in January 2011 alleging defects in ERL/GZA’s work; ERL and GZA moved for summary judgment asserting the contractual one‑year limitations period barred the suit and that the contract was assignable.
- The Law Division (Judge Furnari) granted summary judgment for defendants and denied reconsideration; the Appellate Division affirmed, concluding the one‑year limitations clause was enforceable and the contract was assignable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of the one‑year contractual limitations period | Clause is unreasonable and unenforceable; equitable discovery tolling applies | The parties freely agreed to a one‑year limit; discovery doctrine does not render it unenforceable here | Court held the one‑year clause enforceable; plaintiff's claims time‑barred |
| Assignability of the contract to GZA | Asset purchase was not binding on plaintiff; contract required personal services and thus not assignable without consent | Contract expressly allowed assignment and inured to successors/assigns; plaintiff accepted GZA's performance | Court held the contract was freely assignable and the assignment valid |
| Effect of plaintiff's post‑assignment conduct (accepting/paying for GZA) | Acceptance did not waive plaintiff's right to later sue for deficient work | Plaintiff accepted services and paid without timely objection, undermining later challenge | Court relied on plaintiff's acceptance as consistent with assignability and limitations enforcement |
| Procedural/waiver arguments raised on appeal | Various new arguments (merger theory, conflict of interest) | Defendants maintained arguments were forfeited if not raised below | Court declined to consider issues not raised below and deemed unargued points waived |
Key Cases Cited
- Conley v. Guerrero, 228 N.J. 339 (2017) (standard for de novo appellate review of summary judgment)
- Cypress Point Condo. Ass'n v. Adria Towers, L.L.C., 226 N.J. 403 (2016) (no deference to trial court's legal conclusions on summary judgment)
- Eagle Fire Prot. Corp. v. First Indem. of Am. Ins. Co., 145 N.J. 345 (1996) (upholding contractual limitations provisions)
- Mirra v. Holland Am. Line, 331 N.J. Super. 86 (App. Div. 2000) (enforceability of agreed statutes of limitation)
- Somerset Orthopedic Assocs., P.A. v. Horizon Blue Cross and Blue Shield of N.J., 345 N.J. Super. 410 (App. Div. 2001) (contract assignment principles)
- Owen v. CNA Ins./Continental Cas. Co., 167 N.J. 450 (2001) (contract interpretation and assignment issues)
