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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, 2017
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Background

  • 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)
Read the full case

Case Details

Case Name: ELAR REALTY CO. VS. ENVIRONMENTAL RISK LIMITED(L-0709-11, ESSEX COUNTY AND STATEWIDE)
Court Name: New Jersey Superior Court Appellate Division
Date Published: Oct 11, 2017
Docket Number: A-2201-15T3
Court Abbreviation: N.J. Super. Ct. App. Div.