State v. Perini Corporation (070558)
113 A.3d 1199
| N.J. | 2015Background
- New Jersey contracted Perini to design/build South Woods State Prison (26 buildings) in three phases; project included a central plant and an underground high temperature hot water (HTHW) distribution system.
- Central plant (Phase I) substantial completion certificates issued May 16, 1997; Phase II final buildings (including 1,000+ bed minimum-security unit) certified May 1, 1998. No separate certificate issued for the HTHW system.
- Perma-Pipe manufactured the insulated carrier piping; Natkin installed the piping and central-plant equipment; Kimball was the designer/engineer; Jacobs provided construction oversight.
- The HTHW system experienced repeated pipe/valve failures beginning March 2000; State sued on April 28, 2008 asserting contract, negligence, malpractice, products liability, and warranty claims.
- Trial court granted summary judgment for Perini, Kimball, Natkin, and Jacobs on statute-of-repose grounds (claim time-barred); denied Perma-Pipe’s motion. Appellate Division reversed for contractors and affirmed denial as to Perma-Pipe. The Supreme Court granted review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does the 10-year statute of repose (N.J.S.A. 2A:14-1.1(a)) begin for an HTHW system serving a multi-phase project? | Trigger is the date the entire project is substantially complete (final buildings connected); plaintiff: system not complete until last buildings connected (May 1, 1998). | Trigger can be earlier when owner first occupies/uses portions served by the system (e.g., central plant/Phase I occupancy May 1997). | Statute begins the day after substantial completion of the final buildings served by the unified HTHW system (May 2, 1998); thus complaint filed April 28, 2008 was timely. |
| Is the HTHW system an "improvement to real property" subject to the statute of repose? | Yes; system provides permanent value and is essential to facility operation. | Defendants did not dispute improvement character but argued earlier trigger dates. | Yes; HTHW is an improvement to real property and falls within the statute's scope. |
| Can separate trigger dates be applied piecemeal to sections/components of a unified system as each building comes online? | No; system designed as a unified whole and completion is when all served buildings are connected. | Yes; phases/components that come into use trigger repose for related work. | No separate piecemeal trigger for a single improvement intended to serve entire project when construction proceeds continuously; use final building certificates. |
| Does the statute of repose apply to claims solely against a manufacturer of component products (Perma-Pipe)? | N/A (State argued PLA governs manufacturer claims). | Perma-Pipe: it played design/fabrication/installation roles and should be covered by statute of repose. | Manufacturer of standardized or job-fabricated products (Perma-Pipe) is governed by PLA/statute of limitations, not the statute of repose; Perma-Pipe was treated as a product manufacturer and not insulated by repose. |
Key Cases Cited
- Totten v. Gruzen, 52 N.J. 202 (1968) (abandons completed-and-accepted rule; frames pre-repose common-law context)
- Russo Farms, Inc. v. Vineland Bd. of Educ., 144 N.J. 84 (1996) (certificate of substantial completion generally triggers repose period)
- Town of Kearny v. Brandt, 214 N.J. 76 (2013) (distinguishes continuous supervisory responsibility vs. discrete-task defendants for repose trigger)
- Dziewiecki v. Bakula, 180 N.J. 528 (2004) (manufacturers/sellers of products are governed by PLA limitations, not statute of repose)
- Daidone v. Buterick Bulkheading, 191 N.J. 557 (2007) (statute may trigger on completion of each contractor’s discrete work when responsibilities are finite)
- Ebert v. S. Jersey Gas Co., 157 N.J. 135 (1999) (defines "improvement to real property")
- Welch v. Engineers, Inc., 202 N.J. Super. 387 (App. Div. 1985) (refuses to segment continuous supervisory contractors into sequential repose triggers)
- Brown v. Jersey Central Power & Light Co., 163 N.J. Super. 179 (App. Div. 1978) (structural components required for a building’s function are improvements)