What New Jersey Businesses Need to Know About Statutes of Repose

What You Need to Know About Statutes of Repose In New Jersey

A statute of repose establishes a deadline within which a lawsuit must be filed after the occurrence of a certain event. As discussed in yesterday’s article, a statute of limitations prescribes a period of limitation for the commencement of certain types of legal action, with the goal of encouraging the resolution of legal claims within a reasonable amount of time. The so-called “clock” begins to run from the time when the plaintiff’s cause of action accrues, typically when the harm giving rise to the claim occurred.

Conversely, statutes of repose are designed to bar actions after a specified period of time has run from the occurrence of some event other than the injury which gave rise to the claim. The goal is to immunize potential defendants from long-term liability. A statute of repose generally can’t be paused or tolled.

New Jersey’s Statute of Repose for Construction Defect Claims

Statutes of repose govern the filing of legal claims in several areas of law. In New Jersey, a statute of repose governs construction defect cases. N.J.S.A. § 2A:14-1.1 provides:

No action, whether in contract, in tort, or otherwise, to recover damages for any deficiency in the design, planning, surveying, supervision or construction of an improvement to real property, or for any injury to property, real or personal, or for an injury to the person, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained on account of such injury, shall be brought against any person performing or furnishing the design, planning, surveying, supervision of construction or construction of such improvement to real property, more than 10 years after the performance or furnishing of such services and construction.

Calculation of the ten-year limitations period for the statute of repose typically starts one day after issuance of the certificate of substantial completion for the project. However, New Jersey courts have acknowledged that there may be instances in which another event signals the commencement of the limitations period. 

U.S. Supreme Court Addresses Statutes of Repose

A recent decision by the U.S. Supreme Court highlights the importance of complying with a statute of repose. In California Public Employees’ Retirement System v. ANZ Securities, Inc., et al., 582 U. S. ____ (2017), the Court addressed the Securities Act of 1933’s three-year statute of repose. It provides that “[i]n no event shall any such action be brought . . . more than three years after the security was bona fide offered to the public…”

The Court concluded that the provision, as a statute of repose, was not subject to tolling. “The instruction that ‘[i]n no event’ shall an action be brought more than three years after the relevant securities offering admits of no exception. The statute also runs from the defendant’s last culpable act (the securities offering), not from the accrual of the claim (the plaintiff’s discovery of the defect),” Justice Anthony Kennedy wrote. Accordingly, the California Public Employees’ Retirement System’s late filing of a securities lawsuit was grounds for dismissal.

Because time is of the essence when pursuing legal claims, it is advisable to contact an experienced attorney as soon as you suspect you may have a claim.