Mark D. Shifton Takes Construction Case to New Jersey Supreme Court

On August 5, 2016, the New Jersey Supreme Court granted SGL Partner Mark D. Shifton’s petition for certification, and has agreed to hear oral arguments in the case of Palisades at Fort Lee Condominium Association, Inc. v. 100 Old Palisades, LLC, et al. The Supreme Court’s decision in this case will likely have significant and far-reaching consequences to construction and community association attorneys in New Jersey, and, given the national stature of the New Jersey Supreme Court, will almost certainly be widely analyzed well-beyond the borders of New Jersey.

This matter began as a construction defect case, filed in April 2009, and venued in the Superior Court of New Jersey, Law Division – Bergen County. SGL was retained as counsel for a subcontractor who had been involved in the original construction of the project, which was located in Fort Lee, New Jersey. During the litigation, SGL filed a motion for summary judgment, arguing that the Condominium Association had not commenced its action within New Jersey’s six-year statute of limitations applicable to claims of construction defect. In opposition, the Condominium Association’s counsel argued that the statute of limitations did not begin running until the unit owner-controlled Condominium Association had actually gained ownership of the building from the Sponsor after transition, and after the Condominium Association gained knowledge of the alleged defects, which would have made the Condominium Association’s lawsuit timely. The Superior Court granted SGL’s motion for summary judgment, and dismissed the Condominium Association’s claims against our client (as well as the three other parties who had not settled the Condominium Association’s claims) in their entirety and with prejudice. 2014 WL 1315219 (N.J.Super., Feb. 28, 2014) (pdf).

The Condominium Association appealed, and the Appellate Division reversed the Superior Court’s decision, holding that the Condominium Association’s claims were timely. 2015 WL 9942206 (N.J. App. Div., Feb. 1, 2016) (pdf). Now, the New Jersey Supreme Court has agreed to review the Appellate Division’s decision, and to determine the ultimate issue of when a construction defect claim accrues in the State of New Jersey – upon substantial completion of the building (subject to equitable tolling under the discovery rule, for those circumstances where a Condominium Association cannot reasonably discovery the alleged defects within the original limitations period), or on some later date after the unit owners take control of the Condominium Association and gain knowledge of the alleged defects.





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