Court Opinion

ID: 4203340
Source: CourtListenerOpinion
Date Created: 2017-09-14 14:13:11.412519+00
Date Added: 2024-06-11T14:40:59.077610
License: Public Domain

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

              The Palisades at Fort Lee Condominium Association, Inc. v. 100 Old Palisade, LLC
                                       (A-101/102/103/104-15) (077249)

Argued April 25, 2017 -- Decided September 14, 2017

ALBIN, J., writing for the Court.

          Plaintiff, The Palisades at Fort Lee Condominium Association, Inc., filed lawsuits alleging that defendants,
the general contractor and three subcontractors, defectively constructed a building complex now under the
Condominium Association’s control. The issue is whether plaintiff filed the lawsuits before the expiration of the
statute of limitations.

         In December 1999, Palisades A/V Acquisitions Co., LLC retained AJD Construction Co., Inc. to serve as
the general contractor on the project. AJD then hired various subcontractors, including Forsa Construction, Inc.,
Benfatto Masonry, Inc., and Luxury Floors, Inc. The chief architect on the project certified that The Palisades was
“substantially complete” as of May 1, 2002. For the next two years, A/V rented units in The Palisades complex. In
June 2004, A/V sold The Palisades to 100 Old Palisade, LLC (Old Palisade), which converted the rental apartments
and units into condominiums. Old Palisade retained Ray Engineering, Inc. to inspect the common elements of the
property. Ray Engineering issued a report dated October 1, 2004 (the Ray Report), stating: “Generally, the
structure of the building, townhomes and parking deck appeared to be in good condition.”

         Old Palisade did not relinquish control of the Condominium Association to the unit owners until seventy-
five percent of The Palisades’ units had been sold. That occurred in July 2006. The Condominium Association then
retained the Falcon Group to inspect The Palisades’ common elements. The Falcon Group issued a report on June
13, 2007 (the Falcon Report), detailing construction-related defects.

          Based on the Falcon Report, the Condominium Association filed a series of complaints in the Law Division
that generally allege that defendants breached express and implied warranties of good workmanship, habitability,
and merchantability and performed their duties negligently. Defendants moved for summary judgment, alleging that
plaintiff filed its claims beyond the six-year statute of limitations, N.J.S.A. 2A:14-1.

          The trial court granted defendants’ motions and dismissed plaintiff’s complaints as time-barred. The court
found that the statute of limitations began to run upon substantial completion of The Palisades—May 1, 2002. In the
trial court’s view of the discovery rule, the Condominium Association had sufficient time within the six-year
limitations period to bring its claims against defendants.

          A panel of the Appellate Division rejected the trial court’s conception of how the discovery rule operates in
construction-defect cases. According to the panel, the “causes of action against defendant contractors did not accrue
until June 13, 2007, when the unit-owner-controlled Board received Falcon’s report.” The panel concluded that
plaintiff filed its complaints against defendants within the six-year period, which commenced on June 13, 2007.

         The Court granted defendants’ petitions for certification. 227 N.J. 154 (2016); 227 N.J. 151 (2016); 227
N.J. 151 (2016); 227 N.J. 145 (2016).

HELD: A construction-defect cause of action accrues at the time that the building's original or subsequent owners first
knew or, through the exercise of reasonable diligence, should have known of the basis for a claim. From that point, the
plaintiff has six years to file a claim. A subsequent owner stands in no better position than a prior owner in calculating
the limitations period. If a prior owner knew or reasonably should have known of a basis for a construction-defect
action, the limitations period began at that point. Here, the Court cannot determine when the accrual clock commenced
for each defendant based on the record before it and accordingly remands to the trial court.
1. N.J.S.A. 2A:14-1 provides that “[e]very action at law for . . . any tortious injury to real . . . property . . . shall be
commenced within 6 years next after the cause of any such action shall have accrued.” In construing accrual
statutes, the Court has eschewed “a rigid and automatic adherence to a strict rule of law” that would produce unjust
results. Lopez v. Swyer, 62 N.J. 267, 273-74 (1973). Under the discovery rule, “in an appropriate case a cause of
action will be held not to accrue until the injured party discovers, or by an exercise of reasonable diligence and
intelligence should have discovered that he may have a basis for an actionable claim.” Id. at 272. (pp. 17-20)

2. In Caravaggio v. D’Agostini, 166 N.J. 237, 246, 248 (2001), the Court gave the plaintiff the benefit of the full
two-year limitations period from the date of accrual, even though she had over a year-and-one-half remaining on the
statute of limitations if the starting date were fixed at the time of the allegedly negligent operation. Russo Farms v.
Vineland Board of Education, 144 N.J. 84, 115 (1996), stands for the proposition that in a construction-defect case,
the date on which an architect certifies to the owner that the structure is substantially complete typically will start the
running of the six-year property-tort statute of limitations, N.J.S.A. 2A:14-1, unless, despite the exercise of
reasonable diligence, the plaintiff is unaware of an actionable claim. Importantly, the Court in Russo Farms gave
the plaintiffs the benefit of the full six-year limitations period, notwithstanding that the plaintiffs would have had
four years to file their claims if the clock began at the time of substantial completion. Russo Farms and Caravaggio
applied the same discovery-rule template to different accrual statutes. The Court therefore rejects defendants’
argument that, so long as plaintiff discovered the basis for an actionable claim within six years from the date of
substantial completion, plaintiff had to file within the time remaining in the limitations period. (pp. 20-27)

3. The Court also rejects the approach taken by the Appellate Division—that the six-year statute of limitations could
not accrue before plaintiff gained full control of the Condominium Association. The statute-of-limitations clock is
not reset every time property changes hands. However, if the original owner was unaware of an actionable claim,
despite the exercise of reasonable diligence, then the accrual clock begins when a subsequent owner knew or
reasonably should have known of the existence of the claim. A cause of action, for purposes of N.J.S.A. 2A:14-1,
accrues when someone in the chain of ownership first knows or reasonably should know of an actionable claim
against an identifiable party. A condominium association is not exempted from this long-standing rule. (pp. 27-30)

4. Based on the record, the Court cannot perform the accrual calculation because it requires findings of fact to
determine when A/V Acquisitions, Old Palisade, or the Condominium Association—all entities in the chain of
ownership—first knew or, through the exercise of reasonable diligence, should have known of a cause of action
against each defendant. Whether the accrual clock began when the Ray Report or the Falcon Report issued or at
some time before, after, or in between requires a detailed inquiry. To answer those questions, the trial court must
conduct a Lopez hearing and examine the documentary evidence and deposition transcripts presented by the parties
and, in its discretion, take testimony from relevant witnesses. (pp 30-32)

5. The Legislature enacted the statute of repose in construction-defect cases, N.J.S.A. 2A:14-1.1(a), to insulate
construction professionals from indefinite liability through operation of the discovery rule. The ten-year repose
statute begins at the date of a project’s substantial completion and sets the outer limit for the filing of a construction-
defect claim. The complaints against all defendants were filed within this ten-year period. Therefore, N.J.S.A.
2A:14-1.1(a) does not stand as a bar to plaintiff’s claims. (pp. 32-34)

6. In summary, the date that a structure is deemed substantially complete oftentimes is when a cause of action
accrues. But many construction defects will not be obvious immediately. In such instances, a cause of action does
not accrue until the plaintiff knows or, through the exercise of reasonable diligence, should know of a cause of
action against an identifiable defendant. A plaintiff who is a successor in ownership takes the property with no
greater rights than an earlier owner. If the earlier owner knew or should have known of a cause of action against an
identifiable defendant, the accrual clock starts then. The determination of when a claim accrued ordinarily should be
made at a Lopez hearing. At the hearing, the plaintiff will bear the burden of proving that the claim accrued at a
time after a project’s substantial completion. (pp. 34-35)

        The judgment of the Appellate Division is REVERSED. The matter is REMANDED to the trial court for
proceedings consistent with this opinion.

     CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, PATTERSON, FERNANDEZ-VINA,
SOLOMON, and TIMPONE join in JUSTICE ALBIN’s opinion.

                                                              2
                                     SUPREME COURT OF NEW JERSEY
                                           A-101/102/103/104
                                          September Term 2015
                                                 077249

THE PALISADES AT FORT LEE
CONDOMINIUM ASSOCIATION, INC.,

    Plaintiff-Respondent,

         v.

100 OLD PALISADE, LLC, CRESCENT
HEIGHTS OF AMERICA, INC., CRESCENT
HEIGHTS ACQUISITIONS, LLC, 100 OLD
PALISADE HOLDINGS, LLC, 100 OLD
PALISADE HOLDINGS II, LLC, 100 OLD
PALISADE HOLDINGS III, LLC, EREZ
BASHARI, PEIRU WEN, LENNY WARSHAW,
NISSIM LANCIANO, SHARON
CHRISTENBURY, JOSEPH ZDON, PABLO
DE ALMAGRO, EPHRAIM BASHARI, SONNY
KAHN, individually and as Trustee
of the SK Business Trust, SK
BUSINESS TRUST, RUSSELL W. GALBUT,
individually and as Trustee of the
RF Business Trust, RF BUSINESS
TRUST, BRUCE A. MENIN,
individually and as Trustee of the
MENIN 1998 FAMILY TRUST, MENIN
1998 FAMILY TRUST, F&G MECHANICAL
CORP., MANNIX EXTERIOR WALL
SYSTEMS, INC., SOUTH SHORE
CONTRACTING, INC., PATWOOD
CONTRACTING CO., INC., d/b/a
PATWOOD ROOFING, MTA CORP., MAARV
WATERPROOFING, B&B IRON WORKS,
INC., RAY ENGINEERING, INC.,
STEVEN W. RAY, P.E., METRO GLASS,
INC., and ROMITCH CO.,

    Defendants-Appellants,

          and

AJD CONSTRUCTION CO., INC., LUXURY

                                 1
FLOORS, INC., BENFATTO MASONRY,
INC., and FORSA CONSTRUCTION,
INC.,

    Defendants-Appellants.

100 OLD PALISADE, LLC, CRESCENT
HEIGHTS OF AMERICA, INC., CRESCENT
HEIGHTS ACQUISITIONS, LLC, 100 OLD
PALISADE HOLDINGS, LLC, 100 OLD
PALISADE HOLDINGS II, LLC, 100 OLD
PALISADE HOLDINGS III, LLC, EREZ
BASHARI, PEIRU WEN, LENNY WARSHAW,
NISSIM LANCIANO, SHARON
CHRISTENBURY, JOSEPH ZDON, PABLO
DE ALMAGRO, EPHRAIM BASHARI, SONNY
KAHN, individually and as Trustee
of the SK Business Trust, SK
BUSINESS TRUST, RUSSELL W. GALBUT,
individually and as Trustee of the
RF Business Trust, RF BUSINESS
TRUST, BRUCE A. MENIN,
individually and as Trustee of the
MENIN 1998 FAMILY TRUST, MENIN
1998 FAMILY TRUST,

    Defendants/Third-Party
    Plaintiffs,

         v.

APPLIED PROPERTY MANAGEMENT CO.,
INC., a/k/a APPLIED DEVELOPMENT
COMPANY, IRONSTATE DEVELOPMENT
COMPANY, a/k/a IRONSTATE
DEVELOPMENT, LLC, IRONSTATE
HOLDINGS, LLC, COSTAS KONDYLIS &
ASSOCIATES, P.C., COSTAS KONDYLIS
& PARTNERS, LLP, CONSTANTINE A.
KONDYLIS, a/k/a COSTAS KONDYLIS,
GOLDSTEIN ASSOCIATES CONSULTING
ENGINEERS, P.C.,

    Defendants/Third-Party
    Defendants.

                                  2
AJD CONSTRUCTION CO., INC.,

    Third-Party Plaintiff,

         v.

PATWOOD CONTRACTING CO., INC.,
d/b/a PATWOOD ROOFING, MTA CORP.,
MAARV WATERPROOFING, INC.,
BENFATTO CONSTRUCTION CORP., B&B
IRON WORKS, INC.,

    Third-Party Defendants.

SOUTHSHORE CONTRACTING, INC.,

    Third-Party Plaintiff,

        v.

ARQ PAINTING & CONTRACTING, INC.,

    Third-Party Defendant.

APPLIED PROPERTY MANAGEMENT CO.,
INC., THE PALISADES A/V COMPANY,
LLC, APPLIED PALISADES, LLC,
APPLIED DEVELOPMENT COMPANY, INC.,
improperly pleaded as d/b/a
APPLIED DEVELOPMENT COMPANY,
IRONSTATE DEVELOPMENT, LLC,
IRONSTATE HOLDINGS, LLC,

    Fourth-Party Plaintiffs,

        v.

WENTWORTH PROPERTY MANAGEMENT
CORPORATION, WORTHMORE
CONSTRUCTION & MAINTENANCE CO.,
INC.,

    Fourth-Party Defendants.

                                  3
Argued April 25, 2017 – Decided September 14, 2017

On certification to the Superior Court,
Appellate Division.

Eric S. Schlesinger argued the cause for
appellant Forsa Construction (Golden,
Rothschild, Spagnola, Lundell, Boylan &
Garubo, attorneys; Eric S. Schlesinger and
Russ M. Patane, of counsel and on the
briefs, and Francesca E. Cheli, on the
briefs).

Stephen C. Cahir argued the cause for
appellant Luxury Floors, Inc. (Law Office of
William E. Staehle, attorneys; Stephen C.
Cahir, on the brief).

Mark D. Shifton argued the cause for
appellant Benfatto Construction Corp.
(Seiger Gfeller Laurie, attorneys; Mark D.
Shifton of counsel and on the briefs, and
Chester D. Ostrowski, on the brief).

John H. Osorio argued the cause for
appellant AJD Construction Co., Inc.
(Marshall Dennehey Warner Coleman & Goggin,
attorneys; John H. Osorio, Walter F.
Kawalec, III, and Pauline E. Tutelo on the
briefs).

Raymond A. Garcia of the Connecticut bar,
admitted pro hac vice, argued the cause for
respondent (Lum, Drasco & Positan and Garcia
& Milas, attorneys; Paul A. Sandars, III, of
counsel and on the brief, and Raymond A.
Garcia, and Nicole Liguori Micklich, of the
Connecticut and Rhode Island bars, on the
brief).

Gene Markin argued the cause for amicus
curiae Community Association Institute
(Stark & Stark, attorneys; Gene Markin and
John Randy Sawyer, on the brief).

                      4
            Michael S. Zicherman submitted a brief on
            behalf of amicus curiae Associated
            Construction Contractors of New Jersey
            (Peckar & Abramson, attorneys; Charles F.
            Kenny, of counsel, and Michael S. Zicherman,
            of counsel and on the brief).

    JUSTICE ALBIN delivered the opinion of the Court.

    Plaintiff, The Palisades at Fort Lee Condominium

Association, Inc., filed lawsuits alleging that defendants, the

general contractor and three subcontractors, defectively

constructed a building complex that is now under the Condominium

Association’s control.    The issue before us is whether plaintiff

filed the lawsuits before the expiration of the statute of

limitations.

    N.J.S.A. 2A:14-1 is a statute of limitations generally

governing tort-based property-damage claims.    Under that

statute, a construction-defect action must be commenced within

six years “after the cause of any such action shall have

accrued.”   Ibid.   The heart of the controversy in this case is

the point at which plaintiff’s causes of action “accrued.”

    The trial court determined that the six-year statute of

limitations began to run in May 2002, when the building was

substantially complete.    Applying its conception of the

discovery rule, the court found that the building’s owners knew

or reasonably should have known of any defects within the six-

year period and therefore should have filed the lawsuits by May

                                  5
2008.   Because the Condominium Association did not initiate the

first lawsuit until after that date, the court dismissed the

actions against all defendants.

    The Appellate Division reversed, concluding that the

Condominium Association’s claims accrued in June 2007, when it

undertook full unit-owner control of the building and became

“reasonably aware” of actionable claims of construction defects

based on the report of a construction expert it had retained.

The Condominium Association filed all complaints against

defendants within six years of that date.

    We now hold that neither the trial court nor the Appellate

Division applied the correct legal standard for determining when

the construction-defect actions accrued pursuant to N.J.S.A.

2A:14-1.   Although N.J.S.A. 2A:14-1’s six-year statute of

limitations typically commences upon substantial completion of a

structure, the discovery rule applies to the accrual of a claim

under N.J.S.A. 2A:14-1.   Under that rule, the limitations clock

does not commence until a plaintiff is able to discover, through

the exercise of reasonable diligence, the facts that form the

basis for an actionable claim against an identifiable defendant.

Caravaggio v. D’Agostini, 166 N.J. 237, 246 (2001).

    Over time, as in this case, ownership of a building may

change hands.   A construction-defect lawsuit must be filed

within six years from the time that the building’s original or

                                  6
subsequent owners first knew or, through the exercise of

reasonable diligence, should have known of the basis for a cause

of action.    A subsequent owner stands in no better position than

a prior owner in calculating the limitations period.    If a prior

owner knew or reasonably should have known of a basis for a

construction-defect action, the limitations period began at that

point.

       In light of the legal paradigm just articulated, we cannot

determine when the accrual clock commenced for each defendant

based on the record before us.    Accordingly, we remand to the

trial court to conduct a Lopez1 hearing and to make findings of

fact to settle that issue.

                                 I.

                                 A.

       The Palisades is a residential building complex located in

Fort Lee, New Jersey.    The centerpiece of The Palisades is a

forty-one story high-rise consisting of a thirty-story

residential tower set atop an eleven-story parking garage.

Within The Palisades complex are mid-rise apartments, townhomes,

and various recreational facilities.

       Palisades A/V Acquisitions Co., LLC (A/V Acquisitions)

developed The Palisades project on property that it had

1   Lopez v. Swyer, 62 N.J. 267 (1973).

                                  7
acquired.   In December 1999, A/V Acquisitions retained AJD

Construction Co., Inc. (AJD) to serve as the general contractor

on the project.   AJD then hired various subcontractors,

including Forsa Construction, Inc., Benfatto Masonry, Inc., and

Luxury Floors, Inc., to perform specialized work on the project.

Forsa Construction built the high-rise tower and garage,

Benfatto Masonry constructed the exterior walls, and Luxury

Floors installed flooring throughout the common areas.     The

chief architect on the project certified that The Palisades was

“substantially complete” as of May 1, 2002, the date on which

certificates of occupancy had been issued for various floors and

units.

     For the next two years, A/V Acquisitions rented apartments

and units in The Palisades complex.   In June 2004, A/V

Acquisitions sold The Palisades to 100 Old Palisade, LLC (Old

Palisade),2 which converted the rental apartments and units into

condominiums pursuant to the Condominium Act, N.J.S.A. 46:8B-1

to -38.   As part of the condominium conversion process, Old

Palisade retained Ray Engineering, Inc. to inspect the common

elements of the property.   Ray Engineering issued a report dated

2 The parties refer to Old Palisade, Crescent Heights
Acquisitions, Inc., and Crescent Heights of America, Inc.
interchangeably. These companies appear to be part of the same
corporate family. For the sake of consistency and clarity, we
use only the name Old Palisade.

                                 8
October 1, 2004 (the Ray Report), stating:    “Generally, the

structure of the building, townhomes and parking deck appeared

to be in good condition.”   The report noted the presence of

“some spalling of concrete” and “some sporadic cracking of the

concrete” in the parking deck.    The spalling and cracking,

however, did “not appear to be a structural concern at the

present time.”

    In converting The Palisades to a condominium form of

ownership, Old Palisade attached the Ray Report to its public

offering statement on January 27, 2005, and to the master deed.

According to the master deed, the condominium association would

be responsible for the administration and maintenance of the

building’s common areas and facilities.

    Although The Palisades at Fort Lee Condominium Association,

Inc. (the Condominium Association or plaintiff) was incorporated

on February 23, 2005, Old Palisade did not relinquish control of

the Condominium Association until seventy-five percent of The

Palisades’ units had been sold.   See N.J.S.A. 46:8B-12.1(a)

(“Unit owners . . . shall be entitled to elect all of the

members of the governing board . . . upon the conveyance of 75%

of the units in a condominium.”).     That occurred in July 2006.

At that point, the unit owners took full control of the

Condominium Association.

    The unit-owner-controlled Condominium Association then

                                  9
retained the Falcon Group, an engineering and architectural

services firm, to inspect The Palisades’ common elements for any

construction defects.   The Falcon Group issued a report on June

13, 2007 (the Falcon Report), detailing construction-related

defects in the building’s exterior walls, roofing, concrete

flooring, and plumbing, and in other areas, such as the parking

garage and landscaping.

                                B.

     Based on the Falcon Report, the Condominium Association

filed a series of complaints in the Superior Court, Law

Division, including one against defendants AJD and Luxury Floors

on March 12, 2009, one against Benfatto Masonry on April 16,

2009, and another against Forsa Construction on September 7,

2010.3   The complaints generally allege that defendants breached

express and implied warranties of good workmanship,

habitability, and merchantability and performed their duties

negligently.

     At the completion of discovery, AJD, Luxury, Benfatto, and

Forsa (collectively defendants) moved for summary judgment,

alleging that plaintiff filed its claims beyond the six-year

statute of limitations, N.J.S.A. 2A:14-1.

3 Plaintiff filed an initial complaint followed by nine amended
complaints against the parties whose names appear on the caption
of this case. The plaintiff’s actions against all parties,
other than defendants, have been resolved.

                                10
                                C.

    The trial court granted defendants’ motions and dismissed

plaintiff’s complaints as time-barred.   The court found that the

six-year statute of limitations governing construction-defect

claims, N.J.S.A. 2A:14-1, began to run upon substantial

completion of The Palisades complex -- May 1, 2002.   The court

recognized that, under the discovery rule, “a cause of action

will be held not to accrue until the injured party discovers, or

by an exercise of reasonable diligence and intelligence should

have discovered that he may have a basis for an actionable

claim,” quoting Belmont Condominium Ass’n, Inc. v. Geiberl, 432
N.J. Super. 52, 83 (App. Div.), certif. denied, 216 N.J. 366

(2013).   The court, however, held that so long as “the plaintiff

has sufficient knowledge of its claim and there remains a

reasonable time under the applicable limitations period to

commence a cause of action, the action will be time barred if

not filed within that remaining time,” citing Torcon, Inc. v.

Alexian Brothers Hospital, 205 N.J. Super. 428, 437 (Ch. Div.

1985).

    The court noted that the October 2004 Ray Report, appended

to Old Palisade’s public offering statement, “outlined a number

of [construction] deficiencies” and that, “[e]ven assuming that

the [Condominium] Association was not reasonably aware of the

defects until [the issuance of the Falcon Report in June 2007],

                                11
there was still an entire year left in the statute of

limitations for the Association to bring a claim.”   In short, in

the trial court’s view of the discovery rule, the Condominium

Association had sufficient time within the six-year limitations

period to bring its claims against defendants.

    The court also rejected plaintiff’s argument that its

causes of action did not accrue until the formation of the

Condominium Association.   The court concluded that defendants

“could not have reasonably anticipated that they would be liable

in perpetuity . . . for alleged construction defects that were

previously known or should have been known” to The Palisades’

prior owners.

    The court denied plaintiff’s motion for reconsideration.

                                D.

    In an unpublished per curiam opinion, a panel of the

Appellate Division reversed the trial court’s order dismissing

plaintiff’s claims on statute-of-limitations grounds.     The panel

rejected the trial court’s conception of how the discovery rule

operates in construction-defect cases, asserting that “by its

plain terms, [N.J.S.A. 2A:14-1] indicates that a claimant would

have the benefit of the full limitations period to file its

complaint after the cause of action has accrued.”    The panel

found that “it would be unreasonable for the statute of

limitations to run on the claim of a condominium association,

                                12
unless a unit owner, or group of unit owners, took on that

responsibility.”   The panel therefore determined that the

Condominium Association’s “causes of action did not accrue until

the unit owners took full control of the Association’s governing

Board, and the Board had sufficient facts upon which to assert

actionable claims against defendant contractors.”

    According to the panel, the Condominium Association did not

have sufficient facts to assert actionable claims against

defendants until its receipt of the Falcon Report, which

identified, in greater detail than the Ray Report, construction

defects in The Palisades.   Therefore, the “causes of action

against defendant contractors did not accrue until June 13,

2007, when the unit-owner-controlled Board received Falcon’s

report.”   The panel concluded that plaintiff filed its

complaints against defendants within the six-year limitations

period, which commenced on June 13, 2007.

    Last, the panel dismissed defendants’ assertions that such

an outcome would render contractors “forever liable.”     It

observed that N.J.S.A. 2A:14-1.1(a), the statute of repose,

limits to a ten-year period, starting at a project’s substantial

completion, the liability of contractors and therefore restricts

“an expansive application of the discovery rule.”

    This Court granted defendants’ petitions for certification.

Palisades at Fort Lee Condo. Ass’n v. 100 Old Palisade, LLC, 227

                                13
N.J. 154 (2016); Palisades at Fort Lee Condo. Ass’n v. 100 Old

Palisade, LLC, 227 N.J. 151 (2016); Palisades at Fort Lee Condo.

Ass’n v. 100 Old Palisade, LLC, 227 N.J. 151 (2016); Palisades

at Fort Lee Condo. Ass’n v. 100 Old Palisade, LLC, 227 N.J. 145

(2016).   This Court also granted the motions of Associated

Construction Contractors and Community Association Institute to

participate as amici curiae.

                                II.

                                A.

    Defendants, collectively or individually, submit that the

Appellate Division erred in concluding that the statute of

limitations did not begin to run until after The Palisades’ unit

owners took full control of the Condominium Association.

Defendants assert that, for purposes of determining the accrual

date of a construction-defect case, the purchaser of a building

stands in the shoes of the prior building owners.   Under

defendants’ construct, the original owner, A/V Acquisitions,

which knew or reasonably should have known of alleged defects by

the time of the Ray Report, conveyed the rights it possessed --

and no greater rights -- to subsequent owners in the chain of

ownership.   Defendants thus argue that the Condominium

Association is not entitled to a reset of the statute of

limitations based on when it took ownership responsibility of

The Palisades.

                                14
    Defendants also agree with the trial court that the

discovery rule -- as a rule of equity -- does not apply if a

plaintiff knows or has reason to know of a cause of action

against an identifiable defendant within the limitations period.

From this perspective, the discovery rule is not applicable

“until after the normal period of limitations runs.”    Thus,

defendants argue that plaintiff had a year left to file its

claims after receipt of the Falcon Report and no excuse for not

taking action until almost two years afterwards.

    Last, defendants contend that the Appellate Division

wrongly held that the ten-year statute of repose, N.J.S.A.

2A:14-1.1(a), sets the outer limit for all construction-defect

actions.   Defendants point out that the repose statute only bars

construction claims “arising out of the defective and unsafe

condition of an improvement to real property.”     N.J.S.A. 2A:14-

1.1(a) (emphasis added).   Defendants reason that under the

Appellate Division’s construct, architects and contractors have

limitless liability for construction defects that do not raise

safety concerns.

    Amicus curiae Associated Construction Contractors advances

similar arguments.

                                B.

    Plaintiff submits that the statute of limitations did not

begin to run on the Condominium Association’s claims until the

                                15
unit owners took control of the governing board.    Plaintiff

insists that the prior owners’ knowledge of construction defects

on the property, or their failure to exercise reasonable

diligence in discovering those defects, did not trigger the

limitations period against the Condominium Association.

Plaintiff contends that it did not have sufficient knowledge to

assert adequate claims against defendants until June 13, 2007 --

the day it received the Falcon Report, which identified

construction defects not mentioned in the earlier Ray Report.

From that point, plaintiff reasons, its causes of action accrued

and the six-year limitations period commenced.     Last, plaintiff

asserts that the ten-year statute of repose protects contractors

from potential liability in perpetuity.

    Amicus curiae Community Association Institute echoes many

of these arguments.

                                III.

    Our primary task is to determine whether plaintiff filed

its construction-defect claims within the six-year limitations

period allowed by N.J.S.A. 2A:14-1.    To resolve that issue, we

must decide when plaintiff’s causes of action “accrued” for

purposes of N.J.S.A. 2A:14-1.   Accrual of an action is the

trigger that commences the statute-of-limitations clock.

    We are not writing on a blank slate in construing the

statutory term “accrued.”   Although we have developed a body of

                                16
jurisprudence on this subject, the differing viewpoints of the

Appellate Division, trial court, and parties illustrate that the

legal principles set forth in our jurisprudence are still

susceptible to varying interpretations.

    Determining the meaning of the statutory word “accrued” as

well as the metes and bounds of the discovery rule are matters

of law.   We review issues of law de novo, according no deference

to the interpretative analysis of either the Appellate Division

or trial court, except as we are persuaded by the reasoning of

those courts.   Zabilowicz v. Kelsey, 200 N.J. 507, 512 (2009);

see also Manalapan Realty, L.P. v. Twp. Comm. of Township of

Manalapan, 140 N.J. 366, 378 (1995) (“A trial court’s

interpretation of the law and the legal consequences that flow

from established facts are not entitled to any special

deference.”).

                                 A.

    We begin our analysis with the statute of limitations that

generally governs tort-based property-damage claims, including

plaintiff’s construction-defect lawsuits.    N.J.S.A. 2A:14-1

provides:

            Every action at law for trespass to real
            property, for any tortious injury to real or
            personal property, for taking, detaining, or
            converting personal property, for replevin of
            goods or chattels . . . shall be commenced
            within 6 years next after the cause of any
            such action shall have accrued.

                                 17
          [(emphasis added).]

The Legislature did not define “accrued” in N.J.S.A. 2A:14-1 or

other similar statutes of limitations and therefore left to the

judiciary the role of infusing this term with meaning.    See

Rosenau v. City of New Brunswick, 51 N.J. 130, 137 (1968).4

     Statutes of limitations, by their nature, are intended to

compel plaintiffs to file their lawsuits within a prescribed

time to allow defendants a fair opportunity to respond and

safeguard their interests.   Gantes v. Kason Corp., 145 N.J. 478,

486 (1996).   Such statutes encourage diligence and penalize

dilatoriness by allowing the dismissal of stale claims.     Ibid.

In construing accrual statutes, however, we have eschewed “a

rigid and automatic adherence to a strict rule of law” that

would produce unjust results.   Lopez, supra, 62 N.J. at 273-74.

That is because, in the realm of tort law, a plaintiff may not

realize immediately that he suffered a personal injury or

property damage or know that he has a cause of action against an

identifiable wrongdoer.   See Kendall v. Hoffman-La Roche, Inc.,

209 N.J. 173, 192 (2012); see also Beauchamp v. Amedio, 164 N.J.
4 The personal-injury statute of limitations is also an accrual
statute and has been the subject of repeated judicial
interpretation. N.J.S.A. 2A:14-2(a) provides: “Every action at
law for an injury to the person caused by the wrongful act,
neglect or default of any person . . . shall be commenced within
two years next after the cause of any such action shall have
accrued.” (emphasis added).

                                18
111, 117 (2000); Baird v. Am. Med. Optics, 155 N.J. 54, 65-66

(1998).

    Equitable principles -- principles that comport with

notions of fundamental fairness -- govern the accrual date of a

legal claim.   See Caravaggio, supra, 166 N.J. at 245.       The

trigger point for the start of a cause of action under an

accrual statute is when “the facts presented would alert a

reasonable person, exercising ordinary diligence, that he or she

was injured due to the fault of another.”      Id. at 246.   This

simple elucidation of our law has been the product of decades of

evolving jurisprudence.

    More than fifty years ago, in Fernandi v. Strully, we

recognized that equitable principles applied to the accrual of a

personal-injury claim governed by a two-year statute of

limitations.   35 N.J. 434, 439 (1961).      In that case, based on

an x-ray examination, the plaintiff discovered that the

physicians, who had operated on her three years earlier, had

left a wing nut in her abdomen during surgery.      Id. at 435-36.

The plaintiff filed her negligence claim one year later -- four

years after the operation.     Id. at 436.    We held that because

the plaintiff’s “cause of action was unknown and unknowable to

her” until discovery of the wing nut on the x-ray, her claim did

not accrue until that point.    Id. at 451.

    In Lopez, supra, we called the equitable approach taken in

                                  19
Fernandi the “discovery rule.” 62 N.J. at 273.   Under that

rule, “in an appropriate case a cause of action will be held not

to accrue until the injured party discovers, or by an exercise

of reasonable diligence and intelligence should have discovered

that he may have a basis for an actionable claim.”   Id. at 272.

The qualifier to the discovery rule was how to determine the

“appropriate case” for its application.   The Court listed a

number of non-exhaustive factors, such as “the nature of the

alleged injury, the availability of witnesses and written

evidence, the length of time that has elapsed since the alleged

wrongdoing, whether the delay has been to any extent deliberate

or intentional, [and] whether the delay may be said to have

peculiarly or unusually prejudiced the defendant.”   Id. at 276.

    Later, in Fox v. Passaic General Hospital, the Court

refined Lopez’s language qualifying the discovery rule, stating

that the “rule should be as simple and uncomplicated as is

consistent with the achievement of justice.”   71 N.J. 122, 125

(1976).   The Court expressed concerns about the difficulties

that trial judges would face in deciding the “reasonableness” of

time left for a plaintiff to file a claim when the discovery

occurred within the two-year limitations period.   Id. at 126.

To eliminate uncertainty in calculating the limitations period,

the Court maintained that “the plaintiff should normally have

the benefit of the legislative policy determination that he may

                                 20
institute his action at any time within two years from the date

of such accrual.”   Ibid. (emphasis added).   The rationale for

that approach “is that the cause of action does not ‘accrue’

until discovery.”   Id. at 127.   Thus, Fox made clear that the

accrual clock generally does not begin to tick until, through

the exercise of reasonable diligence, the plaintiff discovers --

whether inside or outside the typical two-year limitations

period -- the basis for an actionable claim.   See id. at 126-27.

    Having set forth that straightforward standard, the Fox

Court added some equitable qualifiers:

           [I]f a defendant can establish (a) that the
           lapse of time between the expiration of two
           years after the actionable event and the date
           of institution of the suit “peculiarly or
           unusually prejudiced the defendant[,]” and (b)
           that there was a reasonable time for plaintiff
           to institute his action between discovery of
           the cause of action and expiration of said two
           years after the actionable event, the cause of
           action may be dismissed on limitations
           grounds.

           [Id. at 128 (citation omitted).]

Those added conditions, like the earlier qualifying language in

Lopez, apparently confounded Fox’s goal of adopting “a simple

and uncomplicated” formulation of when a cause of action

accrued.   See id. at 125.   Fox’s foremost principle -- that the

plaintiff is normally entitled to the full limitations period

upon discovery of an actionable claim, id. at 126 -- becomes a

common theme in our jurisprudence, see, e.g., Caravaggio, supra,

                                  21
166 N.J. at 250 (quoting Moran v. Napolitano, 71 N.J. 133, 134

(1976)).    However, Fox’s qualifying language fell into disuse by

1980 and has not been employed again in an opinion of our Court.

    Twenty-five years after Fox, our discovery-rule

jurisprudence was still far from a model of clarity, leading

Justice Long to comment:     “The discovery rule, incorporating as

it does a notion of simple justice, has been anything but simple

in application . . . .     Decades after its enunciation, lawyers

and judges are still grappling with its application.”

Caravaggio, supra, 166 N.J. at 240.     In Caravaggio, we set out

to bring greater certainty and predictability to the calculation

of the limitations period under the discovery rule.

    Caravaggio involved a medical-malpractice claim governed by

a two-year statute of limitations.     Id. at 240-41, 243.    On May

23, 1993, the defendant surgeon operated on plaintiff’s

fractured femur, inserting a rod through it to stabilize the

fracture.   Id. at 240-41.    Two months later, the plaintiff “felt

a ‘snap’ in her leg,” and a week afterwards, an x-ray “revealed

that the rod had broken.”    Id. at 241.    On October 21, 1993, the

surgeon removed and replaced the broken rod and informed the

plaintiff “that there was something wrong with the rod and that

she should take it to [her] lawyer.”       Id. at 242.   An analysis

of the rod revealed that it was not defective.      Id. at 243.   On

September 15, 1995, the plaintiff filed a medical malpractice

                                  22
claim, alleging that the surgeon negligently inserted the rod.

Ibid.

    The Court determined that the two-year limitations period

accrued on October 21, 1993, when the plaintiff had an

objectively reasonable basis to know that the surgeon injured

her through his alleged negligence.       Id. at 250-51, 253.   The

Court gave the plaintiff the benefit of the full two-year

limitations period from the date of accrual, even though she had

over a year-and-one-half remaining on the statute of limitations

if the starting date were fixed at the time of the allegedly

negligent operation.    See ibid.    The Court did not hold that,

after discovering her cause of action, the plaintiff had to file

her malpractice claim within a reasonable period in the time

remaining on the two-year limitation clock.       See ibid.

    In distilling our discovery-rule jurisprudence, the Court

reached the following holding:      “[W]hen a plaintiff knows of an

injury, and knows that it is the fault of another, but is

reasonably unaware that a third party may also be responsible,

the accrual clock does not begin ticking against the third party

until the plaintiff has evidence that reveals his or her

possible complicity.”   Id. at 250.      The Court emphasized that

this rule does not require that a plaintiff have perfect

knowledge to support a claim against an identifiable defendant

before an action will accrue.    See id. at 246.     Under this

                                    23
construct, a plaintiff’s cause of action may accrue at different

times against different defendants, depending on when the

plaintiff knew or reasonably should have known he had an

actionable claim against each defendant.   Id. at 248.

    Absent from the discussion in Caravaggio is any of the

qualifying language in Fox, i.e., peculiar or unusual prejudice

to a defendant.   See Fox, supra, 71 N.J. at 128.   The qualifying

language in Fox created two different standards for when a cause

of action accrues -- one for when discovery occurs within two

years of a personal injury and another for when discovery occurs

more than two years after the injury.   Under the Fox framework,

a court does not inquire whether a defendant was peculiarly

prejudiced if the plaintiff discovered his personal-injury cause

of action eight years after the injury was inflicted.    The

plaintiff is simply entitled to the full two-year limitations

period upon discovery.   Yet, under that same framework, a

defendant could argue that he was peculiarly prejudiced if the

plaintiff discovered his cause of action one-and-one-half years

after the injury but did not file within the six months’ time

remaining under the two-year limitations statute.

    That approach obviously lacks symmetry.    In those two

examples, there is no satisfactory reason why, once accrual is

triggered, the limitations period is not the same two-year

period.

                                24
    Caravaggio provided the template for when a cause of action

commences in accrual statutes of limitations:    accrual occurs

when a plaintiff knows or, through the exercise of reasonable

diligence, should know of the basis for a cause of action

against an identifiable defendant.

                                 B.

    Our discovery-rule jurisprudence has evolved mostly in

construing the personal-injury statute of limitations.       We have

applied the discovery rule, however, to other similarly worded

accrual statutes, including the notice requirement in the New

Jersey Tort Claims Act, N.J.S.A. 59:8-8, see Elazar v. Macrietta

Cleaners, Inc., ___ N.J. ___, ___ (2017) (slip op. at 11-14),

and the tort-based property-damage statute of limitations,

N.J.S.A. 2A:14-1, see Russo Farms v. Vineland Bd. of Educ., 144
N.J. 84, 115 (1996).   Importantly, the discovery rule applies to

property-tort lawsuits arising from construction defects, as

illustrated in Russo Farms, supra.    See 144 N.J. at 115.

    In that case, a board of education constructed a school on

property located across the street from the plaintiffs’

farmland.   Id. at 91-92.   Construction on the school was

substantially complete on September 5, 1979.    Id. at 92-93.

Shortly after the school’s completion, rainwater began to flood

plaintiffs’ farmland, causing soil erosion, poor crop yield, and

diminution of the property’s value.    Id. at 93-94.   Not until

                                 25
1981, however, did the plaintiffs become reasonably aware that

faulty construction of the school’s drainage system was causing

the runoff onto their property.     Id. at 98-99, 115.    At this

point, the plaintiffs were “on notice of a potential claim”

against the architect and contractor who constructed the school.

Id. at 115.   Applying the discovery rule, the Court calculated

the six-year limitations period from the point of accrual in

1981 and determined that the plaintiffs were required to file

suit by 1987.   See ibid.   Because the plaintiffs did not file

their claims against the architect and contractor until 1990,

those late claims were dismissed.      Id. at 115, 119.

    Russo Farms stands for the proposition that in a

construction-defect case, the date on which an architect

certifies to the owner that the structure is substantially

complete typically will start the running of the six-year

property-tort statute of limitations, N.J.S.A. 2A:14-1, unless,

despite the exercise of reasonable diligence, the plaintiff is

unaware of an actionable claim.     See id. at 115-16.

Importantly, the Court in Russo Farms gave the plaintiffs the

benefit of the full six-year limitations period, notwithstanding

that the plaintiffs would have had four years to file their

claims if the clock began at the time of substantial completion.

See id. at 115.   Russo Farms and Caravaggio applied the same

discovery-rule template to different accrual statutes of

                                  26
limitations.

    We therefore reject defendants’ argument that, so long as

plaintiff discovered the basis for an actionable claim within

six years from the date of substantial completion, plaintiff had

to file within the time remaining in the limitations period.

Under defendants’ interpretation of the discovery rule, on one

hand, plaintiff had six years from substantial completion of The

Palisades -- until May 1, 2008 -- to file its claims because the

Falcon Report issued on June 13, 2007, which allowed plaintiff

nine months to file.    On the other hand, defendants apparently

concede that plaintiff would have had a full six years to file

if discovery of the construction defects occurred on May 2,

2008, one day after the limitations period ended.    That

construct yields an absurd result.    Clearly, defendants are no

worse off in presenting a defense if the six-year limitations

period commenced on June 13, 2007, rather than on May 2, 2008.

    Moreover, if the date of accrual -- the date that the

plaintiff knows or reasonably should know of an actionable claim

against an identifiable defendant -- signals the beginning of

the limitations period, then consistency and predictability will

be advanced when all parties can calculate the precise time for

the filing of claims.

                                 C.

    We also reject the approach taken by the Appellate Division

                                 27
-- and advanced by plaintiff -- that the six-year statute of

limitations could not accrue before plaintiff gained full

control of the Condominium Association.    An owner of a building

cannot convey greater property rights to a purchaser than the

owner possessed.   If the building’s owner knew or reasonably

should have known of construction defects at the time of the

sale of the property, the purchaser takes title subject to the

original owner’s right -- and any limitation on that right -- to

file a claim against the architect and contractors.    See

O’Keeffe v. Snyder, 83 N.J. 478, 502 (1980); see also Byrne v.

Autohaus on Edens, Inc., 488 F. Supp. 276, 280-81 (N.D. Ill.

1980) (noting that when owner knows or has reason to know of

injury, limitations statute begins to run for all potential

future plaintiffs in chain of title).     Thus, a subsequent owner

will stand in the shoes of a prior owner for statute-of-

limitations purposes.   See CAMSI IV v. Hunter Tech. Corp., 282
Cal. Rptr. 80, 85 (Ct. App. 1991) (noting that if owner does not

file claim within statutory period, “claim will be barred for

that and all subsequent owners”).

    For example, if the building’s original owner does not file

a construction-defect lawsuit within the six-year limitations

period from accrual of an actionable claim, the purchaser taking

title has no right to revive a lapsed claim.    In certain

circumstances, the purchaser may have a claim against the seller

                                28
for fraudulent concealment or some other cause of action.       See,

e.g., Dep’t of Envt’l Prot. v. Ventron Corp., 94 N.J. 473, 503

(1983).

       The statute-of-limitations clock is not reset every time

property changes hands.    However, if the original owner was

unaware of an actionable claim, despite the exercise of

reasonable diligence, then the accrual clock begins when a

subsequent owner knew or reasonably should have known of the

existence of the claim.    A cause of action, for purposes of

N.J.S.A. 2A:14-1, accrues when someone in the chain of ownership

first knows or reasonably should know of an actionable claim

against an identifiable party.    See O’Keeffe, supra, 83 N.J. at

502.

       A condominium association does not enjoy a preferred status

exempting it from this long-standing rule.    If the owner of an

apartment building does not file a timely construction-defect

lawsuit and then sells the building to a new owner, who has no

right to revive the claim, a construction-defect lawsuit does

not spring to life when the new owner converts the apartments

into condominiums.

       Here, A/V Acquisitions retained defendant AJD as the

general contractor, which in turn hired the defendant

subcontractors, to construct the project known as The Palisades.

A/V Acquisitions then sold The Palisades to Old Palisade, which

                                 29
converted the building’s units from rental to condominium

ownership.   Old Palisade controlled the condominium association

until seventy-five percent of the units were sold.   With respect

to the right to file a construction-defect lawsuit against

defendants, Old Palisade took title subject to the rights of A/V

Acquisitions, and the plaintiff Condominium Association took

title subject to any limitation on the rights of the two

predecessor owners.

    We now assess how those principles apply to determining the

accrual of plaintiff’s claims against defendants.

                                D.

    A/V Acquisitions arranged for the construction of The

Palisades.   Defendants AJD, Forsa Construction, Benfatto

Masonry, and Luxury Floors worked on the construction of The

Palisades, which was “substantially complete” as of May 1, 2002.

Thereafter, A/V Acquisitions rented apartment units from The

Palisades.   In June 2004, Old Palisade purchased the property,

converting the rental units into condominiums.   As part of the

condominium-conversion process, Old Palisade retained Ray

Engineering to inspect the property.   On October 1, 2004, Ray

Engineering issued a report stating that the buildings and

parking deck “appeared to be in good condition,” although the

deck had some spalling and cracking, which was not of structural

concern at the time.   Old Palisade attached the report to its

                                30
public offering statement and the master deed.

    After selling seventy-five percent of the condominium

units, Old Palisade relinquished control of the Condominium

Association to the unit owners in July 2006.    The Condominium

Association then retained the Falcon Group to inspect The

Palisades complex.   That inspection led to a report issued on

June 13, 2007, detailing defects in the exterior walls, roofing,

concrete flooring, plumbing, and other areas.

    The trial court determined that the accrual of the six-year

limitations period under N.J.S.A. 2A:14-1 commenced on May 1,

2002, the date of substantial completion, and that the timing of

the Ray and Falcon Reports allowed plaintiff sufficient time to

file its claims before May 1, 2008.   Because plaintiff did not

file its initial and amended complaints until after that date,

the court dismissed plaintiff’s actions.   As we have explained,

the trial court erroneously calculated the accrual date.

    Based on the record before us, we cannot perform that

calculation because it requires findings of fact to determine

when A/V Acquisitions, Old Palisade, or the Condominium

Association -- all entities in the chain of ownership -- first

knew or, through the exercise of reasonable diligence, should

have known of a cause of action against each defendant.     Whether

the accrual clock began when the Ray Report or the Falcon Report

issued or at some time before, after, or in between requires a

                                31
detailed inquiry.   To answer those questions, the trial court

must conduct a Lopez hearing and examine the documentary

evidence and deposition transcripts presented by the parties

and, in its discretion, take testimony from relevant witnesses.

                                E.

    We cannot end our analysis without noting the distinction

between an accrual statute of limitations and a statute of

repose, which has some bearing on this case.     As discussed, an

accrual statute generally has no certain end date, given that

the trigger of the limitations period may depend on when a

plaintiff discovers the basis for his cause of action.    In

contrast, a repose statute has fixed beginning and ending dates,

thus providing certainty to defendants when their exposure to

liability concludes.   See Town of Kearny v. Brandt, 214 N.J. 76,

93 (2013); Daidone v. Buterick Bulkheading, 191 N.J. 557, 567

(2007).

    The Legislature enacted the statute of repose in

construction-defect cases, N.J.S.A. 2A:14-1.1(a), to insulate

construction professionals -- such as architects, planners,

designers, builders, and contractors -- from indefinite

liability through operation of the discovery rule.    Town of

Kearny, supra, 214 N.J. at 93; see Russo Farms, supra, 144 N.J.

at 116.   N.J.S.A. 2A:14-1.1(a) provides that:

          No action . . . to recover damages for any

                                32
          deficiency in the design, planning, surveying,
          supervision or construction of an improvement
          to real property . . . shall be brought against
          any person performing or furnishing the . . .
          construction of such improvement to real
          property, more than 10 years after the
          performance or furnishing of such services and
          construction. This limitation shall serve as
          a bar to all such actions . . . at the time
          the defective and unsafe condition of such
          improvement constitutes the proximate cause of
          the injury or damage for which the action is
          brought.

          [(emphasis added).]

The ten-year repose statute begins at the date of a project’s

substantial completion.   Town of Kearny, supra, 214 N.J. at 93-

94; Russo Farms, supra, 144 N.J. at 117-18.   The statute of

repose sets the outer limit for the filing of a construction-

defect claim.   For example, if for purposes of the property-

damage statute of limitations, N.J.S.A. 2A:14-1, a construction-

defect action accrues eight years after a project’s substantial

completion, a plaintiff will only have two years to file a claim

before it is barred by the repose statute.    The parties in this

case agree that the date of substantial completion of The

Palisades was May 1, 2002.   The complaints against all

defendants were filed within this ten-year period.   Therefore,

N.J.S.A. 2A:14-1.1(a) does not stand as a bar to plaintiff’s

claims.

    Defendants’ critique of N.J.S.A. 2A:14-1.1(a) does bear

mentioning.   Because the repose statute appears to bar only

                                33
claims involving “defective and unsafe” conditions arising from

construction, defendants posit that this statute will not apply

to a defective condition that does not raise safety concerns.

Our charge here is not to rewrite the repose statute.    See

DiProspero v. Penn, 183 N.J. 477, 492 (2005).    If the wording in

this statute, as defendants believe, has the effect they suggest

and does not represent good public policy, defendants’ appeal on

this issue must be to the Legislature.

                                 IV.

    In summary, the following principles guide application of

the property-tort statute of limitations in construction-defect

cases.   The date that a structure is deemed substantially

complete oftentimes is when a cause of action accrues because

some construction defects will be readily apparent on inspection

and therefore the plaintiff will have a reasonable basis for

filing a claim.   But many construction defects will not be

obvious immediately.    In such instances, a cause of action does

not accrue until the plaintiff knows or, through the exercise of

reasonable diligence, should know of a cause of action against

an identifiable defendant.   A plaintiff who is a successor in

ownership takes the property with no greater rights than an

earlier owner.    If the earlier owner knew or should have known

of a cause of action against an identifiable defendant, the

accrual clock starts then.

                                 34
    The determination of when a claim accrued ordinarily should

be made at a Lopez hearing.     At the hearing, the plaintiff will

bear the burden of proving that the claim accrued at a time

after a project’s substantial completion.     See Lopez, supra, 62

N.J. at 276.    The plaintiff is in the best position to establish

when he first knew or reasonably should have known of his cause

of action.     The court’s decision must be based on objective

evidence.    See Caravaggio, supra, 166 N.J. at 246.   The court

may consider documentary evidence, deposition transcripts, and,

in its discretion, take testimony.     Last, the court must state

its reasons for its findings of facts.

    The test set forth above is not novel.      It has evolved from

our jurisprudence and should result in ease of application and

predictable outcomes.     Caravaggio articulated this approach for

the statute of limitations governing personal injury cases, id.

at 249-50, and this Court applied that test recently in a case

involving the accrual date of a cause of action under the Tort

Claims Act, Elazar, supra, ___ N.J. at ___ (slip op. at 11-14).

                                  V.

    For the reasons expressed, we reverse the judgment of the

Appellate Division and remand to the trial court to conduct a

Lopez hearing to determine when plaintiff’s causes of action

accrued against each defendant.

                                  35
     CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, PATTERSON,
FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE ALBIN’s
opinion.

                               36