RONALD SZIKLA v. 2100 LINWOOD AVENUE OWNERS INC.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

RONALD and ESTHER SZIKLA,

Plaintiffs-Appellants,

v.

2100 LINWOOD AVENUE OWNERS,

INC., VITO X. LANOTTE, GUS

PATTI, and NORMAN GREENBERG,

Defendants-Respondents,

and

BOARD OF DIRECTORS OF 2100

LINWOOD AVENUE OWNERS, INC.,

Defendants.

_______________________________________

October 27, 2015

Argued September 29, 2015 Decided

Before Judges Yannotti and St. John.

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-3172-12.

Mark J. Heftler argued the cause for appellants (Piekarsky & Associates, LLC, attorneys; Mr. Heftler and Scott B. Piekarsky, on the brief).

Adam J. Kipnis argued the cause for respondents (Braff, Harris, Sukoneck & Maloof, attorneys; Mr. Kipnis, on the brief).

PER CURIAM

Plaintiffs Ronald Szikla ("Szikla") and Esther Szikla appeal from an order entered by the Law Division on August 8, 2014, denying reconsideration of an order dated June 10, 2014, which granted summary judgment in favor of defendants 2100 Linwood Avenue Owners, Inc. ("Linwood"), Linwood's Board of Directors ("Board"), Vito X. Lanotte ("Lanotte"), Gus Patti ("Patti"), and Norman Greenberg ("Greenberg"). We affirm in part, reverse in part, and remand for further proceedings.

I.

Linwood is the owner of a cooperative apartment building in Fort Lee, New Jersey. Plaintiffs purchased an apartment in the building in 1984 and resided there from 1988 to 1994, when they purchased and moved to a larger apartment in the building. In 1998, Szikla observed a crack in the ceiling of the larger apartment's living room. He reported the crack to Lanotte, who was then the building's property manager.

Lanotte had one of the building workers visit the apartment and check for moisture near the crack. Lanotte told Szikla that the inspection had revealed no evidence of moisture. He suggested that Szikla retain a contractor to reopen the crack for a further inspection. Szikla did not hire a contractor but continued to complain to building management about moisture on the apartment's ceiling.

About five years later, Szikla complained about other issues in the apartment. He said there was a draft and soot entering the apartment through the windows; water penetration; cracks, buckling and swelling of the walls; as well as other problems. By 2005, the heating, ventilating and air conditioning ("HVAC") system had stopped working.

In 2006, Patti and Greenberg, who were members of the Board, met with Szikla to discuss his concerns and possible remedies for the problems. According to Szikla, Patti and Greenberg promised they would "fix everything" once the building's roof was repaired and the windows replaced. In October 2008, plaintiffs moved out of the apartment, claiming it was uninhabitable.

Sometime in 2008, repairs were made to the building's roof, and in 2009, the apartment's windows were replaced. However, Szikla continued to complain about conditions in the apartment. In a letter to Lanotte dated March 4, 2010, Szikla detailed the "present and past" issues regarding the unit. He identified seven specific issues which he described as "long standing complaints."

Those complaints were: (1) recurring cracks and discoloration of the ceiling due to water penetration and fault lines caused by prior mounting holes; (2) structural cracks in several walls; (3) buckling and cracking of the wood floor tiles from water penetration and absorption; (4) swelling of walls, baseboard wood rot and blistering paint due to water absorption; (5) drafts and soot caused by faulty windows and doors; (6) improperly functioning air vents throughout the building; and (7) various adverse environmental conditions due to moisture, the roof and poor ventilation.

Szikla also stated that during the recent window replacement project, several wood parquet floor tiles had been scratched and paint on the window sills had been damaged, exposing bare metal. Szikla said the plastering and painting had not been completed in certain areas. In addition, Szikla stated that "there is still a draft and whistling noise coming from the top right corner of the newly installed terrace doors, despite notification of its repair."

On April 20, 2012, plaintiffs filed a complaint in the Law Division, naming Linwood, Linwood's Board of Directors (the "Board"), and Lanotte as defendants. On September 20, 2012, plaintiffs filed an amended complaint, and added Patti and Greenberg as defendants. In the amended complaint, plaintiffs alleged that they had experienced "a multitude of problems" in their apartment. They claimed Linwood had been negligent in its maintenance and repair of the roof, windows, walls, and fa ade, which caused "excessive water, air and soot to enter into the unit making it uninhabitable."

Plaintiffs alleged that Linwood had "a long history of roof, window, and terrace door issues." They claimed that Linwood had eventually replaced the roof, windows and terrace doors, but it had failed to ensure "a proper and safe, tight envelope for the unit." According to plaintiffs, this caused cracks in the ceiling and structural walls, water damage, buckling floors, toxic mold throughout the unit, "blistering and peeling paint," delaminated walls, leaks in the roof, and wood rot.

Plaintiffs claimed that Linwood had also allowed "clogged weep holes, voids in mortar joints, and voids in the top and bottoms of window sills." As a result, there was "water entry, soot and unit failure." Plaintiffs alleged that Linwood had failed to make necessary repairs in a timely manner. They also claimed that Linwood did not respond to their complaints "in a timely fashion."

Based on these alleged facts, plaintiffs asserted claims against: (1) Linwood for negligence, which allegedly resulted in property damage and personal injuries; (2) the Board, Patti and Greenberg for breach of fiduciary duty; (3) all defendants for retaliation, harassment, and selective enforcement of certain rules and regulations; (4) all defendants for violations of the Consumer Fraud Act ("CFA"), N.J.S.A. 56:8-1 to -60; and (5) Lanotte for negligence. Defendants filed an answer denying liability. They also asserted various separate defenses.

On April 25, 2013, plaintiffs agreed to dismiss their claims against the Board without prejudice.1 In addition, on October 17, 2013, plaintiffs agreed to dismiss all of their personal injury claims. On April 16, 2014, defendants filed a motion for summary judgment, arguing that plaintiffs' claims were barred by the applicable statutes of limitations. Plaintiffs opposed the motion. The motion was decided without oral argument.

The Law Division judge entered an order dated June 10, 2014, granting the motion. In a rider to the order, the judge noted that under N.J.S.A. 2A:14-1, actions for property damage must be commenced within six years after the cause of action accrues, and under N.J.S.A. 2A:14-2, negligence claims must be asserted within two years of their accrual. The judge wrote that it was

undisputed that the plaintiffs were aware of the subject apartment's allegedly defective conditions prior to 2006, the year in which plaintiffs met with two members of the [Board]. Plaintiffs filed this action in April of 2012, which is not timely under the six-year statute of limitations. Moreover, any alleged negligence claims must have arisen from conduct that occurred prior to 2008, the year in which the plaintiffs vacated the subject premises. Accordingly, such claims are barred by the two-year statute of limitations.

The judge also determined that the discovery rule did not toll the running of the statute of limitations. The judge found that the rule was "inapplicable to the facts of this case since plaintiffs were clearly on notice of all conditions inside the apartment prior to 2006."

In addition, the judge determined that the continuing torts doctrine was inapplicable. The judge stated that "[e]ach of the plaintiffs' complaints arose from issues that were present prior to 2006, [and were] not entirely new defects. The fact that the conditions may have worsened over time does not trigger application of" that doctrine.

Plaintiffs filed a motion for reconsideration, which the judge considered on August 8, 2014. The judge placed an oral decision on the record, finding that plaintiffs had not established any basis for reconsideration of his prior decision. The judge entered an order dated August 8, 2014, denying plaintiffs' motion. This appeal followed.

II.

Plaintiffs argue that the motion judge erred by dismissing their claims as untimely. As we noted previously, plaintiffs agreed to dismiss their claims against the Board. They also agreed to dismiss their personal injury claims. Furthermore, on appeal, plaintiffs do not challenge the trial court's dismissal of their claims under the CFA or the dismissal of their punitive damage claims. Thus, the question to be addressed is whether the remaining claims for property damage were barred by the applicable statute of limitations.

As the motion judge noted, N.J.S.A. 2A:14-1 provides in part that "[e]very action . . . for any tortious injury to real or personal property" must be commenced within six years after the cause of action has accrued. Here, plaintiffs claim that Linwood and Lanotte were negligent in the maintenance and repair of their unit. They also claim that Patti and Greenberg breached fiduciary duties owed to them, and all defendants harassed and retaliated against them. Plaintiffs allege that these wrongful actions resulted in damage to their property.

We are convinced that plaintiffs' claims for property damage accrued when plaintiffs became aware that defendants were negligent or breached their fiduciary duties and that they had sustained property damage as a result of any such tortious acts. As the motion judge determined, plaintiffs were aware before 2006 that their property had sustained certain damage as a result of the alleged deficiencies in the roof, windows and doors. Plaintiffs also knew that the property damage could be attributable to the alleged tortious acts of defendants.

Thus, the motion judge correctly determined that plaintiffs' claims for such property damage, that is, property damage resulting from the alleged deficient conditions in the apartment which existed before 2006, were barred by N.J.S.A. 2A:14-1 because those claims had not been asserted within six years of their accrual.

III.

Plaintiffs argue that the motion judge erred by failing to apply the continuing tort doctrine to their claims. In support of their argument, plaintiffs rely upon Russo Farms, Inc. v. Vineland Board of Education, 144 N.J. 84 (1996).

In Russo, the plaintiffs brought suit against certain public entities, an architect and a contractor, seeking damages to their crops and farmland allegedly caused by the improper siting of a school across from the property and an inadequate drainage system on a nearby street. Id. at 91. Among other issues, the Supreme Court considered whether "each incursion of floodwater" on the plaintiffs' property constituted a continuing tort for purposes of applying the six-year statute of limitations in N.J.S.A. 2A:14-1. Ibid.

The Court explained that the continuing tort doctrine has been applied to "continuing" nuisance cases, and by finding "that a continuing nuisance has been committed, [a court] implicitly holds that the defendant is committing a new tort, including a new breach of duty, each day, triggering a new statute of limitations." Id. at 99.

According to the Court, the applicability of the doctrine depends on "'whether the invasion or interference is permanent or continuous.'" Id. at 102 (quoting Beatty v. Washington Metro. Area Transit Auth., 860 F.2d 1117, 1122 (D.C. Cir. 1988) (internal quotation marks omitted)). The Court stated that "a nuisance is continuing when it is the result of a condition that can be physically removed or legally abated." Id. at 103.

In our view, plaintiffs' reliance upon the Russo case is misplaced. In their complaint, plaintiffs did not specifically assert a cause of action for nuisance. To the extent that any such water infiltration is considered a nuisance, it was essentially a permanent condition. Defendants' alleged failure to repair the roof prior to 2008, and to replace the apartment's windows and doors prior to 2009, represents "one unceasing invasion of the plaintiffs' interests and only one cause of action." Id. at 102 (citation and internal quotation marks omitted). Thus, the continuing tort doctrine does not apply.

IV.

Plaintiffs further argue that the judge erred by failing to apply the discovery rule to their claims regarding mold damage in the apartment because this damage allegedly was not discovered until 2008.

The discovery rule was adopted by our Supreme Court "[t]o avoid the harsh effects of a mechanical application of statute[s] of limitation[]." Szczuvelek v. Harborside Healthcare Woods Edge, 182 N.J. 275, 281 (2005). The "linchpin" of the rule "is the unfairness of barring claims of unknowing parties." Mancuso v. Neckles, 163 N.J. 26, 29 (2000). "'The standard [for applying the rule] is basically an objective one whether plaintiff "knew or should have known" of sufficient facts to start the statute of limitations running.'" Szczuvelek, supra, 182 N.J. at 281 (quoting Martinez v. Cooper Hosp., 163 N.J. 45, 52 (2000)).

Accordingly, the discovery rule may be applied "so long as a party reasonably is unaware either [1] that he [or she] has been injured, or [2] that the injury is due to the fault or neglect of an identifiable individual or entity." Mancuso, supra, 163 N.J. at 29 (alteration in original) (citing Vispisiano v. Ashland Chem. Co., 107 N.J. 416, 426-27 (1987)).

Here, Szikla testified at his deposition that he first observed mold damage during a visit to the apartment in 2008. Szikla stated that someone had "peeled up" half of the floor, and he saw "black, shiny mold." Furthermore, in support of their claims, plaintiffs presented a report from Donly Engineering Group, Inc. ("DEG"), which inspected the apartment in June 2010. In its report, DEG stated that

[i]t is our understanding from speaking with [Szikla] that a water leak previously existed through the ceiling of the living room from the roof. You stated that recent roof repairs have corrected this issue. This is the likely cause of flooring problems with the living room and would have greatly contributed to the excessive moisture condition evidenced throughout the unit.

We also suspect that the fan coil units may be contributing the moisture problem. The units may not be properly drained to remove condensate. Condensate pans and/or drip lines may be clogged and non-functioning. Additionally, the water service line located within the chase in [one] bedroom . . . was found to be saturated with condensation. The condensation is contributing to the excessive moisture problem within the unit.

DEG wrote that the previously-leaking roof had caused damage to the living room floor, as well as "damages to finishes and fixtures caused by excessive moisture created by . . . said leakage." Water staining and buckling to the wood floors were suspected to be the "direct result of past water intrusion at the sliding door and windows prior to replacement." Additional damage was due to "the poorly installed windows."

Plaintiffs also presented an "Industrial Hygiene Report" dated July 31, 2012, that had been prepared by Garden State Environmental, Inc. ("GSE"). In its report, GSE said a visual inspection of the apartment showed "significant evidence of past water intrusion and related damages to interior building materials in multiple rooms including the living room, both bedrooms and dining room."

GSE noted additional "evidence of water related damage" in the master bedroom and kitchen, which appear to be related to interior moisture/humidity and plumbing issues. GSE stated that

The specific sources of moisture that caused the conditions could not be definitively determined based on our industrial hygiene inspection. However, the patterns of water damage around the sliding glass doors and windows and around heating and cooling units indicate water intrusion/leaks in those areas. Further, cracked and poorly repaired ceilings suggest the potential for past water damage due to water penetration through the roof.

The mold and water damage on the master bathroom ceiling is indicative of high humidity. The vent duct in that room appears to be poorly functioning and may not penetrate sufficient negative air pressure to vent excess moisture. The mold and damage beneath the kitchen sink suggest a plumbing leak.

The likelihood of exterior water penetration in this unit is amply supported by the findings of [DEG] who conducted an engineering inspection of this unit on June 17, 2010[,] as outlined in their report dated July 8, 2010. This report presents substantial evidence of building envelope deficiencies which are associated with exterior water penetration and related interior damages.

It should be noted, however, that in February 2011, LEW Corporation ("LEW") performed a mold assessment of plaintiff's unit for Linwood. LEW issued a report which stated that mold growth had been identified in the apartment's three bedrooms. LEW stated that it was not possible to determine "with absolute assurance that fungi/mold germination is caused by a specific condition, without extensive testing and evaluation." LEW asserted that the apartment had experienced "high humidity at some point in the past" as evidenced "by the peeling paint in the master bedroom, rusty window and door casings and lifting parquet flooring."

As this evidence indicates, the mold growth was apparently due to high humidity levels in the apartment, which was largely attributable to the water infiltration from the roof, windows and doors. The evidence establishes that plaintiffs were aware that water was entering the apartment through the leaky roof, windows and doors prior to 2006. Indeed, as we have noted, they complained about moisture on the ceiling of the apartment in 1998.

Because the conditions in the apartment were apparent before 2006, specifically the water infiltration and moisture problems, plaintiffs either knew or reasonably should have known that mold growth of the sort later observed would result. Thus, property-damage claims for mold growth relating to conditions apparent before 2006 were barred by the statute of limitations.

V.

We note, however, that plaintiffs also have asserted claims arising from actions that defendants took in 2008 and 2009, including the repairs to the roof, windows and doors. Plaintiffs claim that such repairs did not fully address the entry of water and soot into the apartment, and caused other damage to the premises. In his deposition, Szikla testified that in 2010, after the roof had been replaced, he noticed puddles of water in the living room and bedroom. Szikla stated that he had visited the apartment in 2011 after a storm, and noted that the walls were saturated with water.

In addition, in its report, DEG opined that, while the newly-installed windows and door addressed the water-leakage problem, "the replacement windows are poorly sealed." DEG stated that soot had entered around a window into the living space. According to DEG, there also was black soot around the window casements in the bedrooms.

In addition, DEG wrote that the walls and floor in the living room had been damaged during the replacement of the fan coil unit, and repairs to the living room ceiling were "substandard." DEG also stated that repairs to the balcony ceiling "have already failed." It said that the ventilation system was not functioning, and the water/fire-service line is saturated with condensation.

We are convinced that the claims for property damage arising from the alleged deficient performance of the repair work in 2008 and 2009 were not barred by N.J.S.A. 2A:14-1. Plaintiffs alleged the repair work was negligently performed, and the negligent repair work caused additional damage to their property. Plaintiffs' claims regarding the repair work accrued when that work was done in 2008 and 2009. We therefore conclude that the claims regarding the alleged negligent repairs were timely filed.

VI.

In summary, we conclude that the motion judge correctly determined that plaintiff's property damage claims are barred by N.J.S.A. 2A:14-1 to the extent that such damage pertained to conditions in the apartment of which plaintiffs were aware more than six years before the complaint was filed. Thus, any claims for property damage, including water damage and mold growth, related to the alleged deficiencies in the apartment's roof, windows and doors that existed prior to April 2006 were properly dismissed.

We also conclude that the judge correctly determined that continuing tort doctrine does not apply to plaintiffs' claims. Moreover, the discovery rule does not apply to plaintiffs' claim for mold damage that resulted from the water infiltration and other conditions of which plaintiffs were aware more than six years before the complaint was filed.

We conclude, however, that the judge erred by dismissing plaintiffs' claims for the property damage, including any additional water damage and mold growth that allegedly resulted from the repairs that were undertaken in 2008 and 2009. On remand, plaintiffs will be required to establish, by a preponderance of evidence, that defendants' negligence or wrongful actions were a proximate cause of any such property damage, including any additional water damage or mold growth.

Affirmed in part, reversed in part, and remanded for further proceedings in accordance with this opinion. We do not retain jurisdiction.

1 Although all claims against the Board were dismissed without prejudice, the Board sought and was granted summary judgment on the claims asserted against it.