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Contractor Who Missed 90 Day Deadline for Serving A Notice of Tort Claim by Two Days Barred by Court To Pursue Tort Claim Against Municipality

Plaintiff Lakeside Construction (“Lakeside”) was a contractor who was hired to perform various site improvements at a school located in the Township of Sparta.  Those site improvements included the installation of an underground pipe to connect the new school building to the municipal water main.  Several weeks after a person who allegedly identified himself as a Township Inspector came out and inspected the pipe, the Township’s Director of Utilities sent a letter to Lakeside that it had impermissibly installed the pipe without authorization and without an inspector present.  Lakeside was forced to incur the expense to install a duplicate pipe and served a Tort Claims Act notice upon the Township, claiming damages for this expense.  The issue in Lakeside Construction v. Township of Sparta, 2019 N.J. Super. Unpub. LEXIS 1062 (App. Div. May 9, 2019) was the accrual date for Lakeside’s claim, as well as whether missing the 90 day Tort Claims Act notice deadline by two days would bar Lakeside from pursuing its tort claims.

Lakeside claimed that a person who identified himself as a Township Inspector had come out on November 10, 2016 and observed the installation of the first section of pipe. The alleged inspector left the site and Lakeside workers completed installing the pipe that day.  It was thereafter on December 29, 2016 that Mr. Spaldi, the Township’s Director of Utilities, advised Lakeside that it had impermissibly installed the pipe.  He sent Lakeside an e-mail, informing it that the water service for the project was not accepted and that water supplied to the project would not be authorized.  While Lakeside disagreed with Mr. Spaldi’s finding that the pipe had not been inspected, they were forced to install a duplicate water line parallel to the one they had already installed because it was under time pressure to complete the overall project for the school so that it would receive a Certificate of Occupancy and the building could be opened promptly.  Thus, according to Lakeside, it incurred expenses in the amount of $50,409 in installing the duplicate pipe.

Thereafter, it sued the Township, alleging negligent supervision by the Township and the Water Utility in hiring, retaining and supervising the Township’s Director of Utilities Spaldi and another Township Official by the name of Michael Sportelli.  The complaint also alleged negligent failure to train, negligence in carrying out ministerial functions, and tortious interference.

The defendants filed a Motion to Dismiss the Complaint, arguing that the Tort Claims Notice that Lakeside had served was not served within the 90 day time period prescribed by N.J.S.A. 59:8-8.  The defendants asserted that any cause of action for negligence accrued on December 29, 2016, the date of Mr. Spaldi’s e-mail advising that the pipe installation was unauthorized.  With that accrual date, notice of any tort claim had to be served on the Township no later than March 29, 2017.  However, the notice was not served until March 31, 2017, the 92nd day after the December 29, 2016 email.

Lakeside opposed the dismissal motion, arguing that its claims did not accrue until mid-January 2017 when it incurred the expense of installing the duplicate pipe.  Further, Lakeside argued that the Township’s ongoing refusal to change its position about the legitimacy of the original November 26 installation amounted to a continuing tort, which it claimed would defer the time of accrual.

At the trial court level, the Judge granted the defendants’ motion, finding that the injury to Lakeside first manifested itself when it received the notice from Mr. Spaldi that its original installation was unacceptable.  Lakeside’s subsequent expenditures on the duplicate pipe did not delay the accrual date.  Further, the judge rejected Lakeside’s theory of a continuing tort.

Upon appeal, Lakeside continued to argue that the accrual did not occur until mid-January 2017 and, hence, its Tort Claims Act notice was timely served.  It also argued, in the alternative, the theory of continuing tort, alleging that the defendants’ persisting refusal to retract the December 29 e-mail represented an ongoing form of negligence by inaction.

The Appellate Division agreed with the trial court that Lakeside’s tort based claims against the Township and its officials did accrue on December 29, 2016, the date of the Spaldi e-mail.  Lakeside’s complaint characterized the e-mail as a wrongful tortious act, one based upon a false belief that a Township Official had not inspected the original pipe connection when it was installed in November 2016.

The Appellate Division also agreed with the trial court that the accrual of the claim was not delayed until the expenditure of funds by Lakeside to install a replacement pipe in mid-January 2017.  It pointed to the Supreme Court decision of Beauchamp v. Amedio, in which the Court held that the date of accrual of a personal injury claim arising from an accident is the date when the accident occurred and when the initial harm was inflicted, even though the plaintiff’s bodily injuries were eventually discovered to be permanent.  The duty to provide notice was triggered by the occurrence of the injury, although the full extent of an injury or loss may not be known.

The Appellate Division found that the trial court correctly applied these principles in determining that the injury to Lakeside was first sustained when the Township declared on December 29, 2016 that the original pipeline installed was unauthorized and thus unusable.  The fact that Lakewood incurred additional expenses in January 2017 when it had to install the duplicate pipeline did not alter the December 29 accrual date.  The January 2017 construction expenses only increased the extent of Lakeside’s damages.

The Appellate Division also rejected Lakeside’s contention that there was a continuing tort as a basis to defer the accrual date.  The Court found that there was no tolling.  The fact that the governmental defendants did not correct the problem does not render the tort continuing.

Further, the Court found that although Lakeside missed the 90 day notice deadline by only 2 days, strict enforcement of the Tort Claims Act was required.  The Court recognized that there are strong public policies underlying the notice provisions of the Tort Claims Act.

Hence, the Appellate Division found that Lakeside had not presented a sufficient legal justification to set aside the trial court’s ruling.  Accordingly, the Appellate Division affirmed the dismissal of the lawsuit based upon Lakeside’s failure to timely file the Notice of Tort Claim within the 90 day deadline as set forth in the Tort Claims Act.

 


Betsy G. Ramos, Esq. is a member of the firm’s Executive Committee and Co-Chair of the Litigation Group. She is an experienced litigator with over 25 years’ experience handling diverse matters. Her practice areas include tort defense, insurance coverage, Tort Claims Act and civil rights defense, business litigation, employment litigation, construction litigation, estate litigation and general litigation.

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