- What constitutes substantial completion sufficient to trigger the statute?
- To which claims does the statute apply?
Multi-Phase Construction in Massachusetts
Large projects often involve multiple phases. In D’Allesandro v. Lennar Hingham Holdings, LLC, 2019 WL 5550629, at *3 (D. Mass. 2019), a 150-unit condominium project in Massachusetts was completed over 24 phases. Several owners brought a suit for construction deficiencies and code violations involving the common areas of their buildings. The suit was filed two and half years after completion of the project.
The United States District Court for the District of Massachusetts agreed with plaintiff’s argument that the statute did not run from the time the architect signed off on substantial completion. Instead, it held Massachusetts’s six-year statute of repose was triggered only after the entire project was completed.
The court determined that while plaintiff’s claims for negligence and breach of implied warranty were subject to the statute, it did not apply to claims for intentional misrepresentation, negligent misrepresentation, violation of Massachusetts’ unfair business practices statute, and breach of fiduciary duty.
Ambiguity in Georgia
This case may be on its way to the Georgia Supreme Court for clarification. All parties to existing warranty agreements are watching closely to determine whether their contracts remain enforceable.
Building owners are concerned because the long-term warranties they bargained for suddenly appear in jeopardy. Contractors are apprehensive because they may no longer have the ability to incentivize construction of high-quality long-term improvements.
Contracts Covered in Ohio
The Supreme Court of Ohio confirmed the Buckeye State’s 10-year statute of repose applies to both tort and contract claims. In New Riegel Local School District Board of Education vs. Buehrer Group Architecture and Engineering, Inc.,157 Ohio St.3d 164 (Ohio 2019), the court clarified any lingering questions about the scope of the law.
In New Riegel, the Supreme Court of Ohio found the statute applies to “all causes of action,” that seek “to recover damages for bodily injury, an injury to real or personal property, or wrongful death, that arises out of a defective and unsafe condition of an improvement to real property *** against a person who performed services for the improvement to real property or a person who furnished the design, planning, supervision of construction, or construction of the improvement to real property.”
Conclusion
Regardless of how broadly these rulings are interpreted, clients contemplating claims involving improvements to real property should avoid unnecessary delay in bringing those claims. Although the broad contours of the statute of repose may seem consistent, essential details continue to be clarified in state courts.
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Large projects often involve multiple phases. In D’Allesandro v. Lennar Hingham Holdings, LLC, 2019 WL 5550629, at *3 (D. Mass. 2019), a 150-unit condominium project in Massachusetts was completed over 24 phases. Several owners brought a suit for construction deficiencies and code violations involving the common areas of their buildings. The suit was filed two and half years after completion of the project.
The United States District Court for the District of Massachusetts agreed with plaintiff’s argument that the statute did not run from the time the architect signed off on substantial completion. Instead, it held Massachusetts’s six-year statute of repose was triggered only after the entire project was completed.
The court determined that while plaintiff’s claims for negligence and breach of implied warranty were subject to the statute, it did not apply to claims for intentional misrepresentation, negligent misrepresentation, violation of Massachusetts’ unfair business practices statute, and breach of fiduciary duty.
Ambiguity in Georgia
A recent decision by the Georgia Court of Appeals has left the local construction industry with more questions than answers. In Southern States Chemical, Inc. v. Tampa Tank & Welding, Inc., 836 S.E.2d 617
(Ga. App. 2019), the enforceability of long-term warranties appears to have been significantly impaired. The court applied the statute of repose against a warranty-contract claim. The court surprised many by holding Georgia’s eight-year statute applied to claims arising from a contractor’s forty-year warranty against defective work.
The improvement in question was a chemical tank and the purported warranty was drafted after it began to leak. To further complicate matters, the court also determined the warranty only covered one year.
This case may be on its way to the Georgia Supreme Court for clarification. All parties to existing warranty agreements are watching closely to determine whether their contracts remain enforceable.
Building owners are concerned because the long-term warranties they bargained for suddenly appear in jeopardy. Contractors are apprehensive because they may no longer have the ability to incentivize construction of high-quality long-term improvements.
Contracts Covered in Ohio
The Supreme Court of Ohio confirmed the Buckeye State’s 10-year statute of repose applies to both tort and contract claims. In New Riegel Local School District Board of Education vs. Buehrer Group Architecture and Engineering, Inc.,157 Ohio St.3d 164 (Ohio 2019), the court clarified any lingering questions about the scope of the law.
In New Riegel, the Supreme Court of Ohio found the statute applies to “all causes of action,” that seek “to recover damages for bodily injury, an injury to real or personal property, or wrongful death, that arises out of a defective and unsafe condition of an improvement to real property *** against a person who performed services for the improvement to real property or a person who furnished the design, planning, supervision of construction, or construction of the improvement to real property.”
Conclusion
Regardless of how broadly these rulings are interpreted, clients contemplating claims involving improvements to real property should avoid unnecessary delay in bringing those claims. Although the broad contours of the statute of repose may seem consistent, essential details continue to be clarified in state courts.
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Patrick McKnight is a January 2020 graduate of Rutgers University earning both his JD and MBA. Mr. McKnight can be contacted at patrick.joseph.mcknight@gmail.com
