For Relief From Liability Claims, First Look to the Statute of Repose

10/28/2016 | Articles & Alerts

In today’s litigious environment, it is not unusual for claims to be asserted for bodily injury or property damage in connection with building construction completed years earlier. Claimants can assert that concealed construction deficiencies, or latent design defects caused a condition which led to an injury to a person or to property. Such claims can be serious depending on the nature of the injury alleged. For example, suits brought on behalf of homeowners’ associations against developers, designers, and contractors can allege significant damages resulting from conditions which are claimed to have been concealed or dormant for many years.

Such claims can be difficult to defend, because of the passage of time between the design and construction activity and the alleged damage. The passing of time can result in relevant records having been destroyed or lost. The personnel involved in the construction may no longer be with the defendant company, or even if they are, the passage of time results in memory loss of potentially key facts.

In recognition of such difficulty, most states have passed laws called statutes of repose. These laws bar actions for design or construction deficiencies, whether based in contract or tort (negligence), if the claim is asserted beyond a defined time period after constructing or design work was completed. Statutes of repose differ from statutes of limitations, which typically require that legal claims be filed in court within a time period commencing when a cause of action accrues. The exceptions to a statute of limitations, like allowing a claim to be asserted beyond the applicable period of limitations if the Claimant did not, or could not have recognized that a cause of action exists, do not apply to claims barred by a statute of repose.

Statutes of repose create an absolute bar to claims for bodily injury or damage to property if they are filed beyond the defined statutory time period. The statute of repose time period varies from state to state. In Pennsylvania, the time period is twelve (12) years from the date on which construction was completed or on which the design service was provided. In New Jersey, the repose period is ten (10) years. In Delaware, it is six (6) years.

These statutes can be a powerful defense to stale claims for bodily injury or property damage. Recently, I represented a general contractor which was named as a defendant in a large, complex, multi-defendant property damage claim alleged to arise from supposed deficient construction. The claim was filed in New Jersey, but more than ten years after the contractor client had substantially completed its work. The defense costs for this claim alone would have been substantial, and there were insurance issues which might have precluded coverage for the claims. However, I was able to secure complete dismissal of the claim based on application of New Jersey’s statute of repose.

When faced with a claim for bodily injury or damage to property alleged to arise from deficient construction or design, first look to the applicable statute of repose for relief.