Post on 29-May-2020
Construction Disputes: Statutes of Limitation and Repose in Indemnity and Contribution ClaimsAdvanced Issues, State Law Differences, Discovery Rule, Substantial Completion, Triggering Events, Patent and Latent Defects, Tolling, Estoppel
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THURSDAY, OCTOBER 10, 2019
Presenting a live 90-minute webinar with interactive Q&A
Marie Cheung-Truslow, Principal, Law Offices of Marie Cheung-Truslow, Boston
Joshua Quinter, Associate Managing Principal, Offit Kurman, Plymouth Meeting, Pa.
Gary Strong, Partner, Seiger Gfeller Laurie, Princeton, N.J.
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STATUTE OF
LIMITATIONS AND
STATUTE OF REPOSE
Presented by:
Gary Strong, Esq.
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Reproduction, distribution, display and use of the presentation without
written permission of the speakers is prohibited.
SEIGER GFELLER LAURIE LLP
Statutes of Limitation in Construction Project –
NOT as Easy as You Think…
Length of Construction Projects
Documents are scarce
Person suing your client may not have had any
connection to the client
Lawsuit occurs…what’s next?
6
SOL
States
Alaska, Arizona, Co – 2 years
California – 3 years
Illinois – 5 years
New Jersey – 6 years
7
Accrual of SOL
Generally speaking, case law states the limitation
period does not begin to run until the plaintiff discovers
or should have discover the cause of action.
Plaintiff hires inspector for home.
Plaintiff is not at property for time but hears about problems.
8
Discovery Rule
Discovery rule provides that accrual date of a cause of
action is delayed until plaintiff becomes aware of
his/her injury.
What if defect is discovered during limitation period?
How much time does one have – NJ, NY, CA?
9
Statute of Repose
Unlike limitations it is a hard stop when a
contractor ceases to perform work.
Single scope of work contractor VS. Contractor
who is on the project throughout its duration.
10
Exception to SOL and Statute of Repose
Fraud and/willful concealment
Right to Repair
States that limit
Statutory limitation by contract
New York, New Jersey, Nevada
11
Statute of Repose: Alabama
Construction: 7 Years from substantial completion to
improvement to real property against any person
performing or furnishing the design, planning, supervision
or observation of the construction. Ala. Stat. § 6-5-
221(2011).
Exception: Where architect, engineer, or builder had
knowledge that a defect or deficiency existed and failed to
disclose the defect. Ala. Code § 6-5-221(a).
Products: None.
12
Statute of Repose: Arkansas
Construction: 4 Years from substantial completion to
improvement to real property for tort or contract actions
for personal injury or wrongful death.
13
Statute of Repose: California
Construction: 4 Years from substantial completion of
construction or construction of improvement to real
property arising out of a patent defect, 10 years from
substantial completion for a latent defect. This doesn’t
apply to actions based on willful misconduct or fraudulent
concealment. Ca. Civ. Proc. Code § 337.1,337.15.
14
Statute of Repose: Illinois
Construction: 10 Years from improvement to real
property, but after person had knowledge, four years. 735
I.L.C.S. § 5/13-214.
15
Statute of Repose: Louisiana
Construction: 5 Years after the date owner takes possession of
(accepts) the improvement to real property. La R.S. 9:2772. If loss during
5th year (i.e. registry of acceptance; ownership or possession), action can
be brought within one (1) year after injury, but in no event more than six
(6) years after loss. L.S.A.-C.C. § 9:2772.
An action against a contractor or an architect for construction defects
must be brought within a ten (10) year liberative ten (10) year
prescription period (statute of limitations). L.S.A.-C.C. Art. § 3500. This
conflicts with a five (5) year prescriptive period for actions against
architects and contracts for ruin of a wood or brick, it is ten (10) years.
L.S.A.-C.C. § 9:2762.
16
Statute of Repose: New Jersey
N.J. Stat. § 2A:14-1.1(a) states, in pertinent part:
No action, whether in contract, in tort, or otherwise, to recover damages
for any deficiency in the design, planning, surveying, supervision or
construction of an improvement to real property, or for any injury to
property, real or personal, … arising out of the defective and unsafe
condition of an improvement to real property, nor any action for
contribution or indemnity for damages sustained on account of such
injury, shall be brought against any person performing or furnishing the
design, planning, surveying, supervision of construction or construction
of such improvement to real property, more than 10 years after the
performance or furnishing of such services and construction….
17
Statute of Repose: North Carolina
Construction: 6 Years after “last act of defendant” or
“substantial completion” by the improvement. N.C.G.S.A.
§ 1-50.
18
Thank You For Your Time!Questions?
Seiger Gfeller Laurie LLPGary Strong, Esquire
gstrong@sgllawgroup.com
(609)375-2035
19
TOLLING OF THE LIMITATIONS PERIOD
PRESENTED BY:
Marie Cheung-Truslow, Esq.
Principal/Owner
101 Arch Street, Suite 800
Boston, MA 02110
(617) 4777-4748
marie@cheungtruslowlaw.com
20
DEFINITION OF TOLLING
The most frequently intended meaning of the phrase
"tolling the statute of limitations" is to suspend its
operation, that is, that the limitations period does not
begin to run for one reason or another, or that it is
temporarily suspended.
21
Circumstances Tolling the
Limitations Period
OVERVIEW
Statutory Tolling
Fraud and Concealment of Cause of Action
Equitable estoppel
Tolling Agreements
22
STATUTORY TOLLING
A minor or person incapacitated by mental illness
When a cause of action accrues
May apply even if parents are available to file suit
Examples
Adding Defendants or new causes of action in a pending case
Relation back statute to the original complaint
Examples
23
STATUTORY TOLLING
Savings Statute
If original claim timely filed, but dismissed, savings
statute provides additional time to refile
Must be dismissed for a “matter of form”
Dismissal for improper venue
Dismissal for lack of jurisdiction
Examples
24
Fraud and Concealment of
Cause of Action
If Defendant fraudulently conceals cause of action
The period prior to discovery of cause of action is
excluded
Positive acts done with the intention to deceive
Examples
25
Tolling of Statute of Repose
Statute of Repose cannot be tolled.
26
Equitable Tolling
Conduct by Defendant that lulls plaintiff into
delaying filing suit until the limitations period
has passed
Need not be based on fraud
Examples
27
TOLLING /STANDSTILL AGREEMENTS
Parties can enter into tolling or standstill
agreements to stop the running of the statute of
limitations
For a specific period of time
Cannot be indefinite
Specify any period that has already expired will
not be revived or revived
Agreements entered into after expiration of SOL
28
TOLLING /STANDSTILL AGREEMENTS
The Parties agree that the period from the Effective Date of
this Tolling Agreement, through and including the Termination
Date of this Tolling Agreement, as defined in Paragraph 2
below, shall not be asserted or relied upon in any way to
compute the running of time under any statute of limitations
or repose, any suit limitation provision, whether statutory,
contractual, equitable or otherwise, concerning any causes of
action, lawsuits or other legal proceedings Plaintiff may have
now or hereinafter bring against Defendant.
29
Thank You!
PRESENTED BY:
Marie Cheung-Truslow, Esq.
Principal/Owner
101 Arch Street, Suite 800
Boston, MA 02110
(617) 4777-4748
marie@cheungtruslowlaw.com
30
CONSTRUCTION CLAIMS:
STATUTES OF LIMITATIONS AND
REPOSE
Joshua C. Quinter, Esquire
jquinter@offitkurman.com
484-531-1701
The Indemnity Landscape
- Indemnity is an agreement to pay for the
“stupidity” of another person.
- Common law indemnity v. contractual indemnity
v. statutory indemnity
- What is covered by the promise of indemnity?
©2017 Offit Kurman, P.A. All rights reserved 32
When Indemnity is Not Indemnity
• Anti-indemnity statutes – generally restrict what a party can or
cannot claim in an indemnity action as a matter of public policy
– Can restrict: 1. Parties
2. Action types
3. Time periods
• Waiver of indemnity obligation – Bester line of cases
• Practical: when the other party refuses to defend and hold
harmless
©2017 Offit Kurman, P.A. All rights reserved 33
Statute of Limitations
©2017 Offit Kurman, P.A. All rights reserved 34
- Each state has a statute of limitations for different claims (tort,
contract, etc.); best practice is to make sure the indemnity claim is in
before that statute of limitations expires.
- Practical reality is that most contract claims are brought long before
the statute of limitations expires, so the issue usually does not arise.
- Tort claims can be problematic because statutes of limitation are
shorter and plaintiffs more often file at the deadline.
- Keep the discovery rule in mind, as it can be a useful tool in
extending the limitations period
Statute of Limitations Continued
- Read the Statute of Limitations, they are statutes so the
analysis starts there
- Case law and court rules should also be considered for a
variety of reasons (entire controversy doctrine, timing,
etc.)
- Some states start the limitations period from the date the
underlying claims arise (similar to the period the Plaintiff
has to file suit)
- Other states will measure from the date Plaintiff’s claims are
filed
©2016 Offit Kurman, P.A. All rights reserved 35
Best Practices to Toll the
Statute of Limitations
©2017 Offit Kurman, P.A. All rights reserved 36
• Tolling Agreements – Be sure the document is clear;
consider definitive versus indefinite time frames and
preserve claims and defenses
• Writ of Summons – A way to initiate suit without filing a
complaint; some courts will not allow cases to linger on the
docket
• Private arbitration under agreement that the statute of
limitations does not apply – not commonly done, but
possible if parties will agree
A Word on Statutes of Repose
• Practically speaking, the statute repose is the construction
equivalent of the rule against perpetuities – its application is
exceptionally rare
• If you have a statute of repose problem, your problem is
much larger than the statute itself – proof is your issue
• Consider that if you bump into a statute of repose question
the case will be exceptionally hard to litigate from a practical
perspective because so much has changed in the period of
time that it took the statute to run.
©2016 Offit Kurman, P.A. All rights reserved 37
Contribution Versus Indemnity
©2017 Offit Kurman, P.A. All rights reserved 38
• A little different than indemnity because asking someone else
to pay a part of the claim as opposed to all of it.
• Contribution, when asserted, is usually asserted under a
statutory or common law theory that allows for recovery – not
contract based
• Legal theory behind contribution is different than indemnity,
but the practical applications discussed in the indemnity slides
is largely the same – the primary difference is that there is not
really contract analysis
Additional Practical Considerations
©2017 Offit Kurman, P.A. All rights reserved 39
• Like in many other situations, communication is key – discussions and
side agreements with valuable clients can be part of the solution.
• Pay attention to contract language up front and discuss these things
when people are not “hot under the collar” – assign risks to the parties
best able to control them so that there are fewer problems and less
disputes
• Keep in mind that choice of law and forum selection clauses can
impact the outcome – think about this when looking at contracts, when
considering where to file, and thinking through defenses.
Additional Practical Considerations
©2017 Offit Kurman, P.A. All rights reserved 40
• Keep in mind that the arbitration rules sometimes give
arbitrators more discretion, including on procedure
(good, bad, or indifferent, the fact is that it exists)
• Is the indemnity claim real or just an attempt to get into
another pot – impacts how hard someone will fight on it
or not (also dependent on the size of the claim)
THANK YOU!
Contact the Presenter
OFFIT KURMAN, P.A.
401 PLYMOUTH ROAD, SUITE 100
PLYMOUTH MEETING, PA 19426
https://www.offitkurman.com/onkonstruction/
Joshua C. Quinter, Esquire
jquinter@offitkurman.com
484-531-1701