Opening Thoughts on Statutes of Limitations on Construction Projects
Statute of limitations defenses are a hotly litigated and important aspect of construction law. This is particularly true in Virginia where the clock often starts ticking based on a literal bright line trigger. This means the time for filing suit can often start running in Virginia before anyone even knows there is a case. In construction litigation, where problems can stem from latent defects which do not manifest for an extended period, these rules can be pivotal in limiting risk.
This backdrop is in sharp relief when you consider the impact of the huge snow storms throughout the DC metro region this winter. There are numerous roof collapse cases working their way throught the system. A couple weeks ago, ENR highlighted a story from the Roanoke Times about the Blacksburg Virginia High School roof collapse.
What caught my eye in the story were these quotes:
The entire school remains closed as officials also examine the safety of classroom areas after engineers, in the wake of the gym collapse, found six concrete beams that did not meet 1974 building codes ... The school board filed several lawsuits against Fralin's company, along with other contractors and suppliers involved in the high school's construction, in 1977. Three suits were settled out of court in 1978 with the defendants agreeing to pay $371,000 to provide the school with a new roof.
Beyond the question of whether any claim is already settled by the prior litigation, going after parties involved in the design and construction of facilities built in 1977 has some significant potential timing hurdles. As can be seen from the report below, the school is forced to address a very serious roof collapse at this point.
Most construction cases focus on a five year written (or occasionally three year unwritten) contract statute of limitations. The rub comes in that the limitations period begins to run "when the breach of contract occurs in actions ex contractu and not when the resulting damage is discovered". Cases looking at this issue in Virginia had generally stated that the owner suffers damage when a project is defectively built, not when those defects translate into problems such as a collapsed roof.
We have talked in passing regarding statute of limitations matters and statute of repose matters in the past, but we are going to delve into them a bit over several post over the next few weeks. For those interested in looking at North Carolina law on the topic, our friend Melissa Brumback has recently covered limitations and repose issues under that state's law.
Thanks for the shout-out, Tim! I'm *very* curious to see how the school can sue for a project completed in the 70's. Keep us posted!
Great thoughts Tim. The idea that a defect that does not manifest until later could trigger the SOL is a scary, but very real possibility
@Melissa - my pleasure, looking forward to the compare and contrast of notes on NC v. VA
@Chris - that is really true, especially with regards to structural defect type issues!
In California, the statute of limitations for latent defects is 10 years. I have seen cases where defects are not manifested for more than 10 years after completion, which means claims for negligence, breach of contract and strict liabilty are barrred. However, fraud claims are not barred by the 10 year statute. Fraud is difficult to prove in construction defect cases, but sometimes it is the only chance a claimant has to recover damages for older construction defects.
Great thoughts Ron - fraud is an exception even in Virginia and has a discovery trigger. It is difficult to raise fraud claims on construction cases in most cases due to underlying commom law ... that is probably another topic to cover here soon.