In Lawrence v. General Panel Corp., 2019 S.C. LEXIS 1, No. 27856 (S.C. Jan. 1, 2019), the Supreme Court of South Carolina answered a certified question related to South Carolina’s statute of repose, S.C. Code § 15-3-640, to wit, whether the date of “substantial completion of the improvement” is always measured from the date on which the certificate of occupancy is issued. The court held that a 2005 amendment to § 15-3-640 did not change South Carolina law with respect to the date of substantial completion. Thus, under the revised version of § 15-3-640, “the statute of repose begins to run at the latest on the date of the certificate of occupancy, even if there is ongoing work on any particular part of the project.” A brief review of prior case law may assist with understanding the court’s ruling in Lawrence.
In Ocean Winds Corp. of Johns Island v. Lane, 556 S.E.2d 377 (S.C. 2001), the Supreme Court of South Carolina addressed the question of whether § 15-3-640 ran from substantial completion of the installation of the windows at issue or on substantial completion of the building as a whole. Citing § 15-3-630(b), the court found that the windows “were ‘a specified area or portion’ of the larger condominium project” and, upon their incorporation into the larger project they could be used for the purpose for which they were intended. Thus, the court held that “the statute of repose began running when installation of the windows was complete.”
In 2005, the Legislature amended § 15-3-640 by adding the following sentence: “For any improvement to real property, a certificate of occupancy . . . shall constitute proof of substantial completion of the improvement . . . unless the contractor and owner . . . establish a different date of substantial completion.” In Lawrence, the court accepted a certified question to determine whether, when it added the noted sentence, the Legislature intended to “supersede” the holding in Ocean Winds and, thus, intended that the date of substantial completion would always be the date of the issuance of the certificate of occupancy.
In Lawrence, Mark Lawrence constructed his home using structural insulated panels (SIPs) manufactured by General Panel Corporation. Lawrence claimed that faulty installation of the SIPs allowed water intrusion, which in turn caused the panels to rot, damaging the structural integrity of his home. The subcontractor completed the installation of the SIPs by March of 2007 but the county did not issue a certificate of occupancy until December 10, 2018. Lawrence filed his lawsuit against General Panel on December 8, 2016, more than eight years after the SIPs were installed but less than eight years after the date on which the county issued the certificate of occupancy.
General Panel filed a motion for summary judgment, arguing that South Carolina’s statute of repose barred Lawrence’s action. Lawrence argued, based on the 2005 amendment to the statute of repose, that “the Legislature intended the date of substantial completion always to be the date of the issuance of the certificate of occupancy.” The Lawrence court, relying in part on Ocean Winds, disagreed. The court held that, when it changed § 15-3-640 in 2005, “the Legislature did not intend the date of substantial completion to be the date of the issuance of the certificate of occupancy in all cases.” Rather, the purpose of the change “was to provide prima facie ‘proof of substantial completion,’ despite any ongoing work on a particular area or portion.” Thus, the Lawrence court held that the “statute of repose begins to run at the latest on the date of the certificate of occupancy.”
Applying this analysis to the plaintiff’s claim in Lawrence, the court noted that the SIPs are structural and “their purpose is not only to provide structure upon completion of the home, but also to provide the structure necessary for the rest of the home to be constructed.” As contemplated by § 16-5-630(b), the SIP structural system began to serve its purpose long before the date of substantial completion. Thus, although the court did not specifically decide the issue, the court’s analysis dictates, that having answered the certified question in the negative, the United States District Court – the court that certified the question to the Supreme Court of South Carolina – grant General Panel’s motion for summary judgment.
The Lawrence court’s decision provides subrogation professionals with a reminder that, when faced with a statute of repose, the accrual date—generally geared toward the date of substantial completion—may depend on whether the applicable jurisdiction defines the phrase in terms of the completion of the whole project, a building, or when the defendant completed its work on the project. Thus, when faced with a statute of repose issue, subrogation professionals should analyze the meaning of the term “substantial completion” carefully.
 In pertinent part, § 15-3-640, entitled Actions based upon defective or unsafe condition of improvements to real property; right to contract for guarantee of structure for extended period, states:
No actions to recover damages upon or arising out of the defective or unsafe condition of an improvement to real property may be brought more than eight years after substantial completion of the improvement.
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For any improvement to real property, a certificate of occupancy issued by a county or municipality . . . shall constitute proof of substantial completion of the improvement under the provisions of Section 15-3-630 unless the contractor and owner, by written agreement, establish a different date of substantial completion.
 Section 15-3-630 provides definitions for the terms used in South Carolina’s statute of repose. Section 15-3-630(b) defines the term “substantial completion” to “mean that degree of completion of a project, improvement, or a specified area or portion thereof . . . upon attainment of which the owner can use the same for the purpose for which it was intended.”