There has been a growing trend among states to enact statutes that impose specific notice requirements when bringing claims against construction professionals. These notice requirements may apply to the subrogated carrier bringing a claim against a construction professional for certain types of damages. Failure to comply with the notice requirements can result in a dismissal of the subrogation action. Accordingly, caution must be exercised when notifying construction professionals of certain claims, and not just claims for construction defects.
In Palisades at Fort Lee Condominium Association v. 100 Old Palisade, LLC, et al., 2017 N.J. LEXIS 845 (Palisades), the Supreme Court of New Jersey addressed how the discovery rule – which tolls the statute of limitations – applies in construction defect cases. The court clarified that, when a building has multiple owners, the statute of limitations begins to run when the first owner – be it an original or subsequent owner – in the line of building owners reasonably knew or should have known of the basis for a cause of action.
When the validity of a construction defect claim depends on whether the claim is barred by the applicable state’s statute of repose, it is important to review the statute to identify when claims subject to the statute of repose accrue. In Busch v. Lennar Homes, LLC, 219 So.3d 93 (Fla. Ct. App. (5th Dist.) 2017), the Court of Appeals of Florida clarified the accrual date for the statute of repose in cases where the accrual date depends on a construction contract’s completion date. Pursuant to Busch, the date of full performance under the contract, not the building’s purchase closing date, is the date on which claims accrue.
In Damon v. Vista Del Norta Dev., LLC, — P.3d –, 2016-NMCA-083, 2016 N.M. App. Lexis 52 (N.M. Ct. App.), the Court of Appeals of New Mexico addressed the trigger date for the ten-year statute of repose for a physical improvement of real property. Adopting a nuanced approach to interpreting the statute’s three-prong trigger test, the court made it clear that the type of “improvement” at issue is specific to each defendant. Thus, there can be separate statute of repose accrual dates for each different defendant.
In Beaufort Builders, Inc. v. White Plains Church Ministries, Inc., 783 S.E.2d 35 (N.C. Ct. App. 2016), the Court of Appeals of North Carolina addressed whether the economic loss rule barred the negligence claim of White Plains Church Ministries, Inc. (White Plains) against Charles F. Cherry (Cherry), the owner of Beaufort Builders, Inc. (Beaufort Builders). The court held that, because the economic loss rule would bar White Plains’ negligence claims against Beaufort Builders, White Plains could not pursue a third-party negligence claim against Cherry, individually.
In Adams v. Hellings Builders, Inc., 2016 Pa. Super. 192, 2016 Pa. Super. LEXIS 487, Christopher Adams and his wife, Margaret Adams (Plaintiffs), filed suit against Defendant Hellings Builders, Inc. (Hellings) to recover for moisture-related damage to their home caused by Hellings’ allegedly defective installation of stucco. Hellings filed Preliminary Objections, arguing that Plaintiffs failed to state a claim because they were not in privity with Hellings and they had no direct business dealings with Hellings.
In Rogers v. Wright, 366 P.3d 1264 (Wyo. 2016), the Supreme Court of Wyoming held that home builders have a tort duty of reasonable care and this duty, independent of any contractual obligations, makes the economic loss rule inapplicable.
In Zbranek Custom Homes, Ltd. v. Joe Allbaugh, et al., No. 03-14-00131-CV, 2015 WL 9436630 (Tex.App.-Austin Dec. 23, 2015), the Court of Appeals of Texas, Austin, considered the circumstances under which a general contractor can be held liable for injuries to a non-contracting party’s property. The court held that, because the general contractor, Zbranek Custom Homes, Ltd. (Zbranek), exercised control over the construction of the fireplace at issue, Zbranek owed a duty of care to the first lessees of the home that Zbranek built.
By: Edward Jaeger and Michael Wolfer
In Gongloff Contracting, L.L.C. v. L. Robert Kimball & Associates, Architects and Engineers, 119 A.3d 1070 (Pa. Super. 2015), the Pennsylvania Superior Court recently held that a negligent misrepresentation claim against an architect does not require a plaintiff to make allegations of an express misrepresentation by the architect in order to survive a motion for judgment on the pleadings based on the economic loss doctrine. The court held that, pursuant to Bilt-Rite Contractors, Inc. v. The Architectural Studio, 581 Pa. 454 (2005), a plaintiff may sufficiently plead a negligent misrepresentation claim by asserting that the architect’s design documents contained false information.
Many states, including Texas, have Right to Repair statutes that require homeowners to provide notice and an opportunity to repair construction defects to home builders, including contractors who build condominiums. See, e.g. Tex. Prop. Code §§ 27.001 to 27.007. With respect to condominium-related construction defect claims, Texas recently adopted additional procedural requirements that a condominium association with eight or more units must comply with “before filing suit or initiating an arbitration proceeding to resolve a claim pertaining to the construction or design of a unit or the common elements” of a condominium. See Tex. Prop. Code § 82.119 (eff. Sept. 1, 2015). Prior to filing suit or initiating an arbitration proceeding, condominium associations subject to § 82.119 must, among other things: