You Snooze, You Lose – School’s Claim Against Roofer Too Late

Posted by: Hilger Hammond On: 12th January 2015 | no responses.

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By Aileen Leipprandt

In a recent ruling, White Cloud Public Schools v Bri-Car Roofing & Sheet Metal, Inc., et al, (December 2014), the Michigan Court of Appeals affirmed dismissal of White Cloud Public School’s breach of contract claim against a roofing company, Bri-Car, holding that the claim was time barred. In that case, White Cloud claimed that Bri-Car did not properly attach roof shingles to the roof decking and that this defective work later caused the roof to collapse. Bri-Car moved for summary disposition, arguing that the school’s breach of contract claim was barred by the six-year statute of limitations applying to contract claims.

The parties’ construction contract stated that the architect’s Certificate of Substantial Completion established the date of substantial completion. The Certificate stated that Bri-Car’s work was substantially complete on February 1, 2004. The parties’ contract also provided that the statute of limitations (SOL) started not later than the date of substantial completion. White Cloud claimed that the SOL should have started on March 17, 2004, the date when the architect actually signed the Certificate. The trial court rejected the school’s claim based upon the unambiguous contract language which provided that the date of substantial completion was the date identified in the Certificate, February 1, 2004, not the date the Certificate was signed. Consequently, the school’s claim filed on March 17, 2010, more than six years later, was too late.

The Court of Appeals court also rejected White Cloud’s claim that the SOL was tolled (stopped) because Bri-Car fraudulently concealed the defective construction. The appellate court reviewed the school’s complaint that Bri-Car failed to report obvious construction defects and signed the Certificate of Substantial Completion, knowing that the roof was defectively designed. Nonetheless, the Court held that Bri-Car’s alleged actions did not amount to affirmative action by Bri-Car to conceal the roof’s defective conditions, particularly where there was no evidence that the school and Bri-Car had a fiduciary relationship such that Bri-Car had an affirmative duty to disclose.

Lesson learned for owners – don’t sit on contract rights, particularly when bumping up against an expiring statute of limitations.

Lesson learned for contractors – pay attention to contract language, particularly as it relates to the statute of limitations, to assure that the contract does not extend the statute of limitations beyond commercial expectations or beyond the limits established by Michigan law.

Statute of Repose Bars Claims Against Contractors

Posted by: Hilger Hammond On: 16th September 2013 | no responses.

airplaneBy Aileen Leipprandt

Contractors can breathe a sigh of relief as a recent Sixth Circuit Court of Appeals case underscores that repair work does not serve to extend the time for filing claims for defective construction under Michigan’s Statute of Repose.

In Tompkins v Hunt Construction, et al., (6th Cir. August 2013), the Court ruled that claims against contractors for defective construction and repair of a roof at Detroit Metropolitan Airport (DWA) should be dismissed based upon Michigan’s Statute of Repose.  In Tompkins, plaintiff was injured when she slipped and fell in a terminal at the DWA.   Tompkins sued a host of defendants, including Hunt Construction Group, the contractor who built the terminal, and Crown Corr, the roofing subcontractor who built the roof of the terminal.  Plaintiff claimed defendants negligently installed and repaired the leaky roof.  Crown’s contract included a ten-year warranty and it occasionally made repairs to the roof until 2005.

Generally speaking, under Michigan’s Statute of Repose (SOR), claims against contractors are barred after six years from the date of substantial completion or acceptance of the improvement.  In Tompkins, Crown completed its work and the terminal became operational in February 2002.  Plaintiff, therefore, was required to bring her claim by February 2008.  She did not file her complaint until December 2008.

To avoid application of the Statute of Repose, plaintiff argued that warranty repair work performed by Crown through 2005 did not relate to the original improvement but instead constituted repairs which were not covered by the SOR.  The lower court disagreed and dismissed the contractors, finding that even when work continues after the date of acceptance or completion, the earlier acceptance date can still control for the purposes of the Statute of Repose.  The court reasoned that the repairs by Crown were clearly within the scope of the original contract, and thus a continuation of the work.  In that respect, the repair work was merely incidental to the earlier installation of the roof.

Contract Provision Attempting to Reduce Statute of Limitations Backfires

Posted by: Hilger Hammond On: 12th March 2013 | no responses.

Reproduced with permission of the publisher, International Risk Management Institute, Inc., Dallas, Texas, from free e-zine Construction Risk Manager, copyright International Risk Management Institute, Inc. Further reproduction prohibited. For subscription information, phone 800-827-4242 or visit  www.IRMI.com for reliable and practical risk and insurance information.

baseballAttempt To Avoid Discovery Rule Backfires

In a January 2013 decision, the Supreme Court of Washington upheld a ruling that a contractual provision establishing when a cause of action accrues effectively eliminated the ability to argue that a construction defect claim was barred by the statute of repose. In Washington State Major League Baseball Stadium Pub. Facilities Dist. v. Huber, Hunt & Nichols-Kiewit Constr. Co., 2013 Wash. LEXIS 75 (Jan. 31, 2013), the owner of Safeco Field (the Public Facilities District, or PFD) brought a multimillion-dollar breach of contract claim against the general contractor (Hunt-Kiewit) alleging defective fireproofing work and/or materials. Construction on the project was completed on July 1, 1999. Despite a 6-year statute of repose, PFD brought a claim against the general contractor in August of 2006 for costs associated with repairing the defective fireproofing. Hunt-Kiewit filed a motion for summary judgment on the grounds that the action is barred by the statute of repose, which expired in 2005. The court denied the motion, allowing PFD’s claim to proceed.

The construction contract included a provision that specified that claims arising from acts or omissions that occur prior to substantial completion will be “deemed” to have accrued “in any and all events not later than such date of Substantial Completion.” The purpose of this provision was to prevent a discovery rule from being applied with regard to the statute of limitations and thus protect the contractor from an extended period of liability that exists under that rule of law. The court found that while the provision accomplished its intended purpose by establishing a specific date on which the statute of limitations begins to run, it also effectively negated the statute of repose.

The statute of repose stipulated that any cause of action that has not accrued “within six years after such substantial completion of construction, or within six years after such termination of services, whichever is later, shall be barred.” Read in conjunction with the contract, the court held that a cause of action that accrues no later than substantial completion will always accrue earlier than 6 years after substantial completion. And once the cause of action has accrued under the statute it cannot later be barred by the same statute. Because the court had previously ruled that the claim was not barred by the statute of limitations due to an exception to the statute regarding actions brought “for the benefit of the state,” the contractor had no statutory protection from the owner’s claim. (See Washington State Major League Baseball Stadium Pub. Facilities Dist. v. Huber, Hunt & Nichols-Kiewit Constr. Co., 165 Wash. 2d 679, 202 P.3d 924 (2009).)

This case brings to light a potential unanticipated consequence of contract language that purports to stipulate when the statute of limitations begins to run. Contractors operating in Washington or elsewhere should have qualified legal counsel examine any such contract provisions for potential conflicts with applicable statutes of repose.

Michigan Court of Appeals: Statute of Limitations Bars Claim Against Architect and General Contractor

Posted by: Hilger Hammond On: 6th November 2012 | no responses.

In the case of Caron v The Christman Company, et al, (October 2012), the Court of Appeals dismissed claims against a general contractor and design professionals related to the installation of portable room partitions (PRPs) as part of an art classroom addition at Cranbrook Educational Community.  Plaintiff in Caron suffered serious injuries when a room partition collapsed upon her as she attempted to move the partition on its casters.

The trial court granted defendants summary disposition finding that plaintiff’s claim was untimely because it was brought more than six years after the completion of the construction project.  Plaintiff appealed claiming that the PRPs were not an “improvement to real property” because the walls were movable and not permanently affixed, therefore the statute of limitations/repose related to construction professionals should not apply.  The appellate court disagreed and affirmed summary disposition in favor of the contractor and architects.  The appellate court reasoned that the PRPs were part of the original design of the classroom addition and were placed in the addition during the construction project.  The fact that the walls were portable was not controlling since PRPs tend to be permanent relative to remaining at the location they serve.

 

The One-Year Discovery Extension to the Statute of Limitations Only Applies to Tort Claims

Posted by: Hilger Hammond On: 16th November 2011 | no responses.

By: Mark A.

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The Michigan Court of Appeals recently applied the six-year statute of limitations to bar an implied warranty claim even though the claim was discovered within the year before the lawsuit was filed. Rivers Investments LCP, LLC v cheap cialis 20mg Watson Bros. Co.

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The Court’s decision was based on a Michigan Supreme Court holding that the one-year discovery rule applies only in tort actions. The Michigan Court of Appeals determined that a claim for implied warranty arises by implication of the law and that the statute of limitations for such claims is six years.

Bah-Humbug – Michigan Legislature Fails to Pass Statute of Limitations Reform Bill

Posted by: Hilger Hammond On: 28th December 2010 | no responses.

 

Bcapitol domey Benjamin H. Hammond

Proposed Senate Bill 882 would have revised the statute of limitations for bringing an action against an architect, professional engineer, land surveyor, or construction contractor.  This bill was introduced in September of 2009 and passed by the Senate.  There was great anticipation by many that the House would pass the bill in this lame duck session; however, the Speaker of the House did not choose to bring the matter to a vote in the final legislative session.
It is anticipated that yet another attempt to limit the statute of limitations will be introduced in early 2011.  With the Republican control of the House, it is likely that such a bill will pass during the next legislative session.