Construction and Design Claims: Beware of the Statute of Limitations and Repose

Contractors, developers, owners, and anyone involved in the construction and design industry must be aware of the time periods for bringing suit to enforce construction and design related claims.  Florida law has various limitations periods for filing of lawsuits.  95.11 Florida Statutes.  These time periods are referred to as the statutes of limitation.  If a lawsuit is not filed during the requisite time periods, the claim is deemed to be time barred.

In Florida, the statute of limitations for bringing a claim founded on the design, planning, or construction of an improvement to real property is governed by Section 95.11(3)(c) of the Florida Statutes.  This Florida statute provides for a four-year statute of limitations, as follows:

[a]n action founded on the design, planning, or construction of an improvement to real property, with the time running from the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest; except that, when the action involves a latent defect, the time runs from the time the defect is discovered or should have been discovered with the exercise of due diligence. In any event, the action must be commenced within 10 years after the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.

Thus, Section 95.11(3)(c) distinguishes between latent defects (hidden/unknown) and patent defects (known/should have been known), and provides for a statute of repose of 10 years based on four specific events.  The statute of repose is the very latest any such claim could be filed.

Recently, the court in Cypress Fairway Condominium Association, Inc. v. Bergeron Construction Co., Inc. examined the 10-year statute of repose of Section 95.11(3)(c) in the context of the “date of completion of the contract” scenario to determine whether a lawsuit for construction defects was timely filed.  2015 WL 2129473.  While the opinion is not yet final, it is instructive in understanding how the statute of repose operates.

In Cypress Fairway, a condominium association obtained an assignment from the general contractor to pursue claims against various parties for construction defect claims.  One of the contractor parties argued the 10-year statute of repose of Section 95.11(3)(c) barred the association’s claim.  The contractor argued the meaning of “completion of the contract” was the date the final application for payment was made; therefore, the statute began to run on that date.  The condominium association argued the statute of repose did not begin to run until final payment was made.  The trial court agreed with the contractor’s definition of “completion of the contract”, but the appellate court disagreed and reversed.

On appeal, the Florida Fifth District Court of Appeal stated “completion of the contract means completion of performance by both sides of the contract, not merely performance by the contractor.”  Thus, the appellate court held the 10-year statute of repose commenced to run on the date of completion of the contract which, in Cypress Fairway, was the date on which final payment was made.

Parties pursuing or defending against construction and design claims must be aware of the statute of limitations and repose for such claims.  If the lawsuit for such claims is untimely, it can result in the early dismissal of the claim.