2006 Winter, 24. BUILDING INDUSTRY STATUTE OF REPOSE UPHELD New Hampshire Joins Majority of Other Jurisdictions.

AuthorBar Journal Author - Attorneys R. James Steiner and Gayle M. Braley

New Hampshire Bar Journal

2006.

2006 Winter, 24.

BUILDING INDUSTRY STATUTE OF REPOSE UPHELD New Hampshire Joins Majority of Other Jurisdictions

New Hampshire Bar Journal Volume 46, No. 4, Pg. 4 Winter 2006 BUILDING INDUSTRY STATUTE OF REPOSE UPHELD New Hampshire Joins Majority of Other Jurisdictions Bar Journal Author - Attorneys R. James Steiner and Gayle M. Braley I. INTRODUCTION

On August 18, 2005, the New Hampshire Supreme Court issued its decision in the case of Winnisquam Regional School District v. Daniel J. Levine, et. al., ___ N.H. ___, 880 A.2d 369, 2005 N.H. Lexis 134 (N.H. 2005), upholding the constitutionality of the statute of repose that protects members of the building industry from suits brought more than eight years after substantial completion of a construction project.(fn1) The ruling reversed the superior court's finding that the statute of repose at issue, RSA 508:4-b, violated the equal protection clause of the New Hampshire Constitution.(fn2) It also marked a change in the Supreme Court's unbroken pattern of finding other statutes of repose, including the former version of RSA 508:4-b, to be unconstitutional.

This article will discuss the significance of this ruling as well as the likely future course of litigation in New Hampshire under this statute.

II. BACKGROUND

A. The Statute of Repose

A statute of repose is a limitation on the ability of a plaintiff to bring a cause of action, similar in many ways to a statute of limitations. However, a critical difference exists between a statute of limitations and a statute of repose under modern law: the time at which the prescriptive period begins to run. A statute of limitations begins to run at the time of injury or discovery of injury; a statute of repose, in contrast, begins to run from the date of the defendant's act, regardless of whether there has been injury or discovery of injury. (fn3) RSA 508:4-b provides in relevant part as follows:

[A]ll actions to recover damages for injury to property, injury to the person, wrongful death or economic loss arising out of any deficiency in the creation of an improvement to real property, including without limitation, the design, labor, materials, engineering, planning, surveying, construction, observation, supervision or inspection of that improvement shall be brought within 8 years from the date of substantial completion of the improvement and not thereafter.

In Big League Entertainment, the Court held that, based upon its method of operation and the intent of the legislature in enacting it, RSA 508:4-b acts as a statute of repose. Therefore, an action relating to an improvement to real property must be brought within three (3) years of the accrual of the cause of action, but no later than eight (8) years after substantial completion of the construction period.(fn4 )

B. The History of RSA 508:4-b

The justification for RSA 508:4-b was clearly stated by the legislature:

The general court finds that, under current law, builders, designers, architects and others in the building trade are subject to an almost infinite period of liability. This period of liability, based on the discovery rule, particularly affects the building industry and will eventually have very serious adverse effects on the construction of improvements to real estate in New Hampshire. Therefore it is in the public interest to set a point in time after which no action may be brought for errors and omissions in the planning, design and construction of improvements to real estate. This act is determined to be in the public interest and to promote and balance the interests of prospective litigants in cases involving planning design and construction of improvements to real property.

RSA 504:4-b, Legislative Findings and Purpose.

As the Court found in the Winnisquam case, the legislative history behind the current version of RSA 508:4-b (introduced as House Bill 348) "makes clear that the lawmakers intended to promote the public interest by protecting the building industry from infinite liability . . . the Legislature's concern that those involved in the construction trade not be subject to an almost infinite period of liability." Winnisquam, 880 A.2d at 372.(fn5)

In a superior court case6, Judge McHugh described the legislative concerns underlying the statute of repose in more detail:

Those who supported House Bill 348 presented a number of compelling arguments in favor of its passage. For example, the New Hampshire Special Claim Study undertaken by Schinnerer & Company, Inc. and submitted to the Senate Judiciary Committee, showed that 96 percent of the claims filed in New Hampshire against New Hampshire design professionals were brought within seven years of substantial completion of the construction project. Therefore, the statute was unlikely to eliminate many truly legitimate claims. Additional arguments presented in support of the bill's passage included the following:

  1. Injury and damages suffered long after completion of construction are usually caused by improper maintenance, inspection, repair and other similar factors over which those involved in the construction have no control.

  2. Requiring design professionals, materialmen, laborers, etc. to defend against stale claims forces them to rely on faded memories, lost evidence and unavailability of witnesses.

  3. Defending against stale claims imposes a heavy financial burden on defendants, who must often take substantial time from ongoing projects to retrieve files and records from archives, locate former employees, and attend depositions and trials.

  4. Indefinite exposure to liability places a substantial burden on those in the construction industry, particularly design professionals, to maintain liability coverage for unreasonable periods of time after they retire.

  5. A statute of repose providing for a reasonable period of time within which to file a claim does not unfairly burden the injured plaintiff, since he or she is usually able to seek redress against the owner or occupier of the building, who is the party most likely to be responsible for the injury and the one in the best position to have prevented it.

    Moreover, as argued to the Supreme Court in the Winnisquam case by Dutton & Garfield, these concerns are not unique to New Hampshire, but rather are largely mirrored in the concerns expressed in legislatures throughout the United States.(fn7)

    Given its concerns for the construction industry, in 1990 the New Hampshire General Court chose to enact RSA 508:4-b. And, the legislature did so despite the fact that the Supreme Court in the Hendersen Clay Products, Inc. v. Edgar Wood and Associates had stricken as unconstitutional on equal protection grounds an earlier version of the same statute because it applied the statute of repose to architects and contractors, but left out materialmen and laborers.(fn8) In Henderson, the C/ourt had found the distinction between various potential defendants in the construction setting to be unconstitutional because there was no rational reason to distinguish among them.(fn9) This distinction was eliminated in the current version of the statute, which now covers claims for "any deficiency in the creation of an improvement to real property, including without limitation, the design, labor, materials, engineering, planning, surveying, construction, observation, supervision or inspection of that improvement."(fn10)

    C. The Winnisquam Case

    The Winnisquam case involved the failure of a roof installed over a middle school. The general contractor, Dutton & Garfield, Inc. ("D & G"), installed the new roof over a pre-engineered metal building which had been manufactured in 1973. D & G performed its re-roofing work in 1991, substantially completing the project by the spring of 1992. Testimony at trial indicated that the school district, through its own project engineer, had indicated to D & G in response to queries that no additional bracing would be necessary prior to the installation of the new roof.(fn11) In March, 2001, a civil engineer attending her daughter's concert noticed what she believed to be "buckled bridging" in the building frame purlins (the beams) across the top of the school gymnasium. The resulting inspection led to conflicting conclusions about the cause as either attributable to a load of heavy wet snow that year (many roofs failed in New Hampshire during this particular winter period) or to a failure in the roof design or installation.

    The Winnisquam School District brought suit against the general contractor, the installation subcontractor, the school's own project engineer, the roof manufacturer, and another engineering firm that had done an assessment of the roof in 1991.(fn12) In the nearly ten years between the substantial completion of the re-roofing project and the initiation of the lawsuit, the school's project engineer had passed away (and his...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT