8.8.2 Statute of Repose Scope, Persons Covered, and Timing.

• Jurisdiction: Arizona

8.8.2 Statute of Repose Scope, Persons Covered, and Timing. Like most states, Arizona has enacted a statute of repose that applies to design professionals.³⁵⁰ A.R.S. § 12-552(A) provides “. . . no action or arbitration based in contract may be instituted or maintained against a person who develops or develops and sells real property, or performs or furnishes design , specifications , surveying , planning , supervision , testing , construction or observation of construction of an improvement to real property more than eight years after substantial completion of the improvement to real property.”³⁵¹

The language of A.R.S. § 12-552 casts a broad net in terms of who are people covered by the statute of repose. Persons covered would include contractors, subcontractors, and most certainly architects and engineers because they engage in a number of the activities specified in the statute including design, specifications, surveying, planning, supervision, and potentially construction or observation.³⁵²

Accordingly, in order for the statute of repose to apply, the first requirement is the action must be based in contract. “Based in contract” means “an action based on a written real estate contract, sales agreement, construction agreement, conveyance or written agreement for construction or for the services set forth in subsection A . . . .”³⁵³ If the action is not based in contract, the statute of repose will not apply to bar the claims.³⁵⁴ For example, in Fry’s Food Stores of Arizona, Inc. v. Mather & Associates, Inc. ,³⁵⁵ the property owners brought a negligence action for negligent performance of the construction contract against the architect and structural engineer among others.³⁵⁶ In Fry’s Food , an outdoor canopy was blown on top of the Fry’s store cause significant damage in 1989, and it is alleged the canopy’s connectors were negligently selected and installed back in 1974.³⁵⁷ The defendants, including the architect and engineer, argued the statute of repose bars the action because the claim “arose out of” contract. The court of appeals ultimately held that the action was not barred by the statute of repose because “[w]hen statutory language reasonably permits an alternative construction, [one should] avoid construing the statute in a way that render it unconstitutional . . . or . . . construing a statute in a manner that preempts or abrogates a common-law action.”³⁵⁸ Simply put, the court stated the “language may reasonably be construed as inapplicable...