What Time is it?

By Timothy R. Hughes, Esq.

Understanding statutes of limitations and repose will help you understand how long risks extend past project completion and could prove a helpful defense if you are sued.

Statutes of limitations and statutes of repose provide an important possible defense if you are sued. Limitations periods are designed to bar untimely and stale claims. The theory is that as time passes, documents are lost, witnesses leave the area, and recollections become hazy. All these factors combine to interfere with the likelihood of a fair and accurate trial.

Knowing and understanding the limitations periods that apply to your work in your area is important to evaluating risk. Different states apply various limitations periods and rules for their interpretation. Thus, as with many other matters, it is important to understand the law that applies to your specific situation.

Limitations v. Repose

Even lawyers have a tough time understanding the difference between statutes of limitations and statutes of repose. A limitations period starts to run from when the cause of action accrues. In contrast, a statute of repose generally starts to run from the occurrence of an independent event. For construction repose statutes, the repose period is often tied to a construction related event, such as completion of the defendant's work or completion of the project.

Accrual

Accrual is when the statute of limitations starts to run. Accural can be tied to a number of different standards. For example, in Virginia, statutes of limitations generally accrue upon the occurrence of any damage, no matter how slight. The clock can be ticking in Virginia when the potential plaintiff has no idea they have suffered any wrong.

Other states apply a discovery trigger. In Maryland, the statute of limitations generally starts to run from when a plaintiff knew or reasonably should have known that they had a cause of action. The discovery rule applies to both tort claims for personal injury and property damage as well as contract claims. The District of Columbia applies a discovery trigger to tort claims. There is case law providing that contract claims accrue from the time of the breach of contract.

Naturally, there are exceptions to these general rules. Under Virginia law, fraud claims have a discovery trigger. Under Maryland law, claims involving breach of warranty under the Uniform Commercial Code accrue from when the goods are delivered.

Specific Periods of Limitations

The specific time periods allowed to file suit vary from state to state as well. Virginia law permits a plaintiff five years to file suit for breach of a written contract and three years on an oral or implied agreement. For personal injury cases, a plaintiff has two years to file suit. Property damage claims have a five year statute of limitations.

Maryland law generally applies a three year statute of limitations to all of the above claims. Some other claims are governed by specific statutes, such as the four year breach of warranty statute in the Uniform Commercial Code. The District of Columbia has a three year statute for contract, personal injury and property damage claims.

Each state permits different causes of action beyond those listed here. The important point is to understand that wherever you are doing business, it is a good idea to have an idea of how long you are exposed to damage claims after you leave.

Specific Periods of Repose

Virginia has a five year statute of repose that runs from when a party finishes its work on a construction project. Virginia's repose statute is limited to personal injury and property damage claims. Cases construing the statute have ruled it does not apply to contract claims. Notably, the statute also applies to contribution and indemnity actions.

The District of Columbia has a ten-year statute of repose on construction projects running from project completion. The repose statute again applies to only personal injury and property damage cases as opposed to contract. The repose period also applies to contribution and indemnity claims. Maryland's statute of repose is ten years from when the structure is fit for its intended purpose. The statute applies to wrongful death, personal injury and property damage claims.

Timothy R. Hughes, Esq., is the principal of the Northern Virginia law firm of Hughes & Associates, P.L.L.C. He specializes in construction litigation, corporate and business related representation, and complex civil litigation. He may be reached at tim@hughesnassociates.com, or by phone at (703) 671-8200.