Statute Of Repose: New York May Finally Be Joining The Rest Of The Country
A Statute of Repose, for purposes of this discussion, bars a claim against design professionals and contractors after passage of a certain amount of time from project completion. This is similar to but different than a Statute of Limitations, which sets a deadline to commence a lawsuit measured from the time an injury occurs or when a professional engagement, if injury occurred during that engagement, ends. The rationale behind the former is to allow design professionals and contractors to put a project to rest, at some point. If windows start to leak 20 years after construction, for example, the owner ought not to be able to make a claim against those responsible for design and construction of the building shell and façade. 48 States have a Statute of Repose, and New York may finally be joining those ranks with two pending pieces of legislation. That would leave Vermont as the only State without a Statute of Repose.
Currently in New York, contractors and design professionals have exposure to bodily injury and property damage claims resulting from construction defects for an unlimited number of years after completion of a project. The only restriction in place in terms of repose is Section 214-d of the New York Civil Practice Law and Rules (“CPLR”). That requires wrongful death, personal injury and property damage claimants to provide design professionals with a written notice of claim, at least ninety days prior to commencing suit, when the conduct at issue occurred more than ten years prior to the date of the claim. Failure to follow this notice requirement opens the door to a motion to dismiss pursuant to CPLR § 3211(h) and/or CPLR § 3212(i). As long as the defendant can show that more than ten years has elapsed since project completion and notice was not served, the case will be dismissed. See, Rogan v. Sear-Brown Group, 183 Misc. 2d 364, 702 N.Y.S.2d 795 (Sup. Ct. Monroe Co. 2000). While often colloquially referred to as the “statute of repose” for New York, CPLR §214-d does not have nearly the same effect as a true Statutes of Repose. Among other things, even if a claim is dismissed for failure to serve the ninety day notice, all a claimant need do is serve the notice and start the action over again.
Although New York portrays a forward thinking image and its motto of Excelsior translates to “ever upward,” in this realm it is not only behind but nearly dead last. Under the current law, design professionals practicing in New York are subject to claims for an indefinite period of time. As long as a notice is served, they could be sued 20 or 30 years after completing a project. Not only does the passage of time make such claims more difficult to defend (witnesses and documents may no longer be available), but professionals have to consider liability insurance that covers these potential claims for work completed in years past.
As a result, the design and construction communities in New York have been advocating for a meaningful Statute of Repose for years, and now there seems to be a light at the end of that tunnel. Due in significant part to lobbying efforts, the New York Legislature is considering whether to repeal CPLR § 214-d in its current form and provide a true 10-year statute of repose for wrongful death, personal injury, and real property damage claims asserted against design and construction professionals. In this regard, the Assembly’s Standing Committee on Higher Education and the Senate’s Judiciary Committee, are each considering a bill (Assembly Bill A3595 1 and Senate Bill S41272) which provides a limitations period of ten years after the completion of improvements to real property. In addressing the concerns and previous issues raised, the New York Legislature’s cited purpose of the proposed bills is to curb the continuing rise in insurance premiums by bringing certainty to the scope of post-operational risk to which design professionals and contractors are exposed. In the interest of fairness, each bill provides for a one-year extension to assert a claim which accrues during the tenth year after the completion of the improvements. At the time of this article, Assembly Bill A3595 is “in Assembly Committee” and Senate Bill S5158 is “in Senate Committee – Judiciary Committee.” Hopefully, once out of committee, both bills will be put on the Floor Calendar, pass the Senate and Assembly, and then be delivered to the governor to be signed into law without issue.
It appears that the time will soon come for New York to join the ranks of the other 48 States and level the playing field by adopting a Statute of Repose that will shield design professionals and contractors from being haunted by claims derived from work in the distant past.
- The text of the proposed Assembly Bill can be found here: https://legislation.nysenate.gov/pdf/bills/2021/A3595
- The text of the proposed Senate Bill can be found here: https://legislation.nysenate.gov/pdf/bills/2021/S4127