By: Peter W. Nigra
As published in Lawyers Journal
Pennsylvania applies two important, yet distinct, time limitations on construction claims. A statute of limitations sets a mandatory period within which an injured person must file a lawsuit after suffering the injury, or the injured person will forever lose the claim. A statute of repose establishes a bright-line deadline that precludes any claims against a contractor after a certain period of time, even if a person is injured by the construction after that deadline has passed.
Pennsylvania applies a two year statute of limitation for personal injury and property damage and a four year statute of limitations for breach of contract actions. 42 Pa. C.S.A. § 5524; 42 Pa. C.S.A. § 5525. Thus, if a person or property is injured by negligent construction, the person must bring the claim within two years of being injured. Similarly, if a general contractor wishes to bring a claim against a subcontractor for breach of contract, the general contractor will have four years after discovery of the breach to bring the claim.
But Pennsylvania also applies a 12 year statute of repose for claims against any person performing or furnishing the design, planning, supervision or observation of construction, or construction of any improvement to real property. 42 Pa.C.S. § 5536. If an injury occurs within the last two years of the statute of repose, the time period will be extended by up to two years. The statute of repose acts to prevent claims for latent defects in construction. The Pennsylvania Superior Court has recognized that, “[a]s a statute of repose, Section 5536 does not merely bar a party’s right to a remedy as a statute of limitations does, but it completely abolishes and eliminates the cause of action.” Noll v. Harrisburg Area YMCA, 643 A.2d 81 (Pa. 1994) (citing Schmoyer by Schmoyer v. Mexico Forge, Inc., 621 A.2d 692, 693 (Pa. Super 1993)). Thus, contractors can enjoy a sense of security that they will not face claims after 12 years have passed since construction was completed.
The statute of repose and statute of limitations, while similar, are distinct and provide separate protections for contractors. The statute of limitations begins to run when a person realizes she has suffered an injury, while the statute of repose begins to run when construction is complete even though no injury has occurred. Graver v. Foster Wheeler Corp., 96 A.3d 383, 386-87 (Pa. Super. 2014).
By way of example, if a decorative wall falls and injures a person one year after the wall was constructed, the injured person will have two years to bring a personal injury action. If the person waits to file the lawsuit just one day beyond the two year period, the claim will be precluded and the contractor will have a complete defense to the claim. If the decorative wall were completed 12 years and one day prior to its fall, the injured person would be precluded from bringing any lawsuit, even if she attempted to file the claim the very same day.
The statute of repose can create somewhat complex issues where one contractor is sued for the workmanship of another. For example, assume a person was injured when the decorative wall fell exactly nine years after its completion, and that the injured person brought suit exactly two years later against the contractor. The injured person will have filed properly within both the statute of repose and the statute of limitations. But now assume that the decorative wall was designed by an engineering company who was not named in the lawsuit. The contractor must bring the engineering company into the lawsuit before the 12 year statute of repose runs out, i.e., within one year. (9 years from completion + 2 years until suit is filed = 11 years; only 1 year remains on the statute of repose). While fault-sharing claims of indemnity and contribution normally have a six year statute of limitations, the contractor in this example must understand and act within the drastically shortened timeframe of the statute of repose or it will lose the right to bring in the engineering company to answer for its failures.
While the interplay between the statute of limitations and statute of repose can be nuanced, contractors should be aware that each of these protections applies separately to bar untimely claims.
Mr. Nigra is an Associate at Pietragallo Gordon Alfano Bosick & Raspanti, LLP. He is a civil litigation attorney practicing across a spectrum of Practice Groups including Insurance Coverage, Construction, Risk Management, Professional Liability, the Pro Bono Guardianship Program, and Litigation.