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Building Industry Protected From Endless Liability Periods
 In an Aug. 18 ruling in the case of Winnisquam Regional School District v. Daniel J. Levin, the New Hampshire Supreme Court concluded that members of the building industry are entitled to protection from suits brought more than eight years after substantial completion of a construction project. With this decision, New Hampshire joins a number of states across the country that have recognized the need to protect the building industry from a potentially endless period of liability for defects.
The particular case in New Hampshire points up the pitfalls of working on projects in states that don’t have a statute of repose, a legislative remedy that limits lawsuits to six to 12 years from the completion date, depending on the state. Without a statute of repose, plaintiffs can potentially come back with a claim decades later, contending that they were unable to “discover” the alleged defect within the normal three-year period that applies to most actions brought in civil court.
In the New Hampshire case, the general contractor, Dutton & Garfield, Inc., installed a new roof over a middle school in 1991, substantially completing it by the spring of 1992. The school district’s project engineer, in response to questions from the general contractor, indicated that the structure — a pre-engineered metal building manufactured in 1973 — would require no additional bracing for the roof.
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. An inspection reached conflicting conclusions that the buckling was caused by that winter’s extraordinarily heavy load of wet snow or by some failure in the roof design or installation.
A Gaping Hole for the Defense
More than nine years after “substantial completion” of the project, the school district sued engineers who had made an assessment of the roof in 1991, the general contractor, the installation subcontractor, the school’s own project engineer and the roof manufacturer.
The school project engineer had passed away by this time, and none of his office records could be located; and the general contractor had a policy of destroying old records after seven years. As a result, the defense was left with a gaping hole in the information it needed to refute the claim.
The initial round of litigation ended with a $136,500 jury verdict against Dutton & Garfield, Inc., out of a damage claim exceeding $700,000.
When the case reached the New Hampshire Supreme Court the issue that needed to be addressed was whether the state’s statute of repose was constitutional, specifically whether it was in the public interest to limit the period in which action could be brought against real estate projects, and whether the law was balanced in how it treated prospective litigants. The court concluded unanimously that the statute met constitutional muster.
Though not referenced directly in the court’s decision, the New Hampshire Special Claim Study, undertaken years earlier by Schinnerer & Company, Inc. and submitted to the State Senate Judiciary Committee, showed that 96% of the claims filed against New Hampshire’s design professionals were brought within seven years of substantial completion of the construction project. This led the legislature to conclude that its statute was unlikely to eliminate very many truly legitimate claims.
Faded Memories and Lost Evidence
The study also showed that injury and damages suffered long after the completion of construction were usually caused by improper maintenance, inspection, repair and other similar factors over which those involved in the construction had no control, and that requiring design professionals, material men, laborers and others to defend themselves against stale claims forced them to contend with faded memories, lost evidence and witnesses who could no longer be found.
The court specifically rejected a comparison of those in the building trade with doctors or manufacturers. Buildings are subject to inspection during construction and are certified for occupancy only after they comply with the applicable standards. And once industry members leave a project, an owner or occupant has the ability to inspect, repair and insure the structure, and certainly is responsible for maintaining it. Finally, builders can’t go back into a building without the authority of its owner or occupant.
As such, the New Hampshire Supreme Court agreed that the state legislature had sound reasons for enacting a statute of repose limiting lawsuits against construction projects to eight years following their completion.
If your state doesn’t have a statute of repose, you should bring the New Hampshire case to the attention of your state legislators so that they can take the steps that are needed to protect your entire industry from a potentially endless period of liability. As of Aug. 18, New Hampshire now enjoys the protection of an eight-year period after a project is substantially completed. This provides a reasonable and fair balance between the interests of the building industry and the consuming public.
R. James Steiner, Esq. represents clients involved in a variety of civil matters, personal injury issues and family law. Located in Concord, N.H., his firm, D’Amante Couser Steiner Pellerin, P.A., provides general legal services in New Hampshire and New England. He served as lead trial counsel and lead appellate counsel in the Winnisquam Regional School District case, defending Dutton & Garfield. Steiner is a graduate, cum laude, of Suffolk University Law School. Prior to practicing law, he served with distinction as an Army Green Beret with the 10th Special Forces Group (Airborne).
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