A professional liability claim against an architect was governed by a three-year statute of limitations applicable to non-medical, professional malpractice rather than the six-year statute for actions based on breach of contract. Regardless of whether the alleged failures of the architect were a breach of contract, they arose out of alleged malpractice. Actions to recover damages for malpractice were required by New York law to be commenced within three years regardless of whether the underlying theory is based in contract or negligence.
In this case the allegations were that the architect failed to comply with fireproofing requirements of the Connecticut Building Code applicable to a commercial building being designed and built in Stamford , Connecticut . Almost four years after the building was completed and occupied, the building owner brought a demand for arbitration against the architect. (Although the project was located in Connecticut , the contract apparently specified that New York law would be applied.)
In denying the architect’s motion to dismiss the action based on the three year statute of limitations having elapsed, the first court (motion’s court) concluded that the plaintiff Owner was entitled to the six-year statute for breach of contract because it was contending in its suit that the architect completely failed to perform its specified contractual responsibility and not that the architect committed malpractice. In reversing that decision, the appellate court stated that “whether [architect’s] alleged failure to comply with the applicable code provisions was a breach of contract or tortious [i.e., negligent] in nature is immaterial for statute of limitations purposes, since the resulting non-compliance is the same, as is the remedy sought.” The court went on to find that the New York Legislature’s intent was that this type of action be subject to the statute of limitations for professional malpractice. A Legislative Memorandum supporting certain clarifying amendments to the statute of limitations was quoted by the court stating that it was “the legislative intent that where the underlying complaint is one which essentially claims that there was a failure to utilize reasonable care or where acts of omission or negligence are alleged or claimed, the statute of limitation shall … be three years … regardless of whether the theory is based in tort or in a breach of contract.” R.M. Kliment & Frances Halsband, Architects v. McKinsey & Company, Inc., 770 N.Y.S. 2d 329 (2004 WL 57074 (2004).
Comment: This case demonstrates the importance of specifying in the contract what law will govern. Will it the law of the state where the project is built or where the architect is domiciled, or even where the project owner maintains its principal office? The outcome of a case can be dramatically altered by that decision. To clarify when a cause of action accrues for the purpose of measuring the time for filing action, there is much to be said for specifying that date in the contract, for example as the date of substantial completion of construction. The time periods can be further clarified by contractually agreeing to a specified number of years following substantial completion in which a suit or demand for arbitration may be brought. This can avoid completely disputes such as this one over how to interpret state statutes of limitations.
About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk.com Report, Vol. 6, No. 4 (May 2004).
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