Print Friendly, PDF & Email

A plaintiff filed suit for negligence as well as products liability against a firm that designed, manufactured and installed precast concrete products for a parking garage. The court dismissed the suit because it was filed beyond the six years permitted under the state’s statue of repose applicable to services on construction projects. The plaintiff argued that the statute of repose was inapplicable because the damages arose not out of construction services but out of products liability. The statute of limitations for filing products liability claims had not yet expired when the suit was filed because it permitted suit to be filed up to two years after discovery of the defects. It provided no absolute deadline – but rather a moving date that depended upon the date a plaintiff discovered the defect.

The statute of repose bars “all actions against any architect, contractor, builder or builder vendor, engineer, or inspector performing or furnishing the design, planning, supervision, inspection, construction . . . of any improvement to real property … [filed] six years after the substantial completion of the improvement . . .” In rejecting the plaintiff’s assertion that the manufacturer was not one of the named entities to be protected by the statute of repose, the court focused on the nature of the activity performed. Instead of looking only at the label placed on the party performing the work, the court stated it was necessary to “look to whether that individual’s actions fall within the statute’s protected class of activities.” Since in this case, the defendant engaged in “design” and “construction” it was entitled to protection under the statute of repose. Two Denver Highlands Ltd. Partnership v. Stanley Structures, Inc. No.98CA2177, 2000 Colo. App. LEXIS 16 (Jan 20, 2000).

Risk Management Note: A key used by courts in deciding if an item is a service or a product is whether it is an off-the-shelf item that is made by a party that has little or no on-site activity. If the party that creates the product also installs it, the court is more likely to find this to be construction work. On the other hand, if a party simply supplies a product that someone purchases, takes to the site and then installs it, the courts are more likely to be found to be a product and, therefore, no protection is afforded by the statute of repose for construction activities. Interestingly, mere size and cost of the item is not necessarily determinative. In some instances, for example, huge water tanks have been considered to be products if they are manufactured off-site and later bolted down to a concrete pad on- site, because they are considered mobile and the on-site installation was a minor part of the total cost. Also, the more site-specific design and customization of the item there has been, the more likely that the court will find this be to construction activity protected by the statute of repose.

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. 1, No. 4 (Apr 2000).

Copyright 2000, ConstructionRIsk.com, LLC