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Kent Holland, J.D.

A homeowner’s negligence suit against a contractor for construction defects resulting in water damage to the home was held to be untimely because it was filed more beyond the 10 year period established by the state’s Statute of Repose. Every winter following the original construction of the home in 2001, the owner noticed water damage in different areas of his ceiling and each time he asked the contractor to inspect the house, the contractor informed him that he inspected and repaired the problem. In 2012, after once again notice water damage, the owner had the situation inspected by another contractor who reported that the water damage was caused by improper ventilation in the roof – an issue never identified by the original contractor. The trial court and appellate court determined that the owner’s negligence and negligent misrepresentation claims arising from the water damage were barred by the two year statue of limitations and the ten year statute of repose because they relate to the 2001 construction. The fact that the contractor inspected and repaired the house each year after that did not start the clock for measuring the time limits set by those statutes.   A two year statute of limitations also barred the Consumer Protection Act claims against the contractor for all but the two most recent years during which repair work was performed. Hein v. Sott, 380 Mont. 85 (2015).

The statute of limitations for general tort actions, including negligence and negligent misrepresentation in Montana is three years. Section 27–2–204, MCA. The statute of repose for actions for damages arising out of work on improvements to real property, § 27–2–208(1), MCA, provides:

[A]n action to recover damages … resulting from or arising out of the design, planning, supervision, inspection, construction, or observation of construction of any improvement to real property … may not be commenced more than 10 years after completion of the improvement….

Accordingly, the appellate court explained that “even if the statute of limitations is tolled, a tort action related to construction damages may not be brought more than ten years after construction is completed.”

The homeowner attempted to avoid the bar set by the statutes by arguing that each and every time the contractor inspected and repaired the home constituted a new act of negligence or negligent misrepresentation. The court did not agree. It said that in reviewing the complaint it was clear that the only injury alleged with respect to the home’s roof was water damage due to the contractor’s alleged failure to properly vent the roof. As stated by the court, the complaint did not allege that any of the contractor’s subsequent inspections or repairs created a new or separate injury. For this reason, the appellate court affirmed that the trial court correctly determined that the homeowner’s claims derived solely from the 2001 injury and were therefore barred by the statutes of limitations and repose.

Another count of the complaint alleged liability under the state’s Consumer Protection Act (CPA). Most of this claim was likewise deemed barred by a two statute of limitations, specifically applicable to CPA claims. Because the homeowner knew of the water damage every year and had it inspected and repaired every year, but nevertheless waited until 2013 – eleven years after construction was completed – to ask for a second opinion from a different contractor, the court concluded that the homeowner did not exercise due diligence to discover the cause of his injury, and the two year statute of limitations therefore must be enforced to bar the claims for damages occurring more than two years before the complaint was filed.

Only damages occurring during the last two years before the complaint were filed would be allowed to go to trial as not being barred by the statute of limitations. A separate issue before the court concerning the CPA claim was whether the homeowner was required to have the testimony of an expert witness in order to maintain the CPA claim. The court held that the trial court erred in granting summary judgment due to the lack of an expert. But because the CPA aspect of the complaint was based solely on the allegation of breach of contract for failure of the contractor to complete work on an entirely separate aspect of the house (an addition that was undertaken in 2011), the court held expert testimony was not necessary. This is because the claim was based on the allegation that the contractor failed to perform work for which he billed and was paid. It had nothing to do with the quality of the work but rather the allegation that the work was not done at all. An expert witness was not required to prove that aspect of the claim.

 

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. 18, No. 1 (January 2016).

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