The Complexities of the Statute of Repose in Construction and Related Litigation
Perhaps one of the most critical issues to
parties involved in—or threatened with—
construction litigation is timing. As a plaintiff,
failure to bring your claim within the required
time limit can bar your claim. As a defendant, a
plaintiff’s failure to timely bring a claim can
protect you from a claim. In either case,
knowing when a claim must be brought is an
important aspect of construction defect
litigation. This is particularly true, and
complicated, when applying the statute of
repose to construction defect claims. The
statute of repose acts as both a bitter end to a
plaintiff’s lawsuit before it begins and a shield for defendants against unlimited exposure to claims.
Tennessee Code Annotated (TCA) § 28-3-202 provides that a suit involving construction defects or
injuries resulting from construction defects against “any person performing or furnishing the design,
planning, supervision, observation of construction, or construction . . .” must be brought within four
years of “substantial completion” of the construction. The statue of repose is not applicable to the
owner or possessor of the property where the injury occurred. TCA§ 28-3-202. If the personal injury or
property damage occurs after the statute of repose runs, and no exception applies, then no claim may
be brought against the covered construction service providers or professionals involved in the design
or construction of the improvement.
Putting aside defining what “substantial completion” means, this statute seems straightforward:
claims must be brought within four years of substantial completion. However, TCA§ 28-3-203 provides
an exception for any injuries to person or property that occurred in the fourth year after substantial
completion. In those cases, the suit must be brought within one year from the date of the injury. For
example, if an injury or damage occurred at three years and ten months after substantial completion,
the plaintiff would have until four years and ten months after substantial completion to file suit.
The complexity does not stop there, however, because the statute also provides an exception for cases
involving fraud. Specifically, the statute states that a person who committed fraud in the provision of
construction services or fraudulently concealed the claim cannot use the statute of repose as a
Tennessee Courts have elaborated on the application of the statute on several occasions. In Watts v.
Putnam County, the Tennessee Supreme Court stated that because the statute of repose begins to
run from substantial completion, when a defect is discovered is irrelevant to the application of the
statute. In that case, the Court held that the personal injury claim, although filed within the one-year
personal injury statute of limitation, was barred against those providing professional design and
construction services due to the statute of repose because substantial completion had occurred more
than four years before the personal injury. The Court recognized that though the result is harsh, the
clear intent of the statute is to protect construction and design professionals from liability. The Court
also noted that the statute was an outer limit of liability and that statutes of limitations for injuries to
person and property still applied. Thus, just because a claim is filed within the statute of repose does
not mean that it is within the time for other statutes of limitation. (525 S.W.2d 488, 493-94 (Tenn. 1975))
Furthermore, in Counts Company v. Praters, Inc. the Tennessee Court of Appeals held that the statute
began to run, and continued to run, while a contractor attempted to repair defects in the construction.
(392 S.W.3d 30, 86 (Tenn. CT.App. 2012)) Additionally, in Henry v. Cherokee Construction and Supply
Company, Inc. the Tennessee Court of Appeals held that for purposes of the concealment exception,
the wrongful concealment must be of the claim rather than concealment of some defect in the original
construction. (301 S.w.3d 263, 267 (Tenn. Ct. App. 2009))
The lesson taken from reading the statute and the cases is that any person or entity involved in a
potential construction defect claim—or personal injury arising from construction—will need to make a
prompt evaluation of the date of substantial completion as the countdown clock of the statute of repose
continuously runs from that date. A plaintiff cannot rely exclusively upon the date of injury or property
damage to calculate the time for asserting a legal claim.
Those persons or entities providing construction or design services for construction should likewise
be familiar with the statute of repose and the exceptions which may extend it beyond four years from
substantial completion. Tennessee Courts have made it clear the statute is intended to protect
construction and design professionals from unlimited exposure to liability and that it will be applied.