Ten Year Statue Of Limitations On Construction Defect Actions

Law Talk

Windscape LLC ("Windscape"), a developer, contracted with Western Products Co. ("Western") wherein Western would install windows for an apartment complex. Construction of the apartments ended in 1991.

Windscape agreed to sell the apartments to Pine Terrace Apartments LP ("Pine Terrace"). In May 2003, escrow on the sale closed.

After the sale, Pine Terrace became aware of various defects, which caused damage to the apartments. It found that an absence of flashing in the windows caused the damage and that Windscape's managing member, Eugene Andrade, knew of the defect. On May 17, 2004, Pine Terrace sued Windscape alleging that the defective work amounted to willful misconduct. Windscape cross-complained against Western and other subcontractors with an allegation of willful misconduct. The subcontractors argued that the ten-year statute of limitations in the Code of Civil Procedure barred the claim. The Superior Court agreed and dismissed the action against the subcontracts. Windscape appealed.

The Appellate Court reversed the case and remanded it for a different decision.

The Appellate Court held that Section 337.15 states, "no action for latent construction defects may be commenced more than ten years after substantial completion of the construction project." However, this bar does not apply to actions arising out of willful misconduct. Since the complaint was based on willful misconduct, the exemption of the statute of limitations cannot be applied.