An In Depth Explanation Of Latent and Patent Defects

Law Talk

In 1997, Creekridge Townhome's 61 unit, 11 building structure had its shake roofs replaced with Cedarlite concrete tile roofs. Later that year, one of the owners sent a letter to the Creekridge Townhome Owners Association, Inc. describing that she had water moisture problems in the second-story bedroom window as a result of the new tile roof. She also went on to let them know that there were several broken roof tiles.

In 2003, this same owner had roof leaks numerous times and hired a roofing consultant. The roofing consultant, Randy Davis, found many causes for the leaks and many types of roof defects and stated that the defects "would not be readily apparent to a lay person." Creekridge then filed suit against the roofers for breach of warranty, breach of contract, and negligence.

One of the three roofing contractors asked for a summary judgment on a statute of limitations grounds based on two interrogatories propounded during the discovery process, namely, when and how was it determined that the roof was leaking. In response, the answer to these two discovery questions referenced the letter written in 1997 about the moisture problems in the window, the argument was made that the statute of limitations on the issue had come and gone. The trial court granted the summary judgment based on the case of Landale-Cameron Court, Inc. v. Ahonen. The other two roofing contractors obtained a stipulated judgment on the same grounds as the first summary judgment.

The appellate court stated that the decision should be upheld on a summary judgment "...if all the evidentiary papers associated with it...show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law." The appellate court's job in this case was to determine whether there are factual issues to resolve since the summary judgment denied Creekridge its day in court. Any factual dispute on a material issue requires a court to give the parties their day in court.

The two statute of limitations issues explored by the appellate court were patent construction defects and latent construction defects' discovery.

A patent construction defect (an obvious flaw) has a four year statute of limitations that starts running when the construction is substantially completed. There is an objective test to determine whether a construction defect is patent that asks "whether the average consumer, during the course of a reasonable inspection, would discover the defect. The test assumes that an inspection takes place." A patent defect could then be determined as a matter of law.

The appellate court stated that it "...cannot say that the reroofing defects... were patent defects as a matter of law. Only one roof-related to a 'water moisture problem' in one unit of a 61-unit, 11-building complex - and that problem was inside a window - coupled with a report of several broken roof tiles..." Based on this, the four-year statute of limitations for a patent construction defect does not provide a basis on which to grant summary judgment so the discovery of a latent construction defect was then discussed.

A latent construction defect is one that is "not apparent by reasonable inspection." A claim arising from a latent defect must be filed within three years of injury to a property or four-years of discovery for a breach of written contract, but at no time can it be filed later than 10 years of substantial completion. Again, the limitation periods start to run upon "discovery." Discovery occurs when the plaintiff suspects, or reasonably should suspect that someone has done something wrong to the plaintiff, causing the injury.

On the issue of knowledge, the appellate court again stated that "... we cannot say, as a matter of law, that 'a water moisture problem' inside a window as a result of the tile roofs - in just one unit of a complex that comprises 61 units and 11 buildings - along with a report of several broken roof tiles..., constitutes sufficiently appreciable damage to give a reasonable person notice that remedies must be pursued."
Although the trial court relied on the Landale case in granting the summary judgment, the appellate court was not of the same mind. The Landale case was also a summary judgment construction defect case but it involved water leaks on an 8-unit condo complex. Almost half the units in the complex had leak issues and repairs were attempted. The appellate court found this much different than what occurred with respect to Creekridge because the issues only affected one of 61 units and no repairs were ever attempted.

The appellate court went on to say that, "if we were to find in favor of defendants, that would force property owner associations across the state to conduct extensive investigations for possible construction defects based on any report of a small problem. This could prove very expensive for the associations, and would often be futile." The court declined to impose such a burden.

Therefore, the judgments were reversed and Creekridge was awarded its costs on the appeal.

Although this was a lengthy case and much has been left out, we felt that the discussion would be of interest.