Thursday, March 7, 2013

New California Appellate Decision Regarding Statute of Limitations

Sometimes an otherwise meritorious case cannot be heard simply because too much time has passed between the alleged wrongdoing and the start of litigation. Statutes of limitation are unbelievably powerful way legislatures have restricted the ability to litigate potential personal injury claims. They are a legislature’s way of saying that at some reasonable point in time, liability has to end. The case of Bo Du v. H. Gene Hawkins, a recently decided case by our 9th Circuit, is a tort but not a personal injury case. But it illustrates well how draconian the California’s statute of limitations can be. In this case there are two separate couples that sued one geological services professional. The first couple built and developed the property at issue and the second couple eventually purchased and lived in it. Defendant was retained by the first couple while they were constructing the house. Defendant provided pre-grading professional geological consultation and graded the property observations for the rough grading improvements. This work was done from July 1997 to May 1999. In May 1999 defendant submitted his interim completion report. A month after he left the job, the work was certified as satisfactory. In 2000 the property was sold to the second couple. In 2007, these owners discovered damage to the house and lot due to earth movement, cracking, and structural defects. Although these problems were discovered in 2007, a lawsuit was not brought until 2009. In the 2009 complaint, the second owners sued the geological services professional for negligence. At trial, the primary issue was the proper timing of defendant’s final report on the property. This was a critical issue because of California’s 10-year statute of limitations on latent deficiency liability. Defendant never actually filed a final report; the interim report was his last work on the project. Plaintiffs argued that the final report should have been submitted in 2000 thus making 2000 the termination of his engagement with the project. Under this theory, the 2009 lawsuit would have been within California’s statute of limitations. The trial court rejected this argument and found that the work had been substantially completed in 1999. This test of completion was put into California law so contractors and builders can know when their latent deficiency liability terminates. Here the court found that the defendant’s final report was not necessary because the project went forward in its absence. Summary judgment was granted on the grounds that no right to relief existed under California’s statute of limitations. I'm a plaintiff's personal injury lawyer. I don't like the opinion. But I agree with the court’s ruling here. While I think California's statute of limitations is way too short, there does come a point when claims should be exhausted. While the court did not discuss what was actually wrong with the home in detail, there comes a time when liability must terminate for public policy reasons. Imagine what litigation could cost the construction industry if a homebuilder was potentially liable forever. Even assuming defendant was objectively at fault, a 10-year window is a reasonable amount of time to find a construction defect - probably any claim - and bring a lawsuit.