| New Indiana Court of Appeals Case Clarifies Application of Statutes of Limitations On Owner Claim Against GC |
| Posted: 2/10/2010 |
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A new case in Indiana clarifies application of statutes of limitations on an owner claim against a general contractor. Power & Sons Constr. Co., Inc. v. Healthy E. Chicago, 919 N.E.2d 137, 2009 Ind. App. LEXIS 2842, at *1 (Ind. Ct. App. Dec. 30, 2009). This is important because claims against general contractors are often based on contract but have elements of negligence. Significantly, the court looked past the negligence components and determined that the statute of limitations for breach of contract applied.
The owner had filed a complaint against the general contractor, alleging that the general contractor knew or should have known the building site contained toxic and organic materials and a high water table, failed to have the materials removed, failed to properly supervise installation of a slab, and failed to warn the owner of the materials and that the slab installation could damage the floors, walls, and ceilings of the building. Powers, 2009 Ind. App. LEXIS 2842, at *4-5. The general contractor moved for summary judgment on the basis of the complaint not being timely under statutes of limitations, which the lower court denied. The general contractor appealed.
The Indiana Court of Appeals affirmed the denial of the summary judgment motion based on statutes of limitations. The court applied a ten-year statute of limitations for written contracts found in Indiana Code § 34-11-2-11, which made the complaint timely. The general contractor had pushed for application of a (tort) six-year statute of limitations for injuries to property other than personal property found in Indiana Code § 34-11-2-7. The general contractor also argued for the application of a two-year statute of limitations for actions on injuries to personal property found in Indiana Code § 34-11-2-4. Either statute argued for by the general contractor would have rendered the Complaint untimely.
In dismissing the argument for the two-year statute, the court looked at the nature of the property at issue. The building at issue is not “personal property” in that it is immovable and part of the real estate. Using this simple reasoning, the court gave little attention to proposed two-year personal property statute of limitation.
The court paid more attention to the ten-year versus six-year statute argument. The general contractor claimed that the basis for the complaint was professional negligence, but the court disagreed. “We have never held the responsibility of a general contractor to be akin to that of an attorney or a doctor, however.” Powers, 2009 Ind. App. LEXIS 2842, at *14-15. The parties’ relationship arose from “contract rather than a standard of care imposed by law.” Powers, 2009 Ind. App. LEXIS 2842, at *15. The complaint sought to recover damages resulting from the general contractor’s “failure to perform according to the contract” in terms of hiring and supervising subcontractors and constructing the building according to plans and specifications. Powers, 2009 Ind. App. LEXIS 2842, at *15.
The lesson here is that, where a contract exists, claims against a general contractor that involve negligent performance of contractual duties will be evaluated by a ten-year statute of limitations for written contracts rather than a shorter statute of limitations for torts or for injury to personal property. The related lesson is that the standard of care for a general contractor can be found in the contract rather than imposed by a court.
Submitted by Eric D. Foerg.
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