• Ten Year Statute Of Limitations Is Extended By Periods Of Remedial Work Performed By A Contractor
  • August 26, 2003
  • Law Firm: Atkinson, Andelson, Loya, Ruud & Romo, A Professional Corporation - Cerritos Office
  • California law provides a ten year outer limit on the time a party may file a lawsuit based on claims of latent defects; i.e., defects not immediately apparent upon ordinary inspection of the work. No matter what the legal basis of the claim (contract or tort), a claimant must file a case based on latent defects within ten years after substantial completion of the project. The purpose of this rule is to provide some "closure" for contractors. Otherwise, statutes of limitation which did not begin to run until after the discovery of a defect might conceivably not start running until decades after a project is complete.

    A recent case, Lantzy v. Centex Homes (2001) 89 Cal.App.4th 1059, 107 Cal.Rptr.2d 795, holds that this ten year period is "equitably tolled," or suspended, during any period while a contractor was effecting repairs to the work. If a contractor spends two months trying to repair roof leaks, those two months are added to the ten years.

    Whether the application of equitable tolling to the ten-year statute will survive as the rule in this state is questionable. Four Courts of Appeal have considered the issue. Three of them held that periods of remedial work toll the statute, but one court ruled that they did not. Such a conflict between different Court of Appeal panels makes it likely that the California Supreme Court will eventually take up the issue to provide a uniform rule for the state.

    As a practical matter, the Courts of Appeal holdings mean that an owner should not refrain from filing a claim for latent defects, even if it appears the suit might be a few weeks or months late. It is wise to file the complaint and do some investigation and discovery regarding remedial work, rather than to assume the worst and forego a potentially valid claim. Moreover, maintaining and retaining accurate records during the time a contractor performs remedial repairs will be helpful to later establish the tolling of the statute of limitations.