- Statutes of Limitations Still Vague In Claims Against Design Professionals
- September 24, 2003
- Law Firm: Plunkett & Cooney, P.C. - Detroit Office
In Michigan, there are two separate statutes that affect the timeliness of claims brought against design professionals. This article will give a general overview of each statute and analyze the situations where each is applicable.
The first statute provides in pertinent part:
No person may maintain any action to recover damages for any injury...arising out of the defective and unsafe condition of an improvement to real property...against any state licensed architect or professional engineer performing or furnishing the design or supervision of construction of the improvement...more than 6 years after the time of occupancy of the completed improvement, use, or acceptance of the improvement, or 1 year after the defect is discovered or should have been discovered, provided that the defect constitutes the proximate cause of the injury or damage for which the action is brought and is the result of gross negligence on the part of the contractor or licensed architect or professional engineer. However, no such action shall be maintained more than 10 years after the time of occupancy of the completed improvement, use, or acceptance of the improvement. MCL §§ 600.5805(10), 600.5839(1).
This statute limits claims by prescribing a six-year period within which they must be brought after there is an improvement to real property. Also, the statute provides an exception to the six-year limitation in situations where the claim is brought within one-year after the defect is discovered or should have been discovered, the defect is the reason why the injury occurred, and the design professional was grossly negligent. Additionally, the statute acts as one of repose by abolishing any claim not brought within 10 years after the work is accepted.
The second statute that affects the timeliness of claims brought against design professionals is the general professional malpractice statute of limitation found in MCL 600.5805(5). This statute provides that claims brought against a design professional for malpractice must be brought within two-years from the time the state-licensed professional discontinued serving the plaintiff as to the matters out of which the claim arose.
There is one exception to the two-year statute of limitations. A malpractice claim may be brought within six months of when the plaintiff discovers or should have discovered the claim. However, the burden is on the plaintiff to demonstrate that the malpractice claim could not have been discovered within the two-year statute of limitation period and that the claim was filed within six months of having made the discovery. The statute was held applicable to architects in City of Midland v Helger Const Co, 157 Mich App 736, 403 NW2d 218 (1987).
With two statutes covering actions brought against design professionals, the question becomes which statute applies to what type of claim? The statutory language specifies that the six-year limitation period and 10-year complete bar against claims applies to any action for any injury to real (or personal) property or bodily injury.
In Michigan Millers Mut Ins Co v West Detroit Bldg Co Inc, 196 Mich App 367, 494 NW2d 1 (1992), the court considered a claim by the owner of a restaurant and the subrogor insurance company against the general contractor for an alleged defective roof truss that resulted in the collapse of a roof. The restaurant was completed and opened for business in July 1980. The roof collapsed in 1988, and suit was filed in 1989.
The defendant contractor brought a motion for summary disposition based on the six-year statute of limitation found in MCL §§ 600.5805(10), 600.5839(1), which the trial court granted. The Michigan Court of Appeals affirmed, holding that the six-year statute of limitation found in MCL §§ 600.5805(10), 600.5839(1) would apply to all suits brought against architects, engineers and contractors whether they were for damages for defects or those arising out of defects.
Therefore, the six-year limitation period and 10-year ultimate bar against claims brought against architects, professional engineers, and contractors are applicable to both claims arising out of injuries caused by the condition and claims by owners for damages to the improvement itself.
In another case, one court has held that the six-year limitation period applies only to an action to recover damages for injury to persons or property, not to all actions against an architect or contractor for damages resulting from work done by them. Garden City Osteopathic Hosp v HBE Corp, 55 F.3d 1126 (6th Cir. 1995).
The two-year statute of limitations, on the other hand, is applicable to situations where allegations against the design professional are grounded in negligence (i.e., errors or omissions, not resulting in physical damage to person or property, such as a deficiency in the design professional's services themselves).
This was the case in City of Dearborn v DLZ Corp, 111 F Supp 2d 900 (ED Mich 2000). In this case, the City of Dearborn solicited proposals for the construction of retention basins. During excessive flows, storm water and wastewater would be captured in such basins and then bled back into the transportation systems for treatment.
In response, the design professional proposed a retention treatment tunnel in lieu of the retention basins. The city accepted this proposal and entered into an agreement wherein the design professional would design and provide engineering services for the construction of the tunnel. In the end, the tunnel project was unworkable and the city terminated the design professional's contract and eventually the entire project.
Later, the city filed suit against the design professional, alleging, among other claims, professional negligence pertaining to the design firm's representations about its capabilities and negligence related to the engineering designs of the tunnel project. The court concluded that these allegations asserted professional malpractice claims and were barred by the applicable two-year statute of limitations provision.
Unfortunately, neither legislation nor judicial guidance has alleviated all of the ambiguities regarding the situations when each statute is applicable. As a consequence, when design professionals are confronted with a lawsuit, it is essential that an analysis of the timeliness of the lawsuit be conducted early and a determination made as to the theory or theories under which the plaintiff seeks recovery. In some situations, the design professional may find that the claim has been brought too late and may be disposed of early, avoiding protracted litigation.