Legal Updates for Construction Litigation
A Chapter 558 Notice Now Stops the Clock on the Statute of Repose
A new case out of the Fourth District Court of Appeals for Florida, Gindel v. Centax Home, Case No. 4D17-2149 (Sept. 12, 2018), seeks to clarify the timing to commence an action under the statute of repose. Gindel v. Centax Home is a construction defect case alleging improperly constructed townhomes. On March 31, 2004, the homeowners closed and took possession of their townhome constructed by Centex. Section 95.11(3)(c), Florida Statutes (2014), provides:
An action founded on the design, planning, or construction of an improvement to real property […] must be commenced within 10 years after the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion of the contract or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.
As provided under Section 95.11(3)(c), the statute of repose began to run on March 31, 2004, as to any construction defects, expiring March 31, 2014.
The homeowners alleged they discovered construction defects in their townhome at the beginning of 2014. On February 6, 2014, the homeowners provided a pre-suit notice of construction defect to Centex, pursuant to Chapter 558, Florida Statutes. In response, Centex told the homeowners they would not cure the defect. The homeowners filed suit against Centex on May 2, 2014.
The homeowners argued their action commenced when they issued their Chapter 558 notice on February 6, 2014. However, the trial court rejected their argument and ruled their action was not commenced until the date suit was filed, May 2, 2014. As a result, the homeowners' claim was barred by the statute of repose, which ran on March 31, 2014. The trial court granted summary judgment in favor of Centex, and the homeowners appealed.
On appeal, the Fourth District Court of Appeals was faced with determining whether a Chapter 558 pre-suit notice qualified as an "action," as the defined in the statute of repose.
The homeowners argued that the trial court had erred when it used the definition of "action" provided in Chapter 558, ignoring the definition of "action" in the statute of repose. Section 95.011, Florida Statues, defines an "action" as "a civil action or proceeding." The homeowners went on to argue the mandatory Chapter 558 pre-suit notice was a "proceeding" under Section 95.011 and therefore met the definition of an "action." They also argued they would have filed suit in February 2014 if Chapter 558 had not required them to serve the pre-suit notice first.
The court agreed with the homeowners, noting that Chapter 558 lays out a series of mandatory steps that must be complied with before judicial action is to be taken. Thus, the pre-suit notice does constitute an "action" for the purposes of the statute of repose and the homeowners' claim against Centex was not barred by the statute of repose. In support of this position, the court cited Musculoskeletal Institute Chartered v. Parham, 745 So. 2d 946 (Fla. 1999), where the Florida Supreme Court held, in a medical malpractice matter, that compliance with the statutory pre-suit notice and investigation requirements constituted commencement of an "action" for the purposes of the statue of repose. The court found the ruling in Musculoskeletal Institute applicable to construction defect cases as well and noted that the pre-suit notice requirement in Chapter 558 was not intended as a stalling device in order to bar claims.
With this most recent ruling, the statute of repose has now been extended beyond the ten-year statute of repose when it comes to construction defect claims. Contractors and design professionals must be cognizant that the receipt of a Chapter 558 notice stops the clock on the statute of repose and, therefore, must be taken seriously.
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