Today I am back on the legal analysis/interesting case train after a few weeks of getting my new solo practice (thank you to all who have wished me well in this endeavor) up and running and discussing various green building trends and topics.
This week’s case discusses the operation of the Virginia construction “statute of repose” that operates as a 5 year cut off on any claim relating to improvements to a property and runs from the completion of any improvement work. Unsurprisingly, this case comes out of the Fairfax County, Virginia Circuit Court. In Travelers Indemnity Co. v Simpson Unlimited, Inc the Court considered the question of what constitutes and “improvement” under this code section.
The facts are these: Simpson was contracted to replace soffits on the terraces of a building and provide maintenance work on a building in 2002. in late 2004 a leek, attributable to the soffit work, developed and caused property damage. The lawsuit was filed in March of 2009. Simpson Unlimited argued that while the suit was filed within the applicable statute of limitations, but outside of the cutoff found in the statute of repose and therefore the case must be dismissed. Traveler’s argued that the work was not improvement work, but repair or replacement work so the statute of repose did not apply.
The Court agreed with Traveler’s, stating the general rule that repairs did not constitute improvements and that Simpson Unlimited’s work constituted repair work. The Court cited Black’s Law Dictionary in making this determination. It then concluded that removal and replacement of the soffit was repair work, despite the clear addition to the value of the property because of the work.
The take away? Contractors and subcontractors will need to determine whether they are performing improvement work or repair work in order to determine if the statute of repose applies in the first instance. Additionally, this case shows that the Courts in Virginia will look to strictly construe both the contract and the applicable statutes when analyzing construction claims. The assistance of an experienced Virginia construction lawyer can help construction professionals navigate this statutory and contractual minefield.
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Chris: it sounds like repairs to me too. What was improved? from a leaky soffit to a waterproof one? in other words, the original installation was a leaky soffit? wonder if they changed materials, if there was some “value added”? at any rate, the primary goal was remedial work, not upgrades. Excellent question, topic comes into play with many change orders and additional service requests too. Cindy
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Thanks for stopping by Cindy. I appreciate your insight.
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Getting dug out here and catching up, I had missed this post Chris. Interesting topic – having read the case, it looked borderline so I could see it going either way. It does open the door to people chipping away the statute of repose continually though.
Heidi wrote a couple posts on this one and another related issue on furnishings:
http://www.valanduseconstructionlaw.com/2010/02/articles/litigation/the-line-between-maintenance-and-modification-what-constitutes-an-improvement-under-virginias-statute-of-repose/
http://www.valanduseconstructionlaw.com/2010/04/articles/litigation/the-line-between-furniture-and-fixtures-what-constitutes-an-improvement-part-ii/
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Thanks as always for checking in Tim. I always appreciate your thoughts. I recommend that others check out your blog for some great stuff!
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