Personal Injury Statutes of Repose

Victims of an accident are often shocked to find that, having waited too long to take action against the party responsible for their injuries, they are statutorily barred from doing so. These so-called “statutes of limitation” assign strict times in which to file a lawsuit after having discovered the injury or action giving rise to the claim. However, some claims are also subject to statutes of repose. These are similar to statutes of limitation in that they assign strict time limits in which to file a lawsuit; unlike statutes of limitation, however, a repose statute will often impose a time limit that begins ticking and can expire even before an injury is sustained. While statutes of limitation may allow for some extensions in time, repose statutes almost always impose a time limit that cannot be extended.

In addition, rather than being based upon a plaintiff’s action, statutes of repose instead begin to count down the day the defendant does something, and there are generally no exceptions to them. Thus, if a claim for damages is based upon the faulty design of a product, the plaintiff might only have five years after the product left the factory in which to sue the manufacturer or designer even if the injury occurred after that time. A statute of limitation, by contrast, may not even begin to count down until the plaintiff discovered, or reasonably should have discovered, the injury. While both statutes provide for times in which to file suit, statutes of limitation are often based upon the action of the plaintiff, and statutes of repose usually follow after a potential defendant’s actions or lack thereof. These rules can affect a wide range of cases from those involving products, property, and even services from a professional such as a doctor, contractor, or attorney. Cases involving products are often subject to statutes of repose when damages arise from the faulty design or manufacture of something, and they have been used to shield manufacturers from cases in which they might otherwise have exposure to civil liability.

Products liability cases also provide more concrete examples to illustrate how repose statutes work. Suppose, for example, that someone fell from an office chair and sustained an injury. If the chair had been defectively designed and/or manufactured, a suit naming the chair’s manufacturer and/or designer might be in order. However, if the injury occurred one day after the tenth year the chair had been delivered from the factory that churned it out, the plaintiff would be barred by applicable statutes of repose. While a statute of limitation might give such a litigant two years from the date of the injury in which to sue the employer that owned the defective chair, the plaintiff might never even be able to make a claim against the manufacturer because of a statute of repose. Thus, the plaintiff’s right to recover from his or her injuries may be barred before the plaintiff could even reasonably have known they existed. Unlike statutes of limitation which routinely provide such extensions when the plaintiff could not have known or discovered the problem, a statute of repose simply cuts off litigation after a certain date. This may lead to the question: why are some groups of defendants protected by statutes of repose and not others? While the breadth and scope of these statutes vary by state, the rationale for enacting them revolves around the same theories about civil litigation and its impact on business.

Specifically, in the middle part of the last century, there was a push by lobbyists and interest groups to protect some classes of defendants from civil litigation. Citing escalating insurance premiums, it was alleged that certain classes of defendants must be provided strict statutes of repose for cases involving products liability, professional malpractice, and real property. Without such protections, it was claimed, the country would fall down a slippery slope of endless civil litigation; it was further alleged that cases involving products, services, or real-estate from many years ago would be difficult to defend against; finally, liable defendants would simply not carry any insurance, resulting in even worse consequences over time. All of this, it was claimed, would cause certain sectors of the economy to flee from “high risk” areas. For example, doctors would avoid “risky” specializations for fear of being sued, and industrial companies might stop making an important product for fear of legal consequences (Sullivan 161). Some even articulated theories that all innovation would come to a grinding halt as companies and innovators would no longer be able to keep up with the legal costs that might result from a new idea. Even as proponents of such theories had difficulty producing any support for these ideas, laws were passed in several states, including California, providing statutes of repose for many protected classes.

Beyond these fears, however, proponents also insisted that it would be difficult to determine blame in an injury resulting from a product or real property built many years ago. By this rationale, a home built ten years ago will likely have substantial works of improvement done by parties other than the original builder of the residence. In that case, it might be difficult—if not impossible—to assign liability as any other parties involved in repairing or building upon the home could also be in some way responsible. Likewise, a product may be misused by one or more owners over the product’s lifespan. Without a statute of repose, it could be argued, plaintiffs could sue for product defect when, in fact, the original product had simply been broken by plaintiff’s negligence. For instance, an automobile may have three to four owners in a ten year time span, and, proponents of statutes of repose might argue, any one of those owners could be partly to blame for an injury arising from a defect in the car. As well, it was also feared that juries would only consider the product in hindsight and not be able to understand it within its historical context. So while it may seem self-evident that a particular product would cause an injury now, the jury may not be able to understand that this was not ascertainable at the time of the product’s design or implementation. Thus, such parties might argue, the original manufacturer should not be held liable for that if there was no way to foresee it at the time in which the product was designed, constructed, and/or conveyed to the person claiming injury from it. Finally, some manufacturers who produced items such as industrial equipment meant to last for decades felt that they needed protection because someone might use their product for several decades, and there was no way for such manufacturers to “pass on” the cost of litigation in a new product since a new product might only be designed every few decades (Martin 748-749). Finally, there was concern that collecting evidence in such cases might be difficult, costly, or even impossible to obtain.

Publishers, too, enjoy a similar repose statute for plaintiffs who might pursue them for defamation lawsuits. Ordinarily, the “date of discovery” of an injury can toll or extend a statute of limitation. Thus, if you are injured in a car accident, but the injury was undiscoverable until after the statute of limitation for such an injury, you might still be able to pursue a suit against the defendant driver who struck you. On the other hand, if a publication is distributed to the general public, California courts have found that any suit for defamation has an absolute statute of repose that begins running down on the day the publication was distributed to the public. This applies whether that distribution was done “widely” to the public or not. This means that even if the plaintiff could not have discovered the defamation until years later, they would have no cause of action against the publisher because of an applicable statute of repose. On the other hand, if the defamatory statement had not been published but rather hidden away somewhere and only brought out for a select few to see, the writer of the defamation might not be protected even if the plaintiff discovered this decades later.

In California, one prominent statute of repose is found in the Code of Civil Procedure, section 337.15. In that section, builders, designers, surveyors, and certain other parties involved in construction on or of real property are provided a ten year statute of repose for all defects which may be “latent”—or hidden—after the work is “substantially completed.” The section does not apply if the defect was fraudulently concealed—for example if a contractor tried to cover up the defect so it could not be detected. Notably, this statute of repose provides far more time than a similar statute of limitation—which also protects these defendants—because that statute is for “patent” construction defects. The courts define these two terms in this way: “’patent deficiency’ means a deficiency which is apparent by reasonable inspection” (Cal. Code Civ. Proc. 337.1(e)), meanwhile, “(b) ‘latent deficiency’ means a deficiency which is not” (Cal. Code Civ. Proc. 337.15(b)). The statute of repose in this case provides a firm limit in which to sue for a particular kind of defect—one that cannot be easily discovered. On the other hand, if the defect was, or should have been, discoverable by a reasonable person, the plaintiff generally has four years. In addition to being specific as to when and how, this statute of repose also only applies to specific parties such as builders and contractors; homeowners, however, are generally not protected by it.

The current owner of a building, for example, would not be protected by this same statute of repose even if an injury arose from the installation of something that had been “substantially completed” ten years prior to the injury. Thus, if a tenant renting an apartment from a landlord was injured as a result of some shoddy electrical work in the unit, the tenant might have a case against the landlord for that dangerous condition. However, the contractor who originally designed and/or installed the electrical work in the unit might be protected by CCP 337.15 if the defect(s) was(were) “latent” but not fraudulently concealed, and the injury resulting from it occurred ten years after the contractor completed the job. This means a landlord could be held liable for a defective condition created by some other defendant because that landlord could and should have found the problem to fix it even though the contractor originally responsible would no longer be liable; the fact that the landlord failed to take action against that original contractor does not mean that a later defendant now has a right against the contractor. This example also helps to highlight the difference between repose and limitation, for while the plaintiff or landlord’s claim against the contractor could be barred, a similar claim against the landlord would not be since the injury had just occurred. If, on the other hand, the injury occurred to the owner and not her tenant, the owner would probably have no case at all because of the repose statute. To put it another way, “The time limit established by a statute of repose may expire—and accordingly bar any cause of action governed by the statute—prior to the time of the party’s injury [. . .] a statute of repose may bar an action even before a party has suffered damage that otherwise might be compensable” (Heller 920-921). Indeed, many recent cases show decisions rendered by the court in which it is admitted that the plaintiff’s claim is otherwise meritorious but for some statute of repose. Such a hypothetical also helps to show how access to the courts may be diminished or even lost entirely because of such statutes. Some of the following examples can help to highlight how 337.15 and other similar code sections have been used in recent California cases to protect certain parties from civil litigation.

One operative case, in this regard, actually involves the evocation of an out-of-state statute of repose. In this matter, the court decided that Oklahoma’s repose law protected the designer of a boiler even though plaintiff filed his complaint shortly after discovering the injury in California (McCann, et al. v. Wheeler, et al). In this matter, the plaintiff was an employee of a contractor who had installed the boiler designed by the defendant—a company with its principal place of business in Oklahoma. The defendant appears to have also consulted in the installation onsite, but Oklahoma’s statute was still interpreted as overriding California’s. Unbeknownst to plaintiff, he contracted mesothelioma from working around the boiler, and this condition went undetected until sometime in 2000. However, because the boiler had been installed some sixty years prior to plaintiff discovering the injury it had caused to him, plaintiff had no cause of action against the designer of the boiler because of Oklahoma’s strict statute of repose. This statute is very similar to California’s CCP 337.15 in that it sets a ten year time frame after work has been “substantially completed” on the work of improvement. This meant plaintiff had until sometime in the late 1960’s in which to sue the designer even though plaintiff was not diagnosed with mesothelioma until 2000 and therefore had no way of even knowing he had a cause of action against the designer until it was already far too late to do anything about it. While plaintiff’s condition could be traced to his work around the boiler, because it went undetected for so long, and because plaintiff had no reason to suspect it, plaintiff was barred from recovery from the boiler’s creator. Even if plaintiff had a strong case against the boiler designer, and even if the plaintiff overcame the statute of limitation by filing less than two years prior to discovering the mesothelioma, the statute of repose cut off any chance at recovery on that particular defendant.

Similarly, an entity which sells real property or improvements upon it may be protected by 337.15 from a later plaintiff who is injured as a result of a defect in that same property. In one recent case, the County of San Diego successfully fended off a lawsuit involving a former landfill operated by the county. After closing it in 1967, it was sold to various parties until being bought by a family who opened a nursery business on it. Sometime in 2000, they discovered severe damage from methane gas intrusion resulting from trapped gas underground that had created “void pockets” under the surface of the former landfill. In this case, even though a landfill would not seem to be a “work of improvement,” the court found that the county could not be held liable to later owners who sued them alleging property defects because of the previous landfill. The court interpreted a landfill to be an “’improvement’ within the meaning of the 10-year statute of repose provided by Code of Civil Procedure section 337.15 (Gaggero, et al. v. County of San Diego). Because of this, it was determined that the current owners could not sue the county even though the current owners had themselves become responsible for large bills to clean and fix the property thanks to the damage caused by the “void pockets.” Again, it is important to note that 337.15 actually eliminated any rights that these owners had before they even realized they might need them. Even though the damage from the landfill was not discovered until many decades after the property was sold by the county, and even though there was no way for the owners to discover it until after the statute ran out, a strict interpretation of 337.15 prevailed and barred plaintiffs from any recovery against the county for losses resulting from the real property.

In another real property case in which this statute has been invoked to protect defendants even after they make promises to repair a problem. In this matter, the courts sided with defendants and dismissed plaintiff’s entire action on a ruling based primarily around CCP 337.15 even though defendant apparently acknowledged some liability and even promised to effect repairs. Even though plaintiffs did not discover the defects until several decades after the project was “substantially completed,” recovery was barred by the statute of repose in 337.15 because defendant simply promised to effect repairs, thereby causing the plaintiff to forgo a lawsuit, until the statute of repose ran out. In its ruling the court noted that prior to 1971, a defendant promising to repair or otherwise honor a warranty or assurance to fix would “toll”—or extend—the time in which plaintiff could file suit. However, because of the passage of applicable statutes of repose, such defendants can now promise their way past a repose limit and thereby avoid a lawsuit whether they honor that promise or not. It is therefore important to be aware of dates and to be especially careful when interacting with a defendant who may be trying to “buy time” until your rights disappear. In the end, even though a statute of limitation could be extended in this case—since the defect was not discovered for many years—the statute of repose still barred recovery in the matter (Lantzy v. Centex). The case also highlights an important change in the law since, “the 10-year limitations period could not be extended by a defendant’s promises or attempts to repair” (Lantzy v. Centex). While a statute of limitation might be tolled in that case, a similar statute of repose is so strict that even defendant’s own conduct in promising and attempting repairs was not enough to extend it. In fact, they are so strict that they can even cancel out the statute of limitation imposed by other code sections.

In one case, the courts decided that section 337.15 “controls” the time in which a lawsuit involving a harm or nuisance could be filed (Chevron v. Superior Court, et al.). Ordinarily, when a case involves an ongoing harm—such as a black mold in the walls of a rental property that has yet to be removed and remediated—the statute of limitation is tolled until the problem is corrected. However, in the “Chevron” case, the plaintiff alleged that an underground storage tank full of diesel had been installed or designed defectively. This, it was claimed, caused a “continuing nuisance” consisting of the release of the fuel into the ground and surrounding area. Although the storage unit was installed sometime “between November 1967 and June 1970,” the contaminated soil was not discovered until 1989, and suit was not filed until 1993. While the original plaintiff claimed any statute of limitation was tolled because the nuisance was “ongoing,” the defendants objected noting CCP 337.15 imposing a ten year limitation that began ticking in either the late 60’s or early 70’s; either way, plaintiff’s case would be barred by it. In this case, the defect could not have been discovered prior to the removal of the tanks, and they continued to pollute and contaminate the area until repaired and fixed. As the court noted, either the plaintiff had a viable cause of action because of an ongoing nuisance, or he did not because of a statute of repose: “one of these principles must yield.” In the end, it was the statute of limitations which yielded. Even if a statute of limitation might be tolled by extenuating circumstances, such as an ongoing nuisance or the inability to discover a problem until years later, an applicable statute of repose would override this.

Even a bankruptcy might not be enough to extend or toll a statute of repose. Typically, because a civil action is stayed when the defendant files a bankruptcy, statutes of limitation are extended in cases that name them. However, when applicable repose statutes, such as 337.15, apply, a bankruptcy does not., Thus, the courts recently determined that, “the tolling provision contained in” the part of the code that deals with bankruptcies “does not apply to extend the 10-year period set forth in section 337.15” (Inco v. Haynes, et al.). This is despite the fact that the same court found that, “Under normal circumstances, the effect of the bankruptcy stay here would seem to be clear-cut: the statute of limitations is extended 19 months.” In the case, plaintiffs alleged construction defects against the defendant—a construction company who had completed a development consisting of over two hundred homes. The company filed for bankruptcy in 1999, completed it by 2001, and began to be sued by plaintiffs around 2003. As the homes had been completed in 1993, this meant that the lawsuits were beyond the ten year statute of repose given by 337.15 for latent construction defects. While a lower court deemed that the bankruptcy could toll 337, the higher courts ultimately reversed this and dismissed the defendant completely on the grounds that statutes of repose cannot be tolled by anything. Again, this demonstrates how such classes of defendants may be entitled to rights not afforded to others: ordinarily, a bankruptcy can toll a statute of limitations, so a defendant cannot use it as a means to “wait out” any civil suits.

In fact, so fatal can a statute of repose be to a case, that there are now legal experts who offer advice for litigants on how to avoid “activating” a statute of repose even if you have to sue an entity for a product or property liability case. One scholar calls such statutes, “highly controversial” and notes that they have also “become a subject of much litigation and commentary” (Hicks), echoing the sentiment of others who find the affording of special protections to particular classes of defendants and the denial of rights to others before they even realize they have them to be at odds with some basic constitutional rights. Furthermore, the organization, “Public Citizen,” notes that statutes of repose have not reduced insurance costs as their supporters claim, and they also disproportionately affect poorer citizens who are more likely to use older products. Meanwhile, in a report drafted for the Center for Justice and Democracy, the authors show that tort reforms, which generally include prohibitive statutes of repose, have very little or even no effect on insurance rates (Doroshow, Hunter 7-8). While they have unquestionably provided a boon to certain professions and industries in many states, it is less clear if they have actually reduced the costs their supporters claimed they would.

However, whether one believes they are an integral component of much needed tort reforms or an unconstitutional attack on our rights, statutes of repose must be considered in cases involving products, professional services, or real property in California. The fact that they have been broadly interpreted by the courts to afford protections in many different kinds of cases—from ones involving land used by public entities to employees exposed to harmful chemicals on the job— under many different kinds of circumstances demonstrates that care must be taken when considering the viability of such claims. As recent case history demonstrates, California courts strictly interpret such statutes as overriding most other statutes governing the length a plaintiff has to file suit. Failing to properly prepare for such statutes can have disastrous consequences for plaintiffs who might otherwise have a strong case.

References

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