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(A version of this article appears in the California
Construction Law Reporter, published by the West Group.)
By James E. Acret
A
contractor filed an action against the architect and construction
manager alleging damages incurred because of errors in plans
and specifications and failure to coordinate and inspect
a county library project in a competent and timely manner.
The trial court granted summary judgment based on the two-year
statute of limitations. California Code of Civil Procedure
§339, Subdivision (1).
The
Court of Appeal affirmed. Smith v. SHN Consulting Engineers
& Geologists, Inc., 89 Cal.App.4th 638, 107 Cal.Rptr.2d
424, 2001 DJDAR 5395 (2001). The two-year statute for an
action "upon a contract, obligation or liability not
founded upon an instrument in writing" applies to claims
for professional negligence. The cause of action accrues
when the plaintiff sustains actual and appreciable harm
and discovers or should discover the negligence.
Here,
the damage was incurred when the contractor suffered out-of-pocket
costs during construction due to the approximately 200 requests
for information it claims were necessitated by deficient
design work. The contractor argued that §337.1, being
more specific, should apply because it addresses claims
arising from patent deficiency in the design, specification,
planning, supervision or observation of construction. This
position is partly supported by Nicholson-Brown, Inc.
v. City of San Jose, 62 Cal.App.3d 527 (1976), but §337.1
applies only to claims that exist upon substantial completion
of the project. Kralow Co. v. Sully-Miller Contracting
Co., 168 Cal.App.3d 1029 (1985).
Here,
the wrongful acts allegedly committed by architect and construction
manager may have caused economic loss to the contractor,
but they did not result in defects to the finished project.
It would seem illogical for the limitations period to be
postponed until the time of substantial completion and then
to encompass claims for patent deficiencies that had been
corrected during construction. Moreover, §337.1 is
one prong of a two-prong scheme and provides the outer
limit for suit; it does not revive claims barred under
other applicable statutes of limitations. The Legislature
has enacted two statutes of limitations and requires suit
to be filed within the shorter of two periods, one measured
from the date of discovery and the second, longer period
measured from the completion of the project. Section 337.1
Subdivision (c) specifically provides that it shall not
be construed as extending the period prescribed by law for
bringing any action.
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To learn more about Howrey's Construction Practice Group, click here. For more information about books and other legal materials written by James Acret, click here and enter "Acret" in the site search engine. To learn more about topics covered in this article, contact Paul Berning at 415-848-4996 or at paulberning@howrey.com.
©2002 Howrey LLP
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