In addition to the trial defenses available to a contractor accused of negligent design or construction, law provides contractors with defenses which may entitle them to judgment as a matter of law under certain circumstances.
In addition to the trial defenses available to a contractor accused of negligent design or construction, law provides contractors with defenses which may entitle them to judgment as a matter of law under certain circumstances. These legal defenses are derived from ’s statute of repose, and ’s common law “acceptance doctrine.”
Georgia’s statute of repose (O.C.G.A. § 9-3-51) provides an absolute defense to contractors where more than eight years have passed between substantial completion of the contractor’s improvement, and the date the injury to person or property occurs. The language of the statute makes clear that the legislature intended to bar Plaintiffs from asserting claims based upon negligent surveying, planning, designing, construction, and supervision or observation of construction after the specified time period. There are two primary issues which arise when this defense is asserted: (1) whether the work constitutes an “improvement to real property;” and (2) when the improvement was “substantially completed.”
With regard to the “improvement to real property” issue, Georgia courts have held that a common sense analysis should be used to decide what constitutes an improvement to real property, and the factors important to this analysis are: (1) is the improvement permanent in nature; (2) does it add to the value of the realty for purposes for which it was intended to be used; and (3) was it intended by the contracting parties that the improvement in question be an improvement to real property or did they intend for it to remain removable personal property.
Typically, the construction of new structures, the shoring up of existing structures with new materials, and the inclusion of an integral component part (even if replaceable itself) of any fixed or permanent system identified in the project's construction specifications have been held by Georgia appellate courts to constitute “improvements to real property” for purposes of the statute of repose. Conversely, the installation of an underground gas line, the erection of a power pole and placement of equipment thereon, and the burial of construction debris on an undeveloped subdivision lot have been held by Georgia appellate courts as work which does not constitute an “improvement to real property” for purposes of the statute of repose. The Georgia Court of Appeals has held that whether the construction of an outdoor scoreboard constitutes a “real property improvement” is a question for a jury to resolve.
In a relatively recent case, Taylor v. S & W Development, Inc., 279 Ga. App. 744, 632 S.E.2d 700 (2006), the applicability of Georgia’s statute of repose was litigated. the case involved a Plaintiff who fell through a window, and sued the contractor who installed the window nine years prior to the fall. The contractor allegedly violated applicable law by failing to use safety glass during the window installation. The same contractor had completed other renovations to the building several years later, including some window installation. However, the contractor did not replace the specific window the Plaintiff fell through, nor did the contractor advise the owner that the windows previously installed may be in violation of applicable code. Notwithstanding these facts favorable to the Plaintiff, the Georgia Court of Appeals affirmed summary judgment to the contractor, explaining that the Plaintiff’s negligent construction claim, as well as his alleged “negligent failure to warn” claim were barred because both arose out of the alleged defect in the improvement to real property performed more than eight years prior to the injury. The Court reiterated that the purpose of the statute of repose is to establish a reasonable outside time limit beyond which architects, engineers, and contractors are insulated from suit based upon their work in constructing improvements. Therefore, though the “failure to warn” claim may have arisen several years after substantial completion of the original window installation (and within the statute of repose), the claim was barred because it was ultimately based upon the contractor’s alleged negligent construction.
For purposes of the statute of repose, the “substantial completion” date has been generally defined as the date when construction was sufficiently completed in accordance with the contract so that the owner can occupy the project for the use for which it was intended. Hence, where the defendant is a construction contractor, the date the certificate of occupancy is issued provides the date upon which the clock starts for purposes of the ’s statute of repose. Depending upon the specific circumstances of a claim, the date of “substantial completion” may be hotly disputed.
In addition to ’s statute of repose, ’s common law “acceptance doctrine” may provide an absolute defense for contractors. The doctrine provides that unless a specific exception applies, when work of a contractor is completed, turned over to, and accepted by the owner, the contractor is generally not liable to third persons for damages or injuries subsequently suffered by reason of the condition of the work, even though he was negligent in carrying out the contract. The exceptions to this general rule provide that the contractor is liable where the work: (1) is a nuisance per se (such as an act, occupation, or structure which is a nuisance at all times and under any circumstance, regardless of location or surroundings); (2) is inherently or intrinsically dangerous (such as propane gas, blasting operations, fumigation of premises, spraying from airplanes, the escape of a dangerous animal, emitting sparks from a railway engine and raising an embankment that is unguarded); (3) is so negligently defective as to be imminently dangerous to third persons; and (4) contains a hidden defect that the owner could not discover upon a reasonable inspection. Depending upon the specific circumstances of a claim, whether the contractor’s work fits into one of the enumerated exceptions will likely be disputed.
Both ’s statute of repose and ’s “acceptance doctrine” should be considered in evaluating defective design / construction claims against contractors where the personal injury or property damage occurs after the contractor has completed his work, and after the contractor’s authority to exercise control over the work has ceased.