Florida’s Third District Court of Appeal (“Third District”) recently addressed the applicable statute of limitations for repairs under Section 95.11, Florida Statutes, including the issue of whether a repair constitutes an improvement to real property. In Companion Property & Casualty Group v. Built Tops Building Services, Inc., No. 3D16-2044, 2017 Fla. App. LEXIS 6584 (Fla. 3d DCA May 10, 2017) (“Companion”), the Third District ruled that the trial court erred in finding that a subrogation action arising out of an alleged defective roof repair was time-barred because the statute of limitations had run.
On February 8, 2016, Companion Property & Casualty Group (“Companion”) filed its complaint against a building services company, Built Tops Building Services, Inc. (“Built Tops”), for negligent repair of its insured’s roof. Companion alleged that the defective roof repair was performed on November 21, 2006. Companion further alleged that as a result of Built Tops’ work, the insured suffered water damage to the condominium building on February 9, 2012. Built Tops moved to dismiss the action on the basis that the applicable four-year statute of limitations had run on Companion’s claim, which Built Tops argued accrued on the date the repair was performed, November 21, 2006. The trial court granted the motion to dismiss.
On appeal, Companion argued that the statute of limitations began to run on the date that the “injury” occurred; that is, the date of the water loss. Built Tops maintained that because the complaint was filed more than four years after the date in which the repairs were made, the action should be deemed time-barred. The Third District agreed with Companion and reversed the trial court. In doing so, the court held that “[w]ith regard to roof leaks on real property, the statute of limitations begins to run from the time the defect is discovered or should have been discovered.” Companion, 2017 Fla. App. LEXIS 6584 at *4 (citing Kelley v. Sch. Bd. of Seminole Cnty., 435 So. 2d 804 (Fla. 1983) (finding that, in the context of roof leaks, the statute of limitations begins to run from the time the defect is discovered or should have been discovered); Travel Indem. Co. of Conn. v. CentiMark Corp. , 746 F. Supp. 2d 1284 (S.D. Fla. 2010) (determining that the applicable statute of limitations began to run when the subrogee’s insured first discovered the roof leak on the subject premises)).
Notably, the court clarified that the roof repair was not subject to Section 95.11(3)(c), Florida Statutes, which relates to an “action founded on the design, planning, or construction of an improvement to real property . . . .” The court stated that the applicable portion of the statute is Section 95.11(3)(a), not Section 95.11(3)(c). In support of its determination, the court cited Pinnacle Port Community Association, Inc. v. Orenstein, 952 F.2d 375 (11th Cir. 1992), which held that the “repairs were intended not to enhance the assumed value of the property but to restore the walls to their original watertight state.” The Third District ultimately concluded that the roof repair did not constitute an improvement to real property and therefore did not fall under Section 95.11(3)(c), Florida Statutes. Although both sections provide for a four-year statute of limitations, this ruling could become important when determining whether the ten-year statute of repose applies.
In construction defect cases, there is a ten-year statute of repose under Section 95.11(3)(c), Florida Statutes, which states that an “action 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 or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.” Based on the Third District’s ruling in Companion, it appears the statue of repose under Section 95.11(3)(c), Florida Statutes, may not apply in construction defect cases arising out of negligent repairs.
If you have any questions about the Third District’s decision in Companion Property & Casualty Group v. Built Tops Building Services, Inc., please do not hesitate to contact a member of CSK’s Construction Group.