Change to the Statute of Limitations for Construction Defect Cases – How It Affects You

Samantha Carmickle and John Holper | Winthrop & Weinstine

Under Minnesota Statutes § 541.051, an action arising out of the construction or improvement of real property must be commenced within two years after the cause of action accrues.[1] But when does the cause of action accrue? The Minnesota Supreme Court answered this question on February 3, 2021, when it decided Moore v. Robinson Environmental[2]

In Moore, a homeowner, Moore, sued Robinson Environmental for damages caused by Robinson’s improper removal of asbestos in his home.[3] Moore brought his cause of action four years after the asbestos removal.[4] Robinson moved to dismiss the claim and argued that the 2-year statute of limitations in Minnesota Statutes § 541.051, subdivision 1(a) had expired.[5] Moore, on the other hand, argued that the 2-year statute of limitations did not apply because the removal was not an improvement to real property.[6] Moore argued that the statute of limitations did not begin to run upon the commencement of demolition work, but rather on the commencement of work which added to real property.[7]  The Court, assisted by amicus curiae Construction Law Section of the Minnesota State Bar Association, rejected this argument on the basis that “virtually every construction project involves both types of work[,]” and construction projects should be viewed as a whole.[8] Therefore, the Court held that if demolition is necessary prior to making additions to real property, then a cause of action under § 541.051 accrues when demolition begins.[9]

Following Moore, both contractors and owners need to be aware that a construction project is viewed as a whole even if multiple contractors are working on the project. Therefore, if a project is completed by two contractors and the first contractor does defective work, regardless of whether such work is demolition or addition, the cause of action accrues and the statute of limitations begins to run. As a practical matter, this means that owners must be vigilant in their detection of construction defects throughout the course of the project and must ensure to bring a cause of action within two years of the defective work, not two years of the project completion. Contractors, on the other hand, should recognize that the Moore decision affords them greater protection from construction defect claims through the use of a statute of limitations defense.


[1] Minn. Stat. 541.051, subd.1(a).

[2] 954 N.W.2d 277 (Minn. 2021).

[3] Id. at 279.

[4] Id.

[5] Id.

[6] Id. at 281.

[7] Id. at 284.

[8] Id.

[9] Id.

Change to the Statute of Limitations for Construction Defect Cases – How It Affects You

Samantha Carmickle and John Holper | Winthrop & Weinstine

Under Minnesota Statutes § 541.051, an action arising out of the construction or improvement of real property must be commenced within two years after the cause of action accrues.[1] But when does the cause of action accrue? The Minnesota Supreme Court answered this question on February 3, 2021, when it decided Moore v. Robinson Environmental[2]

In Moore, a homeowner, Moore, sued Robinson Environmental for damages caused by Robinson’s improper removal of asbestos in his home.[3] Moore brought his cause of action four years after the asbestos removal.[4] Robinson moved to dismiss the claim and argued that the 2-year statute of limitations in Minnesota Statutes § 541.051, subdivision 1(a) had expired.[5] Moore, on the other hand, argued that the 2-year statute of limitations did not apply because the removal was not an improvement to real property.[6] Moore argued that the statute of limitations did not begin to run upon the commencement of demolition work, but rather on the commencement of work which added to real property.[7]  The Court, assisted by amicus curiae Construction Law Section of the Minnesota State Bar Association, rejected this argument on the basis that “virtually every construction project involves both types of work[,]” and construction projects should be viewed as a whole.[8] Therefore, the Court held that if demolition is necessary prior to making additions to real property, then a cause of action under § 541.051 accrues when demolition begins.[9]

Following Moore, both contractors and owners need to be aware that a construction project is viewed as a whole even if multiple contractors are working on the project. Therefore, if a project is completed by two contractors and the first contractor does defective work, regardless of whether such work is demolition or addition, the cause of action accrues and the statute of limitations begins to run. As a practical matter, this means that owners must be vigilant in their detection of construction defects throughout the course of the project and must ensure to bring a cause of action within two years of the defective work, not two years of the project completion. Contractors, on the other hand, should recognize that the Moore decision affords them greater protection from construction defect claims through the use of a statute of limitations defense.


[1] Minn. Stat. 541.051, subd.1(a).

[2] 954 N.W.2d 277 (Minn. 2021).

[3] Id. at 279.

[4] Id.

[5] Id.

[6] Id. at 281.

[7] Id. at 284.

[8] Id.

[9] Id.

Is Settling a Bond Claim in the Face of a Seemingly Clear Statute of Limitations Defense Bad Faith?

Christopher G. Hill | Construction Law Musings

We have often discussed payment and performance bonds here at Construction Law Musings, most often in the context of payment bond claims relating to federal and state-owned. construction projects.  A late 2020 case out of the Eastern District of Virginia federal court examined what happens after such a claim, in this case, based upon a developer’s subdivision bonds, is made and negotiations commence between the surety and the claimant.  Specifically, Fidelity & Deposit Co. of Maryland v. Ransgate Corp., et. al. looked at claims for indemnity by a surety and the principal/indemnitors in the event that the Surety settled such a claim.

In the Ramsgate case, Surety provided two separate subdivision subcontract bonds to Ramsgate.  Pursuant to those bonds and the indemnity clause of its indemnity agreement, the Surety sought reimbursement of its $80,000.00 settlement payment to the local building authority that it paid to resolve what was originally a claim for over $420,000.00 by the City.  The project was started in 2002 and after many years of failures to complete (according to the City of Suffolk), the City made its claim for expenses in 2017.  Ramsgate claimed that it completed the subdivisions in 2003.

Of course, Ramsgate, and by extension, the Surety argued that any claim against the bond was barred by the statute of limitations due to the passage of time between Ramsgate’s claimed completion date and the making of the claim.  The City of Suffolk contested that Ramsgate had in fact completed the subdivisions and that it incurred the expenses claimed.  Despite this defense, or possibly because of it, the Surety was able to settle the claim for $80,000.00 and then sought to enforce its indemnity agreement with the defendants.  The defendants filed a Motion for Summary Judgment seeking dismissal of the Complaint because, the defendants alleged, the settlement was made in “bad faith” due to the clear and undeniable statute of limitations defense.

The Court disagreed.  The Court first found that as a matter of law, the payment of a claim despite the availability of a possible affirmative defense is not bad faith and not in violation of Surety’s right to settle claims. In response to the defendants’ claim that the statute of limitations is a different sort of defense because it is an absolute bar to action, the Court stated that the statute of limitation does not provide a guaranteed defense, particularly under the circumstances of the case before it because:

[A] statute of limitations defense is not a guaranteed defense. Rather, a statute of limitations defense raises two questions: (1) the length of the statute of limitations and (2) when this statute of limitations period accrued, both of which are disputed by the parties.

The parties could neither agree on the time of accrual or the length of the statutory timeframe.  The Court then went on to state that Surety had attempted to pass the claim on to the defendants to allow them to make whatever defenses they wanted to make and that the defendants passed up this opportunity.  In short, there were enough questions regarding the statute of limitations defense that the Surety was well within its rights to settle the claim and therefore the Court dismissed the Motion for Summary Judgment.

The main takeaways from this case in my mind are these:  1.  A bond principal should always take the opportunity to participate strongly in defense of any bond claim, and 2.  If any argument can be made that a defense is not iron clad, there is likely no way to make a claim for bad faith should a surety settle the claim.

As always, I recommend that you consult with experienced construction counsel when evaluating your options in a situation such as this.  I also commend the entire opinion to your reading.

Florida Appellate Court Affirms Statute of Limitations for Latent Construction Defects

Johnathan T. Ayers | Bilzin Sumberg

The Cottages at Stoney Creek Condominium Association, Inc. et al v. JDR Construction, LLC et al, No. 1D20-956, 2021 WL 2209851 (June 1, 2021) aff’d per curiam.

Construction defect litigation often surrounds a dispute over timeliness in bringing the claim for purposes of surviving a statute of limitations defense. In the case of latent defects, Florida Statutes § 95.11(3)(c) bars an action “founded on the design, planning, or construction of an improvement to real property” if it is not commenced within four years of the date the latent defect “is discovered or should have been discovered with the exercise of due diligence.” Success on this defense acts as a complete bar to liability for the developer, designer, or contractor. A long line of Florida cases hold that the limitations period begins to run once there is an obvious manifestation of the defect, regardless of whether the claimant knew the exact nature of the defect. More often, the dispute centers on whether the manifestation is “obvious” or could be due to causes other than an actionable defect, in which case a factual issue remains.

Recently, the First District Court of Appeal, in The Cottages at Stoney Creek, affirmed without opinion a trial court’s final order enforcing the statute of limitations defense to bar a condominium association’s construction defect claim against a general contractor. The trial court’s order1 focused on whether the evidence established, for purposes of summary judgment, that the association knew or should have known of certain defects it sued upon, based on a 2011 Building Evaluation Report and other contemporaneous evidence issued six (6) or more years earlier. According to the Order, the 2011 Report identified certain stucco cracks and water intrusion. In 2017, the association produced a separate report, which, according to the Order, identified the “same claims” that were in the 2011 Report. The trial court concluded that the defects asserted in the lawsuit were discovered or readily discoverable four years prior to the lawsuit and, thus, the lawsuit was precluded by the statute of limitations.

On appeal, many of the questions at oral argument2  focused on whether the identification of stucco cracks in the 2011 Report constituted sufficient evidence to bar the assertion of the alleged latent defects concerning the stucco system identified in the 2017 Report. Compare Performing Arts Ctr. Auth. v. Clark Constr. Grp., Inc., 789 So.2d 392, 394 (Fla. 4th DCA 2001) (“[W]here there is an obvious manifestation of a defect, notice will be inferred at the time of manifestation regardless of whether the plaintiff has knowledge of the exact nature of the defect. However, … where the manifestation is not obvious but could be due to causes other than an actionable defect, notice as a matter of law may not be inferred.”). During oral argument, the panel and the contractor’s counsel echoed the trial court’s citation of certain correspondence among the association’s board of directors in 2011-2012 discussing the existence and extent of the stucco cracks. Although the appellate court’s opinion is of no precedential value, the record and oral argument demonstrate that the defense remains an important—and sometimes case-dispositive—defense that may be available to defendants in construction defect lawsuits. Moreover, the record highlights the type and extent of evidence, including contemporaneous communication, that the trial court may look to in determining whether a party discovered or should have discovered a defect under the strictures of section 95.11(3)(c).

[1] The trial court’s order can be accessed here.
[2] The link to the appellate oral argument can be accessed here.

Ohio Bill Shortening Statute Of Limitations Goes Into Effect

Alayna Bridgett and Gregory Thompson | Hahn Loeser & Parks

Yesterday, June 14, 2021, Ohio Senate Bill 13 went into effect. This bill shortens the statute of limitations for breach of written contract actions from eight years to six and, for oral contracts, from six years to four.

As we shared with readers earlier this year, while S.B. 13 amends the statute of limitations for contract claims in general, it is important for construction project stakeholders to consider provisions within their own contracts that limit contract claims periods. Nearly every construction contract will include provisions shortening the time frame in which a party may bring a claim (oftentimes to just days). These provisions provide a period much shorter than the enumerated statute of limitations. It is important to remember that, regardless of whatever appears in the Ohio Revised Code, parties must comply with the claims provisions provided in their contracts.