{"id":904253,"date":"2025-04-22T15:48:33","date_gmt":"2025-04-22T21:48:33","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=904253"},"modified":"2025-04-22T15:48:38","modified_gmt":"2025-04-22T21:48:38","slug":"statute-of-limitations-substantial-completion-minnesota","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/statute-of-limitations-substantial-completion-minnesota\/","title":{"rendered":"Minnesota Court of Appeals Clarifies When Statute of\u00a0Limitations\u00a0Begins for Certain Claims Against Contractors"},"content":{"rendered":"\n<p>Christian V. Hokans | <a href=\"https:\/\/www.fredlaw.com\/the-construction-counselor\/minnesota-court-of-appeals-clarifies-when-statute-of-limitations-begins-for-certain-claims-against-contractors\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Fredrikson &amp; Byron<\/a><\/p>\n\n\n\n<h4 class=\"wp-block-heading\">KEY TAKEAWAYS<\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Statute of Limitations May Not Start to Run Until Substantial Completion<\/strong><br>The Minnesota Court of Appeals held that the two-year <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/statute-of-limitations-isnt-game-over\/\">statute of limitations<\/a> for claims against contractors arising out of \u201cdefective and unsafe conditions\u201d does not begin to run until the\u00a0<em>entire project<\/em>\u00a0is substantially complete.<\/li>\n\n\n\n<li><strong>Contractor Termination or Abandonment Doesn\u2019t Trigger Accrual<\/strong><br>Even if a contractor is removed early due to a dispute, the statute does not begin to run until the project as a whole reaches substantial completion.<\/li>\n\n\n\n<li><strong>Contractors Face Extended Uncertainty<\/strong><br>Decision could create longer periods of potential liability for contractors who exit projects early.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p>In construction projects, deadlines are key. Property owners want to know when their project will be completed, and contractors want to know how long they have to get their permits, order materials, deploy subcontractors, and do everything else that goes into satisfying an owner\u2019s deadlines.<\/p>\n\n\n\n<p>However, when something goes wrong on a project, property owners and contractors need to remember another type of deadline: the statute of limitations. The applicable statute of limitations controls how long a party has to file a lawsuit. When a dispute breaks out, owners want to know how long they have to file their lawsuit, and contractors want to know how long they have until they can breathe a sigh of relief that an owner\u2019s time to file has run out.<\/p>\n\n\n\n<p>But calculating when a statute of limitations runs out depends on when the clock starts running. Courts call this figuring out when a claim first \u201caccrues.\u201d However, determining when a claim against a contractor \u201caccrues\u201d can be tricky under Minnesota law.<\/p>\n\n\n\n<p>The Minnesota Court of Appeals recently took up this issue in&nbsp;<em>American Family Insurance Co. v. NB Electric, Inc., et al.<\/em>, Case No. A24-0377 (Minn. App. Jan. 21, 2025). In&nbsp;<em>American Family<\/em>, the homeowners hired a general contractor to remodel their home beginning in February&nbsp;2020. In July&nbsp;2020, a fire damaged the home. The homeowners alleged that an electrical subcontractor caused the fire, and they terminated the contractor and subcontractor by April&nbsp;2021. The homeowners hired replacement contractors, and the project was substantially completed by July&nbsp;2021.<\/p>\n\n\n\n<p>The homeowners filed suit against the original contractors in July 2023 \u2014 two years after the project was substantially completed in July 2021. The lower court dismissed the case after finding that a two-year Minnesota statute of limitations applicable to the homeowners\u2019 claims had passed in April 2023.<\/p>\n\n\n\n<p>The court\u2019s decision was based on a lengthy statute, Minn. Stat. \u00a7 541.051, which states that claims \u201carising out of the defective and unsafe condition of an improvement to real property\u201d must be brought within \u201ctwo years after the cause of action accrues.\u201d Under the statute, a cause of action cannot accrue \u201cearlier than substantial completion, termination, or abandonment of the construction or the improvement to real property.\u201d Minn. Stat. \u00a7 541.051 subd. 1(c).<\/p>\n\n\n\n<p>The contractor in&nbsp;<em>American Family<\/em>&nbsp;argued that the homeowner\u2019s claim was untimely because their \u201ctermination\u201d from the \u201cconstruction\u201d project occurred in April&nbsp;2021, and the homeowners did not file their claim until more than two years later, in July&nbsp;2023. The homeowners countered that \u201cconstruction, termination, or abandonment of the construction,\u201d as used in the statute, refers to the \u201centire construction project, not the individual contractor who is terminated.\u201d Therefore, their claim did not accrue, and the clock did not start running on the two-year statute of limitations, until the project was substantially completed in July&nbsp;2021. The Court of Appeals agreed with the homeowners and allowed their lawsuit against the contractors to proceed.<\/p>\n\n\n\n<p>The opinion includes a dissent that focuses on the uncertainty this decision creates for contractors who are terminated or abandon their work because of a dispute early on in the project. Depending on when the project reaches substantial completion, the two-year statute of limitations might not begin to run for years after the contractor leaves the project. The Court of Appeals considered this uncertainty but concluded that the statute\u2019s language bound it. The case is now on appeal to the Minnesota Supreme Court.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Christian V. Hokans | Fredrikson &amp; Byron KEY TAKEAWAYS In construction projects, deadlines are key. Property owners want to know when their project will be completed, and contractors want to know how long they have to get their permits, order materials, deploy subcontractors, and do everything else that goes into satisfying an owner\u2019s deadlines. However,&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/statute-of-limitations-substantial-completion-minnesota\/\">Continue reading <span class=\"screen-reader-text\">Minnesota Court of Appeals Clarifies When Statute of\u00a0Limitations\u00a0Begins for Certain Claims Against Contractors<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,12,542,187,9835],"class_list":["post-904253","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-construction","tag-minnesota","tag-statute-of-limitations","tag-substantial-completion","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Minnesota Court of Appeals Clarifies When Statute of\u00a0Limitations\u00a0Begins for Certain Claims Against Contractors - Advise &amp; 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