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Fla. Court Clarifies Statute Of Repose For Building Defects

By Nathan Hale of Law360

Law360 (September 12, 2018, 8:46 PM EDT) — A Florida appeals court ruled Wednesday that a lower court erred in finding that a group of homeowners missed a deadline to sue Centex Homes over alleged construction defects even though they filed a statutorily required pre-suit notice to the builder within the eligible time period.

Ruling on an apparent issue of first impression, the Fourth District Court of Appeal said that the mandatory pre-suit notice required before filing a construction defect lawsuit qualifies as an “action” in respect to the 10-year statute of repose contained in another section of the Florida Statutes.

Based on this holding, the appeals court reversed the lower court’s summary judgment ruling for Centex Homes and its subcontractor, Reliable Roofing and Gutters Inc., against the group of owners of townhomes they built in the early 2000s, according to the opinion.

The three-judge appeals panel said the trial court’s order “conflated the separate and distinct definitions of the term ‘action’” in the two relevant sections of the Florida Statutes. It sided instead with the homeowners’ “logical and practical” argument that the mandatory pre-suit notice established by Chapter 558 should fall under the broad definition of “action” as a “civil action or proceeding” provided in Chapter 95, which covers the statute of repose.

“We wholeheartedly agree with the court’s statement that the homeowners should not be penalized for complying with the [Chapter] 558 [pre-suit notice] statute in an effort to resolve their construction issue without resorting to filing a formal complaint,” North Carolina-based attorney Scott C. Harris of Whitfield Bryson LLP, who is representing the homeowners, said. “We hope that all construction professionals take note of this opinion and do not try to use the Chapter 558 process as a sword.”

The homeowners took possession of the Centex-built townhomes at its Ocean Cay Community development in Florida’s Palm Beach County town of Hypoluxo on Mar. 31, 2004, starting the clock on the 10-year statute of repose, according to the opinion.

After noticing water intrusion in their homes, the homeowners provided Centex pre-suit notice of the alleged defects on Feb. 6, 2014. When Centex informed them that it would not cure the alleged defects, the homeowners filed their complaint on May 2, 2014.

The complaint brought claims for negligence, breach of implied warranty, breach of contract, and violations of the Florida building code and Florida’s Deceptive and Unfair Trade Practices Act. The homeowners alleged that construction experts they hired found the stucco on the walls, drainage systems and windows had been installed improperly, resulting in interior water damage.

In its analysis, the Fourth District rejected the trial court ruling that the homeowners’ action started with the filing of their complaint and thus fell outside of the applicable statute of repose.

“The trial court’s interpretation ignores the full definition of Chapter 95, rendering the rest of the definition, ‘or proceeding,’ as meaningless surplusage,” the panel said.

Florida courts had not previously directly addressed the issue of whether the mandatory pre-suit notice in Chapter 558 qualified as an “action” under Chapter 95, the Fourth District said. But it pointed to the Florida Supreme Court’s decision in 1999’s Musculoskeletal Institute Chartered v. Parham , which stated that the statutory pre-suit notice and investigation requirements for medical malpractice lawsuits qualify as commencement of an action in regard to the statute of repose.

“[I]t would be an unconstitutional impediment to access to the courts if compliance with the statutory requirements … resulted in a potential claimant’s suit being forever barred by the associated statute of repose,” the high court said in Parham. The Fourth District said it found the same applies to construction suits.

The trial court held the Parham decision could not be applied to construction suits because Chapter 558 provides that a defect lawsuit filed without pre-suit notice should be stayed without prejudice until the pre-suit requirement is satisfied, but the court used the stay provision as a sword against the homeowners, the Fourth District said.

“Chapter 558 makes clear that the pre-suit notice requirement is a mandatory procedure that must be complied with before filing suit. Homeowners should not be penalized for rightly complying with the mandates of the statute,” the appeals court said.

Counsel for Centex declined comment Wednesday. Counsel for Reliable Roofing did not immediately respond to an inquiry.

The homeowners are represented by Scott C. Harris of Whitfield Bryson LLP.

Centex is represented by John H. Dannecker, Derrick M. Valkenburg, Jennifer P. Sommerville and Jason B. Gonzalez of Shutts & Bowen LLP.

Reliable Roofing and Gutters is represented by Luis E. Ordonez and Gabriel A. Alfonso of Quintairos Prieto Wood & Boyer PA

The case is Gindel et al. v. Centex Homes et al., case number 4D17-2149, in the Fourth District Court of Appeal of Florida.

–Editing by Dipti Coorg.