BILL NUMBER:S3334

TITLE  OF BILL:   An act to amend the civil practice law and rules, in
relation to providing a statute of  limitations  for  certain  actions
against professional engineers, architects, landscape architects, land
surveyors  and  construction  contractors and to repeal section 214-d,
subdivision (h) of rule 3211 and subdivision (i) of rule 3212  of  the
civil practice law and rules relating thereto

PURPOSE:    To  establish  time  limits  after  which  tort claims for
personal injury or wrongful death may not be asserted  against  design
professionals and construction contractors.

SUMMARY  OF  PROVISIONS:    Repeals section 214(d), subdivision (h) of
Rule 3211 and subdivision (i) of Rule 3212, and  adds  a  new  section
214(d) to the Civil Practice Law and Rules ("CPLR") to establish a ten
year  statute  of  repose  for  professional  injury or wrongful death
actions brought against professional engineers, architects,  landscape
architects,  land  surveyors  or construction contractors. The accrual
date for the limitations period would be the date of completion of the
project.   The term completion is  defined  in  subsection  4  of  the
proposed  statute. The bill also includes a one year extension of time
(or grace period) so that if an injury  or  death  occurs  during  the
tenth  year after completion of the project the plaintiff will have an
extra year to commence an action.

              

Subsection 3 of the proposed statute  provides  that  the  affirmative
defense  shall  not  be  asserted by an architect, engineer, landscape
architect,  land  surveyor  or  construction  contractor   in   actual
possession  or  control  of the premises at the time an injury occurs.
Subsection 3 also limits the applicability of the ten year statute  of
repose  to  third party actions, thereby leaving intact the existing 3
or 6 year statute of limitations governing actions by an owner/client.

EXISTING LAW:  Under current law, a cause  of  action  grounded  on  a
theory  of simple negligence brought by a third party (not an owner of
building or structure) against a design professional  or  construction
contractor  is governed by a three year statute of limitations and the
cause of action does not accrue until the injury takes place  --  even
if  the  plaintiff  is injured 20, 30,50 or 100 years after the design
professional has completed work on the building or  structure.    (See
CUBITO  V.  KRIESBURG,  51 N.Y.2d 900, affirming 69 A.D.2d 738 (1980).
Although there is an expedited procedure for those claims brought more
than 10 years' after the completion of the  design  professionals'  or
contractors'   work,   design  professionals  and  contractors  remain
answerable to alleged negligence claims commenced  indefinitely  after
project completion; many design professionals and contractors are thus
forced  to  carry  insurance  coverage even after they retire from the
profession. The insurance problem  is  exacerbated  because  insurance
coverage  is  only  available on a "claims- made" basis rather than an
"occurrence"  basis  --  thereby  requiring   the   professional   and
contractor to maintain insurance coverage well into retirement.

JUSTIFICATION:    When  a  contractor  or design professional's client
(i.e.,  an  owner  of  a  building)  sues  a  contractor   or   design
professional, the CPLR's general statute of limitation rules apply and


operate  to  cut off any claim within a three year or six year period.
In an action brought by an owner/client against a design  professional
or  contractor  for  damages resulting from a personal injury based on
negligence,  a three year statute of limitations applies and the cause
of action accrues at the time of injury. A malpractice claim against a
design professional or contractor by an owner/client carries  a  three
year  statute  of  limitations  and  the  cause of action accrues upon
completion of the project. Similarly, an owner/client claim  based  on
breach  of  contract  is governed by a six year statute of limitations
and the cause of action accrues upon  completion  of  the  contractual
duties.

Chapter  682  of  the  Laws  of  1996,  which  instituted an expedited
procedure for claims against design professionals brought more than 10
years after completion of work, was a positive, yet modest, first-step
to protect design  professionals  from  merit  less  claims  that  are
brought  years,  sometimes  decades;  after  completion  of  a  design
professional's work.

It  is  still  unfair,  however,  to  hold  design  professionals  and
contractors  liable  for errors in design where injuries are sustained
many years after the  rendition  of  services  and  where  the  design
professional  or  contractor no longer has supervision or control over
the premises. This legislation recognizes the fact that there comes  a
time  when  a  structure  passes  from  a  well-designed building to a
well-maintained building. The bill seeks to  place  liability  on  the
person  in  the  best  position  to correct the defects -- the present
Owner of the building, and to relieve the design professional and  the
contractor  from  the  threat of perpetual liability that exists under
current law.

The outer limit of a ten year statute of repose was selected because a
study of insurance claims against design professionals and contractors
prepared for the American Institute of  Architects  demonstrated  that
the  majority  of third party claims are brought within seven years of
project completion. More specifically, the study indicates that  if  a
ten  year statute of repose were in place and the claims were measured
from completion of the project, 100% of all claims brought during  the
study  period  would have been allowed.  The additional one year grace
period which sets an outside limit of eleven years for  those  injured
in  the  tenth year following completion of the project, would provide
additional assurance  that  injured  parties  will  have  a  right  of
recourse. These numbers demonstrate that the problem is not the number
of  actual claims brought after ten years -- the problem is the threat
of  potential  lawsuits  which   forces   design   professionals   and
contractors  to  carry  insurance  coverage long after the project has
been completed and for years after they  supposedly  retire  from  the
profession.

Further justification for establishing a statute of repose is that the
longer  the period of time between the completion of the structure and
the  injury,  the  greater  the  opportunity  for   some   intervening
negligence  to  occur.  The  longer  the owner is in possession of the
improvement, using it, altering  it,  and  maintaining  it,  the  more
likely  it  is  that  an  injury  will  be  the  result of the owner's
negligence  rather  than  that  of   the   design   professionals   or
contractors.


Thirty-two  other  states  have  enacted  legislation  establishing  a
statute of repose of seven  years  or  more  with  completion  of  the
project serving as the accrual date for the cause of action.

LEGISLATIVE  HISTORY:    2011-12 - S. 4782 Judiciary Committee/A. 2475
Higher Ed Committee.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE:  The first of January after the date  it  becomes  law
and  shall  apply  to  all actions commenced on or after its effective
date.