BILL NUMBER:S4931

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.
2014 S. 3334 Judiciary Committee/A. 5301 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.