BILL NUMBER: S8213

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the civil practice law and rules, in relation to provid-
ing 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 OR GENERAL IDEA OF BILL:

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 SPECIFIC 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 profes-
sional 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 struc-
ture) 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 cover-
age 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 with-
in 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 stat-
ute of limitations applies and the cause of action accrues at the time
of injury. A malpractice claim against a design professional or contrac-
tor 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 meritless claims that are brought years, some-
times decades, after completion of a design professional's work.

It is still unfair, however, to hold design professionals and contrac-
tors 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:

2021-2022 A1706 referred to higher education

2019-2020 A3595 referred to higher education

06/05/18 A2198 held for consideration in higher education

01/16/15 referred to higher education

01/06/16 referred to higher education

2009-10, A.4394 Referred to Higher Education

2007-08, A.2179/S.4228 Referred to Higher Education/Senate Codes

2005-06, A.269/S.1533 Referred to Higher Education/Senate Codes

2003-04, S. 4172/A.9201 Referred to Codes/Senate Codes

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law and shall apply to all sections
commenced on or after its effective date.