Statute of Repose

Jonathan P. Killeen
Shareholder at Boyle | Shaughnessy Law PC in Manchester, NH

No. 2018-0604
August 6, 2019
Interlocutory Transfer Without Ruling By Trial Court

  • Whether RSA 508:4-b, the statute of repose, applies to and bars a third party action by a defendant property owner for indemnity and/or contribution against architects involved in the design of a premises that the first party plaintiff alleged was dangerous and caused him injury.

In March of 2017, the plaintiff fell and was injured on property owned by the defendant, and third-party plaintiff, South Street Downtown Holdings, Inc. (“South Street”). The plaintiff sued South Street for negligence and alleged that the property was dangerous and did not meet the applicable building code. South Street in turn sued the third-party defendants — the project and landscape architects for the subject property — seeking indemnity and contribution. South Street had hired the architects to serve as design professionals for renovations at the subject property. South Street claimed the plaintiff was injured in the area the architects designed. The architects substantially completed the renovations by January 2009. There was no dispute that South Street commenced its action against the third-party defendants more than 8 years after the date of substantial completion.

On interlocutory appeal, the third-party defendants asserted that South Street’s claims were barred by the statute of repose. RSA 508:4-b—the statute of repose—holds, in relevant part, that “all actions to recover damages for … economic loss arising out of any deficiency in the creation of an improvement to real property … shall be brought within 8 years from the date of substantial completion…”

South Street argued that the statute of repose did not apply to claims for indemnity or contribution. Conversely, the third-party defendants asserted that indemnity and contribution claims attributable to deficiencies in the property are barred by the statute of repose because they are actions to recover economic loss arising out of such deficiencies. The Court agreed with the third-party defendants and held that the phrase “economic loss,” when defined by its plain and ordinary meaning, meant loss that is financial, fiscal, or monetary in nature. In doing so, the Court concluded that South Street’s third-party action for indemnity and contribution fell within the meaning of “economic loss” as set forth in the statute of repose. Furthermore, the Court broadly interpreted the phrase “economic loss arising out of any deficiency” to include indirect actions such as those for indemnity and contribution.

 

Shaheen & Gordon, P.A., of Dover, for the plaintiffs, John C. Rankin and MaryAnne Rankin, filed no brief. Devine, Millimet & Branch, Professional Association, of Manchester (Andrew D. Dunn and Tavish M. Brown on the brief, and Mr. Dunn orally) for the defendant/third-party plaintiff, South Street Downtown Holdings, Inc. Lewis Brisbois Bisgaard & Smith LLP, of Boston, Massachusetts (Kenneth B. Walton and Elena M. Brander on the brief, and Mr. Walton orally), for third-party defendant, TruexCullins and Partners Architects. Morrison Mahoney LLP, of Manchester (William A. Staar and Nicholas Meunier on the brief, and Mr. Staar orally) for third-party defendant, Wagner Hodgson, Inc.