Court Enters Order Finding Claims of Deficient Townhome Construction Were Timely Under Statute of Repose

Florida’s 9th Judicial Circuit recently ruled on competing motions for partial summary judgment, determining that a homeowner’s association’s claims for deficient construction of 104 townhomes were not barred by Florida’s statute of repose, and applying the date of the issuance of the last certificate of occupancy for the project and final payment due date to reach that conclusion.

Beacon Park Phase II Homeowners Association Inc v. D.R. Horton, arises from a lawsuit claiming deficiencies in the construction of 104 townhome units, across 14 separate buildings, and competing motions for partial summary judgment. The specific issue before the Court in the order discussed in this post was whether the homeowner’s associations claims were barred by Florida’s Statute of Repose. By way of a brief aside, while Florida’s legislature earlier this year shortened the statute of repose to seven years (read our write up on it here), this case involves the prior, 10 year version of the statute of repose. In the litigation between the contractor and the homeowners association, the contract asserted as a defense that the claims were barred by Florida’s statute of repose, which requires that claims based on the design, planning, or construction of an improvement be brought no later than 10 years after one of several statutory triggers, as set forth below:

In any event, the action must be commenced within 10 years after [1] the date of actual possession by the owner, [2] the date of the issuance of a certificate of occupancy, [3] the date of abandonment of construction if not completed, or [4] the date of completion of the contract or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest. However, counterclaims, cross-claims, and third-party claims that arise out of the conduct, transaction, or occurrence set out or attempted to be set out in a pleading may be commenced up to 1 year after the pleading to which such claims relate is served, even if such claims would otherwise be time barred.

The contractor sought summary judgment on the language in the statute, and the issues in dispute were whether the statute of repose was triggered by the date of actual possession, date of the certificate of occupancy, or date of completion of the contract, and the events supporting each of those dates.

In response, the association argued that that date of actual possession should be interpretted as the date the last unit was deeded to a non-developer owner. The trial court applied the recent decision in Westpark Preserve Homeowners Association, Inc. v. Pulte Home Corporation, (read our write up here) to reject this argument, and conclude that because the contractor was also the owner, the date of actual possession of the owner was the same as the date of certificate of occupancy.

The Parties also argued as to whether the statute of repose should be applied to the community as a whole, or to each individual unit. While the contractor argued that the court should apply it separately to each unit, the court rejected this argument, finding that no legal authorities adopted the approach suggested by the contractor.

The court concluded that by applying the statute to the community as a whole, the claims were brought timely. Specifically, the court concluded that final payment under the contract was due in October 2011, and the final certificate of occupancy was issued in September 2011. The lawsuit was filed in July 2020, making it timely under the 10 year statute of repose. Based on this, the court entered partial summary judgment in favor of the association on the statute of repose defense.

There are a few takeaways from this case. First, this is only a trial court order following a summary judgment hearing, and doesn’t have any precedential value in the state. But it’s helpful to see how trial courts consider and address these issues.

Second, the trial court applies the statute to the entire community as a whole, and bases the statute of repose deadline on the latest dates possible—final performance under the contract and the last certificate of occupancy. Notably, the recently amended version of the statute of repose indicates that in multi-building projects, each building must be considered its own improvement for the purpose of determining the limitations period. This might result in a different outcome, if the new statute applied to this case.

Finally, contractors should be aware that their liability for work performed can range anywhere from four to seven years, and for a little while longer, ten years if the prior statute of repose applies. This can impact many business planning and insurance decisions, and contractors should make those decisions with these liability time periods in the back of their mind.