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Minimize Risk - Maximize Performance
January 2013

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Statute of Limitations At Risk

 

 

Forty years after the Interstate 35 Bridge over the Mississippi river was built, it collapsed in 2007. Minnesota’s Supreme Court voided the 10-year limit on liability, statute of repose, allowing claims to be brought against the design and construction companies. More recently, the Connecticut Supreme Court rendered a decision holding the state immune from statute of limitations and repose defenses, and allowing the state to take action for construction and design defects on a law school library 12 years after completion.

 

The Connecticut Supreme Court decision is State v. Lombardo Brothers Mason Contractors, et al., holds that the state is not bound by statutes of limitations or repose when it wants to sue years later. It will come as a surprise to design and construction professionals that this decision is based on over a century old doctrine known as "Nullum Tempus Occurrit Regi," which means that time does not run against the king.  It’s been described as similar to the sovereign immunity doctrine, but separate. The rule is of ancient origin, reflecting both policy considerations regarding protection of the State's fiscal condition, and the concept that the rules issued by the sovereign do not bind the sovereign itself unless explicitly stated.

 

The century old doctrine "Nullum Tempus” has always been the rule in Connecticut, as it is in most states as part of the common law carried over from English legal traditions. The rule has never been removed in Connecticut, and the Legislature's has been silence in past court decisions.

 

The Connecticut Supreme Court decision identified only two situations where a time period would run against the State.  First - when the statute explicitly names the State as a party against which the time runs. Second - where the State's claim is based on a statute, not common law that includes a time limitation as inherent in the rights established by the statute.

 

The Court struck down a defense offered by one of the defendants based on a negotiated limitations period in its contract. The Court held that the Nullum Tempus doctrine can be waived only by the Legislature itself, and so a contract provision to that effect negotiated by a State officer was not binding on the State.

 

Only a few states have removed this century old doctrine - it continues to be in play in most jurisdictions today. For design professionals and contractors working for a state, it heightens the need for diligence in determining if this doctrine is in play and methods to mitigate your risk. The quality of work,  experience of the project team, having a reasonable budget and schedule is important on public projects, as defects discovered years after completion could still lead to legal exposure. Document retention programs should be considered that take into account the extended time periods applicable to claims by state governments.

 

Recommendations:

 

  • Consult with a qualified design and construction lawyer to determine if the Nullum Tempus doctrine has been abolished by the state’s legislature or state’s courts, can be contractually waived under the state’s applicable law, or otherwise does not apply to the state’s claims.
  • Determine whether the party you are contracting with is a sovereign entity under the applicable state’s law.  According to the Lombardo court case, a sovereign entity in Colorado includes “not” only the state and its subdivisions and agencies, but extends to towns, townships, and public school corporations. 
  • If the Nullum Tempus doctrine applies, determine whether the doctrine can be contractually waived under the applicable state’s laws.
  • If the doctrine can be contractually waived, confirm that the person signing the contract on behalf of the sovereign entity has authority to bind terms that establish a limitation of liability for the State or entity.

You are welcome to forward this notice to others who may be interested.


Thank you.


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SmartRisk



SmartRisk is a leading risk and performance management consultancy for design and building professionals. Through firm specific risk assessments, training and consulting, services focus on improving overall performance, profitability and reducing insurance costs through tailored risk management solutions.

If you have any questions about our services, or would like dicusss how we could assist your efforts, please contact us.

Thank you,

Timothy J. Corbett, BSRM, MSM, LEED GA
Founder & President
626-665-8150
tcorbett@smartrisk.biz
www.smartrisk.biz.

Copyright and Information Only. This newsletter is for information purposes only and should not be construed nor relied upon as guidance, regulatory or legal advice. Readers should consult with appropriate counsel regarding their specific situations and circumstances. 

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