A Strong Defense

The statute of repose is a viable defense in cases dealing with construction defects in Pennsylvania. It limits the liability of builders for defects by barring suits filed 12 years from the date construction is completed.

In a recent decision from the Superior Court of Pennsylvania, the court affirmed defendants’ motion for summary judgment, dismissing the plaintiffs’ construction-defect claims on the ground that their action was not commenced within the time period set forth in 42 Pa.C.S. § 5536 (the statute of repose). The case is Johnson v. Toll Brothers, Inc. et al., 302 A.3d 1231 (2023). The trial court had ruled that plaintiffs’ suit was barred because over 12 years had elapsed between the completion of the home’s construction and the commencement of the action.

The facts of the Johnson case are as follows: A residence was built in Chester Springs, Pennsylvania, which was designed by Toll Brothers. Toll obtained the building permit and completed construction of the home on Oct. 18, 2004. A certificate of occupancy was issued on the same date. The home was immediately transferred to the original purchasers the same date. The home was later sold and then resold to the Johnsons on Sept. 13, 2016.

On Aug. 21, 2018—over 13 years after the certificate of occupancy was issued—the Johnsons commenced their action via a writ of summons. In 2020, the Johnsons filed their complaint alleging violations of the Unfair Trade Practices and Consumer Protection Law (73 Pa.C.S. §§ 201-1, et seq.), civil conspiracy, fraud, and negligence. The complaint alleged that defendants had negligently, and in violation of the governing building codes, installed door frames, brick façade and windows that allowed for water intrusion into the home, causing continuous damage for five years up to and including the year in which the action was commenced (2018).

Statutes of repose act to bar a plaintiff’s suit before the cause of action arises and are jurisdictional in nature, thus courts must determine their scope as a matter of law. For construction-project cases the statute reads as follows:

A civil action or proceeding brought against any person lawfully performing or furnishing the design, planning, supervision, or observation of construction, or construction of any improvement to real property must be commenced within 12 years after completion of construction of such improvement to recover damages. 42 Pa.C.S. § 5536(a). 

A Statute-of-Repose defense has three elements:

• The project involved lawful improvement to real property.
• Over 12 years elapsed between completion of improvement to commencement of the action.
• The party is in the statute’s protected class.

The Johnson opinion, in reliance on general statutory construction, defines the term “lawful.” The court found that “[e]ven if Toll violated local, state, or federal rules when constructing the residence, the construction was still ‘lawful’ because Toll was authorized under the laws of the Commonwealth to do it.” In other words, Toll was a licensed builder, and the certificate of occupancy was issued by the Commonwealth upon completion of the project.

The Johnson court further opined that the two-year filing extension (from 12 to 14 years) did not apply. The statute of repose states the additional two years applies if “an injury or wrongful death shall occur more than 10 and within 12 years after completion of the improvement.” Moreover, “injury” includes injuries either to persons or property resulting from a construction defect. The court determined that the continuing harm test is inapplicable under the statute of repose. An injury is one that arises for the first time no earlier than the 10th year of the filing period.

In establishing the statute of repose as a defense, the building permits and certificates of occupancy are essential records to maintain.