News & Insights

Idaho Supreme Court Rules That Statute Of Limitations Began To Run When Landslide Damaged Lot, Rather Than When Damage To Home Later Manifested

In 2014, Amy and William Dempsey purchased a vacant lot in a subdivision. The Dempseys hired an architect to design a home, who then contracted with Briggs Engineering to prepare plans for site grading, drainage, and erosion control. In 2015, the Dempseys entered into a contract with BrunoBuilt, Inc. to build the home, which called for the Dempseys to transfer ownership of the lot to BrunoBuilt via a quitclaim deed. The contract noted that the Dempseys would pay for the home upon its completion, and then BrunoBuilt would transfer ownership of the property back to the Dempseys.

During construction of the home in 2016, a landslide occurred, resulting in utility lines needing to be rerouted, a retaining wall built, additional land grading, and remediation of a surface crack in the yard. After construction was complete, the City of Boise refused to issue a certificate of occupancy, and the Dempseys refused to pay BrunoBuilt, who still had ownership of the property.

In December 2016, BrunoBuilt filed a professional negligence claim against various engineering firms that originally deemed the subdivision suitable for residential construction back in the early 2000’s. In July 2018, BrunoBuilt discovered that the landslide had caused structural damage to the home and amended the complaint to name Briggs Engineering as a defendant in September 2018, alleging that Briggs failed to identify preexisting landslide conditions and other conditions.

Briggs moved for summary judgment, arguing that BrunoBuilt’s claims were barred pursuant to the 2-year statute of limitations in Idaho Code, Section 5-219(4), because the statute of limitations began to run at the time of the landslide in February 2016. In response, BrunoBuilt argued the statute of limitations did not begin to run until July 2018 when damage to the home manifested. The trial court granted Briggs’ motion for summary judgment and BrunoBuilt appealed.

On appeal, BrunoBuilt argued that the timeliness of these claims depended on whether the damage to the house was separate from the damage to the lot. BrunoBuilt argued that its acquisition of the lot and its construction of the home involved separate transactions, and because the claims were separate, the statute of limitations governing the claim for damage to the house did not begin to run until the damage manifested.

The Idaho Supreme Court disagreed, ruling that the preparation of the lot and the construction of the home were not separate transactions for purposes of applying the statute of limitations. The Court noted that this was one transaction because there was a single contract governing the quitclaim deed and the home construction. The Court pointed to the fact that the agreement provided that the Dempseys would buy back the lot and the house once the home was built, deeming the lot and the house an “integrated whole.”  The Idaho Supreme Court affirmed.

Construction professionals should be mindful of relevant statutes of limitation provisions in each state in which they are working. Delay in filing suit can be costly.