In Sears, Roebuck & Co. v. Hardin Constr. Grp., Inc., 697 F. App'x 637 (11th Cir. 2017), the United States Court of Appeals for the Eleventh Circuit affirmed the United States District Court for the Southern District of Alabama’s conclusion that a specific written timeframe is necessary in order to extend Alabama’s statute of repose.
In 1996, Sears and Hardin, Inc. entered
into a contract whereby Hardin agreed to make certain renovations to the
elevator located inside one of Sears' retail stores (the “Contract”). Hardin
substantially completed all work called for under the Contract on June 30,
1997. On June 14, 2014, there was a fatal accident involving the escalator
which had been installed by Hardin pursuant to that contract.
After suit was filed against
Sears for wrongful death, Sears in turned filed suit against Hardin seeking a ruling
that Hardin was required to provide it with defense and indemnification pursuant
to the Contract. Sears’ demand for indemnification occurred nearly nineteen
years after construction had been substantially completed.
Hardin filed a Motion to Dismiss
arguing that the applicable Alabama statute of repose barred the claim. Alabama’s
statute of repose bars all claims against an architect, engineer, or builder,
including claims for contribution and indemnity, seven years after a building
is substantially completed unless an exception applies. One
such exception to the statute of repose is a written contractual agreement extending
the limitations period beyond seven years.
The Court held that while
parties are free to extend the limitations period, in order to do so the
“period of time” must be “specified in writing.” The Court determined that
although the Contract contained a provision which stated that the rights under
the indemnity provision should not be limited by any statutory bar, this alone
was not sufficient to overcome the requirement that the intended “period of time” must be “stated in
writing.” The Court held that the language used in the contract did not
extend the applicable period of repose and Sears' claims against Hardin were
time barred.
In light of this decision, parties are reminded that if they
desire to extend the timeframe an engineer, architect, or builder is required
to provide defense and indemnification obligations beyond the statute of repose
in Alabama, they must include specific language in the contract setting out the
timeframe the obligation is intended to endure for. Failure to include a
specific timeframe in the contract will cut off any such obligation after seven
years, regardless of any other language in the contract which a party may
otherwise believe provides grounds for such an extension.
