In Rankin v. South Street Downtown Holdings, Inc.,
2019 WL 3562167 (N.H. Aug. 6, 2019), the New Hampshire Supreme Court addressed
whether the state’s Statute of Repose applied to indemnity and contribution
claims against architects, or only applied to claims for direct losses. The Court found the statute did apply and
imposes a time limit on indemnity claims against architects.
In March 2015, John C. Rankin (“Rankin”) was injured in a
fall on commercial property owned by South Street Downton Holdings, Inc. (“South Street”) that had been renovated
between 2002 and 2009. In 2017, Rankin sued
South Street for negligence, alleging the fall was due to a defective ramp or
partial stair that violated the building code.
Over eight (8) years after the renovations were substantially complete, South
Street filed a third-party complaint against the architects TruexCullins and
Partners Architects and the landscape architects, Wagner Hodgson, Inc., both of
whom had been involved in renovating the property.
The architects filed a Motion to Dismiss, arguing the claims
were barred by the state’s eight-year Statute of Repose. Without ruling on the Motion, the trial court
transferred to the Supreme Court the question of whether the Statute of Repose applied
to indemnity and contribution claims against architects. The Court found the Statute of Repose does
apply to indemnity and contribution claims.
The New Hampshire Statute of Repose, RSA 508:4-b, applies to
“all actions to recover damages for. . . economic loss arising out of any
deficiency in the creation or improvement to real property.” South Street argued the Statute of Repose did
not apply because it did not expressly refer to actions for indemnity or
contribution. South Street argued the
term “economic loss” was a term of art that meant the cost of repairing or
replacing a defective product and that the third-party claim was not for
“economic loss” in that sense.
The Court rejected South Street’s argument, holding the Court
and legislature have used the phrase “economic loss” to mean financial or
monetary loss generally in other contexts and this usage was consistent with
the plain meaning of the phrase. The
Court ruled that South Street’s third-party claim sought to recover for
economic loss as a claim for indemnification seeks economic compensation for
the damages paid to a third person.
Applying its ruling, the Court held the Statute of Repose barred South
Street’s third-party claims against the architects.
It is important to note that a Statute of Repose is not an
absolute immunity for professional negligence, but the statutes do impose a
time limit on exposure to liability. Although
the statutes may vary from state to state, the New Hampshire Supreme Court’s
ruling is important, as it makes the statute applicable to third party claims,
as well as direct actions.
