In Town of West Seneca v. Kideney Architects, P.C., 2020 WL 5867490 (N.Y. App. Oct 2, 2020), a New York appellate court held a project owner’s claim against the architect accrued, and the statute of limitations began, upon completion of the project, rather than discovery of the damage.  Town of West Seneca, the project owner, contracted with an engineering firm for professional services on the project.  The engineering firm then contracted with Kideney Architects (“Kideney”) for architectural services.  The project was certified as substantially complete in 2002.

In 2017, the Owner discovered damage to the project.  In 2018, the Owner sued Kideney for its defective design, arguing the claim had not accrued until the damage was discovered.  Kideney filed a Motion to Dismiss, arguing the action was barred by the three-year statute of limitations which was triggered by substantial completion.  The Owner responded that Kideney’s argument failed because the Owner and Kideney were not in privity of contract.  The trial court granted Kideney’s Motion.  The appellate court affirmed the dismissal.  The appellate court ruled that, “a claim against an architect accrues upon the completion of performance.”  The appellate court held, “this rule applies no matter how a claim is characterized in the complaint, because all liability for defective construction has its genesis in the contractual relationship of the parties.” (internal quotations omitted).  The Court further held, “[e]ven if the plaintiff is not a party to the underlying construction contract, the claim may accrue upon completion of the construction where the plaintiff is not a stranger to the contract and the relationship between the plaintiff and the defendant is the functional equivalent of privity.” (internal quotations omitted).  As such, the Owners professional malpractice claim accrued in 2002, upon completion of construction, rather than upon the discovery of damage in 2017. 

This case continues the trend to treat claims by an owner against a design professional as contractual claims, rather than negligence claims.  Courts have recently become increasingly likely to find the owner is a third-party beneficiary to these contracts.  This holding has broad implications for owner’s claims, including the trigger of the statute of limitations, such as in this case.