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.
