In Bristol Southside Association, Inc. v. Meridian Construction & Development, LLC, the United States District Court for the Northern District of Alabama denied the Defendant’s Motion for Summary Judgment, which it supported by arguing the Plaintiff’s claims were barred under Alabama’s statute of repose. 2020 WL 6712270.

Plaintiff Bristol Southside Association, Inc. (“Bristol”) asserted several claims against Defendant Meridian Construction & Development, LLC (“Meridian”) related to the construction of a condominium development. Meridian was the general contractor for the development. Architecture firm Hemsley Lamkin Rachel, Inc. (“HLR”) designed the development. Members of HLR regularly inspected the development, while Meridian maintained supervision of the development. After each inspection, HLR created Field Reports that were issued to necessary parties, including Meridian. Construction was completed in October 2006.

The development comprised two separate buildings, with exterior cladding made of composite trim, fiber cement siding, brick veneer, and three coat stucco. In 2017, the breezeways which provide access to each unit began to collapse. Bristol investigated and determined that water flowed behind the exterior claddings, the fiber cement had not been applied correctly, and the stucco was not installed consistent with nationally accepted standards. Further, load bearing columns were misaligned, causing them to fail and damage the framing.  HLR’s Field Reports, which Meridian received, identified these issues during construction.

Bristol hired a licensed home inspector to perform an assessment of the Field Reports and the issues later occurring at the condominium. The Field Reports indicated that the waterproof coating was not applied to necessary areas. They also indicated that the mortar for the brick veneer was installed incorrectly, and that the mortar was not properly cleaned during construction. The Field Reports also mandated that a one-inch rod be installed between the stucco and the brick, which the inspector confirmed was never completed. The Field Reports identified other construction issues that the home inspector confirmed were never corrected.

Alabama has a two-year statute of limitations for the claims Bristol brought against Meridian, and a seven-year statute of repose for claims that relate to defect or deficiencies regarding construction. Meridian argued that the statute of repose barred Bristol’s claims.

Bristol argued that neither the statute of limitations nor the statute of repose applied because Meridian had actual knowledge of defects leading to the damage and failed to disclose them. The Court agreed, finding that there was sufficient evidence for a jury to find that Meridian had actual knowledge of the defects and misrepresented to Bristol that those defects had been corrected. The Court denied Meridian’s Motion for Summary Judgment.

Contractors performing work in Alabama should be aware that a statute of repose is not necessarily a bright-line rule. There are exceptions in instances where the claims relate to issues that were known prior to completion of construction. Contractors should be diligent about ensuring that issues identified during the course of construction are corrected prior to completion of the project.