Two Months Late and Thousands of Dollars Short

A recent appellate decision in the matter of Center Street Lofts Condominium Ass’n v. Center Street Partners, L.L.C. et al. (Not Reported in N.W.2d, 2016 WL 7496614) provides an example of how a failure to promptly pursue a claim can lead to expiration of applicable statutes of limitations, which in turn can prevent association plaintiffs from obtaining favorable decisions on otherwise legitimate claims.

In this case, a settlement had previously been reached with the developer and all other defendant subcontractors except the architect for the condominium, so the architect was the only defendant that responded to the appeal.

A statute of limitations is basically a time period in which a lawsuit must be filed, which in the case above began to run from the date that construction defects occurred, and which the court determined to be the completion of construction in June 2007. The plaintiff condominium association argued that the statute of limitations on certain causes of action should have begun to run from the date that the defect was discovered, i.e., when residents began to notice water intrusion in December 2007. But the court disagreed, noting that damage can occur without it necessarily being discovered. The action was filed in August 2013, and the court found that applicable six-year statutes of limitations on those causes of action had expired in June 2013, just two months earlier. There was also an alternate one-year statute of limitations that applied and began to run from August 2011, which is the point in time when it was clear that the association knew there were issues with the design that contributed to the water intrusion. But that is an even shorter time period that expired in August 2012 and therefore obviously did not help the association.

The appeals court also awarded attorneys’ fees to the architect.

We can only wonder as to what factors contributed to the fatal delay in filing the action. But this case just reinforces the importance of promptly addressing these issues with experienced legal counsel.

By Mark Petrie, Legal Assistant