Does the design/construction statute of repose protect an engineering firm that conducted an inspection of a newly built structure for a prospective purchaser? Manney v. MBV Engineering, Inc. District Court of Appeal, Florida (2019), by Hugh Anderson

Summary: In 2002 Manney retained MBV Engineering to review the construction drawings and inspect a newly built house that Manney was planning to purchase. MBV informed Manney that the structural integrity of the house was excellent. Manney purchased the house.

Thirteen years later Manney retained a structural engineer who reported that the house had significant structural defects, including a design defect in the foundation. Shortly after learning of these defects, Manney filed a lawsuit against MBV alleging negligence in the 2002 inspection. MBV filed a motion to dismiss based on Florida’s 10-year statute of repose, which requires that claims “founded on design, planning, or construction of an improvement to real property” be commenced within 10 years of the first actual possession of the improvements. The trial court found that MBV’s inspection work “related to the planning, design, and construction” and therefore MBV was entitled to the protection of the statute of repose. As a result the trial court dismissed Manney’s lawsuit because it was commenced more than 10 years after first possession. Manney appealed.

Decision: The appellate court reversed the trial court’s ruling. The court reasoned that MBV did not “design, plan, or construct” the house, and held that a claim based on negligence in analyzing the design and inspecting the construction was a step removed from a claim “founded on” design or construction errors. The appellate court concluded that MBV was not shielded by the statute of repose, and instructed the parties to return to the trial court for further proceedings.

Comment: The trial court had taken a broad view, perhaps reasoning that the purpose of statutes of repose is to avoid stale claims that are very difficult to adjudicate many years after the event. The trial court’s standard was whether the claim “related to” design or construction—a standard arguably consistent with the intent of the statute of repose. The appellate court took a narrower view, focusing on the precise words of the statute (only claims “founded on” design or construction are barred).
The result of the Manney v. MBV decision is that the architect and construction contractor that allegedly committed errors in the design/construction are shielded from liability, while the inspector that failed to detect those errors is not.

Although not much information is given in the published case regarding the nature of the defects, during further proceedings MBV may be able to pursue a defense that the owner knew or should have known about the defects much sooner than 13 years after the house was constructed. It is also possible that the errors were not detectable through a standard inspection.
One minor point of interest about the Florida statute of repose is that the repose period starts “after the date of actual possession by the owner…” This differs from the approach taken by most statutes of repose, which measure the repose period from the date of substantial completion.