Indemnification and The Statute of Repose
We have previously written on the difference between the statute of limitations and statute of repose with regard to construction related disputes. As a refresher, in the construction defect context, a claimant has four years to file suit from the date they knew or reasonably should have known with the exercise of due diligence the existence of a defect. This is known as the statute of limitations. However, no matter what, a claimant must sue within ten years from the date of possession of the property by the owner, issuance of certificate of occupancy, date of abandonment of work, or the date of completion or termination of the contract between the engineer, architect, or licensed contractor and the employer, whichever is last to occur. This is the statute of repose.
For contractors, there is an additional analysis that must be made when seeking to sue a subcontractor for indemnification. “The statute of limitations for an action seeking indemnity does not being running until the litigation against the third-party plaintiff [general contractor] has ended or the liability [against the third-party plaintiff], if any, has been settled or discharged by payment.” Castle Constr. Co. v. Huttig Sash & Door Co., 425 So.2d 573, 575 (Fla. 2d DCA 1982). The Second District found in Castle Construction that the general contractor’s indemnity claim against subcontractor did not accrue until the owner’s litigation against the general contractor ended or the general contractor’s liability was determined. As such, the statute of limitations for the general contractor’s indemnification claim did not begin to start running until its liability to the owner for the defects was discharged / settled.
However, although the statute of limitations may not begin to run for the indemnification claim until the time period referenced in Castle Construction, the statute of repose still applies. In Dep’t of Transp. V. Echeverri, 736 So.2d 791 (Fla. 3d DCA 1999) the Third District explained that the statute of repose for construction defect claims still applies to claims for indemnity. Therefore, even if a general contractor sues a subcontractor for indemnification within the time period allowed under Castle Construction, it is still bound by the ten year statute of repose that started accruing on the date of possession of the property by the owner, issuance of certificate of occupancy, date of abandonment of work, or the date of completion or termination of the contract between the engineer, architect, or licensed contractor and the employer, whichever is last to occur.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.