Supreme Court Holds That 10-Year Statute of Limitations for Construction Defect Actions in CCP § 337.15 is not Subject to Equitable Tolling While Promises to Repair
October 1, 2003
Pursuant to Code of Civil Procedure section 337.15, all actions for latent defects in construction must be brought within ten years after substantial completion of the project. Courts of Appeal in California have split over whether the ten-year period is tolled while defendants' promises to repair the subject defects are pending. On August 4, 2003, the California Supreme Court settled this dispute by holding that the ten-year period is not subject to the doctrine of equitable tolling. The ten-year statute continues to run even while defendants' promises to repair are pending and unresolved.
However, the Court did hold that a defendant may be equitably estopped from asserting the ten-year statute of limitations if plaintiff proves the following: (1) defendant represents, while the limitation period is still running, that all actionable damage has been or will be repaired thus making it unnecessary to sue, (2) the plaintiff reasonably relies on this representation to refrain from bringing a timely action, (3) the representation proves false after the limitations period has expired, and (4) the plaintiff proceeds diligently once the truth is discovered. If plaintiff meets these four factors, a complaint can be brought after the ten-year statute of limitations has expired. However, the defendants' mere failure to do promised repairs is insufficient to establish that defendants' conduct "actually and reasonably induced plaintiffs to forbear suing within the 10-year period of section 337.15." Plaintiffs must establish that defendants' conduct directly prevented them from filing a timely action.
In sum, the Supreme Court held that the ten-year statute of limitations is not "equitably tolled" while defendants' promises to repair are pending. The statute keeps running. However, if defendants' conduct actually induces plaintiffs to forbear suing within the ten-year period, the defendants can be "equitably estopped" from asserting the statute of limitations as a defense.
