WHAT CONSTITUTES NOTICE OF A DEFECT TO START THE RUNNING OF THE STATUTE OF LIMITATIONS?

 By Larry R. Leiby, Esq. and David S. Hawkins

            In order to sue a contractor for defective "design, planning, or construction" of an improvement to real property the plaintiff must file suit within four years of becoming aware of the defect pursuant to Fla. Stat. 95.11(3)(a).  As a further limit, the action must be brought within 15 years from the completion, abandonment, or occupancy pursuant to Fla. Stat. 95.11(3)(c).     When the plaintiff had notice of the defect will determine whether the plaintiff has timely filed suit.

            In Snyder v. Wernecke, 2002 WL 491855 (Fla. 4th DCA 2002) a buyer purchased a home from the owner-builder in 1983.  The buyer noticed cracks in the foundation in 1989 or 1990 and asked the builder about them.  The builder told the buyer that the cracks were mere settlement, which was normal and occurs everywhere.  The cracks, however, got worse. In 1997 the buyer hired an engineering firm to do soil tests to determine the cause of the settlement.  The tests established that the fill consisted of loose sand, marl and muck, which is unacceptable material upon which to build a house.  This is not new technology.  See the Bible, for example. 

            The buyers filed suit in December of 1997, 14 years after they purchased the home and 7 years after first asking the builder about the cracks in the foundation.   The trial court found in favor of the buyers and awarded them $70,000 in damages.  The builder appealed.

            On appeal, the builder asserted that the buyer’s action was barred by the statute of limitations, and contended that the buyers had notice of the cracks in the foundation in 1989 or 1990, seven years prior to filing their suit. The buyers countered that they did not have constructive notice of the real defects until after the inspection in 1997 because the cracks first noticed in 1989 or 1990 were not sufficient or large enough to put them on notice of a foundation problem .

            The builder referred to a number of appellate cases decided in 1982-3, which held that notice of a problem roof occurs as soon as the owner finds any sign of the defect (e.g., a leak).  The builder said that under that logic and those decisions, the statute of limitations started running on the buyer’s claims as soon as the buyer became aware of the cracks (in 1989-90).

            The buyer argued that the small cracks that they found in 1989-90 were not sufficient to put them on notice of a foundation problem.  The cracks could have been settlement cracks that are not indicative of a problem.  When the cracks grew larger beyond what would be normal settlement cracks, the buyer was then on notice, and not before.  When the cracks got larger, the buyer hired an engineer and was made aware of the foundation problem.

            The Appellate court agreed with the buyers and held that the buyers did not have notice of the defect until after the inspector's report.   The court stated the following rule:  “where the manifestation (of the defect) is not obvious but could be due to causes other than an actionable defect, notice as a matter of law may not be inferred.”

If a roof leaks, you know you have a problem.  If you have small cracks in concrete, you don’t necessarily know you have a problem.