Watts v. Putnam County
| Decision Date | 30 June 1975 |
| Citation | 525 S.W.2d 488 |
| Parties | James T. WATTS, etc., et al., Petitioners, v. PUTNAM COUNTY et al., Respondents. |
| Court | Tennessee Supreme Court |
James T. Watts, etc., Charles C. Trabue, Jr., Nashville, Solon Fitzpatrick, Carthage, R. Bruce Draper, William R. Willis, Alfred H. Knight, III, Nashville, for petitioners.
T. Eugene Jared, Aron P. Thompson, Cookeville, for respondents.
Petitioners seek review in this Court by way of certiorari to the Court of Appeals for the Western Section sitting at Nashville.
We are concerned with the proper construction of Chapter 353 of the Public Acts of 1965, carried forward into Tennessee Code Annotated as Sections 28--314 through 28--318. These sections deal with actions to recover damages for any deficiency in the design, planning, supervision, observation of construction, construction of, or land surveying in connection with, an improvement to real property, for injury to property, real or personal, arising out of any such deficiency, or for injury to the person or for wrongful death arising out of such deficiency.
Section 28--314 provides in substance that all such actions shall be brought within four years after substantial completion of the improvement.
Section 28--315, provides in substance if an injury to Person or property occurs during the fourth year after such substantial completion, an action shall be brought within one year after the date on which such injury occurred, and in All events Within five (5) years after the substantial completion.
Section 28--316, provides in substance that nothing in 28--314 to 28--318 shall be construed as Extending the period or periods provided by the laws of Tennessee for the bringing of any action, nor shall said sections be construed as Creating any cause of action not heretofore existing or recognized.
Section 28--317 provides in substance and in pertinent part that this limitation shall not be available as a defense to any who shall have been guilty of Fraud . . . or to any person who shall Wrongfully conceal any such cause of action.
Section 28--318 merely contains definitions.
Any proper understanding and analysis of these statutes must start with the recognition that they are virtually verbatim the Model Code proposed by the American Institute of Architects, the National Society of Professional Engineers, and the Associated General Contractors. 1
Similar statutes were adopted between 1964 and 1969 in some thirty jurisdictions as a result of the activities of these interested associations and following major extensions of their potential liability. 2
We must, therefore, indulge in the realistic recognition that they were designed to mitigate against liability.
It, therefore, follows that their purpose was to provide outer limits of liability (five years as a maximum) as to all potential actions based upon injury to person or property, and without regard to the date of discovery and without distinction between personal injury and property damage.
The four-year limitations, as imposed by Sec. 28--314, is but an outer limit or a ceiling. This is not a conventional statute of limitations. Sec. 28--316 makes it clear that these statutes do not extend the 'period, or periods provided by the laws of Tennessee . . . for the bringing of any action.' This wording effectively says that the limitations imposed by Sec. 28--304 (one-year personal injury) and 28--305 (three-year property damage) are applicable in a limited sense. Sec. 28--314 et seq. are simply superimposed upon existing statutes. Suits for personal injuries and for property damage must be brought within one and three years, respectively, from and after the date of injury or damage, or the date of such injury or damage was discovered or should have been discovered with reasonable care and diligence, 3 subject to the ceiling imposed by Sec. 28--314 et seq.
These statutes (Sec. 28--314 et seq.) are entirely unrelated to the accrual of any cause of action, since they begin to run on the date of substantial completion as opposed to the date of injury or damage.
We should point out that the additional year provided under Sec. 28--315 is merely a grace period designed to guard against the patent injustice of a situation wherein injury or damage occurs or is discovered in the fourth year.
These statutes may not be construed to extend any existing statute of limitation, but they must be construed to curtail and limit all other periods to the four-year period, plus one year of grace, in appropriate cases.
Judge Matherne, writing for the Court of Appeals in Leyen v. Dunn, 62 Tenn.App. 239, 461 S.W.2d (1970), held as follows:
We conclude the legislative intent was that when a person suffered personal injury, as a result of situations covered by the Act, within four (4) years after substantial completion of the improvement, that person could bring suit for damages thus sustained within one (1) year after the date of injury. 461 S.W.2d at 44.
We approve this holding (relating only to actions for personal injuries) but wish to make it entirely clear that suits for personal injuries continue to be governed by Sec. 28--304, T.C.A., interpreted by the case law of the state and within the framework of the foregoing discussion.
In March 1972, Judge Neese filed his opinion in City of Kingsport, Tennessee v. SCM Corporation, 352 F.Supp. 288 (E.D.Tenn.1972), wherein he followed Leyen, which applied only to personal injury actions, and surmised that:
(T)he courts of Tennessee would hold that the limitation of this action is governed by T.C.A. § 28--305, and that a person whose property is damaged, as a result of defective improvement of real estate, within four years of substantial completion of the improvement, has three years from the date of the accrual of his cause of action to bring suit. Id. at 290.
With utmost deference to Judge Neese, for whose judgment we have profound respect, and for the reasons hereinabove pointed out, we cannot approve or accept this construction.
Judge Wilson touched upon this statute in Agus v. Future Chattanooga Development Corporation, 358 F.Supp. 246 (E.D.Tenn.1973). He takes the position that:
(T)he intent of the Tennessee (L)egislature in passing T.C.A. § 28--314 was to insulate contractors, architects, engineers and the like from liability for their defective construction or design of improvements to realty where either the occurrence giving rise to the cause of action or the injury happens more than four years after the substantial completion of the improvement. Id. at 251.
We take note that Judge Wilson holds in Agus that where the occurrence or injury giving rise to the cause of action comes more than four years after substantial completion, suit is barred. This conclusion is harsh, but it is demanded under the statutory scheme.
We now analyze the opinion of the Court of Appeals in the instant case, believing that such analysis will further clarify these statutes.
We agree with the majority holding that Sec. 28--314 et seq., are special and limited in scope, whereas Sec. 28--305 applies generally to property damage actions; and that applicable special statutes prevail over general statutes.
We further agree that there is no vested right in a statute of limitation unless and until the cause or action has accrued and expired. McCroskey v. Bryant Air Conditioning, supra; and that until the statute has run, it is remedial in nature and applies to a cause of action existing prior to its enactment. We, therefore, agree that Sec. 28--314 et seq., are applicable to this case. We do not overlook the concluding sentence of Sec. 28--316, wherein it is provided that '(s)aid sections shall not affect rights accrued, liabilities incurred or duties imposed prior to May 5, 1965.' 4 The Watts contract was entered into on January 27, 1964, but no tort action rights accrued and no liabilities were incurred until after May 5, 1965. The parties concede that the Watts project was substantially completed in 1966. Final payment was made on February 28, 1967.
We agree that these statutes contain no distinction between personal injury and property damage and that the legislature intended that they apply equally and uniformly to such actions, but, of course, each is to be governed by its own statutory period of limitation.
We agree that the legislature 'intended that architects, engineers, etc. not be subject to lawsuits for the reasons contemplated by the Act except for these injuries which occur within four years after substantial completion, and such lawsuits must be brought in any event not later than five years after substantial completion of the improvement.'
We do not agree with the majority opinion's observation that:
(I)t would be inconsistent to allow a person three years to bring his lawsuit when the injury to property occurred during the first, second and third years after substantial completions of the improvement, but allow only one year when the injury occurred during the fourth year.
This holding represents a faulty construction of the statute. Laying aside the question of discovery, the following tabulation indicates the meaning and intent of the law:
If Property Suit Must Be Filed No
Damage Occurs Within: Later Than--
--------------------- -------------------------
First year Three years after Date of
Damage
Second year End of fourth year (up to
a maximum of 2 years and
364 days)
Third year End of fourth year (up to
maximum of 1 year and
364 days)
Fourth year End of fifth year
Fifth year Statute has run
This may be an inconsistent, inequitable and undesirable 5 law, but it represents the clear legislative intent.
Again, we disagree with the following holding:
We therefore conclude that when a person suffers...
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