Morrison Mahoney Partner William Staar and Associate Nicholas Meunier prevail in a construction litigation case before the New Hampshire Supreme Court.
The plaintiff is an elderly man who fell on a short set of exterior stairs and ramp that are part of a commercial property in Hanover, New Hampshire. As a result, he suffered severe facial injuries. The plaintiff sued the property owner, arguing that a defective design plagued the stairs and ramp and that such design caused him to fall. The owner filed contribution and indemnity claims against several building professionals allegedly involved in the design and construction of that stairs and ramp, including our insured, i.e., a landscape architect.
We moved to dismiss, arguing as follows: (1) A New Hampshire statute of repose, i.e., RSA 508:4-b (1990), bars all claims against building professionals “arising out of” allegedly-defective defective construction that are over eight years post the date of substantial completion of a project and (2) that the owner brought his third-party claims against our insured 8.5 years after the local town issued a certificate of substantial completion. The owner conceded that the third-party claims were late but argued that the statute of repose only barred direct claims against building professionals and that it did not bar indemnity nor contribution claims. He principally relied on the fact that the pre-1990 version of the statute did specifically bar indemnity and contribution claims and that the current version of the statute did not. The trial court did not rule on the motion and, instead, passed the issue to the New Hampshire Supreme Court.
The NHSC found that the current version of the statute bars both indemnity and contribution claims. Its principal reasons were as follows: (1) Although the current version of the statute does not explicitly bar indemnity and contribution claims as the prior one did, it contains broader language that does encompass such claims. Specifically, the current statute bars “all actions” older than eight years against building professionals “to recover damages for . . . economic loss arising out of any deficiency in the creation of an improvement to real property.” The Court found that a successful claim by the plaintiff against the owner would constitute an “economic loss” that “arose out of” such an alleged deficiency; (2) Excepting contribution and indemnity claims from the statute fundamentally would frustrate the central purpose of the statute, i.e., to allow building professionals to be free and clear from lawsuits pertaining to their work on a particular project eight years after the completion of such work. As made clear by the legislative record for the statute, the goal of the statute was to protect such professionals from all claims arising out of their work. The genesis of the statute was that, prior to its enactment, many building professionals operating in New Hampshire suffered severe financial strain by having to maintain liability insurance for their work sometimes decades after they completed such work, including well into retirement.
Oral argument for this matter was held in the House Chamber at the New Hampshire State House, the oldest active sate house in the country, to celebrate the bicentennial anniversary of the state house. All five NHSC justices sat for oral argument, and almost 400 members of the public sat in House seats to watch the hearing. At the close of oral argument and after the justices left the bench, Bill and the attorneys for the owner and another third-party defendant engaged in a 45-minute Q & A session with the attendees, which is available here. Please click here to view the entire press release.
