Fifth District publishes new interpretation of Ohio's construction statute of repose

Ohio’s Fifth District Court of Appeals recently issued two holdings in State v. Karl R. Rohrer Assocs., Inc., 2018‑Ohio‑65, that seemingly upend the previously-settled interpretation of Ohio’s construction statute of repose (which bars claims against architects and builders for damage to property or personal injury related to a construction project when those claims are brought more than 10 years after the project is substantially complete).  First, the court held that the statute of repose does apply to breach of contract claims, and not just negligence claims, in contradiction to existing Ohio Supreme Court precedent.  Second, the court held that the doctrine of nullum tempus (“the clock does not run against the king”) does not apply to Ohio’s statute of repose – meaning state entities and private parties alike are subject to Ohio’s 10-year statute of repose.

Holding 1: Ohio’s construction statute of repose applies to breach of contract claims

The present statute of repose in Ohio (Revised Code Section 2305.131),   which has been in effect since 2005, provides that no cause of action to recover damages for bodily injury, an injury to real or personal property, or wrongful death that arises out of a defective and unsafe condition of an improvement to real property and no cause of action for contribution or indemnity for damages sustained as a result of bodily injury, an injury to real or personal property, or wrongful death that arises out of a defective and unsafe condition of an improvement to real property shall accrue against a person who performed services for the improvement to real property or a person who furnished the design, planning, supervision of construction, or construction of the improvement to real property later than 10 years from the date of substantial completion of such improvement.

The Ohio Supreme Court has stated in several opinions over the years that R.C. 2305.131 applies only to actions which sound in tort.  Kocisko v. Charles Shutrump & Sons Co., 21 Ohio St.3d, 488 N.E.2d 171 (1986); Sedar v. Knowlton Constr. Co., 49 Ohio St.3d 193, 551 N.E.938 (1990); Brennaman v. R.M.I. Co., 70 Ohio St.3d 460, 639 N.E.2d 425 (1994).  These decisions, however, all concerned former versions of the statute.  In November 2017 we published an alert titled “Ohio’s construction statute of repose still only applies to tort claims,” where we discussed the Eighth Appellate District’s decision that the statute of repose does not apply to breach of contract actions.  See New Riegel Local School Dist. Bd. of Edn. v. Buehrer Group Architecture & Eng. Inc., 2017-Ohio-8521 (Nov. 13, 2017).  At that time, the Eighth District’s decision was another opinion in a line of precedent that upheld what appeared to be the well-settled rule that Ohio’s statute of repose only applies to tort claims. In fact, based upon the Ohio Supreme Court’s consistency over the past several decades, all of the state’s lower courts have continually fallen in line with this seemingly clear legal principle.  Not anymore.

Enter the Fifth District’s Jan. 8, 2018 opinion in State v. Karl R. Rohrer Assocs., Inc., 2018‑Ohio‑65.   In Rohrer, the Fifth District Court of Appeals held that Ohio’s construction statute of repose applies to both tort and breach of contract claims.  In so holding, the court focused on the language in the statute which provides that the statute bars claims “in any civil action notwithstanding any other section of the Revised Code or prior rule of law of this state * * *.”  The court found that under this language, prior Supreme Court decisions involving earlier versions of the statute which no longer exist do not apply and therefore, past precedent was not considered to be dispositive.

In deciding to not apply Ohio Supreme Court precedent, the court found that the legislature’s intent in enacting the current version of the statute of repose was to limit liability to design professionals and contractors for injury to person or property caused by defective or unsafe improvements to real property, regardless of whether those causes of action sounded in tort or contract.  The implications of this ruling (applying the statute to more than just third party tort claims) will serve, on the one hand, to bring finality to contractors’ and architects’ potential exposure more than 10 years after a project is substantially completed. Whether the claim is based in tort or contract, it cannot be asserted more than 10 years after the project is finished.  On the other hand, this could result in more defective construction lawsuits being brought within that 10 year period in order to preserve a project owner’s right to bring a case, even when it may be premature before responsibility for defects or whether there are even any defects are determined. 

Holding 2: Time does run against the king

In Rohrer, the Fifth District Court issued another significant holding; striking a blow to public owners by eliminating one of their legal protections that has been surprisingly upheld in years past.  Specifically, the court held that the doctrine of nullum tempus does not apply to Ohio’s statute of repose – meaning state entities and private parties alike are subject to Ohio’s 10-year statute of repose.

The doctrine of nullum tempus occurit regi is an ancient common law doctrine that exempts the federal government and most states from general limitations periods.  The phrase’s literal translation is “no time runs against the king.”  The general purpose behind this doctrine is to protect the public interest based upon the policy that the public should not pay the price for the failure of their officials to bring timely actions.  Application of this doctrine varies greatly from state to state.  In Ohio, however, the doctrine has been recognized as a means to allow state entities to bring actions against contractors far beyond the statute of limitations period.  As recently as 2013, the State of Ohio had been successful in having this doctrine applied so as not to bar claims the state had brought for defective construction claims discovered more than 10 years after construction had been substantially competed.  

In Rohrer, the Ohio Department of Transportation (“ODOT”) sued Karl R. Rohrer Associates, Inc. (“Rohrer”) in early 2015 for alleged design defects concerning a garage construction project that was completed in the early 1990s.  ODOT claimed that Rohrer’s work on the project was defective and that all of the brick around the garage’s windows had cracked as a result of Rohrer’s alleged poor design.  Rohrer responded to ODOT’s complaint by arguing that ODOT’s claims were barred by Ohio’s construction statute of repose.  R.C. 2305.131.  The trial court rejected Rohrer’s argument and held that the statute of repose was “generally worded,” did not explicitly indicate that it applies to the state, and it therefore did not apply to claims brought by public owners.  The case proceeded to trial and the trial court ultimately ruled in favor of Rohrer on other grounds at the close of ODOT’s case.  ODOT appealed the trial court’s decision, but Rohrer filed its own appeal of the trial court decision, arguing that the court erred in not dismissing ODOT’s claim based upon Ohio’s 10-year construction statute of repose. 

On appeal, the Fifth District disagreed with the trial court’s decision and held that Ohio’s construction statute of repose extinguishes all claims 10 years after completion of the project regardless of whether the plaintiff is a public or private entity.  The court explained that “because the statute of repose prevents a cause of action from accruing, application of the doctrine to the statute of repose would not stop time from running against the king, but rather would give the king a cause of action where otherwise one would not exist.”  This means – at least as far as the Fifth District Court is concerned – that the state no longer can rely upon the common law doctrine of nullum tempus to preserve claims that are otherwise barred by the statute of repose.

ODOT did not appeal the Appellate Court’s opinion to the Ohio Supreme Court in the Rohrer case – meaning this most recent decision out of the Fifth District will stand as precedent that Ohio’s statute of repose applies to both tort and breach of contract claims, as well as claims brought by state entities.

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