Update on Ohio’s construction statute of repose application to tort and contract claims
Back in July, the Ohio Supreme Court sided with Ohio construction contractors in a highly-anticipated decision in New Riegel Local School Dist. Bd. Of Edn. v. Buehrer Group Architecture & Eng., Inc., 2019-Ohio-2851. The case dealt with the application of Ohio’s statute of repose to breach of contract claims. The court declared that Ohio’s construction statute of repose applies to both tort and contract actions, providing much needed clarity and finality to construction defect claims against contractors in Ohio.
The matter, however, was not fully resolved. It was remanded to the Court of Appeals to address New Riegel’s remaining arguments, one of which was whether the statute in question applies to claims that “accrue” during the 10-year statute of repose period. In other words, if a claim “accrued” within the 10-year period, New Riegel argued that the statute did not apply and the applicable statute of limitations would govern. This is an important argument because most claims “accrue” during the first 10 years after substantial completion as that term is typically defined in case law.
On remand, the Third District Court of Appeals addressed that issue when it cited another Ohio Supreme Court decision that held that the statute “applies to civil actions commenced after the effective date of the statute regardless of when the cause of action accrued.” This is consistent with what Justice Sharon Kennedy addressed in her concurring opinion in the original July 2019 Ohio Supreme Court decision. Click here to review the full decision from the Third District Court of Appeals.
This is an important issue to contractors and designers. While this accrual argument in the New Riegel case may still be appealed, at least two other appellate courts in Ohio have recently addressed the issue and have reached the same result.
In Union Local Sch. District v. Grae-Con Constr., Inc., 2019-Ohio-4877, the Seventh District Court of Appeals cited to the same Ohio Supreme Court case cited by the Third District that held that statute “applies to civil actions commenced after the effective date of the statute regardless of when the cause of action accrued.” The Fifth District Court of Appeals found similarly in another case, Bd. Of Education of Tuslaw Local School District v. C.T. Taylor Co, 2019-Ohio1731.
For now, the issue is settled pending the acceptance of a discretionary appeal by New Riegel to the Ohio Supreme Court. For more information on the New Riegel case, along with McDonald Hopkins’ involvement in the matter on behalf of the Associated General Contractors of Ohio and the Ohio Contractors Association, see our post “Victory For Construction Contractors: Ohio Supreme Court Rules That Construction Statute Of Repose Applies To Both Tort And Contract Claims.”