March 28, 2008

Evidence of "significant and pervasive" problems in an newly constructed home starts the statute of limitations period in claims against homebuilders


Home buyers brought suit against home builder alleging fraud, breach of contract, consumer protection violations, negligent misrepresentation, and negligence. The trial court granted the builder's motion for summary judgment based upon the statute of limitations and statute of repose. We affirm.

Opinion may be found at the TBA website:

"It is well-settled law in this state that 'the gravamen of an action, rather than its designation as an action for tort or contract, determines the applicable statute of limitations.' ... Pursuant to these authorities, we must conclude that, with respect to all but the consumer protection claims, the Liggetts’ claims are governed by the three-year statute of limitations set forth at Tenn. Code Ann. § 28-3-105. The claim for violations of the Consumer Protection Act is governed by the special one-year statute of limitations set forth at Tenn. Code Ann. § 47-18-110." Id.

"In interpreting the provisions of Tenn. Code Ann. § 28-3-105, the courts have held that, in a suit for property damages, 'the cause of action accrues at the time the injury occurs, or when it is discovered, or when in the exercise of reasonable care and diligence the injury should have been discovered.' ... The Liggetts filed their complaint on March 2, 2004. Under the statute of limitations of Tenn. Code Ann. 28-3--05, any cause of action that accrued prior to March 2, 2001 would be barred because the complaint would not be filed within three years of the accrual of the cause of action. ... In light of the overall picture of the information known to the Liggetts prior to March 2001, however, this Court has reached the conclusion that they were on notice that there were significant and pervasive problems with the construction of their home. ... Viewing the evidence in the light most favorable to the Liggetts, we must conclude that they knew of significant defects prior to March 2001 and either knew or should have known that they had a cause of action against Brentwood Builders for fraud and/or negligent misrepresentation." Id.