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Florida Appellate Court Affirms Statute of Limitations for Latent Construction Defects

Analysis of The Cottages at Stoney Creek Condominium Association, Inc. et al v. JDR Construction, LLC et al, No. 1D20-956, 2021 WL 2209851 (June 1, 2021) aff’d per curiam.

Construction defect litigation often surrounds a dispute over timeliness in bringing the claim for purposes of surviving a statute of limitations defense. In the case of latent defects, Florida Statutes § 95.11(3)(c) bars an action “founded on the design, planning, or construction of an improvement to real property" if it is not commenced within four years of the date the latent defect "is discovered or should have been discovered with the exercise of due diligence.” Success on this defense acts as a complete bar to liability for the developer, designer, or contractor. A long line of Florida cases hold that the limitations period begins to run once there is an obvious manifestation of the defect, regardless of whether the claimant knew the exact nature of the defect. More often, the dispute centers on whether the manifestation is "obvious" or could be due to causes other than an actionable defect, in which case a factual issue remains.

Recently, the First District Court of Appeal, in The Cottages at Stoney Creek, affirmed without opinion a trial court’s final order enforcing the statute of limitations defense to bar a condominium association’s construction defect claim against a general contractor. The trial court’s order1 focused on whether the evidence established, for purposes of summary judgment, that the association knew or should have known of certain defects it sued upon, based on a 2011 Building Evaluation Report and other contemporaneous evidence issued six (6) or more years earlier. According to the Order, the 2011 Report identified certain stucco cracks and water intrusion. In 2017, the association produced a separate report, which, according to the Order, identified the “same claims” that were in the 2011 Report. The trial court concluded that the defects asserted in the lawsuit were discovered or readily discoverable four years prior to the lawsuit and, thus, the lawsuit was precluded by the statute of limitations.

On appeal, many of the questions at oral argument2  focused on whether the identification of stucco cracks in the 2011 Report constituted sufficient evidence to bar the assertion of the alleged latent defects concerning the stucco system identified in the 2017 Report. Compare Performing Arts Ctr. Auth. v. Clark Constr. Grp., Inc., 789 So.2d 392, 394 (Fla. 4th DCA 2001) (“[W]here there is an obvious manifestation of a defect, notice will be inferred at the time of manifestation regardless of whether the plaintiff has knowledge of the exact nature of the defect. However, ... where the manifestation is not obvious but could be due to causes other than an actionable defect, notice as a matter of law may not be inferred.”). During oral argument, the panel and the contractor’s counsel echoed the trial court’s citation of certain correspondence among the association's board of directors in 2011-2012 discussing the existence and extent of the stucco cracks. Although the appellate court’s opinion is of no precedential value, the record and oral argument demonstrate that the defense remains an important—and sometimes case-dispositive—defense that may be available to defendants in construction defect lawsuits. Moreover, the record highlights the type and extent of evidence, including contemporaneous communication, that the trial court may look to in determining whether a party discovered or should have discovered a defect under the strictures of section 95.11(3)(c).

[1] The trial court’s order can be accessed here.
[2] The link to the appellate oral argument can be accessed here.

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Scott L. Baena is a senior partner with Bilzin Sumberg Baena Price & Axelrod LLP in Miami and chairman of the firm's restructuring and bankruptcy group. His practice focuses on creditor's rights, workouts, bankruptcy and commercial loan transactions.