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Every jurisdiction has multiple statutes of limitations with
varying time lengths, more than one of which may apply to
claims arising from construction projects. As demonstrated
by the decision in Sprint Communications Co., L.P. v.
Belvidere Construction Co., 2006 U.S. Dist. LEXIS 74260
(N.D.Ill. 2006), claimants must carefully determine and comply
with the requisite limitations period which corresponds to
their specific claim.
In Sprint, the state hired a general contractor to reconstruct a
road intersection (including a bridge and overpass). The
general contractor hired a subcontractor to construct the
bridge and its foundation. The subcontractor, in turn, retained
a sub-subcontractor to auger holes for streetlights and
traffic lights at the intersection. While performing its work,
the sub-subcontractor inadvertently hit a communications
cable. The communications company brought suit against
the subcontractor and sub-subcontractor for damages.
The subcontractor and sub-subcontractor moved for summary
judgment on the grounds that the communications
company’s claim was barred by Illinois’ four-year statute of
limitations for damage occurring during construction. They
argued that the project was an “improvement to real property”
(to which the four-year limitation applies) because the
purpose of the project was to widen the intersection and construct
a bridge and overpass. The communications company
opposed the motion on the grounds that the project was not
an “improvement to real property,” and as such, the more
general five-year statute of limitations for property damage
applied. The communications company’s contention was
based on the fact that the damage to its cable occurred while
the sub-subcontractor was excavating a hole for a street lamp
which already existed on-site prior to the renovation; the
specific excavation that caused the damage was not an
“improvement to real property.”
In analyzing this issue, the court found that the factors for
determining whether work constitutes an improvement to
real property are: (a) whether the work was meant to be permanent
or temporary; (b) whether the work became an integral
component of the overall system; (c) whether the value
of the property increased; and (d) whether the work enhanced
the use of the property. More importantly, such analysis
must focus on the entire system that was constructed, not just
a
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single component. As such, the sub-subcontractor’s augering
work must be considered in light of the entire intersection
reconstruction. The court then found that the subcontractor
and sub-subcontractor had demonstrated that the
changes made to the intersection were substantial, permanent,
and enhanced the value of the property.
As such, the court found that the sub-subcontractor’s augering
work was an improvement to real property. And as an
improvement to real property, the work was deemed to fall
within the parameters of the four-year statute of limitations.
Because the communications company had filed suit more
than four years after the date of discovery of the damage,
the court held that communications company’s claim was
time-barred and granted summary judgment for the subcontractor
and sub-subcontractor.
Note, in addition to applying one or more statutes of limitation
to construction-related claims, many states also have a
“statute of repose” which sets an outside deadline on the
bringing of such a claim, regardless of whether all applicable
statutes of limitation have run. As evidenced in Sprint,
claimants that fail to carefully determine and comply with
all applicable limitation may find that their claim is lost.
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