ELEVENTH CIRCUIT COURT OF APPEALS AFFIRMS NECESSITY TO INCLUDE SPECIFIC TIMEFRAME IN CONTRACT IN ORDER TO PROPERLY EXTEND INDEMNITY AND DEFENSE OBLIGATIONS BEYOND SEVEN YEAR STATUTE OF REPOSE FOR ANY CLAIM AGAINST AN ARCHITECT, ENGINEER, OR BUILDER
In Sears,Roebuck & Co. v. Hardin Constr. Grp., Inc., 697 F. App'x 637 (11th Cir.2017), the United States Court of Appeals for the Eleventh Circuit affirmed theUnited States District Court for the Southern District of Alabama’s conclusionthat a specific written timeframe is necessary in order to extend Alabama’sstatute of repose.
In 1996, Sears and Hardin, Inc. enteredinto a contract whereby Hardin agreed to make certain renovations to theelevator located inside one of Sears' retail stores (the “Contract”).Hardinsubstantially completed all work called for under the Contract on June 30,1997. On June 14, 2014, there was a fatal accident involving the escalatorwhich had been installed by Hardin pursuant to that contract.
After suit was filed againstSears for wrongful death, Sears in turned filed suit against Hardin seeking a rulingthat Hardin was required to provide it with defense and indemnification pursuantto the Contract. Sears’ demand for indemnification occurred nearly nineteenyears after construction had been substantially completed.
Hardin filed a Motion to Dismissarguing that the applicable Alabama statute of repose barred the claim. Alabama’sstatute of repose bars all claims against an architect, engineer, or builder,including claims for contribution and indemnity, seven years after a buildingis substantially completed unless an exception applies. Onesuch exception to the statute of repose is a written contractual agreement extendingthe limitations period beyond seven years.
The Court held that whileparties are free to extend the limitations period, in order to do so the“period of time” must be “specified in writing.”The Court determined thatalthough the Contract contained a provision which stated that the rights underthe indemnity provision should not be limited by any statutory bar, this alonewas not sufficient to overcome the requirement that the intended “period of time” must be “stated inwriting.” The Court held that the language used in the contract did notextend the applicable period of repose and Sears' claims against Hardin weretime barred.
In light of this decision, parties are reminded that if theydesire to extend the timeframe an engineer, architect, or builder is requiredto provide defense and indemnification obligations beyond the statute of reposein Alabama, they must include specific language in the contract setting out thetimeframe the obligation is intended to endure for. Failure to include aspecific timeframe in the contract will cut off any such obligation after sevenyears, regardless of any other language in the contract which a party mayotherwise believe provides grounds for such an extension.
