Generally, a six-year statute of limitations applies to claims for negligence and breach of contract. However, a shorter two-year limitation period applies to construction claims under Minn. Stat. § 541.051, subd, 1(a) (the “Improvement to Real Property Statute”).
The Improvement Real Property Statute applies to claims for property damages or bodily injury “arising out of the defective and unsafe condition of an improvement to real property” against any party who “perform[ed] or furnish[ed] the design, planning, supervision, materials, or observation of construction or construction of the improvement to real property.”
Disagreement has existed over whether a demolition contractor “perform[ed] . . . construction.” Plaintiffs have traditionally sought to limit “construction” to the building or addition of something, arguing that “demolition” does not fall within the definition of construction as it involves destruction, removal, and/or abatement (i.e., taking something away) as opposed to building or adding something.
In 1997, the Minnesota Court of Appeals seemingly put the issue to rest in Brandt v. Hallwood Mgmt. Co., 560 N.W.2d 396 (Minn. Ct. App. 1997), by unanimously holding that demolition is not construction. The Minnesota Supreme Court declined to review the appellate decision. Therefore, the governing rule was that the two-year statute of limitations in the Improvement Real Property Statute did not apply to demolition contractors.
Brandt governed contract and tort lawsuits against demolition contractors until the Minnesota Supreme Court’s February 3, 2021, decision of Moore v. Robinson Environmental, A19-0668, ___ N.W.2d ___ (Minn. 2021). Moore explicitly overruled Brandt and held that demolition is in fact “construction.” As such, the two-year statute of limitations in the Improvement Real Property Statute did apply. The court saw no distinction between contractors who performed subtractive work and those that performed additive work on the same project.
Moving forward, lawsuits claiming property damage or bodily injury for the negligence and/or breach of contract by a demolition contractor must be brought within two-years of the date of discovery. The date of discovery is the earlier of (1) the date of actual discovery of the injury or damage; or (2) the date that the plaintiff had sufficient facts to be put on notice that a potential injury or damage exists. If the plaintiff fails to properly serve the summons and complaint on the demolition contractor within that two-years, the court should dismiss the lawsuit.
For more information, contact partner Elizabeth J. Roff.