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Contract – Statute Of Repose – Soffit Replacement – ‘Improvement’

A repair project to replace soffit on building terraces was not an “improvement” under Virginia’s statute of repose, and a Fairfax Circuit Court in this first-impression case says the defendant contractor is not protected under Va. Code § 8.01-250.

This case presents the following matter of first impression: Under Va. Code § 8.01-250 (statute of repose), does a building repair project constitute an “improvement” such that the “cutoff provisions” of the statute would apply? The court concludes that a repair project is not an “improvement” and the statute of repose does not apply.

Defendant Simpson Unlimited Inc. entered into a contract with the subrogor of plaintiff, Three Flint Hill Partnership LLP, which designated Simposon to act as an independent contractor on a building construction project. The terms of the contract required Simpson to replace soffit on the terraces of the building and to perform other maintenance work. Simpson submitted its application certificate for final payment on the job on Dec. 4, 2002, and was paid for its work on Dec. 16, 2002.

On Dec. 20, 2004, there was a water leak on the 8th floor of the building on which Simpson had worked. The leak caused damage to areas of the building that were occupied by tenants. On March 18, 2009, plaintiff filed suit, claiming the water leak was related to work negligently performed by Simpson under the July 2002 contract. The contract between the parties describes the work done by Simpson as “repair/replacement of various exterior building components and cleaning of other building surfaces,” to include work “to remove and replace terrace soffits at the eighth floor level.”

Defendant’s plea in bar seeks dismissal of the cause of action based on the argument that, while the statute of limitations (which runs from the accrual of the cause of action) might not require dismissal, the five-year statute of repose (which runs from the completion of the building project in 2002 or 2003) does apply and would require dismissal of the cause of action.

At argument, the parties agreed that the issue before the court is whether or not “repairs and maintenance” are included within the definition of the word “improvement” as contained in Va. Code § 8.01-250. Defendant argues the soffit replacement enhanced the value of the building and thus it constitutes an improvement under the statute of repose. Plaintiff argues that the soffit replacement is akin to a repair and does not constitute an improvement under the statute of repose.

While the Virginia Supreme Court has defined the term “improvement,” it was in a different context and did not address the issue here.

This court turns to other jurisdictions that have addressed this issue and applies an analysis of the New Jersey Superior Court to hold that the removal and replacement of soffit performed by Simpson was a “mere replacement” that permitted the continuation of the pre-existing use of the property.

Simpson was hired to make necessary replacements of goods that had reached the endpoint of their
useful life span. The work Simpson performed was therefor part of the normal upkeep and maintenance of the building. It was not a modification or an addition, and thus not an improvement under Code § 8.01-250. Therefore, the protection afforded by the statute of repose does not apply in the present case and plaintiff’s cause of action withstands defendant’s challenge.

Plea in bar denied.

Travelers Indemnity Co. v. Simpson Unlimited Inc. (Bellows, J.) No. CL 2009-4013, Jan. 12, 2010; Fairfax Cir.Ct.; Scott E. Snyder for plaintiff; Francis J. Prior Jr. for defendant. VLW 010-8-025, 5 pp.

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