Construction Claims

Limitations and Repose Periods

Statute of Limitations

A breach of any contract for sale must be commenced within four (4) years after the cause of action has accrued. Parties may contract to reduce the period of limitation to not less than one year but may not extend the period. A cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. D.C. Code § 28:2-725.

Breach of a simple contract express or implied must be commenced within three (3) years of the alleged breach. D.C. Code § 12-301(7).

Recovery of damages for injury to:

1. Real property – three (3) years D.C. Code § 12-301(3).
2. Real property from toxic substances including products containing asbestos— five (5) years from the date the injury is discovered or with reasonable diligence should have been discovered. D.C. Code § 12-301(10).
3. Recover for land tenements or hereditaments – fifteen (15) years D.C. Code § 12-301(1).

Recovery for wrongful death must be brought within two (2) years after the death.

When a limitation is not specifically prescribed the aggrieved party has three (3) years to bring a claim. D.C. Code 12-301(8).

Statute of Repose

An action to recover damages resulting from defective property is barred unless the injury occurs within ten (10) years from substantial completion of improvement to real property. D.C. Code § 12-310.

Right to Repair Laws and/or Pre-Suit Statutory Procedures

None

Indemnity and Contribution

Indemnity

D.C. has no statutory provision preventing indemnity contracts in construction cases. Indemnity clauses are allowed as long as they are not “construed to permit an indemnitee to recover for their own negligence unless the court determines that such an interpretation reflects the intention of the parties. W.M. Schlosser Co., Inc., v. Maryland Drywall Co., Inc., 673 A2d 652-53 (D.D.C. 1996).

Contribution

Joint tortfeasors who pay more than their pro rata share have a right of contribution. Berg v. Footer, 673 A.2d 1244 (D.C. 1996); Rose v. Associated Anesthesiologists, 501 F.2d 806 (D.C. Cir. 1974).

Certificate of Merit-Experts

None

Economic Loss Doctrine

The economic loss doctrine in the D.C. bars recovery of economic losses in negligence cases, except where a special relationship exists. Anguilar v. RP MRP Washington Harbour, LLC, No. 13-CV-329(D.C. Court of Appeals, 2014).

Contractor Licensing Requirements

In Bell v. Elite Builders and HVAC, Inc., 949 F. Supp. 2d 143 (D.D.C. 2013), a homeowner brought suit against the contractor remodeling her home after she slipped on a drop cloth in front of her kitchen door in the middle of the night. The contractor, who had been remodeling the home for almost three months, moved for summary judgment arguing that the homeowner assumed the risk of the drop cloth and therefore could not pursue her negligence action. The court agreed, finding that the homeowner had voluntarily exposed herself to an “obvious” risk when she approached the drop cloth in the dark “not once, but twice.” The court also reasoned that the homeowner was fully aware of the danger posed by the drop cloth because it had been in her kitchen for several days, and because she had previously characterized it as a tripping hazard. In the court’s view, the homeowner did not need to be a safety engineer or review “research studies on injury causing worksite mechanisms” to apprehend the “danger of slipping or tripping on a cloth” on a slippery wooden floor.

In Mariano v. Gharai, No. 12-1400, 2013 WL 6098236 (D.D.C. Nov. 21, 2013), a homeowner brought suit against the owner of a neighboring property after the homeowner’s backyard collapsed into the neighboring property due to excavation being done. The homeowner sued the owner of the neighboring property, (the “LLC Owner”), one of its members (the “LLC Owner Member”), and the architect. In response, the LLC Owner Member filed a Third-Party breach of contract and negligence action against the general contractor responsible for the excavation, asserting that it was a beneficiary of the contract between the general contractor and the LLC Owner. Based on that admission, the general contractor moved to compel arbitration against the LLC Owner Member under the arbitration clause in the contract with the LLC Owner. The court denied the motion, finding that the question of whether the LLC Owner Member was a third-party beneficiary was a question of fact and “therefore is not susceptible to judicial admissions.” Accordingly, the court looked beyond the LLC Owner Member’s admission to determine whether the general contractor and LLC Owner intended to benefit the LLC Owner Member. After reviewing the evidence in detail, the Court found that the only evidence to support such a conclusion was the fact that the LLC Owner Member was a member of the LLC Owner, which, in its view, “is plainly insufficient” to conclude that the LLC Owner Member was an intended third-party beneficiary

Construction Damages

Cost of Repair

None

Diminution in Value

D.C. courts have allowed for a tort remedy, but not when it involves the coverage available under an insurance policy. Other jurisdictions were referenced when they determined that “recovery may be had for both the reasonable cost of repair and the residual diminution in value after repair, provided that the award does not exceed the gross diminution in value.” American Service Center Associates v. Helton, 867 A.2d 235 (D.C. 2005).

“When a plaintiff can prove that the value of an injured chattel after repair is less than the chattel's worth before the injury, recovery may be had for both the reasonable cost of repair and the residual diminution in value after repair, provided that the award does not exceed the gross diminution in value.” Id. at 243.

Punitive Damages

To sustain an award of punitive damages in tort cases in D.C., the plaintiff must prove, by a preponderance of the evidence, that the defendant committed a tortious act, and by clear and convincing evidence that the act was accompanied by conduct and a state of mind evincing malice or its equivalent. Jonathan Woodner Co. v. Breeden, 665 A.2d 929, 938 (D.C.1995). The Standardized Civil Jury Instructions for the D.C. provides that the jury “may award punitive damages only if the plaintiff has proved with clear and convincing evidence:

That the defendant acted with evil motive, actual malice, deliberate violence or oppression, or with intent to injure, or in willful disregard for the rights of the plaintiff; and

That the defendant’s conduct itself was outrageous, grossly fraudulent, or reckless toward the safety of the plaintiff.” Croley v. Republican Nat’l Comm., 759 A.2d 682, 695 (D.C.2000) (quoting Standardized Civil Jury Instructions for the District of Columbia, No. 16-1 (1998 ed.)); see also United Mine Workers of Am., Int’l v. Moore, 717 A.2d 332, 341 (D.C.1998).

Attorney’s Fees

Counsel fees are not generally allowed either as damages or costs. However, there are exceptions. One is where a party brings or maintains an unfounded suit or withholds action to which the opposing party is patently entitled, as by virtue of a judgment or because of a fiduciary relationship, and does so in bad faith, or for oppressive reasons, reasonable attorneys' fees may be awarded. 1901 Wyo. Ave. Coop. Assoc. v. Lee, 345 A.2d 456, 464-65 (D.C. 1975).

On application of a prevailing party to a contested judicial proceeding under § 16-4422 (arbitration proceeding), § 16-4423 (seeking to vacate an arbitration award), or § 16-4424 (modification or correction of an award), the court may add reasonable attorney’s fees and other reasonable expenses of litigation incurred in a judicial proceeding after the award is made to a judgment confirming, vacating without directing a rehearing, modifying, or correcting an award.

General joint and several liability rules apply. In D.C. a plaintiff can sue one defendant for the full amount of the damages, but plaintiff can only obtain a single recovery. Leiken v. Wilson, 445 A.2d 993, 999 (D.C. 1982).

Cost Incurred to Access Repair Areas

None

Consequential Damages

The injured are entitled to losses that are the natural consequence and proximate result of the defendant’s tort or breach of contract. Boiseau v. Morrissette, 78 A.2d 777, 780. Injured derived in tort need only be within the risk created by the defendant’s action. Damages as a result of contract breaches must be foreseeable.

Liquidated Damages

Property damage occurs at the time the damage is discovered or when it has manifested. Wrecking Corp. of Am., Virginia, Inc. v. Insur. Co. of North Am., 574 A.2d 1348, 1350 (D.C. 1990). However, there is an exception to this rule when the damage to the property is characterized as “continuous or progressive.” Id.

Below are other definitions of “occurrence” concerning specific topics.

Loss of Use: ‘Loss of use’ under the terms of the policy, must result either from the physical destruction or injury of tangible property or from an ‘occurrence’ which is defined as an accident resulting in bodily injury or property injury. Western Exterminating Co. v. Hartford Accident & Indem., 479 A.2d 872 (D.D.C. 1984)

Resulting Property Damage: It would be a strained interpretation to construe the occurrence clause as though it covered ‘exposure during the policy period which results in bodily injury.’ It is the result which is keyed to the period, and not the accident or exposure.” Abex Corp. v. Maryland Cas. Co., 790 F.2d 119 (C.A.D.C. 1986).

Faulty Workmanship: Under Maryland law, in a case where condominium owners suffered damages the court found no occurrence under a CGL policy where a contractor’s use of defective materials and substandard workmanship resulted in economic losses that would normally be recoverable in a breach of contract action because a breach of contract is not an accident. United States Fire Ins. Co. v. Milton Company, 35 F.Supp.2d 83 (D.D.C. 1998) (Maryland law).

Duty to Defend

An insurer has a duty to both provide the insured with a defense and to indemnify the insured for a judgment up to policy limits. Salus Corp. v. Continental Cas. Co////., 478 A.2d 1067, 1069-70 (D.C. 1984). The duty to defend depends on whether the alleged facts bring the claim within the insurance policy, and the duty to indemnify depends on the ultimate truth of those facts. Id.

Contractual Indemnity: D.C. has no statutory provision preventing indemnity contracts in construction cases. Indemnity clauses are allowed as long as they are not “construed to permit an indemnitee to recover for their own negligence unless the court determines that such an interpretation reflects the intention of the parties. W.M. Schlosser Co., Inc., v. Maryland Drywall Co., Inc., 673 A2d 652-53 (D.D.C. 1996).

Anti-Indemnity Statutes

Additional Insureds: When there are two applicable insurance policies the provisions of each will be interpreted to give effect to the intent of the contracting parties. If it is impossible to reconcile the various clauses then the court will likely require the insurers to apportion the liability. Jones v. Medox, Inc., 430 A.2d 493 (D.C. 1981).

1. Coverage for Additional Insureds own negligence vs. Vicarious Liability for Named Insured
2. Determining Primary and Non Contributory vs. Excess Position
3. Addition Insurers carrier’s rights to reimbursement for defense expenses from other, co-primary carriers

Insureds Right to Independent Counsel and Consequences of Rejecting a Defense

Coverage Defenses

None

Choice of Law (Forum Selection Clauses)

When any District of Columbia court finds that in the interest of substantial justice the action should be heard in another forum, the court may stay or dismiss such civil action in whole or in part on any conditions that may be just. D.C. Code § 13-425. Forum selection clauses are “prima facie valid and will be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances this includes whether the existence of the clause was reasonably communicated to the plaintiff.” "Forrest v. Verizon Communs., Inc., 805 A.2d 1007, 1010 (D.C. 2002).

Targeted Tenders