Authored by attorney Ned Nicholas
Builders and design professionals are sometimes sued for personal injuries and property damages arising out of their construction and design work. Because buildings tend to last for decades, builders and design professionals would face decades of potential exposure to such suits if it weren’t for statutes of repose. These statutes set an outside limit on such suits against builders and design professionals. Virginia’s statute of repose sets the outside limit at five years after “the performance or furnishing of such services and construction.” So for a builder, the exposure time should end five years after final completion of construction.
There is an exception to Virginia’s statute of repose for “the manufacturer or supplier of any equipment or machinery” installed in a structure. This exception raises at least two issues important to builders.
First, what is equipment or machinery? This question has generated a lot of court opinions, but no clear rule. It is clear that ordinary building materials such as drywall are not equipment or machinery. But some distinctions have not been so clear. One Supreme Court of Virginia opinion held that a sprinkler head was equipment and another held that an electrical panel box was not equipment. Yet another opinion held that the manufacturer of switchgear and an associated circuit breaker was not protected by the statute of repose.
Second, who is a supplier? General contractors and subcontractors “supply” much equipment and machinery on construction projects. Does that make them suppliers? The answer is “No.” The Supreme Court of Virginia, in the sprinkler head case mentioned above, held that a subcontractor which designed, purchased and installed a sprinkler system was not a “supplier” as that term is used in Virginia’s statute of repose. The same reasoning should apply to general contractors who “supply” equipment and machinery on a project.
Suppliers, presumably, are the middlemen who purchase goods from manufacturers and then sell to contractors. Suppliers of equipment and machinery are not covered by the statute of repose, but construction contractors are, even with respect to equipment and machinery.
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