Mr. ABERNETHY. What is meant by "after the 'cause of action. accrues' "'?

Mr. FAULKNER. When a person is injured or property is damaged. The only statute in the District on this says that action must start within three years, but this could happen 20 years from now, or 30 years from now. There is no limitation.

Mr. ABERNETHY. It is not three years from the date that the construction is completed?

Mr. FAULKNER. That is right. That is what we are trying to get. In order to remedy this hardship, the proposed bill would create a new Section 310 of Title 12 of the District of Columbia Code, which would provide a period of four years following "substantial completion" of improvements to real property during which actions for damages arising out of such improvements could be brought against persons involved in the design and construction of such improvements.

Mr. ABERNETHY. Does the bill define "substantial completion?" Mr. FAULKNER. Yes. It is in the bill at page 2, line 22.

Furthermore, within the four-year period, the action would have to be commenced within two years following the discovery of the damage, but, if the injury or damage occurred in the fourth year following substantial completion, the injured party would have a minimum of one year to commence his action.

It should be understood that this bill would not limit the injured party's rights against the owner or landlord of the property, whose liability for maintaining an unsafe structure would be unaffected by the proposed bill.

Nor would it limit the owner's contract and warranty claims against the architect, the engineer or the contractor.

The need for a statute of limitations of this sort for the District of Columbia is evident from the fact that since 1961 over half of the states have enacted laws to create statutes of limitation similar to the proposed bill, although they vary in certain details. I am submitting a list of such statutes as an item to be entered into the record.

Mr. ABERNETHY. They are attached to this statement?

Mr. FAULKNER. Yes, sir. Please note that though in some cases the period of limitations in such states appears to be more than four years, the period may start long before the improvement is substantially completed, and, hence, before the person's design or work is actually tested in use. H.R. 6527's entire four-year period on the other hand would be a time of actual use and testing. The amendments I suggest would (1) assure the injured party a minimum period of one year to commence his action, and (2) more clearly define the area of the bill's application.

In view of the rising tendency to sue architects, engineers and contractors for enormous claims for damages to property and persons, we believe that it is only fair to put some limitation on the period during which actions of this sort can be brought. We believe H.R. 6527, amended as we proposed, would provide this necessary and reasonable protection in the fairest possible manner.

(The attachments submitted by Mr. Faulkner follow:)

84-854-67- -2

MEMORANDUM RE STATUTES OF LIMITATIONS FOR THE DESIGN PROFESSIONS (As of September 29, 1967)

According to our information, the states which have passed Statutes of Limitations applicable to the work of architects and engineers are as follows:

Wisconsin. West's Wisconsin Statutes Annotated, Chapter 412, Title 30, Section 330.155, Laws of 1961. Statutory period is six years after performance of services and construction.

Illinois. Smith-Hurd Illinois Annotated Statutes, Chapter 83, Section 24-f, Laws of 1963. Statutory period is four years after performance of services and construction.

*Ohio. Revised Code of Ohio, Section 2305.131. Statutory period is ten years after the performance or furnishing of such services as an architect or professional engineer.

North Carolina. The General Statutes of North Carolina, Chapter 1, Section 1-50(5), Laws of 1963. Statutory period is six years after furnishing of services and construction.

Virginia. Code of Virginia, 1950 Edition as amended, Title 8, Section 24.2. Approved March, 1964. Statutory period is five years after performance of services and construction.

*Louisiana. Louisiana Revised Statutes of 1950 as amended, Title 9, Section 2772. Approved by the Governor July 10, 1964. Statutory period is ten years after occupancy or after completion of design if there was no inspection.

Idaho. Idaho Code, Section 5-241. Approved March 8, 1965. Statutory period is six years after final completion.

Tennessee. Tennessee Code, Title 28, Chapter 3, Sections 1-6, inclusive. Approved March 26, 1965. Statutory period is four years after substantial completion of construction.

Minnesota. Approved May 21, 1965. Statutory period is ten years after final completion of construction.

New Hampshire. New Hampshire Revised Statutes Annotated, Section 508:4-b. Became effective July 27, 1965. Statutory period is six years after performance of services and construction.

Nevada. Nevada Revised Statutes, 11.205. Statutory period is six years after substantial completion.

*Pennsylvania. 12 Pennsylvania Statutes, 65.1-65.5. Became effective July 1, 1966. Statutory period is twelve years after furnishing design, observation of construction or construction.

Kentucky. Kentucky Revised Statutes, Section 413.115. Approved June 16, 1966. Statutory period is five years after substantial completion.

Mississippi. Senate Bill No. 1652, 1966 Regular Session. Approved June 15, 1966. Statutory citation not available. Statutory period is ten years.

South Dakota. House Bill No. 803, 1966 Regular Session. Approved February 14, 1966. Statutory citation not available. Statutory period is ten years after substantial completion.

Alaska. Laws 1967, Chapter 61, Alaska Statutes 09.10.055. Approved March 31, 1967. Statutory period is six years.

Indiana. Laws 1967, Chapter 63. Approved March 4, 1967. Statotury period is ten years.

New Mexico. New Mexico Statutes Annotated, 1953, 67-12-1.2. Approved March 29, 1967. Statutory period is ten years.

North Dakota. Senate Bill No. 303. 1967 Regular Session. Approved March 14, 1967. Statutory citation not available. Statutory period is ten years. Utah. Utah Code Annotated, 1953, 78-12-25.5. Approved February 27, 1967. Statutory period is seven years.

Washington. Laws 1967, Chapter 75. Approved March 21, 1967. Statutory citation not available. Statutory period is six years.

Kansas. Kansas Code of Civil Procedure 1964, Section 60-513. Approved 1963. Statutory period is ten years. This act is not limited to the design professions and construction industry, but is of general application.

Oklahoma. Approved May 22, 1967. Statutory period is five years. Senate Bill No. 232.

Florida. Effective September 1, 1967. Statutory period is 12 years.

New Jersey. Approved May 18, 1967. Statutory period is 10 years. Chapter 59.

*Indicates State where statutory period is not dependent on completion of construction.

Michigan. Approved July 10, 1967, effective November 1, 1967. Statutory period is 6 years. Public Act 203.

Hawaii. Approved June 4, 1967. Statutory period is ten years. Act No. 194.

California. Approved August 23, 1967. Statutory period is four years. NOTE: Applies only to patent deficiencies. Chapter 1326, Laws 1967, Senate Bill No. 309.

*Massachusetts. Statutory period 6 years after furnishing of design, planning, supervision or administrative services.

South Carolina. Statutory period 6 years after substantial completion, The following States are or have considered similar bills:

Maryland: 6 years.

New York: 7 years.
Texas.

Draft of a bill to amend title 12, District of Columbia Code, to provide a limitation of actions for actions arising out of death or injury caused by a defective or unsafe improvement to real property

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That

SECTION 1. (a) Chapter 3 of title 12 of the District of Columbia Code (relating to limitation of actions) is amended by adding at the end the following new section:

"§ 12-310. Actions arising out of death or injury caused by defective or unsafe improvements to real property.

"(a) (1) Except as provided in subsection (b), any action—

(A) to recover damages for—

"(i) personal injury,

"(ii) injury to real or personal property, or

"(iii) wrongful death,

resulting from the defective or unsafe manner of effecting an improvement to real property; and

"(B) for contribution or indemnity which is brought as a result of such injury or death,

shall be barred unless the action is commenced before the period specified in paragraph (2) has elapsed.

(2) The period referred to in paragraph (1) is the shorter of

"(A) two years from the date such injury or death occurred, or

"(B) four years from the date the improvement was substantially completed; Provided, however, that in case such injury (including injury causing death) occured during the fourth year after the date the improvement was substantially completed, then in such event the period referred to in paragraph (1) shall end one year after the date on which such injury occurred (whether death occurred thereafter or not).

"(3) For purposes of this subsection, an improvement to real property shall be considered substantially completed when

“(A) it is first used, or

"(B) it is first available for use after having been completed in accordance with the contract or agreement covering the improvement, including any agreed changes to the contract or agreement,

whichever occurs first.

"(b) The limitation of actions prescribed in subsection (a) shall not apply to— "(1) any action gased on a contract, express or implied, or

"(2) any action brought against the person who, at the time the defective unsafe condition of the improvement to real property caused injury or death, was the owner of or in actual possession or control of such real property. (b) The table of sections for such chapter 3 is amended by adding at the end the following new item:

"§ 12-310. Actions arising out of death or injury caused by defective or unfsafe improvements to real property.'

SEC. 2. The amendments made by section 1 of this Act shall apply only with respect to actions brought after the date of enactment of this Act.

•Indicates State where statutory period is not dependent on completion of construction.

Mr. ABERNETHY. I note your attached memorandum but would you just review these pages for us? Give us examples of limitations in other states and how the limitation in these bills would compare with them.

Mr. FAULKNER. If we take this list of states dated September 29, 1967-we date it this way because they keep appearing all the time; various states pass similar bills almost every few months.

Take the State of Wisconsin. The statutory period is six years after the performance of services and construction. On the other hand

Mr. ABERNETHY. The statute in Wisconsin makes no reference to "substantial."

Mr. FAULKNER. I am coming to that and this is why I would like to make this clear. If you look at the statutory periods in the various states, they vary all over the lot, but the starting time varies from 'state to state.

Now, if you take the State of Ohio, the statutory period is ten years after the performance or furnishing of such services as an architect or professional engineer. He may do his work; the construction of the building may be put off for ten years. The statute of limitations begins when he finishes his work, not when the building is completed. Mr. ABERNETHY. There is some supervisory work on the part of the architect while the building is under construction?

Mr. FAULKNER. There may or may not be.

Suppose he does not supervise the work? His work is completed when the plans are finished and the building may not be constructed for years afterward.

In other words, we felt that the matter of substantial completion is a proper point at which to start a statute of limitations. This is what we have presented in our bill.

Now, if you take the State of Louisiana, the statutory period is ten years after occupancy, or after completion of design, if there was no inspection. This is the point we were speaking about. I am picking out the unusual ones.

In Pennsylvania the statutory period is 12 years after furnishing design, observation of construction, or construction. So that this again is different from the pattern.

Take the State of Massachusetts. The statutory period is six years after furnishing of design, planning, supervision or administrative services. This is, again, a different title. Most of them go back to completion of construction or substantial completion.

Mr. ABERNETHY. Now, the statute of what state comes nearer fitting into this recommendation?

Mr. FAULKNER. Illinois, I would think. The statutory period is four years after performance of services and construction.

Mr. ABERNETHY. How about Virginia and Maryland?

Mr. FAULKNER. Virginia is five years after performance of services and construction. Ours would also be five years in the event of an injury during the fourth year.

Maryland hasn't a statute at the present time, but is trying to get one passed.

Mr. ABERNETHY. Have you been burdened with multiplicity of lawsuits in this field?

Mr. FAULKNER. No, sir. I personally have, a year ago. I was faced with a suit for $250,000; an accident resulting from a fall on a step in

a building which we designed. Fortunately it was settled for considerably less than that.

Mr. ABERNETHY. When were the architectural plans prepared? Mr. FAULKNER. The injury occurred within the first year after completion. We did not even know that it had happened for six years. The case was held seven years after the accident, and we designed the building, of course, a number of years before it was completed. So I speak from personal experience.

Mr. ABERNETHY. You speak of "substantial completion." It is not often that buildings are occupied at the end of what you term "substantial completion," is it? Ordinarily they are not occupied until they are completed.

Mr. FAULKNER. This depends a great deal. We had an interesting case some years ago where the contractor was entitled to a very large bonus if the substantial completion was within a certain time. He did his part of the work. The people who did the decorating had to move in and put in carpets and things of that sort. The contractor had gone as far as he could. I ruled that this was substantial completion. This was as far as the contractor's work could go, and yet this had to be a month or before the owner could actually occupy.

Mr. WINN. Mr. Faulkner, inasmuch as you compared several states with the District, could you tell the committee, have the results of the legislation in these other states been the answer to the long, drawn-out problems that you face?

Mr. FAULKNER. I really can't answer that question because so many of these have been passed recently.

Mr. WINN. I notice some of them are recent though some are '61. Mr. FAULKNER. I think because of the great increase in suits for damages, these things have come about. I can't really tell you what the result of the legislation has been.

Mr. WINN. It is obvious by the list you have submitted that more and more states are getting into this in the last two or three years. Mr. FAULKNER. Yes. As a matter of fact, the list I have I have one list in May that lists another; I have one in June that adds two or three. They keep coming in all the time.

Mr. WINN. Could you give us, other than your own personal experience, some other examples of some of the problems that arise? This is usually a personal injury, such as a fall?

Mr. FAULKNER. Yes.

One of the famous cases here in the District has to do with an iron railing that was built and installed and had been installed for some years and I believe got into a very rusty condition. Somebody fell and was injured and this is one of the famous cases, I believe. This is the first of the cases that I knew about that really got a great deal of publicity.

Mr. WINN. They fell because the railing was insecure?

Mr. FAULKNER. This was a matter of maintenance.

Mr. SCHNABEL. May I make a short statement on this case, since it is a law case?

Mr. WINN. Surely.

Mr. SCHNABEL. The case involved the repair of a railing on an old row house in the District of Columbia. The allegation was made that because of the manner the new iron railing was put in place it was possible for water to run down during rain and get trapped inside and