SIX YEARS AND COUNTING ... WHEN DOES EXPOSURE TO LIABILITY END?

On March 9, 2010, the Mississippi Court of Appeals denied a rehearing in the case of J. Criss Builder, Inc. v. White, but it is not clear the controversy has ended.  The Court has not yet released its opinion for publication which means the decision is still subject to revision or withdrawal.  Perhaps that is because the Court was clearly divided regarding the case as reflected in the four to three decision.

In this case, J. Criss Builder, Inc. ("JCB"), an unlicensed residential contractor, purchased land on which it built a house.  Janie Criss ("Criss"), the owner of JCB and an individually licensed residential contractor, oversaw the construction of the home.  On November 21, 1996, Criss purchased the home from JCB and occupied it as her homestead until February 17, 1997, when it was sold to the Whites.  Even though within one year of moving into the house the Whites noticed a hairline crack in the scored concrete floor which grew bigger over time, the Whites did not file suit for damages from foundation problems until February 12, 2003 – 6 years, 2 months and 22 days after the home had first been occupied by a resident.  On that date, the Whites sued both JCB and Criss, individually.

JCB and Criss sought to have the action dismissed on the basis that the Mississippi statute of repose barred the action.  Specifically, Miss. Code Ann. § 15-1-41 requires an action for damages arising out of construction to be brought "no more than six (6) years after the written acceptance or actual occupancy or use, whichever occurs first." There could be no disputing the fact that the first occupancy of the house occurred on November 21 1996, when Criss purchased the home from JCB for her homestead.  Thus, JCB and Criss contended suit had to be filed by November 21, 2002.  The Court also upheld liability against Criss, individually, even though the property was owned and constructed by JCB "[s]ince Criss was the licensed builder and JCB was legally prohibited from performing residential construction."

The Court majority relied upon a prior decision to conclude that the statute of repose did not apply to circumstances where the possessor and builder were the same and that the statute of repose would not begin to run until the "builder/owner, Criss, undisputably the builder, sold the home to the Whites."  Since suit was filed within 6 years of Criss selling the house to the Whites, the Court ruled the action was not barred.  The three dissenting justices would have barred the action.  They concluded that "Criss-even if considered the builder-purchased the completed home from JCB and actually occupied and used the home in her personal capacity."

The decision leaves more questions than answers.  Would the decision be the same if JCB had been properly licensed?  Residential builders commonly build a home which they occupy first and then sell to someone else.  Under this decision, could a licensed builder build a home, sell to its owner, live in the house ten years, thirty years, or more, and yet the statute of repose still not begin to run until the time the owner sells to a third party?  Clearly, more direction from the Court will be necessary.  Until that time, builders beware: "six years" under the statute of repose may not be six years.

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Melissa Brumback - May 13, 2010 1:33 PM

Interesting! We had a similar case here in NC a few years back, with similar results if I am recalling correctly. (If you really want the case I'll look it up in a spare moment!). I agree that the whole point of the Statute of Repose is to terminate liability at a date certain. No matter where you draw the line, you can always think of situations where someone is out of luck based on falling on just the other side of that line. I'd be interested to hear of any statutory changes Mississippi makes to deal with the fall out of this decision.

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