SOL Can Mean More than the Statute of Limitations

by Wendel, Rosen, Black & Dean LLP

Lawyers can be as fond of their acronyms as they are of their Latin.  Percepio? The statute of limitations, or “SOL” as we attorneys sometimes refer to them, is one example.  The statute of limitations, or SOL, for latent defects is 10 years in California.

Or at least, it could be, after a recent decision by the California Court of Appeals.

In June, the California Court of Appeals for the First District held for the first time ever that California’s 10-year statute of limitations for latent defects can be shortened if parties contractually agree to a shorter limitations period.

Brisbane Lodging

In Brisbane Lodging, L.P. v. Webcor Builders, Inc., Case No. A132555 (June 3, 2013), a developer who tried to argue that California’s 10-year statute of limitations for latent defects couldn’t, or more accurately shouldn't, be limited – despite a provision in its construction contract providing for a shorter limitations  period – found to its chagrin that SOL can mean more than just the statute of limitations.

The case involved the design and construction of a 210-room Radisson Hotel.  The contract, an AIA A201 Standard Form of Agreement Between Owner and Contractor (Cost Plus Fee) (AIA A201), provided in Article that:

As to acts or failures to act occurring prior to the relevant date of Substantial Completion, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than such date of Substantial Completion . . . .

The project was substantially completed on July 31, 2000.  In early 2005, the developer, Brisbane Lodging, L.P. (Brisbane), discovered a sewer line break.  Although repairs were attempted by the contractor, Webcor Builders, Inc. (Webcor), the problems continued, and Brisbane later filed suit against Webcor in May 2008.

The Trial Court Decision

In the trial court, Webcor successfully argued that under Article of the AIA A201, the statute of limitations began to run on the date of “substantial completion” which was July 31, 2000, that Brisbane failed to file its lawsuit within four years of that date, and instead filed its lawsuit almost eight years later in May 2008.

The Court of Appeals Decision

On appeal, Brisbane argued that under the “delayed discovery rule,” the statute of limitations did not begin to run until it “discovered” the defect, that it did not discover the defect until 2005, and that it filed its lawsuit three years later, within four years of discovering the defect.  Brisbane further argued that the court should find the shorter limitations period provided under Article to be void because California has a 10-year statute of limitations for latent defects.

The Court of Appeals disagreed.  While recognizing that under the delayed discovery rule a cause of action does not begin until the “plaintiff either (1) actually discovered his injury and its negligent cause or (2) could have discovered [the] injury and cause through the exercise of reasonable diligence,” the Court held that because “sophisticated parties should be allowed to strike their own bargains” that the shorter limitations period in the contract was enforceable.

In addition, the Court held that the provision was not void as a matter of public policy.  “[W]e disagree with Brisbane’s position that public policy supports an iron-clad, universal rule that in all cases involving latent defects, the applicable statute of limitations cannot begin to run until the defects were or should have been discovered, notwithstanding a contractual agreement to the contrary.”

What This Means To You

Although the California Courts of Appeal have previously upheld contractual provisions which have shortened otherwise applicable statute of limitations, insurance contracts being one example, this is the first reported case in California that enforced such a provision in a construction contract.

Furthermore, although the case involved a specific provision of the AIA A201 – Article – which has been changed in the current version of the AIA A201 (2007) – what is clear is that California courts will now enforce shorter limitations periods in construction contracts, at least between sophisticated parties.

What remains unclear, is whether California courts will limit the Brisbane decision to cases involving latent defects, and whether California courts will apply the Brisbane decision to contractual provisions which not only specify an earlier “trigger” date for commencement of statutes of limitation (for example, substantial completion vs. discovery, as in Brisbane), but shorter statute of limitations in and of themselves (for example, 4 years vs. 10 years for latent defects).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Wendel, Rosen, Black & Dean LLP | Attorney Advertising

Written by:

Wendel, Rosen, Black & Dean LLP

Wendel, Rosen, Black & Dean LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.