Can I Still File A Lawsuit? Understanding When You Are Out of Time to Bring a Claim Related to a Failed Construction Project
When the unthinkable happens and a product supplied as part of a construction project survives only a few years before failing, owners, contractors, and manufacturers often have one question in mind: who is to blame? This inevitably leads to questions about whether it is still possible to bring a claim. Until recently, Nebraska law has been unclear on the time limit for filing a lawsuit against those who manufactured the allegedly deficient product that caused the failure of a larger system or the manufacturer that incorporated the allegedly deficient product into that larger system, but, in 2022, the Nebraska Supreme Court provided some clarity on this question.
Typically, determining whether a lawsuit is time-barred is answered by reviewing the applicable statutes of limitations and repose. Though the answer to whether a suit has been timely filed depends on the particular facts of the case, the applicable statute of limitations generally specifies the maximum number of years for which a damaged party can file suit against those allegedly responsible for the damage. Frequently there are exceptions to statutes of limitations that provide additional time for a suit to be filed if the damage was allegedly caused by an action or failure that could not have been discovered during the initial limitations period. A statute of repose, on the other hand, specifies a firm date after which a party is definitively out of time to file suit, regardless of when the damage was discovered.
While in some situations the application of a statute of repose sets a deadline that is easy to understand and apply, in other situations it can be difficult for the parties to even agree on the number of years allotted by the statute of repose. One situation where there has been disagreement regarding the number of years allotted by a statute of repose has been in the application of Neb. Rev. Stat. § 25-224(2)(a), which generally provides that a lawsuit concerning a “product” manufactured in Nebraska must be brought within ten years of when the “product…was first sold or leased.” However, a lawsuit concerning a “product” manufactured outside of Nebraska must be brought within the time period specified by the laws of the state where the “product” was manufactured or ten years, whichever is longer.
In 2022, the Nebraska Supreme Court issued a notable decision explaining how Nebraska courts are to understand and apply the term “product” in Neb. Rev. Stat. § 25-224(2)(a). This 2022 case involved a plaintiff who had contracted to receive a grain bin system produced by a Nebraska manufacturer that was to be installed by a Nebraska company. The grain bin system required a specialized skid loader door, which was manufactured by a Michigan company. Ten years after the grain bin system was completed, it collapsed, at least in part due to the failure of the skid loader door. However, by the time the plaintiff filed their lawsuit, more than ten years had passed.
The central dispute in the case was whether the failure of the grain bin was subject to Nebraska’s ten-year statute of repose, because the grain bin had been produced by a Nebraska company, or the statute of repose of Michigan, where the allegedly defective skid loader door incorporated into the grain bin was produced. In resolving this question the court held that a “product” for purposes of Neb. Rev. Stat. § 25-224(2)(a) is the entire system a party contracts to receive, not the individual components that have been incorporated into that system because the statute of repose was intended to apply to the entire product that is delivered to the consumer. Thus, because the plaintiff purchased an entire grain bin system, not just a skid loader door, their legal rights are based on the grain bin system as a whole that was purchased. Therefore, Nebraska’s ten-year statute of repose applied and the Plaintiff’s claims were time-barred.
While the Nebraska Supreme Court’s 2022 decision provides clarification for owners, contractors, and manufacturers regarding what constitutes a “product” for the purposes of Neb. Rev. Stat. § 25-224(2)(a), the application of Nebraska’s statutes of limitation and repose depends on the facts of every case. As a result, potential parties to a lawsuit will still be left with lingering questions of whether a lawsuit is possible or potentially time-barred. If you are one of these potential parties, please do not hesitate to contact one of the members of Koley Jessen’s Construction Industry Practice with any questions regarding the application of Nebraska’s statutes of limitations or repose.
 311 Neb. 665 (2022).