Fear and Loathing: The Specter of Perpetual Liability When Working for Municipal OwnersMarch 31, 2015
The legal doctrines of nullum tempus occurrit regi (“no time runs against the king”) and nullum tempus occurrit reipublicae (“time does not run against the state”) jointly stand for the principle that the state is not subject to statutes of limitation or similar legal bars to untimely lawsuits that otherwise govern the rights of private parties seeking to sue. In jurisdictions that apply nullum tempus, the state can sue a contractor or designer even when decades have elapsed since project completion. Unfair as this might seem, it is the rule of law in many jurisdictions, where the state is king, and its subjects, at least in the context of potential litigation, remain forever threatened.
But what about municipalities? Through decades of enforcing nullum tempus, the question whether the doctrine extended to municipalities had not been directly addressed – until now.
In a recent Connecticut trial court case, City of Hartford v. Con-Way Freight, Inc.,1 the City of Hartford sued an owner of a tractor-trailer truck that struck several city-owned utility and traffic poles. The City sued over three years after the accident, which was after Connecticut’s three-year statute of limitations had expired. The defendant moved for summary judgment, arguing the suit was time-barred. The trial court denied the motion, relying on the case State v. Lombardo Bros. Mason Contractors, Inc., in which the Connecticut Supreme Court affirmed the application of nullum tempus by holding that statutes of limitations and other time-based defenses do not apply to the state. Taking Lombardo one step further, the trial court in Con-Way held that a municipality also is exempt from the statute of limitations if it is acting within its delegated governmental capacity. Con-Way is the first post-Lombardo case in Connecticut to explicitly extend nullum tempus to a municipality.
Con-Way, understandably, has shaken the foundation of the construction industry in Connecticut. Not that no one saw it coming. In Lombardo, the Connecticut Supreme Court acknowledged previous decisions extending nullum tempus to subdivisions of the state, including municipalities. For critics of Lombardo (which included most of the Connecticut construction industry), Con-Way realized their worst fears, by adopting a concept they had long loathed: construction and design professionals (and their sureties) who perform work for municipalities are in-effect at risk of perpetual liability.
Courts elsewhere have been divided. In some states, courts have attempted to limit applying “municipality nullum tempus” to where the municipality is performing a governmental function – the approach adopted by Con-Way – or enforcing a public right. However, this “limitation” is often meaningless, because almost all actions by municipalities qualify as “governmental functions” or enforcing public rights. Moreover, courts have failed to apply the governmental function standard consistently. For example, in the District of Columbia, the courts have held that remediating asbestos from public buildings is a governmental function, but removing snow or operating a public swimming pool is not. This creates further uncertainty for contractors working in the public sector.
Nullum tempus might seem a good deal for state municipalities, but its practical effects harm nearly everyone else, including the taxpaying public. Because contractors and designers face potential indefinite exposure for defects on municipal construction projects, they are at risk for stale claims long after the expiration of ordinary statutes of limitations and repose, which typically last three to six years. Public bidders will be forced to factor these increased risks into their bids, which will lead to higher construction costs that will ultimately be passed on to taxpayers. In a worst-case scenario, the risk of limitless liability could dissuade sureties and insurers from underwriting bonds and policies for public projects, which would grind public construction to a halt.
So, what can public contractors do to protect against the risk of infinite liability where nullum tempus has been adopted? Unfortunately, not much, other than take preemptive action to prevent and mitigate risk before they bid on the job. The first step is to understand the risks: Contractors and design professionals, and their sureties and insurers, must determine whether nullum tempus is the law of the state where they are seeking to work, and whether it applies to municipal owners. If so, the next and equally critical step would be to mitigate those risks, including by:
- Obtaining proper insurance with extended tail coverage, to ensure that potential liability is covered beyond the ordinary limitation period.
- Maintaining project records, in long-term storage or otherwise. This might be well worth the costs if litigation were to occur later. As memories fade and personnel move on, project records will be more valuable than ever in defending against stale claims.
- Lobby your legislators. The only way to truly avoid the risks of nullum tempus is through legislative change.2
Since Lombardo, trade industry groups have lobbied Connecticut’s legislature to nullify nullum tempus and create a statute of limitations governing the state and its subdivisions, including municipalities. Those efforts resulted in introducing a bill in the 2014 legislative session that would have made the state and its subdivisions subject to the same statutes of limitations and repose applicable to private parties. Despite vocal support from industry members, the bill, after being watered down to contain longer limitations periods applicable only to design professionals, was tabled and never voted on.
Connecticut trade industry groups have not given up. They have promised to introduce a similar bill in the 2015 legislative session, hopefully with more success. For now, however, nullum tempus remains the law in Connecticut and other jurisdictions, where the state and its municipalities are free from the time limits imposed by ordinary statutes of limitations and repose – and contractors and design professionals remain mired in the fear and loathing of potentially limitless liability. As a result, the business of performing critical public construction and design services on state or municipal projects might be considered a thankless job. For public contracting professionals, the late Hunter S. Thompson might have been right – at least for now – when he said that what you create “will chain you and follow you for the rest of your life.”
1 Conn. Super. Ct., Judicial District of Hartford, Docket No. HHDCV136046452S, 2014 Conn. Super. LEXIS 2721 (Oct. 30, 2014, Huddleston, J.)
2 These actions are not exhaustive, but are examples only. Contractors should consult counsel with any questions or uncertainties about the application of nullum tempus to the public job(s) they might be considering.