Representative Calvin R. Musselman proposes the following substitute bill:




Chief Sponsor: Calvin R. Musselman

Senate Sponsor: Kirk A. Cullimore


8     General Description:
9          This bill amends the time limitation for actions regarding improvements on real
10     property.
11     Highlighted Provisions:
12          This bill:
13          ▸     modifies the definition of an action and a provider for actions related to
14     improvements in real property;
15          ▸     clarifies certain time limitations for actions regarding improvements on real
16     property;
17          ▸     provides a two-year statute of limitations for certain contract or warranty actions
18     involving improvements on real property that occur beyond the six-year statute of
19     repose for contract and warranty actions; and
20          ▸     makes technical and conforming changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          None
25     Utah Code Sections Affected:

26     AMENDS:
27          78B-2-225, as renumbered and amended by Laws of Utah 2008, Chapter 3

29     Be it enacted by the Legislature of the state of Utah:
30          Section 1. Section 78B-2-225 is amended to read:
31          78B-2-225. Actions related to improvements in real property.
32          (1) As used in this section:
33          (a) "Abandonment" means that there has been no design or construction activity on
34     [the] an improvement for a continuous period of at least one year.
35          (b) "Action" means any claim for judicial, arbitral, or administrative relief for acts,
36     errors, omissions, or breach of duty arising out of or related to the design, construction, or
37     installation of an improvement, [whether] regardless of whether that action is based in tort,
38     contract, warranty, strict liability, product liability, indemnity, contribution, or other source of
39     law.
40          (c) "Completion [of improvement]" means the date of substantial completion of an
41     improvement to real property as established by the earliest of:
42          (i) a Certificate of Substantial Completion;
43          (ii) a Certificate of Occupancy issued by a governing agency; or
44          (iii) the date of first use or possession of the improvement.
45          (d) "Improvement" means any building, structure, infrastructure, road, utility, or other
46     similar man-made change, addition, modification, or alteration to real property.
47          (e) "Person" means an individual, corporation, limited liability company, partnership,
48     joint venture, association, proprietorship, or any other legal or governmental entity.
49          (f) "Provider" means any person:
50          (i) contributing to, providing, or performing:
51          (A) studies, plans, specifications, drawings, designs, value engineering, cost or quantity
52     estimates, surveys, staking, construction, [and] installation, or labor to an improvement; or
53          (B) the review, observation, administration, management, supervision, inspections, and
54     tests of construction for or in relation to an improvement[.]; or
55          (ii) providing or contributing materials, products, or equipment that is incorporated
56     into an improvement.

57          (2) The Legislature finds that:
58          (a) exposing a provider to suits and liability for acts, errors, omissions, or breach of
59     duty after the possibility of injury or damage has become highly remote and unexpectedly
60     creates costs and hardships to the provider and the citizens of the state;
61          (b) these costs and hardships include liability insurance costs, records storage costs,
62     undue and unlimited liability risks during the life of both a provider and an improvement, and
63     difficulties in defending against claims many years after completion of an improvement;
64          (c) these costs and hardships constitute clear social and economic evils;
65          (d) the possibility of injury and damage becomes highly remote and unexpected seven
66     years following completion or abandonment; and
67          (e) except as provided in Subsection (7), it is in the best interests of the citizens of the
68     state to impose the periods of limitation and repose provided in this chapter upon all causes of
69     action by or against a provider arising out of or related to the design, construction, or
70     installation of an improvement.
71          [(3) (a) An action by or against a provider based in contract or warranty shall be
72     commenced within six years of the date of completion of the improvement or abandonment of
73     construction. Where an express contract or warranty establishes a different period of
74     limitations, the action shall be initiated within that limitations period.]
75          (3) (a) Except as provided in Subsections (3)(b) and (c), an action by or against a
76     provider based in contract or warranty shall be commenced within six years after the date of
77     completion or abandonment of an improvement.
78          (b) If a provider is required by an express term of a contract or warranty to perform an
79     obligation later than the six-year period described in Subsection (3)(a), and the provider fails to
80     perform the obligation as required, an action for that breach of the contract or warranty shall be
81     commenced within two years after the day on which the breach is discovered or should have
82     been discovered.
83          (c) If a contract or warranty expressly establishes a different period of limitations than
84     this section, the action shall be commenced within that limitations period.
85          [(b)] (4) (a) All other actions by or against a provider shall be commenced within two
86     years from the earlier of the date of discovery of a cause of action or the date upon which a
87     cause of action should have been discovered through reasonable diligence.

88          (b) If the cause of action is discovered or discoverable before completion [of the
89     improvement] or abandonment of [construction] an improvement, the two-year period begins
90     to run upon completion or abandonment.
91          [(4)] (c) Notwithstanding Subsection [(3)(b)] (4)(a), and except as provided in
92     Subsection (4)(d), an action under this Subsection (4) may not be commenced against a
93     provider more than nine years after completion [of the improvement] or abandonment of
94     [construction] an improvement. [In the event the cause of action]
95          (d) If an action under Subsection (4)(a) is discovered or discoverable in the eighth or
96     ninth year of the nine-year period, [the injured person] a claimant shall have two [additional]
97     years from [that] the date of discovery to commence an action.
98          (5) Subsection (4) does not apply to an action against a provider:
99          (a) who has fraudulently concealed [his] the provider's act, error, omission, or breach
100     of duty, or the injury, damage, or other loss caused by [his] the provider's act, error, omission,
101     or breach of duty; or
102          (b) for a willful or intentional act, error, omission, or breach of duty.
103          (6) If [a person] an individual otherwise entitled to bring an action did not commence
104     the action within the periods prescribed by Subsections (3) and (4) solely because that [person]
105     individual was a minor or mentally incompetent and without a legal guardian, that [person]
106     individual shall have two years from the date the disability is removed to commence the action.
107          (7) This section shall not apply to an action for the death of or bodily injury to an
108     individual while engaged in the design, installation, or construction of an improvement.
109          (8) [The time limitation imposed by this] This section does not apply to any action
110     against any person in actual possession or control of the improvement as owner, tenant, or
111     otherwise, at the time any defective or unsafe condition of the improvement proximately causes
112     the injury for which the action is brought.
113          (9) This section does not extend the period of limitation or repose otherwise prescribed
114     by law or a valid and enforceable contract.
115          (10) This section does not create or modify any claim or cause of action.
116          (11) This section applies to all causes of action that accrue after May 3, 2003,
117     notwithstanding that the improvement was completed or abandoned before May 3, 2004.