When evaluating a new case, it is important to look at many factors. One of the first considerations is applicable statutes of limitation or repose. The statute of limitations is a statutory limit on when a claim can be brought. It is an equitable statute. The case law allows the statute to be extended if a reasonable person could not, through the exercise of reasonable diligence, have known about the defect. This is known as the “discovery rule.”

A statute of repose is different in that, rather than allowing a claim to be brought within a specified number of years that can be extended by the “discovery rule,” this statute simply says that within “x” number of years after substantial completion of work, no claims exist-ever. For example, in New Jersey, the statute of limitations on negligence claims resulting in property loss is six years, which is then extended by the discovery rule. The statute of repose in New Jersey, and in many other states, is absolute, even if the builder, subcontractor or design professional intentionally and fraudulently concealed known defects. There is no extension of this statute under any circumstances, and the discovery rule is inapplicable. Thus, at the case intake stage, it is absolutely imperative that counsel be familiar with these statutes and understand how they are going to deal with arguments based upon those statutes.

Another important factor in evaluating a new case is available insurance policies for the general contractor, subcontractors and design professionals. We recommend that clients who have reason to believe that there is no insurance hold off on spending substantial money on expert and legal fees until the availability of insurance is determined in discovery. Many states have court rules allowing quick discovery of insurance information, a simple process that can provide critically needed information early in a case. If the case is being taken on a contingency, it is a good idea to have an agreement in advance of filing suit that counsel will hold off aggressively litigating until counsel gets the insurance policies in discovery, and can make certain that there are no obvious exclusions that destroy coverage. (For example, if you are litigating over damages caused by EIFS , you will want to know as quickly as possible if the developer and the EIFS applicator have insurance policies that contain EIFS exclusions. If it turns out that there is no insurance, the case can be dismissed before the association spends substantial money on litigation that is going to be fruitless in generating a recovery.