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The Line Between Maintenance and Modification: What Constitutes an "Improvement" under Virginia's Statute of Repose

In a recent Fairfax Circuit Court case, Travelers Indemnity Co. v. Simpson Unlimited, Inc., the court wrestled with the issue of what exactly constitutes an “improvement” under Virginia’s statute of repose found in Virginia Code Section 8.01-250.

Three Flint Hill Partnership, RLLP designated Simpson Unlimited Inc. to act as in independent contractor on a building construction project, requiring Simpson to repair and replace exterior building components, including removing and replacing terrace soffits on the eighth floor, as well as cleaning other building surfaces. Simpson submitted its application for final payment on December 4, 2002, and was paid for its work on December 16, 2002.

On December 20, 2004, there was a water leak on the eighth floor, causing damage to areas of the building occupied by tenants. Travelers Indemnity did not file suit until March 18, 2009, claiming that the water leak was related to work that Simpson performed under its contract with Three Flint.

Under these facts, Section 8.01-243 (B), the statute of limitations for property damage, gave Travelers Indemnity five years from December 20, 2004, the date the water leak damaged the building and the cause of action therefore accrued. Therefore, Travelers Indemnity’s claim would survive the statute of limitations.

Getting creative, Simpson instead filed a plea in bar based on the five-year statute of repose found in Section 8.01-250. Simpson argued that its work under the contract constituted an “improvement” allowing it to take advantage of the statute of repose, which began to run upon completion of the building project in 2002. Section 8.01-250 states:

No action to recover for any injury to property, real or person, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained as a result of such injury, shall be brought against any person performing or furnishing the design, planning, surveying, supervision of construction, or construction of such improvement to real property more than five years after the performance or furnishing of such services and construction….

Simpson claimed that the soffit replacement was an “improvement” because it enhanced the value of the building. Travelers Indemnity argued that the soffit replacement not an “improvement” because it was akin to a repair.

Judge Bellows analyzed dictionary definitions and opinions in other jurisdictions, ultimately agreeing with Travelers Indemnity and concluding that the soffit replacement was merely part of the normal upkeep and maintenance of the building rather than a modification or addition of the building, and therefore not an “improvement” that would allow Simpson to take advantage of the statute of repose.