Damon v. Vista del Norte Dev., LLC
2016 NMCA 83
| N.M. Ct. App. | 2016Background
- Vista del Norte Development (Vista) entered an Agreement to Construct Public Subdivision Improvements with Albuquerque on Dec. 22, 2000, to install subdivision infrastructure by Mar. 22, 2002.
- Vista completed infrastructure work and the City issued a Certificate of Completion and Acceptance on Feb. 26, 2002.
- Vista sold Lot 17 to Stillbrooke (July 25, 2003); Stillbrooke built and sold the house to the McGills (Feb. 2004); Plaintiffs Damon purchased the home in June 2006.
- Plaintiffs sued on Dec. 7, 2012, alleging structural defects from improper subsurface preparation and site work performed by Vista.
- Vista moved for summary judgment arguing the ten-year statute of repose, NMSA 1978 § 37-1-27, barred Plaintiffs’ claims because substantial completion occurred on Feb. 26, 2002; district court granted summary judgment for Vista and this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Vista’s infrastructure work is a "physical improvement to real property" under § 37-1-27 | The action concerns defects causing home structural failure traceable to Vista’s site work, so repose should not bar claims | Vista’s infrastructure (paving, utilities, storm drains, dirt work) are physical improvements protected by the statute | Vista’s infrastructure improvements are physical improvements under § 37-1-27 |
| When "date of substantial completion" occurred for Vista’s improvements | Substantial completion should be the date the house was occupied (2004) because that is when the improved property was used/occupied | Substantial completion occurred when the City certified and accepted the infrastructure work (Feb. 26, 2002) | The certificate of completion is prima facie evidence of substantial completion; Feb. 26, 2002 is the relevant date |
| Whether the repose period applies despite later construction/occupation by others | Repose should run from occupation of the house (a later improvement/use) because the injury manifested after transfer and occupancy | Repose applies to each distinct physical improvement and to the person who performed that improvement regardless of later owners/builders | The statute applies to the infrastructure Vista constructed; the timing of the separately constructed house by others is irrelevant to Vista’s repose period |
| Whether Jacobo (owner-builder exception) prevents application of repose to Vista | Plaintiffs relied on Jacobo to argue owner-builder exceptions protect plaintiffs | Vista argued Jacobo is inapplicable because Vista was not a continuous owner-builder of the property | Jacobo is inapplicable; Vista was not a continuous owner-builder, so § 37-1-27 bars the claims |
Key Cases Cited
- Garcia ex rel. Garcia v. La Farge, 893 P.2d 428 (N.M. 1995) (statute of repose begins on triggering event and runs regardless of discovery)
- Cummings v. X-Ray Assocs. of N.M., P.C., 918 P.2d 1321 (N.M. 1996) (statute of repose terminates right to action after prescribed period)
- Mora-San Miguel Elec. Coop., Inc. v. Hicks & Ragland Consulting & Eng’g Co., 598 P.2d 218 (N.M. Ct. App. 1979) (definition of "improvement" for § 37-1-27)
- Delgadillo v. City of Socorro, 723 P.2d 245 (N.M. 1986) (improvements that add value for intended use qualify under § 37-1-27)
- Coleman v. United Eng’rs & Constructors, Inc., 878 P.2d 996 (N.M. 1994) (purpose of repose statute: limit long-tail liability in construction)
- Rosso v. Hallmark Homes of Minneapolis, Inc., 843 N.W.2d 798 (Minn. Ct. App. 2014) (certificate of occupancy can be prima facie evidence of substantial completion)
- Jacobo v. City of Albuquerque, 118 P.3d 189 (N.M. Ct. App. 2005) (owner-builder continuous ownership context where § 37-1-27 does not protect owners who built the property)