North Carolina General Statute § 1-50(a)(5) provides that “[n]o action to recover damages based upon or arising out of the defective or unsafe condition of an improvement to real property shall be brought more than six years from the later of the specific last act or omission of the defendant giving rise to the cause of action or substantial completion of the improvement.” “Unlike an ordinary statute of limitations which begins running upon accrual of the claim, the period contained in the statute of repose begins when a specific event occurs, regardless of whether a cause of action has accrued or whether any injury has resulted.” Roemer v. Preferred Roofing, Inc., 190 N.C.App. 813, 816, 660 S.E.2d 920, 923 (N.C.App.,2008). As the court stated, if the action is not brought within 6 years, the plaintiff “literally has no cause of action.”
In Roemer, the plaintiff received a lifetime warranty on a roof that failed after seven years. The Plaintiff brought an action for damages for the breach of warranty. The Court of Appeals affirmed the dismissal. This decision was recently affirmed in Christie v. Hartley Construction, 745 S.E. 2d 60 (N.C. App. 2013). Where does this leave a building owner who is relying on a warranty longer than six years? You bargained for the longer protection and may have even chosen amongst competitors based upon how long the warranty lasted.
The Roemer Court implied that an action for specific performance of the warranty could be brought more than 6 years after substantial completion but not one for damages. This is consistent with the statute. However, as Judge Boyle reluctantly ruled in Hart v. Louisiana Pacific Corp., 2013 WL 4749499 **2 (E.D.N.C. Case Number 2:08-CV-47-BO Sept. 2, 2013), where the warranty expressly limits the remedy available to damages, an action brought more than six years after substantial completion is effectively barred.
The paradox is to reach this result the Court must enforce the parties’ agreement with respect to the limitation of remedies while at the same time ignoring their agreement with respect to the length of the protection afforded. The bottom line: any warranty related to the improvement of real property that limits the available remedy to monetary damages is no longer than six years long no matter what the parties agreed to.