U.S. District Court in Pennsylvania Holds Bilt Rite Claim Subject to Discovery Rule for Limitations Purposes

Waynesborough Country Club of Chester County v. Diedrich Niles Bolton Architects, Inc.
2008 U.S. Dist. LEXIS 45980 (E.D. Pa. July 21, 2008)

The case arose out of the design and construction of a new clubhouse for Waynesborough. Diedrich Niles Bolton Architects (“DNB”) provided professional architectural services to Waynesborough for the project and Ehret Construction served as the project’s general contractor and construction manager. Structural problems arose after the clubhouse was complete, and Waynesborough sued DNB alleging, as a result of DNB’s professional negligence and breach of contract, significant water leaks developed at various places throughout the interior of the clubhouse. DNB joined Ehret as a third party defendant. Ehret, in turn, filed a counterclaim against DNB for negligent misrepresentation, claiming that DNB’s architectural work was deficient and that Ehret’s work was delayed, disrupted and inefficient as a result of having relied upon inaccurate drawings and other architectural documents supplied by DNB during construction.

DNB moved to dismiss Ehret’s negligent misrepresentation claim on the basis that Ehret’s claim was barred by the applicable statute of limitations, because it was filed more than two years after the local government authority issued a certificate of occupancy for the clubhouse. In response, Ehret argued that DNB offered no support for its argument that the statutory period governing a negligent misrepresentation claim began to run on the date the occupancy permit was issued. Ehret argued that its loss occurred after construction was completed and that it was entitled to proceed with discovery to substantiate its allegations. Ehret further argued that the discovery rule tolled the statute of limitations for its claim until it knew or had reason to know that it was damaged by the negligence of DNB. Ehret asserted that it could not know of its claim until the leaks were discovered and Waynesborough required Ehret to complete the construction of the Clubhouse.

The Court denied DNB’s motion to dismiss, holding that any bar to Ehret’s negligent misrepresentation counterclaim was not apparent on the face of the pleadings and, thus, such claim could not be dismissed under Rule 12(b)(6).

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