Statute of Limitations for Property Damage Claims

Under the discovery rule, a plaintiff’s cause of action for property damage may “not necessarily accrue at the moment they knew they had sustained injury.” Instead, the statute of limitations will not begin to run until they “knew, or in the exercise of reasonable care and diligence should have known, that an injury was sustained as a result of wrongful or tortious conduct by the defendant.” (internal citation omitted).

In Roles-Walter v. Kidd, No. M2017-01417-COA-R3-CV (Tenn. Ct. App. April 24, 2018), plaintiff had purchased a commercial building next to buildings owned by defendants. Plaintiff alleged that beginning in December 2012, she “began to have issues with rain water form the adjacent alleyway flooding their building.” Plaintiff alleged in her complaint that “upon examination by [plaintiff] and subsequently by professionals in this area,” it was determined that the water issues were being caused by water coming off defendants’ buildings roofs, and that defendants had refused to “take any responsibility for the damage…and/or take any actions intended to remedy the water issues.” Plaintiff accordingly filed this lawsuit on November 1, 2016.

Defendants moved to dismiss based on the statute of limitations, which the trial court granted, but the Court of Appeals reversed.

On appeal, plaintiff argued that dismissal should be reversed because the claim sounded in nuisance, not negligence. The Court noted that “the distinction between nuisance and negligence claims is not always clear,” but ultimately deemed this a negligence claim. Quoting from an old Tennessee Supreme Court case, the Court stated that “[t]he distinction must be preserved between negligence, an omission of duty, and a nuisance, or active wrong.” (internal citation omitted). Here, the Court reasoned:

[Plaintiffs] complaint alleges that [defendants] ‘have failed and/or refused to take any responsibility for the damage being suffered by [plaintiffs].’ In short, [plaintiffs] have averred that [defendants] are guilty of a negligent omission, or failure to act, only. Accordingly, at most the complaint charges an omission of duty, or act of nonfeasance. A breach or omission of duty is the stuff of negligence.

Accordingly, plaintiff’s theory that the statute of limitations had not run because the claim sounded in nuisance was rejected.

Despite rejecting the nuisance theory advanced by plaintiff, dismissal of the complaint was still reversed. Why?  Because the claim was for damage to property, the three-year statute of limitations set out in Tenn. Code Ann. § 28-3-105 applied. The Court noted that the trial court had used the date in the complaint when the damage began as the starting point for the three year limitations period, but ruled that there was not enough evidence to support such a holding. The Court stated:

Although we concede that [the complaint] indicates that [plaintiffs] knew, as of December 2012, that they had a problem with water coming into their building, it is not clear from this averment whether [plaintiffs] knew the ‘tortious origin’ of their damages at that time. In other words, under the discovery rule, [plaintiffs’] cause of action did not necessarily accrue at the moment they knew they had sustained injury… Rather, the statute of limitations began to run when [plaintiffs] knew, or in the exercise of reasonable care and diligence should have known, that an injury has been sustained as a result of wrongful or tortious conduct by the defendant. …Although we cannot say definitively when [plaintiffs] discovered that the damage was allegedly caused by [defendants], from paragraph 9 and the opinion letters…which were attached as exhibits to the complaint, we can reasonably infer that [plaintiffs’] cause of action accrued sometime later than December of 2012.

Dismissal was accordingly reversed, with a specific note that further discovery regarding the accrual date was not precluded.

The Court of Appeals reached the correct result in this case. The complaint did not contain facts to support dismissing this case based on the statute of limitations, and further discovery was clearly merited.