Substantial Completion: It’s complete, even if not perfect

By Paul Whitt | August 21, 2015

It’s complete, even if not perfect: Tennessee Court of Appeals confirms substantial completion does not mean free from alleged defects

Recently, the Tennessee Court of Appeals, in 5 separate cases handled by Lewis Thomason construction lawyers, made clear that a project is substantially complete even if there are alleged defects in construction – and even in the face of alleged defects dealing with significant safety issues with a particular project. In these 5 cases, the Plaintiffs filed suit against the hospital, the contractor and the architect, and alleged personal injuries as a result of exposure to excessive radiation while working near a CT scan room at the hospital. The plaintiffs alleged that one of the walls of the CT scan room lacked the required lead shielding to prevent exposure to individuals outside the CT scan room to radiation emitted from the CT machine inside the room. The lawsuits, all filed separately, were filed in 2014. However, the project in question – the design and construction of a large scale addition and renovation to the hospital – was completed in 2007. Since the completion of the project in 2007, the CT scan room had been used for its intended purpose – performing CT scans. In Tennessee, there is a 4-year statute of repose for construction projects. (See Tenn. Code Ann. § 28-3-202). These 5 lawsuits were filed 7 years after the date of substantial completion. As a result, the defendants filed motions for summary judgment seeking to enforce the 4-year statute of repose on construction projects and dismiss the cases for being filed too late. This statute of repose runs from the date of “substantial completion” of the project. “Substantial completion” is defined as: “that degree of completion of a project…upon attainment of which the owner can use the same for the purpose for which it was intended[.]” Tenn. Code Ann. § 28-3-201(2).

The Plaintiffs, seeking to avoid the impact of this statute of repose, argued, among other things, that because the CT scan room allegedly lacked the lead shielding, the CT scan room was not “substantially complete” because it failed to do what it was designed to do: protect individuals outside the room from radiation. Both the trial court and the Court of Appeals rejected this argument. As the Court of Appeals explained, to accept the Plaintiff’s argument that alleged construction defects—such as the alleged lack of lead shielding—prevent the attainment of substantial completion, then the very purpose of the statute of repose in seeking to establish a firm outer limit of liability 4 years from completion of the project would be eliminated. As a result, the Court of Appeals found that the CT scan room was, in fact, substantially complete more than 4 years before the filing of the lawsuits, and held that the statute of repose operated to eliminate the Plaintiffs’ alleged causes of action. These 5 cases were dismissed.

The opinions issued in the 5 separate cases can be found here:

Ridenour Case
Lewellen Case
Raby Case
Gillis Case
Phillips Case

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