Dismissal of Third-Party Complaint Brought by City of Phoenix Against Contractors and Developers Upheld on Appeal Based Upon Statute of Repose Court of Appeals of Arizona, Division One, May 19, 2016
In 2013, Carlos Tarazon filed a lawsuit against the City of Phoenix, alleging that he developed mesothelioma as a result of asbestos exposure while performing pipe installation and other repairs for the city on projects that took place between 1968 and 1993. The city, in turn, filed a third-party complaint against the developers and contractors responsible for the planning, design and construction of the projects, seeking defense and indemnification pursuant to the construction contracts at issue and city ordinances incorporated within other development permits.
The third-party defendants moved to dismiss the complaint, asserting that the city’s claims were barred by the Arizona statute of repose, which provides, in pertinent part, that an action based in contract may not be instituted against a person who “performs or furnishes the design, specifications, surveying, planning, supervision, testing, construction or observation of construction of an improvement to real property more than eight years after substantial completion of the improvement to real property.” The trial court granted the motion, dismissing the city’s third-party complaint.
On appeal, the city contended that it was exempted from the statute of repose based on law suggesting that limitations of actions do not apply to the State or its political subdivisions. The Court of Appeals flatly rejected this argument, finding that the plain language of the statue dictates that it applies to all actions based in contract, including the permits forming the basis of the city’s claims.