MR Hotels, LLC v. LLW Architects, Inc. et al

This interlocutory appeal arises out of the design and construction of a six-story hotel. The owner of the hotel sued LLW Architects, Inc. for breach of contract based on an AIA Standard Form of Agreement Between Owner and Architect. The owner also asserted claims for professional liability against LLW and its principal architect, Dell Livingston, alleging the breach of a duty of care in carrying out their professional services. The trial court summarily dismissed all claims against LLW and Mr. Livingston as time barred by the three-year statute of limitations for damage to real property: Tenn. Code Ann. § 28 3 105. Portions of the hotel first opened for business on May 30, 2007, and the hotel was approved for final use and occupancy on June 26, 2007. Plaintiff commenced this action on October 20, 2010. The owner-architect agreement states that the statutes of limitations for “[c]auses of action between the parties to this Agreement” begin to run on “the date of Substantial Completion.” The accrual provision also states that “[i]n no event shall such statutes of limitations commence to run any later than the date when the Architect’s services are substantially completed.” The agreement defines “Substantial Completion” as “the stage of progress of the Work when the Work or designated portion thereof is sufficiently complete . . . so that the Owner can occupy or utilize the Work for its intended use . . . .” The agreement also defines “date of Substantial Completion” as “the date certified by the Architect . . . .” The trial court held that the accrual provisions applied to the individual architect because Plaintiff’s claims against him were based on duties specified in the architectural agreement. The trial court also determined that June 1, 2007 was the date of Substantial Completion because the hotel was being used for its intended purpose on that date. We respectfully disagree, having determined that LLW and Mr. Livingston were not entitled to summary judgment because they failed to establish the elements of their affirmative defense based on the statute of limitations. Accordingly, we reverse and remand for further proceedings.