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Evans Withycombe, Inc. v. Western Innovations, Inc - 5/16/2006

Arizona Court of Appeals Division One Holds That A.R.S. § 12-552, a Statute of Repose, Barred Contract-Based Claims Asserted in a Third-party Complaint Against Subcontractors, but Not a Common-law Indemnity Claim.


Evans Withycombe was the general contractor for a home purchased by Ira and Wilma Weiss. The Weisses sued Evans Withycombe for defective construction more than eight years after the certificate of occupancy had issued. More than two years after that, just before settling the Weisses’ claim, Evans Withycombe filed a third-party complaint against various subcontractors that had worked on the Weisses’ home. The Superior Court granted a motion for summary judgment to dismiss Evan Withycombe’s third-party complaint on the basis of A.R.S. § 12-552. That statute provides:

A. Notwithstanding any other statute, no action or arbitration based in contract may be instituted or maintained against a person who develops or develops and sells real property, or 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 Court of Appeals affirmed the summary judgment with respect to the contract claims, noting that the statute applies to actions based in contract. In so doing, the Court rejected Evans Withycombe’s argument that the Court should interpret the statute only to bar claims brought by property owners. The Court of Appeals reversed the summary judgment with respect to the common-law indemnity claim. The Court explained that although the statute of repose bars contract-based indemnity claims, it does not bar common-law indemnity claims. The Court declined to consider whether the statute of repose bars negligence claims explaining that the negligence argument had not been properly raised below.

PRACTICE NOTE: Evans Withycombe first raised the negligence argument in a motion for reconsideration. The Court noted that although it may in its discretion consider matters first raised in a motion for reconsideration, it tends to do so in cases in which the facts or evidence presented were not available at the time the summary judgment was entered. That was not the case here.

Justice Snow authored the opinion. Judges Ehrlich and Gemmill concurred.

Posted On: 5/16/2006