City of Phoenix v. Glenayre Elecs., Inc., 2017 Ariz. LEXIS 121 (Ariz. May 10, 2017)

Between 1960 and 2000, Carlos Tarazon (“Tarazon”) performed work installing and repairing water piping for various contractors and developers in the City of Phoenix, Arizona (the “City”).  In 2013, after developing mesothelioma from exposure to asbestos while working on these projects, Tarazon filed a personal injury suit against numerous defendants, including the City and the various contractors and developers for whom he had worked.

The City filed a third-party complaint against the contractors and developers, alleging that they had agreed to defend and indemnify the City against negligence claims relating to these projects.  With respect to the contractors, their various contracts with the City each expressly required the contractor to indemnify the City from all suits arising from their work.

The City brought these indemnity claims more than eight years after the completion of the construction projects at issue.  However, Arizona’s statute of repose states that “notwithstanding any other statute…no action or arbitration based in contract may be instituted…more than eight years after substantial completion of the improvement to real property.”  A.R.S. § 12-552(A).  Consequently, the contractors moved to dismiss the City’s claims, arguing that they were based in contract and therefore time-barred by the statute of repose.

The City opposed the motion, arguing that the statute of repose does not apply to the state’s political subdivisions because: (1) the common law doctrine of nullum tempus occurrit regi (“time does not run against the king”) allows for state entities to bring claims that would ordinarily be barred by the applicable statute of limitations and (2) the express language of A.R.S. § 12-510 codifies this doctrine and provides that claims by state entities are not barred by statute of limitations.  The Superior Court rejected the City’s argument and ruled that neither Section 12-510 nor the doctrine of nullum tempus exempt the City from the statute of repose.  The Court of Appeals of Arizona affirmed.

On appeal, the Supreme Court of Arizona agreed with the lower courts, holding that “the statute of repose controls over other, potentially conflicting state laws[,]” such as the nullum tempus doctrine and A.R.S. § 12-510.  While Arizona common law has “consistently recognized” the nullum tempus doctrine, both that doctrine and its codification in Section 12-510 serve only to exempt the state from the statute of limitations, and not from the statute of repose.  In support of this holding, the Court reasoned that the statute of repose expressly applies “notwithstanding any other statute” which “makes clear” that it “controls over other, potentially conflicting state laws.”

Accordingly, the Supreme Court affirmed the dismissal of the City’s indemnity claims against the contractors because they were: (1) based in contract and (2) brought more than eight years after the completion of construction.  Thus, the statute of repose barred the City’s claims despite the doctrine of nullum tempus.

To view the full text of the court’s decision, courtesy of Lexis®,  click here.

*Ms. Weldekidan is a 2017 Summer Associate in the Construction Practice of Pepper Hamilton LLP.  She is not admitted to practice law.