North Carolina Extends Statute of Repose for Defective Products to 12 Years
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Effective October 1, 2009, North Carolina's statute of repose for claims for defective products will be increased from six to twelve years for actions that accrue on or after October 1, 2009. N .C .G .S. 1-46.1(a)(1) . For actions that accrued prior to October 1, 2009, the former statue of six years after the date of initial purchase or consumption will apply.
This will substantially and positively impact subrogation potential for defective product claims in North Carolina. Interestingly, the statute of repose for improvements to real property will remain six years from the later of the specific last act/omission giving rise to the cause of action or the date of substantial completion . N.C.G.S. 1-50(a)(5)
It is key that in any claim you have that you are calculating both the statute of limitation and statute of repose periods. Remember a statute of limitation begins to run from the date of the event or loss. This is the length of time within which a legal cause of action or suit must be brought. Whereas, as statute of repose may have begun to run months or even years before the event/loss. A classic example would be a defective car which catches fire within the garage of a home. In North Carolina, the statute of limitation for property damages based in tort is generally three years from the event. However, the statute of repose for the product, in this case the car, will be calculated from the date of sale to the first purchaser.
Suit must be brought before the running of both the limitation and repose periods.
It is entirely possible that the repose period may have run before the loss or will run shortly after the date of loss. This was frequently the problem with product claims in North Carolina because of the short repose period of six years. Now, for events that take place after October 1, 2009, a twelve year repose period will apply and more product claims can be brought as now products between 7-12 years in age will not automatically be excluded which would bar suit against the manufacturer. In the example above, a claim that occurred prior to October 1, 2009, for a defective 11-year old vehicle is barred because the six year statute of repose still applies to claims before October 1, 2009. If the fire had occurred today, October 1, 2009, the claim would not be barred because of the longer repose period of twelve years applies. Note, you would still have to bring suit within one year of the loss (before the end of the 12th year), well before the running of the three year statute of limitation. While the increase to 12 years for the product repose period is good news for those in the recovery business.
Keep in mind that North Carolina still has a fairly short six year statute of repose for improvements to real property. So, if your house fire was due to defective original wiring in the garage and not the defective vehicle, you would have only a six year repose period that applies to your claim. Like the example with the car, you might need to bring suit before the running of the limitation period if the six year repose period for the structure will run before the three year limitation period to bring suit expires."
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One of the first things to do upon receipt of a new subrogation loss involving a product is to check to see if there are any recalls of that product. Ultimately, if your cause and origin investigator determines the product is the cause of the loss, the recall can greatly strengthen your subrogation case. It provides effective cross-examination of the manufacturer’s employees and experts, as well as substantial leverage in settlement discussions. 