Background
Plaintiffs Thomas and Deena Bohannon appealed the dismissal of their construction defect claims against Martin McDonald Development, Inc. and Allen Martin Construction, Inc. based on California’s statute of repose. The district court had dismissed the claims, and the plaintiffs argued that their amended complaints should relate back to the original filing dates.
The court’s reasoning
The court reviewed the dismissal de novo. Regarding Martin McDonald Development, Inc., the court found that California law does not allow equitable tolling of the statute of repose to correct a misnamed party. However, regarding Allen Martin Construction, Inc., the court held that the statute of repose does not conflict with the rule allowing suits against unknown defendants. The court concluded that relation back is permissible if the claim and defendant were identified within the repose period, even if the defendant was initially named as a pseudonym. The court also rejected arguments regarding willful misconduct and fraudulent concealment due to insufficient allegations.
What it means going forward
Construction defect claims against misnamed corporate entities may be barred by the statute of repose, but claims against unknown defendants identified later may survive if the initial filing met specific state requirements.