Utah Court of Appeals
When does the two-year statute of limitations apply to construction defect claims? Johnson v. Okland Construction Explained
Summary
Julie Johnson was injured on a sidewalk at the eBay campus in July 2013, nearly four years after Okland Construction completed the project and transferred possession to eBay. The Johnsons filed suit in July 2017, arguing the four-year statute of limitations applied because Okland retained control of the improvement, but the district court granted summary judgment finding the two-year limitation period had expired.
Analysis
The Utah Court of Appeals in Johnson v. Okland Construction clarified when contractors face the shorter two-year statute of limitations versus the longer four-year period for construction defect claims under Utah Code section 78B-2-225.
Background and Facts
Okland Construction completed the eBay campus construction project in early 2013, with eBay assuming full possession in March 2013. In July 2013, Julie Johnson, an eBay employee, tripped and fell on a sidewalk where it dropped off to a concrete driveway. The Johnsons filed suit in July 2017, nearly four years after the accident, alleging negligent construction of the sidewalk.
Key Legal Issues
The central issue was whether Utah Code section 78B-2-225(8) applied to extend the statute of limitations from two years to four years. This exception applies when a contractor has “actual possession or control of the improvement” at the time of injury. The Johnsons argued that Okland retained control of the entire campus through ongoing warranty work, while Okland contended it had no control over the specific sidewalk where the accident occurred.
Court’s Analysis and Holding
The court held that once a construction project is completed and transferred to the owner, the contractor’s “actual possession or control” is limited only to specific areas where it performs warranty or punch list work. Since Okland never performed any warranty work in the area where Johnson fell, it lacked possession or control of that “improvement” at the time of injury. Therefore, the two-year statute of limitations applied, and the Johnsons’ claim was time-barred.
Practice Implications
This decision emphasizes the importance of precisely documenting post-completion work scope. Contractors should maintain detailed records of which specific areas they access for warranty work, as this determines their exposure under the longer statute of limitations. For plaintiffs’ attorneys, this ruling underscores the need to file construction defect claims promptly, as the four-year exception requires actual contractor control over the specific location of injury, not merely the broader project site.
Case Details
Case Name
Johnson v. Okland Construction
Citation
2020 UT App 150
Court
Utah Court of Appeals
Case Number
No. 20180967-CA
Date Decided
November 5, 2020
Outcome
Affirmed
Holding
The two-year statute of limitations under Utah Code section 78B-2-225(3)(b) applies when a contractor lacks actual possession or control of the specific improvement where the injury occurred after project completion and transfer to the owner.
Standard of Review
Correctness for summary judgment decisions
Practice Tip
Document the exact scope of any post-completion warranty or punch list work to establish whether a contractor has actual possession or control of specific portions of an improvement for statute of limitations purposes.
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