particularly with regard to construction principles and methods that involve the public's health and welfare. However, we believe that legislation is necessary to provide protection to those persons, including architects, engineers, and contractors who were once involved in a particular improvement to real property, but who are no longer interested in that property.

It is the desire of the Building Congress, the only association in the area that represents every facet of the construction industry, that you distinguished gentlemen composing this Committee take appropriate action to relieve us of the present situation as is now provided in the D.C. Code, Section 21-301.

It has been a pleasure for me to again appear before a Committee of the Congress and I thank you for affording me this opportunity. Mr. ABERNETHY. Mr. Winn.

Mr. WINN. I would just like some clarification, Mr. McDermott. You represent the Washington Building Congress. Does this include the Master Builders' Association?

Mr. MCDERMOTT. It includes some of its members.

Mr. WINN. Some members?

Mr. MCDERMOTT. Some members.

Mr. WINN. Does it include members of the Homebuilders Association groups?

Mr. MCDERMOTT. Yes. It includes members of practically all the associations that have anything to do with construction industry in the District area.

Mr. WINN. The entire area?

Mr. MCDERMOTT. Yes.

Mr. WINN. Then, because of your title here you could say that the Washington Building Congress does represent homebuilder members? Mr. MCDERMOTT. We have homebuilder members. We have publicized this bill in our monthly bulletin. We have had no objections from any of the homebuilder members.

Mr. WINN. I am trying to clarify if there may be some reason that they were not represented as a group.

Mr. MCDERMOTT. No; I do not believe they object to it.

Mr. ABERNETHY. Thank you very much.

We have here a number of statements which will be incorporated in the record at this point.

Are there any of you gentlemen here who wish to make comment with regard to these statements, that is, those of you who were sent here to present them?

(No response.)

(The statements referred to follow:)

STATEMENT OF GEORGE J. QUINN, MEMBER, BOARD OF DIRECTORS, METROPOLITAN WASHINGTON CHAPTER, ASSOCIATED BUILDERS & CONTRACTORS, INC. My name is George J. Quinn. I am a member of the Board of Directors, and Chairman, of the "Committee on the Statute of Limitations" for the Metropolitan Washington Chapter of the Associated Builders and Contractors, Inc. (A.B.C.), which represents more than 300 firms in the construction business in the Metropolitan Washington Area, and is one of the many organizations in favor of the proposed bill.

This bill is definitely needed and would work toward eliminating the inequities under the present statute. The provisions of the bill are as follows:

A new time limitation of four years after substantial completion, would be set up to apply to persons furnishing design, planning, supervision of construction, or construction of improvements to real property.

A second time limitation of two years after discovery of injury or damage; nor in any event more than four years after substantial completion of the improvement.

The limitation would not apply to persons in actual possession or control of improvements, such as owners, tenants, etc., or for actions based upon

contracts or warrantees.

"Substantial Completion" is defined by that degree of completion in accordance with contract documents when the improvement is first available for use or is used for the purpose intended.

Passage of this bill incorporating the above provisions would eliminate the potential situation of the design professional and the builder, in some cases attempting to prepare a defense many many years after the completion of the improvements, even though he had no control over the improvements from the time he turned them over to the owner. The public interest would not be sacrificed, because the public is protected by the D.C. Building Code and the owners and tenants would be compelled to properly maintain existing structures and improvements.

We, therefore, respectfully urge the passage of this bill.

STATEMENT OF LESLIE F. WEAVer, President, D.C. SOCIETY OF PROFESSIONAL

ENGINEERS

My name is Leslie F. Weaver. I am President of the D.C. Society of Professional Engineers which represents more than 700 engineers practicing in the District of Columbia. We are one of the many organizations favoring this proposed Bill. While we recognize that a reasonable time must be permitted to settle design and construction deficiencies, we do not feel that liability should ensue on the part of the architect, engineer, or contractor until his death. Claims brought 10, 20 or 30 years after substantial completion of construction are almost impossible to equitably adjudicate. Witnesses may be dead or impossible to locate. Pertinent documents pertaining to the claim such as plans, correspondence files, personnel rosters, job notes, etc., will be difficult if not impossible to locate. Without a reasonable statute of limitations, architects, engineers, and contractors must endeavor to preserve all of these documents for every job forever. This of course is impossible and makes an adequate defense practically impossible. Further, with no statute of limitations, architects, engineers, and contractors must carry expensive liability insurance after his retirement until his death.

Failure of a structure many years after it is completed could be caused by one or several factors.

While admittedly, design and construction deficiencies may be one cause, improper building maintenance is a much more likely cause. Inadequate or improper maintenance of wooden frames, inadequate or improper calking, inadequate or improper maintenance of flashings and roofs can all cause serious deterioration which may eventually result in a failure after an extended period of time. It would seem inequitable to require the designer or constructor of a structure to prove that such a failure was not his fault In view of the rising tendency to sue architects, engineers and contractors for enormous claims for damages to property and persons, we believe it is only fair to put some limitations on the period during which actions of this sort can be brought.

In view of the above facts, our Society strongly urges the adoption of H.R. 6527 and/or H.R. 6678 or H. R. 11544.

STATEMENT OF NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS

The National Society of Professional Engineers is a nonprofit organization composed of 53 state and territorial professional engineering societies with more than 500 chapters and over 65,000 members, all of whom are qualified under applicable state engineering registration laws. The membership includes professional engineers engaged in virtually every specialized branch of engineering practice and type of employment-in education, industry, government and private practice.

We wish to thank the authors of the three bills which are the subject of this hearing for providing this opportunity to support the enactment of legislation which will be of material assistance in rectifying an inequitable situation relating to the liability of engineers, architects and contractors.

Sound public policy dictates that persons and organizations which have incurred potential liability for their acts shall not be confronted with their potential liability until the end of time; that at some reasonable point in time after the act has taken place the potential claim or suit for alleged negligence or default shall be barred. For this reason the law has provided statutes of limitation for various types of claims or actions. Such statutes are often referred to as "statutes of repose."

Although the District of Columbia has such statutes of limitations for various types of claims or actions, they are not as a practical matter applicable to the potential liability of engineers, architects and contractors because these statutes start to run from the time the cause of action accrues. But in the case of engineers, architects and contractors the cause of action may not accrue until many years after the project has been designed and built. When this lapse of time extends beyond a reasonable period it is often most difficult or even impossible for the defendant to reasonably defend the suit. Witnesses to the original transaction may have died or moved away, physical evidence, such as the original plans, may have been lost or discarded, and it is a well known fact that with the passage of time the memories of potential witnesses become hazy or uncertain of the facts.

Those who support this legislation agree that there should be some reasonable period of time for an aggrieved party to have an adequate period of time to perfect and process a claim or suit from the date of occurrence which caused the alleged damage. The pending bills provide that this reasonable period of time shall be four years from the date the improvement was substantially completed. We agree with this period of time to arrive at a fair and equitable balance of the interests of the parties. This period of time is in accord with a "model" statute of this type as developed by the National Society of Professional Engineers, American Institute of Architects and Associated General Contractors of America.

The "model" statute is included in full in the attached article "Why Statutes of Limitations?" by Milton F. Lunch, Legislative Counsel, National Society of Professional Engineers. This is attached for inclusion in the record of the hearing if deemed desirable by the Subcommittee.

[From Consulting Engineer, February 1964]

WHY STATUTES OF LIMITATIONS?

(By Milton F. Lunch, Legislative Counsel, NSPE)

An ancient principle of law holds that in the process of establishing rules whereby men may adjust and settle their differences it is important and necessary that there be some point in time when rights and obligations must be settled, and after that time the aggrieved party is foreclosed from exercising his right or claim. This principle is embodied in the laws of every state, though statutes of limitations vary according to the state and type of claim; the precise details are as determined by the legislature.

There are sound, practical reasons for this well-established principle of law. Witnesses to the transaction in dispute may die or move away; physical evidence may be lost; memories grow hazy. And not the least reason for the rule is that as a matter of good business practices a person should have some reasonable security that the slate has been wiped clean of past errors or failures in connection with former transactions. An equally important principle, however, is that an aggrieved or injured party have an adequate period of time to perfect and process his claim from the date of the occurrence which caused the alleged injury or damage. This period of time generally is about three years, though it will vary by states and types of cases.

Time is the Design Profession's Headache

By and large, these general principles have worked satisfactorily over the years. But the increasing volume of claims and suits against design professionals has disclosed a grave weakness that works to the serious detriment of engineers and architects. The flaw lies in the date from which the statute starts to run. In the normal case this is not a particular problem. The injured party has three years (or other statutory period) to file his suit from the date of the injury. Normally this provides an adequate period for the defendant to know of the possibility of suit following the injury caused by his alleged negligence and to collect his evidence, preserve pertinent documents, obtain statements from witnesses, and perform any other task related to his defense.

But take the case of a mechanical consulting engineer who designed a heating system for a structure this year. His work is completed, his fee paid, his plans filed away, and, so far as the engineer knows, all is well. Then 5, 10, or 15 years later the boiler explodes and third persons are killed or injured. Suddenly the engineer is faced with a lawsuit based on his alleged negligence in the inadequate design of the heating system-a transaction that is remote in his memory. His plans may have disappeared. The heating contractor who may have committed an error in installing the unit by not following the engineer's design may be out of business. Employees of the engineer who may have been most familiar with the details may have departed for parts unknown. Under these circumstances the engineer can never know for certain that any professional assignment performed by him throughout his career may not come back to haunt him.

Typical Cases

This situation is not completely hypothetical, for these actual cases are typical of a growing concern:

A granary designed by an engineer in 1934 exploded in 1957. Suit was brought in 1959 for negligence in design and construction. The case is still in court, but even if the engineer wins on the merits he has faced considerable expense in defense costs for damages occurring almost a quarter of a century after the completion of his professional services.

An office building designed by an architect in 1940 had safety hooks for outside window cleaning. In 1956 the hooks pulled out and a window washer was killed. His estate sued the architect; it was awarded damages based on its claim of negligent design.

A building designed in 1954 included underground piping to the water wells that supplied the building. In 1960 trouble developed because the piping had corroded, and both the architect and engineer were sued for negligence in specifying a kind of piping material that was not suitable for the soil conditions. An arbitrator has decided against the defendants, but the amount of damages is yet to be determined. A leading case-repudiating the old rule that a suit will not be entertained unless there is privity (contractual relations) between the partes involved injuries resulting from the fall of an infant from a low concrete porch of an apartment house. The suit was brought six years after the apartment house was completed, based on the architect's failure to provide a protective railing. In this situation, however, the court dismissed the suit on the ground that liability must be based on a hidden danger, and here the danger was obvious.

An important consideration in cases of this type is not necessarily whether damages are assessed against the design professional. Even if the architect or engineer wins the case he has been put to considerable expense and time to formulate and present his defense. And it is not an adequate answer to point to professional liability insurance as the source of bearing the defense costs. Costs of defense are one of the most important ingredients making for high premiums for liability insurance.

Statute of Limitations Legislation

What can the design professions do to offset or limit stale claims or suits? Engineers, architects, and contractors in Wisconsin paved the way with an answer in 1961 when legislation was obtained for a special statute of limitations under which legal actions will not be heard for damages or injuries occurring more than six years after the performance of design, planning, supervision of construction, or construction of a facility or building. The special statute does not apply, however, to persons in actual possession and control as owner, tenant, or otherwise.

Following the Wisconsin initiative, a number of other societies of engineers and architects have moved in a similar direction. So far only Ohio and Illinois have been successful. The Ohio limitation is for 10 years, however, and is limited to persons who are certified or licensed as architects or professional engineers under the state law. The Illinois statute was first introduced for a one year period, but this was felt by the legislature to be an unreasonably short time. The legislation as enacted, adopted a four year period. Pennsylvania architects and enginers came close in 1963; the legislature enacted a bill with a 10 year period, but the Governor vetoed it.

The practical and legal difficulties in drafting and securing enactment of similar legislation in the other states has led to a national effort to provide a "model" statute of limitations. Through the joint efforts of AIA, NSPE, and AGC a model statute has been prepared and circulated to the state groups of each organization. Like all model statutes, this one must be taken as a guide and tailored to meet the legal technicalities of other state laws to which it may relate; for practical political

considerations it may have to be revised as to scope of application or the number of years within which an action may be brought. The model, drafted with the aid of the legal counsel of the sponsoring organizations, goes somewhat beyond the existing state laws in legal details and extent of coverage. It suggests four years as the reasonable period of time for an action, and also a limitation on damages to property as well as persons. The full text of the model statute is as follows: Section 1. No action, whether in contract (oral or written, sealed or unsealed), in tort or otherwise, to recover damages

(i) for any deficiency in the design, planning, supervision or observation of construction or construction of an improvement to real property,

(ii) for injury to property, real or personal, arising out of any such deficiency, or

(iii) for injury to the person or for wrongful death arising out of any such deficiency,

shall be brought against any person performing or furnishing the design, planning, supervision or observation of construction, or construction of such an improvement more than four years after substantial completion of such an improvement. Section 2. Notwithstanding the provisions of Section 1 of this act, in the case of such an injury to property or the person or such an injury causing wrongful death, which injury occurred during the fourth year after such substantial completion, an action in tort to recover damages for such an injury or wrongful death may be brought within one year after the date on which such injury occurred (irrespective of the date of death) but in no event may such an action be brought more than five years after the substantial completion of construction of such an improvement.

Section 3. Nothing in this act shall be construed as extending the period prescribed by the laws of this state for the bringing of any action.

Section 4. The limitation prescribed by this act shall not be asserted by way of defense by any person in actual possession or the control, as owner, tenant, or otherwise, of such an improvement at the time any deficiency in such an improvement constitutes the proximate cause of the injury or death for which it is proposed to bring an action.

Section 5. As used in this act, the term "person" shall mean an individual, corporation, partnership, business trust, unincorporated organization, association, or joint stock company.

Need Concerted Action

Professional liability problems are bound to grow if the past few years is an indication of the future. Bringing the time element on liability claims under control will not solve the over-all liability problem, but it can be a significant step. Consulting engineers therefore should join forces promptly with architects and contractors in a concerted effort to obtain the best possible legislation to bring the problem into balance with the fair interests of the public and of the design professions and the construction industry.

On occasion the courts have taken it upon themselves to reject stale claims as a matter of equity and justice. The Supreme Court of Tennessee recently dismissed a suit filed in 1958 against a surveying firm alleging an error in the survey of a parcel of land performed in 1934. The Tennessee high court commented: "If these surveyors could be held liable to such an unforeseeable and remote purchaser 24 years after the survey, they might, with equal reason, be held liable to any and all purchasers to the end of time. We think no duty so broad and no liability so limitless should be imposed."

This type of sound reasoning will be helpful in meeting similar cases while corrective legislation is being considered. However, it should not be regarded as an adequate substitute for pinning down in law the principle indicated by the Tennessee tribunal. Judges, like other professionals, are notoriously independent in their views. The design professions may be leaning on a thin reed to hope other jurists will likewise see the problem so clearly and fairly.

Mr. ABERNETHY. I overlooked one statement a while ago, that of Mr. Theodore R. Cromar, on behalf of the Potomac Valley Chapter of Maryland, the American Institute of Architects.

This statement and any others the clerk may have will be also included in the record.

(The documents referred to follow:)