Appellate Law

Alabama Supreme Court Reverses Grant of Summary Judgment in Builder and Landlord's Favor in Case Arising Out of Apartment Fire Set By Arsonist: Neither Intervening Intentional Act of Third Party Nor Rule of Repose Barred Claims

In Collins. v. Scenic Homes, No. 1070875, consolidated with Kilgore v. Scenic Homes, Nos. 1070975, and Hopkins v. Scenic Homes, No. 1070976, the Alabama Supreme Court held that neither the intentional criminal act of arson nor the twenty year rule of repose barred tort claims against the builder who constructed an apartment complex twenty-two years before that apartment was intentionally set on fire and the landlord who operated it. The Court held that the 'criminal acts of a third party' defense did not apply because the plaintiff did not allege that the defendants had a duty to prevent the arson. Further, the rule of repose did not bar the claims against the builder because, the Court held, the common law repose period began to run at the time of injury, not at the time of completion of the building.

In 1982, Scenic Homes began building Hunters Ridge, an apartment development. It was undisputed that Scenic Homes did not use a licensed architect to design the plan and to draft the building specifications. Scenic Homes sold Hunters Ridge in the 1980s. It was owned by Jonathan Russell and a limited liability company in which Russell was principal at the time of the fire. In the early morning hours of August 12, 2004, Henry Rice intentionally set a fire at Hunters Ridge, causing the death of one resident and injuries to several others. The residents sued both Russell and Scenic Homes, alleging negligence and wantonness.

Both defendants moved for summary judgment. Both Scenic Homes and Russell argued that Rice's criminal act relieved them of any liability. Scenic Homes also argued that the claims against it were barred by the twenty-year rule of repose. 

The trial court granted summary judgment in favor of Scenic Homes and Russell on these grounds, but the Alabama Supreme Court reversed on both counts. 

The court acknowledged the long line of cases which hold that a premises owner is not responsible for injury or damage to another on the premises caused by the intervening criminal act of a third party. Those cases, the court reasoned, involve allegations that the premises owner had a duty to prevent the intervening criminal act from occurring. In other words, the plaintiffs in those cases argued that the negligence of the premises owner occurred before the criminal act. Here, by contrast, the residents alleged that Scenic Homes had a duty to construct and Russell had a duty to operate a reasonably safe apartment building, equipped with appropriate exists and fire-suppression safeguards designed to reduce the risk of injury as a result of a fire (read: after a fire), regardless of the origin of the fire. The well-settled cases which hold that there is no duty to protect against the criminal acts of a third party were therefore inapplicable. The only question was whether it was foreseeable that the inability to escape from a fire would cause the type of injuries the plaintiffs alleged. The court easily found that risk to be foreseeable and reversed the trial court's order finding no duty existed. 

The court next turned to Scenic Homes's rule of repose argument. Quoting extensively from common law rule of repose cases, including Ex parte Liberty National Life Ins. Co., 825 So.2d 758 (Ala. 2002), the court emphasized the language in those cases indicating that the rule of repose applied to bar claims which 'could have been asserted' or plaintiffs 'who slept on their rights.' The court then reasoned:

The residents contend that the 20-year common-law rule of repose does not bar their action against Scenic Homes because, they say, they did not have the right to sue until after the fire occurred. We agree….In this case, the residents did not have a viable and cognizable claim against Scenic Homes until the fire occurred and the residents suffered injuries as a result of the fire. Only then did the residents have a right to sue. Thus, because the 20-year common-law rule of repose is premised upon a preexisting right to assert a claim and because the residents did not have such a right until the fire occurred and they sustained injuries as a result of an alleged breach of duty by Scenic Homes and because the residents sued within 20 years of their injuries, the rule of repose is inapplicable to this case. 

Accordingly, the court determined that the trial court erred in entering summary judgment in favor of Scenic Homes based on the rule of repose.

Justice Murdock, joined by Justice Shaw, dissented on the repose issue. Justice Murdock noted that Alabama law was conflicted in this area, and that the general definition of a rule of repose indicated that the repose period would begin to run at the time of completion of the action giving rise to liability.

Full post as published by Alabama Appellate Watch on July 08, 2009 (boomark / email).