Litigating construction defect claims can be a time-consuming and tedious process. Because of this, many states have enacted laws that require a notice and opportunity to cure defects before being able to bring such an action to court.
Most legal notices in the construction industry are strictly enforced, allowing any errors or missteps in the process to essentially destroy an otherwise valid claim. However, a recent Tennessee Court of Appeals case found that a forwarded email from a property owner’s engineer was found to be sufficient as notice under the notice and opportunity to cure defects statutes.
Tennessee’s Notice and Opportunity to Cure procedure for construction defects
Back in July of 2020, Tennessee passed some significant legislation impacting the construction industry. While most of the provisions focused on prompt payment and preliminary notice requirements, the new laws also touched on the Notice and Opportunity to Cure procedure for construction defects. This is codified under Tenn Code Ann. §66-36-103. As far as the notice required before making a defect claim, the relevant provision is as follows:
“(a) In actions brought against a prime contractor, remote contractor, or design professional related to an alleged construction defect, the claimant shall, before filing an action, serve written notice… within fifteen (15) days after the discovery of an alleged defect, or as required by contract…”
As far as what this notice entails, it must be a written notice that “describes the claim in reasonable detail sufficient to determine the general nature of the defect, including a general description of the type and location of the construction that the claimant alleges to be defective and any damages claimed to have been caused by the defect.”
The purpose of this statute is to allow the parties to resolve the disputed work without having to resort to litigation. But the statute doesn’t provide much in terms of the form and content of the notice. The limits of this notice were recently tested in a Tennessee Court of Appeals case — and, as it turned out, not much is actually required to satisfy the notice requirement.
Court sets the bar low when it comes to the notice requirements
The case in question is Liberty Construction, Co. v. Curry
- Owners: Peter H. Curry & Patricia B. Curry (Currys)
- Contractor: Liberty Construction Co., LLC
The Currys had hired Liberty as the general contractor for the construction of a commercial retail facility known as the “Curry Plaza.” As the project progressed, numerous issues arose — such as an expanded scope of work issue, disputed payments, a lien claim, a defect claim, breach of contract claims, and more — and were all submitted to trial.
For the sake of brevity, this article is going to focus on the defect claim on the project. More specifically, the notice required under the Tennessee notice and opportunity to cure defect laws.
The alleged defect in question concerned the construction of a bio-retention pond, which essentially is a way to control stormwater runoff. The trial court held that the Currys failed to present enough evidence that Liberty caused the defects, and dismissed their claim to recover the costs of correcting the defects.
Furthermore, even if the defect was caused by Liberty, the Currys failed to provide proper notice for the opportunity to cure. The Currys appealed the judgment.
Owner appeals decision for costs associated with correcting the defective work
The appeals court actually affirmed the trial court’s decision that the alleged defects weren’t caused by Liberty, concluding that the parties had agreed to deviate from the initial plans. But what makes this case particularly interesting is that they reversed the decision that Curry didn’t provide the proper notice to give Liberty the opportunity to cure the alleged defect.
The notice provided by the Currys was an email from a civil engineer (Roy Dale) who evaluated the retention pond. The email contained a detailed explanation of the defects of the pond and a general recommendation for the proposed remedies. It also included a recommendation to get an estimate of what it would cost to correct the defects “[i]f he had not paid for this work, or if he had enough dollars retained to pay for the work needed.”
Lastly, the engineer added that he was “convinced your contractor hasn’t the faintest clue as to what’s going on here” and, “we’re going to have to redo the pond.”
Upon receipt of this email, the Currys forwarded the message to Liberty, solely adding a question mark.
Property owner’s “notice” found to be sufficient
This forwarded email was found by the appellate court to be sufficient to constitute proper and valid notice under Tenessee’s notice and opportunity to cure provisions. Let’s hear it straight from the source, the court declared that:
“The email forwarded to Mr. Arab shows that Mr. Curry only typed a question mark in the body of the email. The forwarded portion of the email sent by Mr. Dale, along with Mr. Curry’s question mark, however, constitutes sufficient notice.”
After declaring that the notice was sufficient, the court then turned to whether Liberty was provided reasonable access and opportunity to evaluate the alleged defect. The court stated that although the email expressly stated that the engineer had “little faith that any instruction [he] [would give] the Contractor [would] be followed,” and recommended another company to perform repairs,” this was also sufficient to provide “reasonable access.”
“Based upon Mr. Arab’s testimony that he recommended that Mr. Curry hire an engineer to assess what needed to be done to compensate for the loss in volume of the pond, we conclude that Liberty made it known that it intended to remedy the issue, despite the fact that it did not provide Mr. Curry with written notice to that effect… “
Therefore, the court concluded that Curry had not only provided sufficient notice, but also reasonable access and opportunity to cure the defect. Although, ultimately, there was no defect.
Contractors should be aware of the “low threshold” for defect notices
Obviously, no one likes to be accused of providing defective work. But there are certain procedures that need to be followed by property owners to make a valid defect claim. Notice (and an opportunity to cure) must be provided. But if you’re waiting for a formal document citing the appropriate statutes with the header “NOTICE & OPPORTUNITY TO CURE DEFECTS,” don’t hold your breath.
The decision in this case makes it abundantly clear that owners don’t need to provide much in terms of notifying a contractor about alleged defects to meet this notice requirement. If we can draw any lessons from this case, is that contractors in Tennessee need to be particularly wary of any communications involving defective work allegations, and respond accordingly so they do indeed have an opportunity to evaluate (and cure if necessary) any potential defects before winding up in court.