Statute of Limitations Apply to New Hampshire Municipalities in Contract Actions

Statute of Limitations Apply to New Hampshire Municipalities in Contract Actions

January 5, 2017

The New Hampshire Supreme Court recently held in the case of City of Rochester v. Marcel that the statute of limitations applies to municipalities in contract actions, providing contractors, engineers and architects with a defense not previously available. 

This case involved a water storage tank operated by the City of Rochester that developed leaks in 2009. The City filed a lawsuit against the CB&I, which constructed the tank in 1985, and AECOM, which designed the tank and oversaw CB&I’s construction. CB&I and AECOM moved to dismiss the City’s breach of contract claims arguing that the claims were time barred by the applicable statute of limitations. City argued that the doctrine of nullum tempus precluded the statute of limitations from running against the City.

The Court dismissed the suit on the basis that the statute of limitations for contract claims against CB&I and AECOM had expired. The Court held that applying the doctrine of “quod nullum tempus occurrit regi” (which literally means “no time runs against the king”) to a municipality’s contract claims, is not supported by public policy. The Court noted that municipalities enter into contracts in the same manner as private parties; the contractual undertakings are unlikely to lead to unknown violations of public rights; and that the municipalities are as equipped as private individuals to enforce their contract rights in a timely fashion.The Court expressly refused to decide whether municipalities could properly invoke the doctrine of nullum tempus in other contexts.

The application of the doctrine of nullum tempus, a common law doctrine, varies between states.  In states where legislatures have included government entities in the statute of limitations, such as Minnesota, the doctrine does not apply. It is applicable only when the legislature expressly exempts, such as in Virginia, or remains silent about the applicability of the statute of limitations to government entities. In states where legislatures have remained silent, courts have reached different conclusions about the applicability of the doctrine.  For example, in Maryland nullum tempus is not applicable to counties and municipalities in contract actions under a 2014 ruling in Baltimore Cty. v. RTKL Assocs. Inc. while in Pennsylvania the right to invoke the doctrine can be contractually waived, per a 2011 ruling in Selinsgrove Area Sch. Dist. v. Lobar, Inc.

Please contact the author, Sunu Pillai, if you have any questions.