Construction defect litigation often turns on questions of timing as much as on the substance of alleged deficiencies. In Pennsylvania, the statute of repose governing construction projects provides builders and contractors with a powerful defense that can extinguish claims long before they are filed. The recent decision in Aloia v. Diament Building Corp., underscores the judiciary's commitment to enforcing the statutory bar, even in cases framed under consumer protection laws or premised upon allegations of building code violations.
The ruling provides important guidance for construction professionals and homeowners alike. It clarifies that "lawful" construction, as used in the statute, refers to authorization and licensure rather than perfect compliance with every regulation. Once a certificate of occupancy is issued, the repose period begins to run, and after twelve years, claims related to construction defects are permanently foreclosed.
Factual Background
The dispute arose from a residence located in Chester Springs, Pennsylvania. The home was originally completed in 2006, with a finished basement and addition completed the following year. Certificates of occupancy were issued for the main structure as well as the later improvements. The appellants, Thomas Aloia and his wife, Amy Stimson, were not the original purchasers. Rather, they acquired the property after the initial purchaser's lender foreclosed and listed the home for sale in 2016.
At the time of the purchase, Aloia, a commercial construction professional, was aware of the regional concerns regarding stucco systems in newer homes. To address these concerns, Aloia contacted John Diament, the Principal of Diament Building Corp. According to the appellants, Diament personally assured them that the residence had been built to the highest standards and with professional workmanship. On the strength of those representations, Aloia and Stimson proceeded with the purchase.
Two years later, in late 2018, the homeowners began to observe water intrusion in both the basement and master bedroom. They engaged an engineer to conduct moisture testing, which revealed defects in the exterior building envelope. According to their allegations, the defects resulted from Diament's design and installation choices, which were allegedly inconsistent with the Uniform Construction Code, the International Residential Code, and local building requirements.
Procedural Posture and Trial Court Ruling
The litigation began in March 2021, when Aloia filed a writ of summons against Diament Building Corp. After being compelled to file a formal complaint, Aloia alleged construction-related defects at the residence he and his wife had purchased. Diament responded with preliminary objections, arguing two threshold issues. First, Diament argued that Aloia lacked standing because his name did not appear on the deed. In addition, Diament argued that any claim was barred by Pennsylvania's statute of repose governing construction-related actions.
Aloia amended his complaint but initially failed to add his wife, Amy Stimson, as a co-plaintiff despite acknowledging her ownership interest. Only after further objections did Aloia file a second amended complaint that included Stimson and asserted a single claim under Pennsylvania's Unfair Trade Practices and Consumer Protection Law (UTPCPL).
The trial court denied Diament's preliminary objections, allowing the claim to proceed. Diament answered and asserted the statute of repose as an affirmative defense. In early 2023, Diament moved for judgment on the pleadings, again pressing the statute of repose. The trial court granted the motion in April 2023, dismissing the complaint with prejudice. Aloia and Stimson filed a timely appeal, framing their arguments around the applicability of the repose statute.
The Appellants' Argument
On appeal, Aloia and Stimson challenged the trial court's reliance upon the statute of repose. They argued that the protection of repose extends only to construction that was performed lawfully. According to their theory, Diament's work fell outside the scope of the repose statute because it allegedly violated the International Residential Code, which had been adopted by West Pikeland Township as a binding local ordinance. Under the ordinance, any violation of the code constituted "unlawful" construction. The homeowners reasoned that if the construction was unlawful, it could not be shielded by the repose statute, and thus their claim should not have been barred at the pleading stage.
This framing brought the appellate court to a critical interpretive question: What does it mean for construction to be "lawfully" performed under Pennsylvania's statute of repose?
The Statute of Repose and the Definition of "Lawful" Construction
Central to the appeal was the interpretation and application of Pennsylvania's construction statute of repose, codified as 42 Pa.C.S.A. §5536. The statute provides that any action against those engaged in the design or construction of real property must be commenced within twelve years after completion of the improvement. Unlike a statute of limitations, which begins running once a cause of action accrues, a statute of repose can extinguish claims before they arise by creating a fixed outer limit on liability. To successfully invoke the statute, a defendant must show that the project was lawfully performed, that more than twelve years have passed since completion, and that the defendant falls within the class of protected actors.
The homeowners argued that the statute did not apply because the construction was not "lawfully" performed. They contended that violations of the International Residential Code, as incorporated into local ordinances, rendered the project unlawful.
The Superior Court, however, had recently addressed this precise issue in Johnson v. Toll Brothers, Inc., 303 A.3d 471(Pa. Super, Ct. 2023). In that case, the court clarified that "lawfully" does not mean flawless compliance with every building code or regulation. Rather, it refers to whether the builder was authorized to engage in construction, such as holding the proper license and obtaining a certificate of occupancy. As the court explained through analogy, a licensed driver may be speeding and thus not "legally" obeying the traffic rules yet is still "lawfully" driving because they are authorized to operate this vehicle. Under Johnson, the issuance of a certificate of occupancy is compelling evidence that construction was lawfully performed, even if building code violations are alleged.
Application to Present Case
Applying this precedent, the trial court concluded that the certificates of occupancy issued in 2006 and 2007 established the lawful completion of construction. Consequently, the repose period began to run on those dates. By the time the homeowners filed their writ of summons in March 2021, more than fourteen years had elapsed since the final certificate of occupancy was issued. The claims were therefore barred as a matter of law.
The court also rejected the appellants' argument that the repose period should be tolled because construction was allegedly incomplete at the time the occupancy permits were issued. Relying on Venema v. Moser Builders, Inc., 2370 EDA 2021 (Pa. Super. Ct. 2022), the Superior Court reiterated that the repose period commences when third parties are first exposed to the completed structure, which is marked by the issuance of a certificate of occupancy. Repairs or unfinished work after that point do not extend or toll the repose period.
The UTPCPL Argument
The appellants attempted to sidestep the repose statute by framing their claim under the UTPCPL. They asserted that their case was not a construction defect action but one for the fraudulent misrepresentations made in 2016, long after the home was built. The trial court disagreed. Due to the fact that the damages sought were entirely based upon alleged construction deficiencies, the claim was subject to and extinguished by the statute of repose.
This approach aligns with the Superior Court's reasoning in Tibbitt v. Eagle Home Inspections, LLC, 305 A.3d 156 (Pa. Super. 2023), which applied a similar repose statute to bar UTPCPL claims that were derivative of inspection-related allegations. In Tibbitt, and subsequent cases, the courts have consistently held that when a claim, regardless of its legal label, arises from alleged deficiencies in construction or inspection, the repose statute applies.
Conclusion
The Superior Court affirmed the trial court's ruling. It held Diament's construction was "lawful" within the meaning of the statute because the builder was licensed, and certificates of occupancy were issued. Since more than twelve years had elapsed before the suit was filed, all claims including those styled under the UTPCPL, were barred.
The Superior Court's decision in Aloia reinforces the protective scope of Pennsylvania's statute of repose and signals courts will resist efforts to evade its reach through alternative pleading strategies. By distinguishing between "lawful" authorization and "legal" compliance, the Court confirmed certificates of occupancy serve as the bright-line marker for triggering repose.
