Statute of Limitations for Professional Malpractice Extended from Four Years to Six Years

Statute of Limitations for Professional Malpractice
Extended from Four Years to Six Years

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Bear witness to a seminal change in Georgia law concerning the period of time in which
to bring an action for professional malpractice, a period of time known as the legal “statute of limitations.” On November 22, 2010, the Georgia Supreme Court issued its opinion in Newell Recycling of Atlanta, Inc. v. Jordan, Jones & Goulding, Inc.

In Newell, a professional engineering firm contracted to prepare a concrete work platform that would control drainage at a shredding facility. After the work had been performed and the facility became operational, in around May 2000, the concrete platform began to fail. Four years later, in August 2004, the facility sued the engineering firm for breach of contract and professional negligence.

The firm asked the trial court to dispose of the suit, arguing that the action was barred
by the four-year statute of limitations applicable to actions “upon any implied promise or undertaking” contained in O.C.G.A. § 9-3-25. The trial court denied the engineering firm’s request, concluding that a six-year statute of limitations for contracts in writing, as prescribed at O.C.G.A. § 9-3-24, may apply under the facts of the case. The case was appealed, first to the Georgia Court of Appeals and then to the Georgia Supreme Court.

The Georgia Supreme Court addressed “whether . . . a professional malpractice claim
premised upon a written contract is governed by the four-year statute of limitations . . . rather than the six-year statute of limitations . . . .” The Supreme Court concluded that “[w]here a complete written contract exists in an action for which a contract is pursued . . . the six-year statute of limitations of O.C.G.A. § 9-3-24 applies, regardless of whether the alleged breach stems from the express terms of the agreement or duties that are implied in the agreement as a matter of law.”

The Supreme Court’s decision foreshadows the primary question to be considered in
calculating the statute of limitations in professional malpractice actions based upon services rendered under a written contract: “whether a written agreement actually exists between the parties such that any implied duties sued upon would have grown directly out of the existence of the written contract itself.” In short, Georgia courts will be left to consider whether a contract exists; and, if so, whether the contract can be considered “complete.”

Under Newell, if no written contract exists with regard to the provision of professional
services, a four-year statute of limitations will continue to apply. Further, if a written contract exists, but the contract is “incomplete,” a four-year statute of limitations will also apply. In all other cases where a complete written contract exists between the parties, a six-year statute of limitations will apply.

Since the issue was not before the Court, it did not address O.C.G.A. § 9-3-71, which
sets forth a two-year statute of limitations applicable to professional malpractice actions arisingout of medical malpractice. Therefore, Newell’s impact on medical malpractice actions is questionable. Indeed, the full impact of the Newell decision remains to be seen. Nevertheless, the Georgia Supreme Court’s holding in Newell represents a significant change in the law of professional malpractice in this State; and all professionals should be aware of the opinion.

** Gregory G. Sewell is an associate attorney at Bouhan, Williams & Levy LLP. Mr. Sewell canbe reached via email at ggsewell@bouhan.com or by telephone at 912.236.2491.