FNB Mortgage Corp. v. Pacific General Group

This action arises from alleged construction defects at a Sacramento apartment complex. The central issue on appeal is whether the 10-year statute of limitations under Code of Civil Procedure section 337.15 bars the cross-complaint of FNB Mortgage Corp. and Granite Savings Bank (collectively, FNB) for express contractual indemnity against the developer, cross-defendant Pacific General Group (Pacific General).

Section 337.15 requires that a suit to recover damages for a latent design or construction defect be brought within 10 years of the date of substantial completion of the improvement, regardless of the date of discovery of the defect. Subdivision (c) of that section, however, permits a transactionally related cross-complaint for indemnity to be filed outside the 10-year period if the main action has been brought within the 10-year period.

In this case, the main action, and FNB’s cross-complaint, were not brought until after the expiration of the 10-year period. However, FNB contends that the main action was timely filed by virtue of a tolling agreement entered between the plaintiff and FNB, and that alternatively, the limitations period was equitably tolled by…