Supreme Court of Georgia Weighs in on Shortened Statutes of Limitations for Wrongful Death Claims

We posted on this BPG Inspection v. Omstead last year when the Georgia Court of Appeals issued its opinion. The facts are as follows: 

BPG agreed to a fee of $380 to conduct an inspection of the home that the Omsteads were considering purchasing.  The key contractual language at issue ran as follows:

YOU MAY NOT FILE A LEGAL ACTION, WHETHER SOUNDING IN TORT (EVEN IF DUE TO OUR NEGLIGENCE OR OTHER FAULT), CONTRACT, ARBITRATION OR OTHERWISE, AGAINST US OR OUR EMPLOYEES MORE THAN ONE YEAR AFTER THE INSPECTION, EVEN IF YOU DO NOT DISCOVER A DEFECT UNTIL AFTER THAT. THIS TIME LIMIT MAY BE SHORTER THAN THE LAW OTHERWISE PROVIDES.

A BPG employee undertook the inspection in February 2020 and provided a report that cautioned that the inspector’s role was to identify material defects discovered upon visual examination.  “Latent, inaccessible, or concealed defects are excluded from this inspection.”  The report mentioned a seven-foot tall retaining wall but observed that it seemed to be functioning as intended.  The inspector returned one month later in connection with some repairs that the Omstead’s had requested of the sellers.  

The Omsteads later discovered that defects in the retaining wall was causing water to leak into their garage.  While they were attempting to address those defects in July 2021, the wall collapsed onto Mr. Omstead, and he died from his injuries. In September 2021, Mrs. Omstead filed suit against BPG and its inspector, alleging negligence, fraud, breach of contract, and breach of warranty.  The trial court denied summary judgment to defendants, finding its exculpatory clauses void as against public policy.  

The Court of Appeals reversed. The majority found no basis, in the common law of the state or in statutes for refusing to enforce the contractual shortening of the statute of limitations. Judge Barnes specially concurred, calling on the legislature to follow the models of other southern states and prohibiting the shortening of statutes of limitations with respect to cases of personal injury or wrongful death. I applauded the call for inter-branch dialogue, and I am generally no fan of exculpatory clauses. However, in this case, I think a party ought not to be forced to open itself up to limitless liability in exchange for a $380 inspection fee.

In Omstead v. BPG Inspection, LLC, the Supreme Court of Georgia upheld the Court of Appeals’ decision. It first noted that the above-quoted contractual language applied to all claims, whether sounding in contracts or tort. Moreover, while there is law that provides that exculpatory clauses cannot by upheld in cases of gross negligence or fraud, the language in question is not an exculpatory clause; it is a shortening of the statute of limitations that does not purport to exclude claims against BPG if brought within one year.

Mrs. Omstead next offered the interesting argument that her cause of action accrued at the time of the wrongful death. Courts should not permit “contractual repose” provisions that allow the statute of limitations on actions to expire before they even accrue. It’s an interesting argument, but the Court found no support for it in Georgia law. The Court would not permit its silence to interfere with the principle of freedom of contract that requires courts to enforce the intent of the parties as manifested in their agreements. Nor was there any statutorily imposed duty of care that BPG was impermissibly trying to escape.  In short, the Court found no legal grounds on which to refuse to enforce the contract as written.

The Court then turned to considerations of public policy. The reasoning here was not much different. Mrs. Omstead relied on a statute that prohibits parties from seeking indemnification from harms resulting from certain kinds of contractual arrangements. The Court assumed without deciding that this contract fell within the ambit of the statute. Nonetheless, a shortened statute of limitations is not an indemnification clause.

Presiding Justice Peterson (right) concurred dubitante. His doubts arose from a question of unconscionability, an issue that Mrs. Omstead never appears to have raised. The majority does not say that the issue is thereby waived, but it declines to address it. Justice Peterson has a nagging sense that the court ought to explore the issue further, as BPG’s counsel acknowledged that there is some point at which a shortening of the statute of limitations becomes unconscionable. Justice Peterson joins in Judge Barnes’s call for the legislature to address the matter.