.

Defense Digest

Pennsylvania Supreme Court Expands Liability of Contractors for Completed Work – Even If a Defect Is Obvious

Defense Digest, Vol. 29, No. 3, September 2023

September 1, 2023

Key Points:

  • The Supreme Court of Pennsylvania held that a contractor can be liable for a hazardous condition it created, even if the work is accepted, known by the property owner, and is obvious in nature.
  • This opens the door to remote claims brought by third parties against construction contractors.
  • It may serve to undercut the open and obvious defense to claims brought by the public against out-of-possession contractors.
  • This does not serve to relieve premises owners/possessors of potential joint liability with contractors.

In Brown v. City of Oil City, 294 A.3d 413 (Pa. May 16, 2023), the City of Oil City, Pennsylvania, retained two contractors to design and oversee reconstruction of the deteriorated concrete stairs leading to the entrance of the City’s library. The work was performed by another contractor, also through a contract with the City. Installation of the new stairs was completed by the end of 2011. However, in early 2012, the City received reports about imperfections in the concrete surface. The City notified the contractors that it considered the steps to be dangerous and defective. Between 2012 and 2015, the condition became worse, but no remedial work was performed. In 2015, the plaintiff exited the library, tripped on one of the deteriorated steps, and sustained a fatal head trauma. A wrongful death suit was filed against the City and the contractors.

After discovery, the contractors were granted summary judgment, having argued they owed no duty to third persons as they were not in possession of the premises at the time of injury. The trial court cited to Section 385 of the Restatement (Second) of Torts as limiting a contractor’s third-party liability to only those situations where a possessor was unlikely to discover the defect. The court relied on Gresik v. PA Partners, L.P., 989 A.2d 344 (Pa. Super. 2009) (Gresik I), which involved a negligence suit against the prior owner of a steel plant where modifications had been made. The prior owner removed a drawbridge designed as a safety feature for steelworkers. After the plant was sold, a steelworker died when he had no means of escaping a molten steel breach. Suit was brought against the prior owner. The Superior Court held that a precondition for liability under Section 385 is showing that the danger was unlikely to be discovered by the possessor. Since the plant’s current owner was aware of the hazard, summary judgment was entered for the prior owner. Citing to Gresik I, the trial court in Brown held that the contractors could not be liable because the City was aware of the hazardous condition of the steps. 

The Commonwealth Court reversed, citing two Pennsylvania cases that imposed liability on contractors to the public, Prost v. Caldwell Stores, 187 A.2d 273 (Pa. 1963) and Gilbert v. Conrail, 623 A.2d 873 (Pa. Cmwlth. 1963). In Prost, the court held that a contractor could be liable to third parties for faulty tile installation, despite the possessor’s acceptance of the work. In Gilbert, Conrail built a defectively designed track crossing and then turned the property over to SEPTA. Despite the obvious nature of the track crossing, the court in Gilbert held that Conrail could still be liable for a passenger’s death resulting from the hazard and that the the condition did not have to be hidden, or latent, for the contractor to be liable. SEPTA’s awareness of the condition did not negate Conrail’s exposure. 

The contractors in Brown argued on appeal to the Supreme Court that the court should adopt the Superior Court’s approach in Gresik I to limit liability for an out-of-possession contractor to latent defects only. They argued that since the condition of the steps was known by the City, that entity was solely responsible for remediation. In fact, the contractors argued that they could not take action without instructions from the City. The City would be in the best position to remedy defects, instead of a contractor who no longer had contact with the property. They also cited to the Restatement under which possessors are required to inspect for latent defects to protect invitees. Further, they cited to a comment of Section 385, which imposed liability on contractors only to the same extent as manufacturers of a product, that is, for defects which the end user is not able to discover. Brown, to the contrary, argued that Section 385 does not pre-condition a contractor’s liability to third parties on the knowledge of the possessor. Brown further argued that the contractor’s interpretation creates an incentive for possessors to ignore defects and that the possessor’s knowledge should not insulate the contractor. 

The Supreme Court in Brown affirmed the Commonwealth Court’s reversal of summary judgment. The court sided with the reasoning of Gilbert, which permitted liability, even for open and obvious conditions known by the possessor. The court held that under Section 385 of the Restatement, a contractor could face liability whether the condition was latent or apparent. 

The Supreme Court interpreted Section 385 as imposing liability on contractors for injuries to third parties arising from all defects, whether latent or obvious. The court noted that comment c to Section 385, which refers to work “unlikely to be discovered by the possessor,” is not applicable to third parties, but only relates to claims brought by possessors. As such, under Brown, a contractor can be found liable to third parties as a result of a dangerous condition it created, regardless of whether the condition is latent, open and obvious, or known by the possessor. If the condition is latent, a possessor may have a viable claim as well. This decision only bars a claim by a possessor against a contractor for an open and obvious condition. The court also notes that a possessor also retains a duty to keep its premises reasonably safe for third parties and could be jointly liable with a contractor. 

This case is problematic as it opens the door to injury claims brought against contractors by third parties long after their work is accepted, even if the condition is open and obvious to the plaintiff and the possessor. Also, the court does not address the established defenses that no duty is owed to warn of open and obvious conditions, or that the plaintiff may be at fault for assuming a risk. Last, it is presumed that this decision does not impact a statute of repose defense, assuming a defendant fits within the protected class. 

*David is an Of Counsel and works in our Philadelphia, Pennsylvania, office. He can be reached at 215.575.3577 or dswolf@mdwcg.com. 


 

Defense Digest, Vol. 29, No. 3, September 2023, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2023 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

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Marshall Dennehey is proud to highlight the firm’s 106 attorneys who have been recognized in the 2027 editions of The Best Lawyers in America® and the Best Lawyers: Ones to Watch® in America. Less than 6% of all practicing lawyers in the U.S. were selected by their peers for this recognition. Additionally, four of the firm’s attorneys received the Best Lawyers® 2027 “Lawyer of the Year” awards in their respective practice areas and demographic regions. Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. For more information, please visit https://www.bestlawyers.com/. OUR 2027 LAWYERS OF THE YEAR Harrisburg, PA Christopher Reeser, Personal Injury Litigation - Defendants Kacey Wiedt, Workers Compensation Law - Employers Roseland, NJ Justin F. 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Thought Leadership

Pennsylvania Superior Court Confirms RESDL Claims Are Subject to a Two-Year Statute of Repose

The Pennsylvania Superior Court recently concluded that claims under the Real Estate Seller Disclosure Law (“RESDL”) are subject to a two-year statute of repose running from the settlement date. This decision will further assist defending errors and omission claims against real estate agents as it bars any RESDL action commenced more than two years after the settlement date regardless of when the defect was discovered.  In Hollinger v. Deitrich, 2026 Pa. Super. LEXIS 328 (June 23, 2026), the buyers entered into an agreement of sale in April of 2017 to purchase a residential property. The settlement occurred in June of 2017. The buyers reviewed the seller disclosures that revealed the property had a sump pump in working order and a sump pit. The disclosures further noted no water infiltration into the basement, but disclosed rehab, an addition to the property and prior sewage backup.  Shortly after the settlement and closing, the buyers experienced flooding in their basement. In March of 2020, the buyers filed suit against the seller, the buyers’ real estate agent and broker and the seller’s real estate agent and broker alleging various causes of action including a violation of RESDL. The buyers alleged that they sought assurances from the agent defendants that no water infiltration occurred on the property. They further alleged that both agents lived in the area and should have known about the neighborhood water infiltration issues. The trial court granted summary judgment for the seller and the seller’s agents and dismissed the RESDL violation.  Relying on the Supreme Court’s decision in Gidor v. Mangus d/b/a Mangus Inspections, 345 A.3d 629 (Pa. 2025), the court explained that a statute of limitation begins to run from the time of the injurious occurrence or a discovery of the same. However, a statute of repose runs for a statutorily determined period after a definitively established event. Notably, a statute of repose eliminates a cause of action regardless of when the claim accrues. Because of this, a plaintiff may not invoke the discovery rule or other equitable tolling considerations.  RESDL requires that an action for damages, as a result of a violation of this chapter, must be commenced within two years after the date of final settlement. The court found that Section 7311(b) was clear and unambiguous that an action for damages pursuant to this chapter must be commenced within a certain time after a definitely established event that is independent of any injury or discovery of any injury. Since the buyers sued over two years after closing on the property, their statutory claims were time-barred. The court explained that the seller disclosure statement could not support common law or consumer protection claims, as using it would improperly expand remedies beyond the statute’s terms. Accordingly, the court upheld the trial court’s summary judgment ruling that the buyers’ claims under RESDL were barred by the statute of repose.  Accordingly, defense counsel should scrutinize complaints involving RESDL claims to ensure that such claims have been timely brought within two-years of the settlement date. A plaintiff will no longer be able to invoke the discovery roll to expand the time frame.

Thought Leadership

Not So Fast. . . The Limitations of the Pennsylvania RELRA in Plaintiffs’ Civil Actions Against Real Estate Broker and Licensee Defendants

Much has been made of the importance and weight of the Pennsylvania Real Estate Licensing and Registration Act, 63 P.S. §§ 455.101, et. seq. (RELRA or Act). After all, a real estate broker generally cannot recover any commission absent a signed agreement that complies with RELRA. But can a plaintiff rely on RELRA as a distinct cause of action in a civil action as to a real estate broker or licensee defendant? The Superior Court has emphatically held that he or she cannot. In the unpublished opinion P. Perez Real Est. Holdings, LLC et. al. v. Home Sale Real Est. Servs., Inc., et al., No. 256 MDA 2025, 2025 WL 35389888 (Pa. Super. Ct. December 10, 2025), the Superior Court held that the Act “does not contemplate private actions for money damages as an enforcement mechanism and consequently, does not create a private cause of action.” citing Schwarzwaelder v. Fox, 895 A.2d 614, 620 (Pa. Super. 2006). While the Act authorizes the Bureau of Professional and Occupational Affairs, State Real Estate Commission, to regulate the conduct governed by RELRA, the Act alone does not create a stand-alone legal cause of action as to a broker-defendant in a civil action. See P. Perez, citing Schwarwaelder at 620. Nor can it be stated that RELRA creates or imposes any legally cognizable duties on real estate brokers or licensees. While the Act contains and refers to general concepts of duty (e.g. the agent must “exercise reasonable professional skill and care which meets the practice standards required by this act” and “to deal honestly and in good faith” 63 P.S. §§606.1 (a)(1),(2), or the broker has a duty to the buyer of property to take “action that is consistent with the buyer’s interest in transaction.”  63 P.S. §§606.3 (1)), these general concepts are secondary to the duties imposed by the required written agreement between the broker and consumer. For example, in P. Perez, a case in which the buyers-plaintiffs argued that the real estate broker failed to investigate recent legislation that would affect buyer’s intentions to convert the property to commercial space, the agreement between buyer and broker contained the following provision in the “Buyer’s Due Diligence” clause: Buyer acknowledges that Brokers, their licensees, employees, officers or partners have not made an independent examination or determination of the structural soundness of the property, the age or condition of the components, environmental conditions, the permitted uses, nor of conditions existing in the locale where the property is situated. . . Accordingly, the broker defendants expressly disclaimed any duty to buyers to inform them or determine whether any applicable zoning classifications, laws, or ordinances in the township applied to the properties in question. Moreover, the Superior Court refused to read provisions of the Act into the Agreement, citing Skiff re Buss, Inc. v. Buckingham Review, LP, 991 A.2d 956 (Pa. Super. 2010). In defending civil actions it is important for the defense attorney to identify any causes of action predicated solely on RELRA. Preliminary objections may be warranted to the extent that the plaintiff asserts RELRA as a stand-alone cause of action for monetary damages, a position struck down by the Superior Court of Pennsylvania in P. Perez.  Moreover, any attempt to create or heighten duties as to the broker defendants may be countered by the general proposition that the courts will not inject the vague concepts of “reasonable professional skill” or “good faith” where the written agreement has express provisions regarding the duties of the parties. Ironically, although RELRA is an important Act with which all realtors, brokers, and licensees should be familiar to guarantee that their commissions are in fact timely paid, it is not a strong stand-alone mechanism for a plaintiff’s attempts to recover monetary damages in a civil action.

Thought Leadership

Commonwealth Court Holds That a Claimant Who Was Struck By a Car While Crossing the Street During an Unpaid Break Was In the Course and Scope of Employment

This case involved a claim petition filed by a claimant who sustained injuries after being struck by a vehicle while crossing the street in front of the employer’s premises. The employer denied the claim based on course and scope, as the accident occurred during one of two mandatory fifteen (15) minute breaks provided to the claimant. The claimant would punch out at the beginning of a break and punch back in when the break was over.  On the date of the incident, the claimant punched out and left the building to get lunch at a restaurant, which required her to cross the employer’s parking lot, and then a public street, where the injury occurred. The Workers Compensation Judge (WCJ) dismissed the petition, noting that that during the two mandatory fifteen-minute breaks per shift allowed by the employer, the claimant was free to leave the employer’s premises, and during breaks, permitted to engage in whatever activity she desired. The WCJ found that at the time of the accident, the claimant was on her own time, in the middle of the street, and going to get lunch.   The claimant filed an appeal with the Worker’s Compensation Appeal Board (Board), and the Board reversed.  According to the Board, the claimant’s location was still on the employer’s premises, as the claimant was taking her customary route while using a reasonable ingress/egress from the employer.  Further, the Board found that the “Personal Comfort Doctrine” applied, as the claimant was on a momentary departure to take care of her personal comfort, within the window of time she was allotted for her break.  The Board remanded the case, and a WCJ granted the claim petition.  The Board affirmed, and the employer appealed to the Commonwealth Court. Before the Court, the employer argued that the claimant was not in the course and scope of her employment, because the injury did not occur on its premises, and the claimant was outside the bounds of the Personal Comfort Doctrine. The Court, however, rejected these arguments, and dismissed the employer’s appeal.  The Court noted that the break given to the claimant was so cursory, when she set out to relieve her hunger for her own personal comfort,  she remained in the course of her employment when she sustained her injuries.  A Petition for Allowance of Appeal in the Supreme Court has been filed by the Employer, Giant Eagle.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict.