You Oughtta Know by Richard Stacey: Contractors, suppliers have limited time to sue cities

RICHARD STACEY, attorney with Meuleman Mollerup LLP specializing in complex business litigation and construction law.July 16, 2013 

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Richard Stacey

The Idaho Tort Claims Act is an important statute that many Idaho lawyers are familiar with but most nonlawyers have never heard of.

Because all claims against cities, including claims for non-payment, are barred unless a city is provided proper notice, people and entities entering into contracts with cities need to be aware of these notice requirements. That includes construction contractors and material suppliers who sign contracts with municipalities on public works construction projects.

The law sets forth the terms on which government entities within Idaho can be sued for wrongful acts that result in injury to a person, property or reputation. The act is the result of a centuries-old doctrine known as sovereign immunity. One of the many reasons that it is good to be the king is that the people ruled by the king cannot sue the king unless he lets them. This doctrine has been incorporated into the American legal system. However, since the American people have long rejected the idea of having a king, our doctrine has been modified slightly. In the United States, including Idaho, "You can't sue the government unless the government lets you sue it."

The Idaho Tort Claims Act is the state's way of "letting" itself be sued for certain wrongful acts specified within the statute.

Because the right to sue the state is determined by statute, there are special limitations and requirements that do not exist when a nongovernment entity is being sued. This agreement to be sued has been extended to all city and county governmental entities within the state.

The act does not bar claims for breach of contract for nonpayment against state governmental entities. However, all claims for damages against a city, including claims for breach of contract, must be filed in accordance with the requirements of the act.

One such requirement is that a written notice of claim must be filed with the city within 180 days from the date "the claim arose or reasonably should have been discovered."

If a construction contractor fails to notify a city of its claim for nonpayment within 180 days of the date the city refuses to pay, or the date that the contractor should have known that the city refused to pay, whichever comes first, then the construction contractor will lose its right to sue the city to recover the amounts it is owed for this work.

All contractors that do business with city governments must remember not to drag their feet if they believe they have a claim for monetary damages. The king will let you sue him for these amounts, but you'd better be quick about it.

If you are uncertain whether your time to file a claim against a city government has expired, contact your construction attorney.

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Richard Stacey: 342-6066

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