The Subrogation Strategist

In Haire-Cochran v. 24 Restore, Inc., No. A25-1206, 2026 Minn. App. LEXIS 153, the Court of Appeals of Minnesota (Court of Appeals) addressed whether construction work performed after a fire loss to a property constituted an “improvement to real property” under Minnesota Statute of Limitations, section 541.051, subdivision 1(a). The statute sets forth a reduced two-year limitations period for claims arising out of “the defective and unsafe condition of an improvement to real property.” The lower court dismissed the plaintiff’s case on grounds of the two-year statute of limitations. The Court of Appeals reversed the dismissal, holding that the two-year limitations period did not apply because the post-loss restoration was not an improvement to real property.

In Haire-Cochran, the plaintiff, Tonita Haire-Cochran (Haire-Cochran), suffered extensive fire damage to her home in January 2019. She contracted with 24 Restore, Inc. (24 Restore) to perform restoration work, including removing damaged materials and restoring the property to a “like-new condition.” Haire-Cochran alleged that the work was incomplete, deficient, and that the contractor used inferior materials. She ultimately hired other contractors to complete and repair the work at her own expense.

In March 2024, Haire-Cochran filed suit against 24 Restore, asserting claims for breach of contract, negligence, unjust enrichment, promissory estoppel, and breach of the covenant of good faith and fair dealing. 24 Restore moved to dismiss the complaint, arguing that the plaintiffs’ claims were barred by the two-year statute of limitations applicable to claims arising out of “the defective and unsafe condition of an improvement to real property” under Minn. Stat. § 541.051, subd. 1(a). The district court agreed with 24 Restore, concluding that the restoration work constituted an “improvement to real property,” and dismissed the complaint with prejudice. Haire-Cochran appealed.

On appeal, the Court of Appeals conducted a de novo review and focused its analysis on whether the work performed qualified as an “improvement to real property.” Minnesota courts define an “improvement to real property” as a permanent addition or betterment that enhances the property’s value, involves labor or money, and is intended to make the property more useful or valuable. To guide this inquiry, courts apply a three-factor test: 1) whether the addition is permanent; 2) whether it enhances the property’s capital value; and 3) whether it is intended to make the property more useful or valuable, rather than simply restore it to its prior condition.

Applying these factors, the Court of Appeals held that the first factor was satisfied because the restoration work involved permanent changes to the home. However, the remaining two factors were not met. The court found no indication that the work enhanced the home’s value beyond its pre-fire condition. Instead, the allegations suggested that the work was intended to return the home to its prior state. Further, the court emphasized that the purpose of the project was restorative—not transformative. The complaint described efforts to remove damage and restore the home to “like-new condition,” which the court interpreted as restoring prior usefulness and value, not improving upon it. The court rejected 24 Restore’s argument that the relevant comparison should be the condition of the home immediately after the fire. Instead, it held that the proper comparison is the property’s condition before the damaging event.

The Haire-Cochran case establishes that claims related to post-loss restoration and repairs may not be subject to the two-year limitations period for improvements to real property. For claims related to post-loss restorative efforts, Minnesota’s general six-year limitations period may apply. Subrogation professionals handling Minnesota matters should consider this case when determining the applicable limitations period for their claims.