(May 10, 2010): Normally there is statute of limitations that will apply to most civil lawsuits. This means that a claim must be filed in Court within a certain time after the action complained about occurred. For instance, in Texas, if you are involved in a motor vehicle accident and suffer an injury you must file a lawsuit within 2 years of the date of the accident. Failure to do so will prevent you from being able to file a lawsuit after the 2 years expires.
A common statute of limitations for a party to bring a lawsuit for breach of contract is four years from the date of the breach. However, in many states, the statute of limitations does not apply or is greatly expanded for a City or other governmental unit if the cause of action is for a public purpose, such as collecting taxes or recovering money or damages for a breach of contract for public construction. In Texas, Section 16.061 of Texas Civil Practice and Remedies Code Section provides that the statute of limitations does not apply and does not bar many causes of actions that a city may have against an individual or a private entity.
Courts in various other states have also provided that limitations do not bar a City in certain civil actions. The cases and summaries are provided by the treatise"McQuillin The Law of Municipal Corporations"17 McQuillin Mun. Corp. § 49:6 (3rd ed.).
In conclusion, Cities should always consult legal counsel on their ability to pursue monies owed or damages to Cities, no matter how long ago the breach or damage occurred. Concurrently, individual and entities that contract with a City should also consult their attorney in regards to limitations and what measures they can take to alleviate or protect from lawsuits for incidents that occur many years in the past.