A state appeals court has ruled that River City Co. and two associates will not have to pay Chattanooga for millions of dollars in repairs at the Passage on the downtown riverfront.
Judge John McClarty's ruling supported the trial court's decision throwing out the case because it the statute of limitations had expired.
"Chattanooga had constructive and actual knowledge of the construction defects and damage regarding the project," McClarty wrote. "The evidence supports the determination of the trial court."
Hamilton County Circuit Court Judge Jacqueline Bolton dismissed the 2009 lawsuit early last year, saying it was filed past the three-year statute of limitations.
Richard Beeland, spokesman for Mayor Ron Littlefield, said that the city is keeping its options open.
"We're reviewing our actions at this point and we'll see if we want to appeal to the Tennessee Supreme Court," Beeland said.
Kim White, president of River City Co., said she hoped the city would not appeal.
"There's been a lot of time and money spent on this," she said. "We would hope that we could just move on."
The city sued River City Co. and partners Hargreaves Associates Inc. and Continental Construction Co. in 2009 after $1.5 million was spent to renovate the Passage, a water feature at the riverfront.
Chattanooga also has found problems with the hard concrete edge of the 21st Century Waterfront and has estimated it could cost up to $8 million to fix.
City officials have said they want to recoup costs for both projects.
The $120 million 21st Century Waterfront opened in 2005 to great fanfare, but even then the city inspector began noticing cracking and electrical problems.