C&R Constr. Co. v. Woods Masonry & Repair, LLC
| Decision Date | 12 February 2020 |
| Docket Number | No. CV-18-198,CV-18-198 |
| Citation | 596 S.W.3d 35,2020 Ark. App. 105 |
| Parties | C&R CONSTRUCTION CO., INC.; and David Smith, Individually and as Personal Representative of the Estate of Jennifer Smith, Appellants v. WOODS MASONRY & REPAIR, LLC, Appellee |
| Court | Arkansas Court of Appeals |
Donald L. Parker II, Jonesboro, and Ronald S. Burnett, Jr., for appellants.
Heaton and Moore, P.C., by: Robert L. Moore and William M. Jeter, for appellee.
This is a dispute between a homeowner, a general contractor, and a subcontractor over the subcontractor’s work. Appellant C&R Construction, Inc., the general contractor, brought claims for breach of contract and unjust enrichment against the subcontractor, appellee Woods Masonry & Repair, LLC. The homeowners, appellants David Smith and Jennifer Smith,1 asserted a claim for negligence against Woods Masonry. The circuit court granted summary judgment to Woods Masonry, finding that C&R’s claims were time-barred. The court also granted summary judgment to Woods Masonry on the Smiths’ negligence claim, finding that the Smiths were not the real parties in interest after previously denying their motions to substitute the real party in interest. We affirm.
In December 2006, the Smiths contracted with C&R to be the general contractor for an addition to their home, including the construction of a deck, patio and pool. C&R requested bids from Woods Masonry. C&R accepted Woods Masonry’s bids, and C&R and Woods Masonry entered into a verbal agreement for Woods Masonry to construct and install the concrete walls and the block posts and to "dry stack" cultured stone on the retaining walls, posts, and addition archways at the Smiths’ home using a process called adhered concrete masonry veneer. This is referred to as the Masonry Work.
The Smith job commenced in December 2006, and the Masonry Work commenced in January 2007. Between March 2007 and April 2008, stones began to delaminate or fall off their supporting structure. Both C&R and Woods Masonry reattached stones at various times, and both returned to the job site to repair the Masonry Work on numerous occasions until May 2012 when Eric Woods, the owner of Woods Masonry, advised C&R that he was finished and would not return to the Smith job. Final payment to Woods Masonry was made by C&R in May 2008.
On December 30, 2013, C&R and the Smiths jointly filed an action against Woods Masonry.2 In their verified complaint, C&R asserted claims for breach of contract and unjust enrichment, while the Smiths’ claim was based on negligence. As damages, C&R and the Smiths sought approximately $139,000 based on estimated costs of repair; C&R also sought $265,000 on its unjust-enrichment claim. Both C&R and the Smiths sought attorney’s fees and prejudgment interest.
Woods Masonry timely filed an answer denying the material allegations of the complaint. Woods Masonry pled both the three-year statute of limitations, Ark. Code Ann. § 16-56-105(3) (Repl. 2005), and the five-year statute of repose, Ark. Code Ann. § 16-56-112, as affirmative defenses. Finally, Woods Masonry pled that "plaintiffs" failed to sue in their proper capacity or lacked standing to sue.
On January 14, 2016, Woods Masonry filed a motion to dismiss appellants’ complaint pursuant to Ark. R. Civ. P. 12(b)(6). The motion asserted that section 16-56-112 barred appellants’ claims because they were filed more than six years after the addition to the Smiths’ home was completed. Appellants responded to the motion to dismiss, arguing that the statute of repose did not apply because Woods Masonry never completed its work on the Smith job and that there never was a time when all the stones were properly attached.
The circuit court denied the motion to dismiss by order entered on March 21, 2016. The court stated that although it was far from clear, it appeared that Woods Masonry was paid the final payment when appellants "thought" the work was complete but that the court could not definitively reach this conclusion without engaging in speculation. The court also said that it was not clear whether Woods Masonry returned to complete the contracted work or to repair the allegedly defective work. However, the court said that it was clear that the work alleged in the complaint involved an "improvement to real property" within the meaning of the statute of repose. Finally, the court said that it would revisit this issue at the appropriate time after discovery was completed and new motions were filed.
On August 25, 2016, appellants filed their motion for summary judgment as to each of their claims. They asserted that there were no disputed factual issues on any of their claims. Woods Masonry filed its response to the motion for summary judgment. It asserted that it did not owe a duty to the Smiths individually because, according to county real property records, the property was owned by David Smith Farms, Inc. It also asserted that C&R’s unjust-enrichment claim was not viable under the facts of this case because there was a contract. In its accompanying brief, Woods Masonry argued that the statute of repose extinguished appellants’ claims. The court denied the motion after having considered the evidence and proof that was developed at the time.
On December 1, 2016, the Smiths filed a motion for substitution of David Smith Farms, Inc., as the real party in interest.
In its response, Woods Masonry argued that the Smiths individually lacked standing to assert a negligence claim, that their original claim was a nullity, and that any complaint filed by David Smith Farms, Inc., would be a new cause of action barred by the statute of limitations. The circuit court denied the motion for substitution without prejudice on March 17, 2017.
On March 20, 2017, the Smiths filed a second motion for substitution of David Smith Farms, Inc., as the real party in interest. The motion was supported by affidavits from the Smiths in which they state that they considered the property their own, that they claimed the homestead credit, and that they never considered the legal distinctions of corporate ownership. Woods Masonry again responded that the Smiths individually lacked standing to assert a negligence claim and that their original claim was a nullity and that any complaint filed by David Smith Farms, Inc., would be a new cause of action barred by the statute of limitations. The circuit court denied appellants’ second motion for substitution of David Smith Farms, Inc., as the real party in interest on May 26, 2017. The court found the "determination of the proper party was not difficult and the mistake was not an understandable mistake as prescribed in Bibbs v. Community Bank of Benton , [375 Ark. 150, 289 S.W.3d 393] (2008)."
Woods Masonry filed its own motion for summary judgment on June 27, 2017, pleading both the statute of limitations— Ark. Code Ann. § 16-56-105(3) —and the statute of repose— Ark. Code Ann. § 16-56-112 —as barring C&R’s claims for breach of contract and unjust enrichment. It also pled that the subject property was owned by David Smith Farms, Inc., and not the Smiths individually. In an incorporated brief, Woods Masonry argued that any claims of David Smith Farms, Inc., were extinguished by the statute of repose and that C&R’s claims were barred by both the statute of limitations and the statute of repose.
In their response to the motion for summary judgment, appellants argued that Woods Masonry never completed the Masonry Work and instead terminated its subcontract in May 2012. They asserted that the Smith job was never completed, that the breach of the subcontract did not occur until May 2012, and that their 2013 complaint was filed well within both the statute of limitations and the statute of repose.
By order entered November 20, 2017, the circuit court granted Woods Masonry’s motion for summary judgment "as to all parties and causes of action." The court found that Woods Masonry received a payment on May 5, 2008, that resulted in a zero balance owed to it. The court found that although the words "Final Payment" were not used, those payment records were sufficient to require appellants to come forward with evidence showing that this was a fact in dispute. Because no contrary evidence was offered, the court found that the Masonry Work was substantially completed by May 5, 2008; thus, appellants’ complaint filed December 30, 2013, was time-barred. This appeal followed.
The law is well settled regarding the standard of review used by this court in reviewing a grant of summary judgment. Muccio v. Hunt , 2016 Ark. 178, 490 S.W.3d 310. A circuit court will grant summary judgment only when it is apparent that no genuine issues of material fact exist requiring litigation and that the moving party is entitled to judgment as a matter of law. Id. The burden of proof shifts to the opposing party once the moving party establishes a prima facie entitlement to summary judgment; the opposing party must demonstrate the existence of a material issue of fact. Id. After reviewing the evidence, the circuit court should deny summary judgment if, under the evidence, reasonable minds could reach different conclusions from the same undisputed facts. Id.
On appeal, appellants argue four points: (1) the circuit court erred in denying the Smiths’ motion for substitution of Smith Farms as the real party in interest for purposes of their negligence claim; (2) the circuit court erred in granting summary judgment to Woods Masonry on C&R’s breach-of-contract and unjust-enrichment claims because Woods Masonry never substantially completed the Smith job; (3) the circuit court erred in denying C&R’s motion for summary judgment on its claims; and (4) alternatively, summary judgment was improper because there was a genuine factual dispute as to the date of substantial completion and the accrual of C&R’s causes of action.
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...or appealable. See , e.g. , Harris v. City of Fort Smith , 359 Ark. 355, 197 S.W.3d 461 (2004) ; C&R Constr. Co. v. Woods Masonry & Repair, LLC , 2020 Ark. App. 105, 596 S.W.3d 35. ...