Adams v. Manchester Park, L.L.C.
| Decision Date | 23 October 2015 |
| Docket Number | No. S–13–429.,S–13–429. |
| Citation | 871 N.W.2d 215,291 Neb. 978 |
| Parties | James A. Adams, appellant, and Rebecca Z. Adams, appellee, v. Manchester Park, L.L.C., a Nebraska limited liability company, and Southfork Homes, Inc., a Nebraska corporation, appellees. |
| Court | Nebraska Supreme Court |
James A. Adams, of Law Offices of James A. Adams, P.C., L.L.O., Omaha, pro se.
Larry E. Welch, Sr., of Welch Law Firm, P.C., Omaha, for appellee Manchester Park, L.L.C.
Patrick S. Cooper and David J. Stubstad, of Fraser Stryker, P.C., L.L.O., Omaha, for appellee Southfork Homes, Inc.
Edward H. Tricker, Jerry L. Pigsley, and Erin L. Ebeler, of Woods & Aitken, L.L.P., Lincoln, for amici curiae AGC Nebraska Chapter and Nebraska Building Chapter of AGC.
Southfork Homes, Inc. (Southfork), petitioned this court for further review after the Nebraska Court of Appeals found an action brought against it for defective construction of a home was not barred by the applicable statute of limitations. We conclude the Court of Appeals erred, and we reverse, and remand to the Court of Appeals with directions to affirm the judgment of the district court.
The underlying facts are fully set forth in the opinion issued by the Court of Appeals.1 We restate only the most relevant ones here.
In August 2006, James A. Adams and Rebecca Z. Adams, the homeowners, executed a purchase agreement with Southfork for the construction of a new home. The home was to be built on a lot purchased by Southfork in 2004 from Manchester Park, L.L.C. (Manchester), a developer. Manchester had completed grading on the lot in 2003.
The home was substantially completed and a final walk-through inspection occurred on September 19, 2007. On September 20, Southfork issued the homeowners a 1–year limited warranty for material defects in workmanship or materials.
Within 6 months, the homeowners noticed cracks in walls and tiles, roof leaks, and windows that would not open. Southfork told the homeowners that they should wait until the expiration of the 1–year limited warranty to request repairs, and the homeowners did so. Southfork then attempted to make repairs, but the issues persisted.
In December 2009, a specialist hired by the homeowners reported potential issues with the foundation of the home. In July 2011, another specialist hired by the homeowners performed test borings on the soil of the lot and concluded the soil was improperly compacted. On September 22, 2011, the homeowners filed this action against both Southfork and Manchester.
The complaint alleged there was improper workmanship because the soil compaction on the lot was done in a substandard manner, the foundation was improperly installed, and the plans and specifications relating to the earthwork did not meet the Omaha, Nebraska, city code. The complaint specifically alleged that the defendants (1) breached the implied duty to perform in a workmanlike manner, (2) breached the implied warranty of habitability, (3) negligently constructed the home, (4) fraudulently concealed facts which prevented the homeowners from discovering the negligence, and (5) breached the express 1–year limited warranty issued on September 20, 2007.
Southfork and Manchester both moved for summary judgment, asserting the action was barred by the 4–year statute of limitations set forth in Neb.Rev.Stat. § 25–223 (Reissue 2008), which provides:
The district court granted summary judgment in favor of both defendants, it determined that the 4–year limitations period began to run in 2003, when the soil on the lot was improperly compacted by Manchester, reasoning that was the alleged act or omission constituting the breach of warranty or deficiency. It then reasoned that because the homeowners did not take possession of the home until September 2007, they could not reasonably have discovered the cause of action within the 4–year period, and thus had 2 years from the date of discovery to file suit. The district court reasoned the homeowners discovered facts that should have put them on notice of the defects no later than September 2008, because they were aware of the roof leaks and wall and tile cracks by that time. It thus held that the statute of limitations ran in September 2010 and that the action filed on September 22, 2011, was untimely.
James appealed, and the Court of Appeals affirmed as to Manchester, finding it had no contractual obligation to the homeowners. But it reversed as to Southfork, finding the action against it was not barred by § 25–223. The Court of Appeals reasoned that the 4–year statute of limitations in § 25–223 did not begin to run in 2003, because at that time, the homeowners were not "in any position to have any knowledge about the grading completed."2 Instead, it held that the 4–year period began to run against the homeowners at the expiration of the express 1–year limited warranty issued by Southfork on September 20, 2007, and that thus, the action filed on September 22, 2011, against Southfork was timely. Because the court found the action was filed within the statute of limitations, it did not reach James' assignment of error related to fraudulent concealment.
Southfork petitioned this court for further review. It alleges the Court of Appeals erred in finding the statute of limitations ran from the expiration of the 1–year limited warranty, instead of from the date of substantial completion of the home. An amicus curiae brief filed by the Nebraska Building Chapter of AGC and AGC Nebraska Chapter concurs with Southfork's argument.
In its petition for further review, Southfork assigns, restated and summarized, that the Court of Appeals erred in holding that the statute of limitations began to run on the homeowners' claims at the expiration of the 1–year limited warranty. Southfork asserts that the Court of Appeals should have held that the limitations period began to run from the date the home was substantially completed.
Summary judgment is proper if the pleadings and admissible evidence offered show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.3
Section 25–223 is a special statute of limitations governing actions against builders and contractors for improvements to real property.4 It is applicable here because the homeowners alleged that Southfork (1) breached the implied duty to perform in a workmanlike manner, (2) breached the implied warranty of habitability, (3) negligently constructed the home, (4) fraudulently concealed facts which prevented the homeowners from discovering the negligence, and (5) breached the express 1–year limited warranty issued on September 20, 2007. All of these theories are based on the underlying allegation that improper soil compaction on the lot caused issues with the foundation of the home, resulting in defective construction.
Section 25–223 states that its 4–year limitations period begins upon the "alleged act or omission constituting [the] breach of warranty or deficiency." Here, the specific "act or omission" alleged to have caused the defective condition of the home was the improper soil compaction in 2003. The district court concluded that the 4–year limitation began to run from the 2003 date of soil compaction.
But we have held that where the basis of the claim is improper workmanship resulting in defective construction, the § 25–223 statute of limitations runs from the date of substantial completion of the project, not the date of any specific act which resulted in the defect.5 In Witherspoon v. Sides Constr. Co.,6 a home suffered damages when a pipe supplying water to it broke. The homeowner brought an action against the builder, and we specifically held that the time limitations of § 25–223 began to run from the date construction of the home was completed, not from the date when the pipe was installed, because the underlying theory was that the builder failed to erect the home in a good and workmanlike manner. In various other cases, we also have either expressly held or strongly implied that when the claim is improper workmanship, the § 25–223 statute of limitations begins to run from the date the project is substantially completed.7
Thus, pursuant to our established precedent, the latest date the 4–year limitations period of § 25–223 commenced in this case was September 19, 2007, the date of substantial completion. Because the lawsuit was not filed until September 22, 2011, it was outside the statute of limitations. And the discovery rule exception in § 25–223 cannot save the action, because it is clear the homeowners knew of the defects in the home no later than December 2009, when they were aware of problems with...
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