Alexander v. Gerald E. Morrissey, Inc.

Decision Date06 February 1979
Docket NumberNo. 52-78,52-78
Citation399 A.2d 503,137 Vt. 20
CourtVermont Supreme Court
PartiesDavid J. ALEXANDER v. GERALD E. MORRISSEY, INC. and Ernest L. Erickson.

William C. Sennett, Bennington, for plaintiff.

Robert E. Cummings, Jr., Bennington, for Gerald E. Morrissey, Inc.

Barbara E. Cory of Dinse, Allen & Erdmann, Burlington, for Erickson.

Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.

BILLINGS, Justice.

This is an action for breach of contract. Plaintiff-appellant Alexander, as owner, entered into a contract with defendant Ernest L. Erickson (Erickson) for architectural and supervisory services in connection with the construction of a fifty-bed nursing home in Bennington, Vermont. Plaintiff then contracted with defendant Gerald E. Morrissey, Inc. (Morrissey), a general contractor, for the materials and construction of the home. Several years after construction was completed, plaintiff Alexander brought an action in Bennington Superior Court, alleging that each defendant breached contractual duties in connection with the insulation and inspection of the roof-ceiling area of the home. The superior court dismissed the action against defendant Erickson on the ground that it was barred by the statute of limitations, and dismissed as to defendant Morrissey on the ground that a contractor is shielded from liability where he faithfully complies with an architect's defective plans or instructions. We reverse.

Plaintiff first entered into a contract with defendant Erickson on July 2, 1962. Alexander and Erickson executed a substantially similar contract under seal, on January 29, 1964, which expressly superseded and voided all prior agreements. Erickson's duties under this contract consisted of providing the necessary architectural, engineering, and consulting services, including the production of specifications and plans, and of supervising and inspecting the work. The agreement expressly provided that Erickson did not guarantee contractors' performance of their contracts. The agreement established both the owner's duty to pay for supplementary drawings necessitated by construction changes as agreed to by both parties, and architect's duty to act in an advisory capacity in connection with any construction changes submitted by the owner. Nowhere in the contract was authority given to the architect to effect construction changes unilaterally.

On November 21, 1963, plaintiff Alexander and defendant Morrissey entered into an agreement, under seal, whereby Morrissey would supply all materials and would construct the nursing home in accordance with architect Erickson's plans and specifications, which were incorporated in and made a part of the Alexander-Morrissey contract. The plans of architect Erickson specified for the ceiling area of the home six inches of fiberglass insulation with a foil vapor barrier on one side, having a thermal resistance of R-19. R-11 insulation was specified for the walls.

Contractor Morrissey sent a letter to Erickson under date of April 6, 1964, which read in full:

The type of insulation encircled on the enclosed sheet is what we are planning to use for the nursing home, if it meets your approval. Please advise.

The type of material indicated was a double foil faced fiberglass of unspecified thickness, which turned out to be three inches. Arrows indicated that, while the thermal resistance for purposes of air-conditioning was R-19, that for heating purposes was only R-15. That is, the insulation value was different for heat flow up and heat flow down. The material indicated was significantly inferior for heating purposes than a material with an R-19 rating for both purposes.

Erickson returned the letter with the notation, "R19 ceilings; R-11 walls o.k." The material actually installed in the ceiling area was three inch double foil fiberglass which had a thermal resistance for heating purposes of only R-15.

Construction of the home was completed in September of 1964. During that month, plaintiff Alexander met with both defendants in the conference room of the institution financing the project and asked each one if everything was done the way it was supposed to have been done. Each responded in the affirmative.

There was no further communication between plaintiff and either defendant until sometime in 1968, when plaintiff complained to the defendants about his high heating bills at the nursing home. Plaintiff did not actually discover that the insulation in the ceiling was less than six inches thick until sometime between December, 1969, and December, 1970.

Action for breach of contract was commenced against contractor Morrissey by summons and complaint dated November 11, 1971, and served November 29, 1971. Architect Erickson was added as a defendant on July 26, 1974, the time at which he was served with a summons and amended complaint. Both defendants properly pleaded the statute of limitations in their answers.

Neither defendant disputes the trial court's conclusion that plaintiff's action is governed as to each of them by 12 V.S.A. § 507, which provides that an action on a specialty shall be brought within eight years after the cause of action accrues, and not after. The rule in this jurisdiction is that a cause of action for breach of contract accrues when the breach occurs and not when it is discovered. Anderson v. McKee, 136 Vt. ---, 383 A.2d 273 (1978); South Burlington School District v. Goodrich, 135 Vt. 601, 382 A.2d 220 (1977). As construction was completed by September of 1964 and the action was not commenced against Erickson until July of 1974, plaintiff's action against the architect is barred unless the statute was tolled by operation of 12 V.S.A. § 555, which provides:

When a person entitled to bring a personal action is prevented from so doing by the fraudulent concealment of the cause of such action by the person against whom it lies, the period prior to the discovery of such cause of action shall be excluded in determining the time limited for the commencement thereof.

As plaintiff commenced suit within four years of his discovery of his cause of action, this provision, if applicable, would render the action timely.

Plaintiff has the burden of showing that § 555 applies, and must establish both a concealment and a fraudulent intent or design to prevent discovery of facts giving rise to his cause of action. Furthermore, he must show that the defendant had actual knowledge of a fact before the defendant can be charged with an intent or design to conceal it from the plaintiff. Merrill v. Reville, 135 Vt. 517, 380 A.2d 96 (1977); Murray v. Allen, 103 Vt. 373, 154 A. 678 (1931).

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