Blueridge Homes Inc. v. Method Air Heating & Air Conditioning

Decision Date06 September 2019
Docket NumberNo. 20180310-CA,20180310-CA
CourtUtah Court of Appeals
Parties BLUERIDGE HOMES INC., Jared Oeser, Ryan Clark, and Julianne Oeser, Appellants, v. METHOD AIR HEATING AND AIR CONDITIONING, K&K Stucco & Stone LLC, Hill & Mehr Heating & Cooling, Curtis Miner Architects, Parrish Construction Company, Dave's Custom Siding, and Hercules Construction Inc., Appellees.

Richard K. Glauser and Richard Bissell, Salt Lake City, Attorneys for Appellants

Joseph E. Minnock, Salt Lake City, Attorney for Appellee Method Air Heating and Air Conditioning

Scott C. Powers and Erik R. Hamblin, Salt Lake City, Attorneys for Appellee K&K Stucco & Stone LLC

Vincent J. Velardo and Thomas J. Rollins, Salt Lake City, Attorneys for Appellee Hill & Mehr Heating & Cooling

Craig R. Mariger, Brad M. Liddell, and C. Michael Judd, Salt Lake City, Attorneys for Appellee Curtis Miner Architects

Peter H. Barlow and Andrew D. Day, Salt Lake City, Attorneys for Appellee Parrish Construction Company

Stephen F. Edwards, Salt Lake City, Attorney for Appellee Dave's Custom Siding

Joseph J. Joyce and Jeremy G. Knight, Attorneys for Appellee Hercules Construction Inc.

Judge David N. Mortensen authored this Opinion, in which Judges Gregory K. Orme and Kate Appleby concurred.

Opinion

MORTENSEN, Judge:

¶1 In this appeal, third-party plaintiffs in a construction defect case seek to avoid a statute of repose but fail in that effort. Plaintiff filed suit against its general contractor, Blueridge Homes Inc. (Blueridge), in December 2014, alleging construction defects in a condominium development project. In July 2015, Blueridge filed a third-party complaint against its various subcontractors, alleging that if Blueridge was liable to Plaintiff, then subcontractors were liable to Blueridge. Although Plaintiff's claims against Blueridge survived a motion to dismiss, the district court dismissed Blueridge's third-party claims as time-barred under Utah Code section 78B-2-225 (Builders' Statute of Repose). Blueridge argues that the district court erred by (1) dismissing its third-party complaint because it should have related back to Plaintiff's December 2014 filing and (2) denying its post-trial motions. We affirm the district court on both points.

BACKGROUND

¶2 Plaintiff entered into a contract with Blueridge as the general contractor for a condominium development in Saratoga Springs, Utah (Project). The Project consisted of nine buildings. Upon substantial completion of each building, certificates of occupancy were issued between May 2, 2007, and June 9, 2009.

¶3 On December 22, 2014, Plaintiff filed a complaint naming Blueridge as defendant and raising various claims related to alleged construction defects on the Project. Blueridge was first notified of the suit when the complaint was served on February 13, 2015. Over five months later on July 15, 2015, Blueridge filed a third-party complaint against subcontractors Method Air Heating and Air Conditioning, K&K Stucco & Stone LLC, Hill & Mehr Heating & Cooling, Curtis Miner Architects, Parrish Construction Company, Dave's Custom Siding, and Hercules Construction Inc. (collectively, Appellees), alleging that Appellees were ultimately responsible for the construction defects raised in the initial complaint.

¶4 On November 30, 2015, Miner filed a motion to dismiss, arguing that the Builders' Statute of Repose barred Blueridge's third-party claims. See Utah Code Ann. § 78B-2-225(3)(a) (LexisNexis 2018)1 ("An action ... based in contract or warranty shall be commenced within six years of the date of completion of the improvement ...."). The district court granted Miner's motion on the grounds that the Builders' Statute of Repose had run on June 9, 2015, six years after the last certificate of occupancy was issued, Blueridge's third-party complaint was not filed until July 15, 2015, and Blueridge's third-party complaint did not relate back to the filing of Plaintiff's initial complaint because Appellees were not named parties in the initial complaint.

¶5 The remaining Appellees followed suit by filing motions for summary judgment, arguing that the Builders' Statute of Repose barred Blueridge's third-party complaint. Blueridge opposed the motions, arguing that the Builders' Statute of Repose did not bar its claims because rule 14 of the Utah Rules of Civil Procedure permitted it to "bring in a third party at any time after the commencement of the action." In other words, Blueridge argued that under rule 14, its third-party complaint should relate back to the initial complaint.

¶6 The district court rejected Blueridge's argument and granted the motions for summary judgment in favor of Appellees. The court ruled that where the last certificate of occupancy on the nine buildings for the Project was issued on June 9, 2009, and the third-party complaint was filed on July 15, 2015, the six-year Builders' Statute of Repose had run. The district court further ruled that if third-party complaints automatically related back to the filing of the original complaint, then rule 14 would become "an all-encompassing rule that would eliminate all limitations on third-party actions." (Citing Perry v. Pioneer Wholesale Supply Co. , 681 P.2d 214, 217 (Utah 1984).)

¶7 Blueridge later filed a motion to reconsider and motion to alter or amend pursuant to rule 59(e) for relief from judgment under rule 60(b) of the Utah Rules for Civil Procedure (Motions for Reconsideration).2 In its Motions for Reconsideration, Blueridge raised three issues for the first time: (1) the existence of three certificates of occupancy for one of the nine buildings created a genuine dispute of material fact—which should preclude summary judgment—concerning when the Builders' Statute of Repose began to run for that building, (2) an exception to the Builders' Statute of Repose should have applied to Appellees, and (3) the Builders' Statute of Repose was unconstitutional as applied. The district court denied the Motions for Reconsideration, stating, "Having considered the written and oral arguments of the parties, the Court finds no persuasive grounds to reconsider its orders or to alter or amend its judgments."

¶8 Blueridge appeals.

ISSUES AND STANDARDS OF REVIEW

¶9 Blueridge argues that the district court erred in granting Miner's motion to dismiss and Appellees' motions for summary judgment. "A district court's grant of a motion to dismiss based upon the allegations in the plaintiff's complaint presents a question of law that we review for correctness." Osguthorpe v. Wolf Mountain Resorts, LC , 2010 UT 29, ¶ 10, 232 P.3d 999 (cleaned up). "We review the district court's grant of summary judgment for correctness and accord no deference to its conclusions of law." Gardiner v. Anderson , 2018 UT App 167, ¶ 14, 436 P.3d 237 (cleaned up).

¶10 Blueridge also contends that the district court erred by denying its Motions for Reconsideration. "Because [district] courts are under no obligation to consider motions for reconsideration, any decision to address or not to address the merits of such a motion is highly discretionary." Mower v. Simpson , 2017 UT App 23, ¶ 43, 392 P.3d 861 (cleaned up). Accordingly, "we will not disturb a district court's decision to grant or deny such a motion absent an abuse of discretion." Id. (cleaned up).

ANALYSIS
I. The Builders' Statute of Repose Barred Blueridge's Third-Party Claims.

¶11 The Builders' Statute of Repose provides that "[a]n action ... based in contract or warranty shall be commenced within six years of the date of completion of the improvement." Utah Code Ann. § 78B-2-225(3)(a) (LexisNexis 2018) (emphasis added). The date of completion is "established by the earliest of: (i) a Certificate of Substantial Completion; (ii) a Certificate of Occupancy issued by a governing agency; or (iii) the date of first use or possession of the improvement." Id. § 78B-2-225(1)(c).

¶12 Here, the final certificate of occupancy on the Project was issued on June 9, 2009, and the third-party complaint was filed on July 15, 2015—more than six years later. Accordingly, Blueridge concedes that its third-party complaint was filed after the Builders' Statute of Repose had run.3 Blueridge contends, however, that its third-party complaint should relate back to the filing of the initial complaint because rule 14 of the Utah Rules of Civil Procedure allows for filing a third-party complaint at any time after the commencement of the initial complaint.

¶13 Rule 14 of the Utah Rules of Civil Procedure provides that "[a]t any time after commencement of the action a defendant, as a third-party plaintiff, may cause a summons and complaint to be served upon a person not a party to the action." While we agree that rule 14 permits a party to file a third-party complaint at any time during the pendency of an action, it does not follow that rule 14 also bars third-party defendants from raising a statute of limitations or repose as an affirmative defense. See Raithaus v. Saab-Scandia of Am., Inc. , 784 P.2d 1158, 1161 n.5 (Utah 1989) ("[T]he statute of repose [is] a separate affirmative defense."). In other words, the language Blueridge relies on merely dictates when a third-party complaint can be filed—not what the substantive effect of the third-party complaint is or what defenses may be raised against the claims stated in a third-party complaint. See Choate v. United States , 233 F. Supp. 463, 464 (W.D. Okla. 1964) (acknowledging that a statute of limitations can be an affirmative defense to third-party claims properly raised under rule 14 of the Federal Rules of Civil Procedure ). Therefore, we conclude that the district court did not err in dismissing Blueridge's third-party complaint because, although Blueridge was permitted to file its third-party complaint at any time under rule 14, rule 14 did not bar application of the Builders' Statute of Repose.

¶14 In spite of this, Blueridge argues that Sharon Steel Corp. v. Aetna Casualty & Surety Co. , 931 P.2d 127 (Utah 1997),...

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