Brown v. Ellison

• Decision Date: 15 April 1981
• Docket Number: No. 64897,64897
• Citation: 304 N.W.2d 197
• Court: Iowa Supreme Court
• Parties: J.L. BROWN and Phyllis I. Brown, Appellants, v. Martha ELLISON, aka Martha M. Ellison, Fiduciary of the Estate of Donald Ellison, aka Donald M. Ellison, Appellee.

Page 197

304 N.W.2d 197

J.L. BROWN and Phyllis I. Brown, Appellants, v. Martha ELLISON, aka Martha M. Ellison, Fiduciary of the Estate of Donald Ellison, aka Donald M. Ellison, Appellee.

No. 64897.

Supreme Court of Iowa.

April 15, 1981.

Richard L. Stevens and Richard J. Donovan, Davenport, for appellants.

Michael J. McCarthy, Davenport, for appellee.

Considered by LeGRAND, P. J., and UHLENHOPP, McCORMICK, ALLBEE and SCHULTZ, JJ.

SCHULTZ, Justice.

J.L. and Phyllis I. Brown, claimants in a probate claim, appeal from the trial court's dismissal of their claim at the conclusion of their evidence. Although the Browns had plead that they discovered their cause of action within the period of the statute of limitations, the trial court found that, based on the Browns' own evidence, the action was barred. We hold that the Browns presented substantial evidence that they discovered their cause of action within the period of limitations, and that the trial court erred by not viewing the evidence in a light most favorable to the Browns, the nonmoving party. We therefore reverse.

In 1971 the decedent, Donald Ellison, drilled a well for the Browns. The Browns, who resided in California at the time, had purchased land in Blue Grass, Iowa, for the purpose of development. They had instructed their agent to obtain a central water system to supply their lots. The agent retained Donald Ellison to dig the well.

The Browns filed a claim in probate in July 1978 against Martha Ellison, as the fiduciary of the estate of Donald Ellison. They requested: (1) damages resulting from the breach of an oral contract with the decedent for construction of a properly drilled and cased well with sufficient capacity to produce a continuous water supply for up to eight families and (2) damages resulting from the breach of warranties implied in law in connection with said well. The Browns claim that the defects in the well were not discovered, and were not discoverable, until problems arose with the well in approximately May 1976, at which time they learned that the well was not cased properly or located in an adequate water bearing rock and thus could not produce a continuous water supply sufficient to serve eight families, as required by the oral contract. The defendant, Martha Ellison (hereinafter Ellison), plead the affirmative defense of statute of limitations, alleging that the claim on the oral contract was barred by section 614.1(4), The Code 1979.

The claim came to trial on November 29, 1979, and Ellison moved to dismiss at the close of the Browns' evidence. The motion to dismiss was based on two general grounds. First, Ellison claimed that the cause of action for breach of contract accrued not later than September or October of 1971, or if the action did not accrue until the breach of contract was discovered, the Browns were put on inquiry notice and should have discovered, or did discover, the breach not later than May 1973. Thus, in either event, Ellison contended, the claim was barred by the statute of limitations. Secondly, Ellison asserted that there was no competent evidence of any express or implied agreement to construct a well which would produce a continuous water supply sufficient to serve up to eight families in the subdivision.

After ascertaining that the trial could be completed in no more than one-half day, the trial court announced that Ellison would not be allowed to present her case until the court had ruled on the motion to dismiss. Approximately three and one-half months later, on March 13, 1980, an "ORDER, JUDGMENT AND DECREE" was filed, which provided:

This was a suit on an oral contract and implied warranty concerning the building of a well. Plaintiffs filed claim in probate on July 12, 1978.

The matter went to trial to the Court and at the close of the plaintiffs' case the defendant made motion to dismiss asserting that the claim is barred by the statute of limitations, the statute being Section 614.1(4), Iowa Code. Plaintiff discovered the alleged defect in the water system not later than May 1973. I find that the action on plaintiff's own evidence is barred by the said limitations statute and that defendant's motion to dismiss should be granted.

The Browns appeal from this order.

The issues presented by the parties in their respective briefs are not complicated. The Browns claim the trial court erred in sustaining Ellison's motion to dismiss. They contend that their claim is not barred by the statute of limitations because the injury giving rise to their cause of action was discovered within the five-year period preceding the filing of their claim. Ellison counters by stating that the trial court's finding of facts is supported by substantial evidence. Neither party has placed in issue the applicability of the discovery rule to a cause of action based upon an express or implied warranty arising in contract. Nor has the sufficiency of the Browns' evidence of an oral contract containing either an express or implied warranty been raised.

Ellison's failure to raise the issue concerning the sufficiency of the Brown's evidence of an oral contract may have been occasioned by the trial court's failure to rule on that ground of the motion to dismiss, contrary to the requirement of Iowa R. Civ.P. 118 that separate rulings are to be made on each separate ground of a motion. The object of rule 118 is to save time and expense and narrow the issues on appeal. Ruby v. Easton, 207 N.W.2d 10, 14-15 (Iowa 1973). It can be grounds for reversal. Id.

Points raised on a motion to dismiss, but not argued or stated on appeal, may be considered waived or abandoned. State v. Otterholt, 234 Iowa 1286, 1293, 15 N.W.2d 529, 533 (1944). We do not feel that we should plod through the record searching for evidence to either substantiate or impugn the insufficiency of the evidence ground of the motion to dismiss when the issue has not been presented in the briefs, arguments, or appendix. Not only is that task time consuming, but the possibility of miscomprehension is greater than if we are guided by the attorneys for parties, who are much more familiar with the evidence. We therefore decline to further discuss this issue.

The discovery rule, when applicable, commences the period of limitations to run from the later of the date of the discovery or the date when, by the exercise of reasonable diligence, the plaintiff should have discovered the wrongful act. Chrischilles v. Griswold, 260 Iowa 453, 462, 150 N.W.2d 94, 100 (1967). In Chrischilles we applied the doctrine to a cause of action based on negligence in which an architect was charged with improper design. We have applied the discovery rule to workers' compensation, Orr v. Lewis Central School District, 298 N.W.2d 256, 262 (Iowa 1980); Robinson v. Department of Transportation, 296 N.W.2d 809, 812 (Iowa 1980); Jacques v. Farmers Lumber & Supply Co., 242 Iowa 548, 47 N.W.2d 236, 240 (1951), professional malpractice, Cameron v. Montgomery, 225 N.W.2d 154, 155-56 (Iowa 1975); Baines v. Blenderman, 223 N.W.2d 199, 201-03 (Iowa 1974), and tortious interference, Stoller Fisheries, Inc. v. American Title Insurance Co., 258 N.W.2d 336, 340 (Iowa 1977). See also Dirksen v. Hynes & Howes Insurance Counselors, Inc., 423 F.Supp. 1290, 1294-95 (S.D.Iowa 1976) (federal district court applied discovery rule to claim of fraud under Iowa Uniform Securities Act as matter of state law).

The trial court applied the discovery rule to the Browns' claim, which, as already noted, is based upon an oral contract containing an express warranty and an implied warranty. In a contractual warranty action the statutory period of limitations normally commences when the contract is breached, unless the warranty relates to a future event, in which case the limitations period begins to run on the happening of the specified event. 54 C.J.S. Limitations on Actions § 136 (1948). Similarly, a cause of action on a contract accrues and the limitations period begins to run when the contract is breached, not when the damage results or is ascertained. Id. § 126. Under this rule the Browns' cause of action for breach of the oral contract would have accrued in 1971 when the well was completed and would be barred by the five-year statute of limitations. See Anderson v. Anderson, 234 Iowa 277, 282-84, 12 N.W.2d 571, 575-76 (1944). If the discovery rule is applicable, however, the accrual of the cause of action was postponed until the alleged breach was discovered or reasonably should have been discovered.

The party pleading an exception to the normal limitations period has the burden to plead and prove the exception. Conklin v. Towne, 204 Iowa 916, 920, 216 N.W. 264, 266 (1927). The Browns plead the discovery rule as an exception, and the trial court applied it but held they discovered their injury more than five years prior to the time they filed their claim.

We recognize there is strong authority disfavoring the application of the discovery rule to actions based on contract and express and implied warranties: "Ignorance of the plaintiff of his rights or of the facts on which his rights are based, when such ignorance is not due to fraudulent concealment by the defendant, is not generally held to prevent the running of the (statute of limitations)." 18 Williston on Contracts § 2025C, at 779 (3d ed. 1978). See also Bulova Watch Co. v. Celotex, 46 N.Y.2d 606, 610, 415 N.Y.S.2d 817, 819, 389 N.E.2d 130, 131-32 (1979) (action for breach of implied warranty on defectively constructed roof accrued at time of sale, not when damage became known); Schwartz v. Heyden Newport Chemical Corp., 12 N.Y.2d 212, 216-19, 237 N.Y.S.2d 714, 717, 188 N.E.2d 142, 144-45, cert. denied, 374 U.S. 808, 83 S.Ct. 1697, 10 L.Ed.2d 1032 (1963) (action based on negligence and implied warranty for product inserted into plaintiff's sinuses to make them perceptible in x-rays accrued when "forces wrongfully put in motion produce injury," not when...