Gordon v. Western Steel Co.

• Decision Date: 24 July 1997
• Docket Number: No. 13-95-512-CV,13-95-512-CV
• Citation: 950 S.W.2d 743
• Parties: Robert Frank GORDON and Port Royal Development Corporation, Appellants, v. WESTERN STEEL COMPANY and Braselton Construction Company, Appellees.
• Court: Texas Court of Appeals

Page 743

950 S.W.2d 743

Robert Frank GORDON and Port Royal Development Corporation, Appellants, v. WESTERN STEEL COMPANY and Braselton Construction Company, Appellees.

No. 13-95-512-CV.

Court of Appeals of Texas Corpus Christi.

July 24, 1997.

Rehearing Overruled Aug. 21, 1997.

Frank E. Weathered, John A. Smith, III, Dunn & Weathered, Corpus Christi, for Appellants.

William N. Woolsey, Woolsey & Schmidt, James W. Wray, Jr., Chaves, Gonzales & Hoblit, Thomas F. Nye, Linda C. Breck, Brin & Brin, Corpus Christi, for Appellees.

Before FEDERICO G. HINOJOSA, Jr., YANEZ and RODRIGUEZ, JJ.

OPINION

YANEZ, Justice.

This is an appeal from the granting of two summary judgments based on a ten-year statute of repose. Appellees, Western Steel Company ("Western") and Braselton Construction Company ("Braselton"), were subcontractors hired by appellants, Robert Frank Gordon and Port Royal Development Corporation ("Gordon" and "Port Royal," respectively). By two points of error, appellants challenge the trial court's holding that substantial completion of a subcontractor's share of a construction project is an improvement that will trigger the statute of repose. We affirm.

Gordon and Port Royal were, at one time, developers of a condominium building project known as "Port Royal By-The-Sea" on Mustang Island in Corpus Christi, Texas. Subsequent to the completion of the entire project, the Port Royal Homeowners Association, Inc. brought suit against Gordon and Port Royal seeking damages for alleged defects in the construction of the condominiums. On October 21, 1994, Gordon and Port Royal filed third-party actions for contribution and indemnity against the various subcontractors involved in the construction, including Western and Braselton.

Western and Braselton moved for summary judgment based on the ten-year statute of repose for those who construct or repair improvements to real property. See TEX. CIV. PRAC. & REM.CODE ANN. § 16.009 (Vernon 1986). By affidavit, Western's president George Gains stated that Western's subcontracting work, which involved delivering and erecting structural steel at Port Royal By-The-Sea, was substantially completed by August 24, 1984. Braselton's president, Bill Braselton, also stated by way of affidavit that substantial completion of its share of the project, which involved building concrete structures, occurred on August 31, 1984. Braselton also attached verified copies of its "applications and certificates for payment" for work performed from August 8 through 31, 1984, and September 1 through 28, 1984, respectively. Gordon and Port Royal agreed that Braselton had submitted its final bill by September 28, 1984.

The condominiums were made up of several buildings, each finished at different stages. Thomas Hardin, a lender for the Port Royal project, determined that substantial completion of the entire project occurred on June 1, 1985. Based on the statute of repose, the trial court granted both Western's and Braselton's motions for summary judgment. The trial court effectively held that a subcontractor's substantial completion of its share of a project can be an improvement to real property which triggers the statute of repose. As a result, Gordon and Port Royal were time-barred from bringing suit against Western and Braselton. Thereafter, the trial court severed appellant's claims against Western and Braselton from the remaining litigation.

Appellants' first point of error challenges the granting of summary judgment on this basis. They contend that the trial court erred in holding that a subcontractor is entitled to the protection of the statute of repose upon the substantial completion of his work, irrespective of the status of the entire construction project. Appellants maintain that the statute should only apply after the entire project is complete, and to rule otherwise contradicts the statute's intent and unnecessarily complicates an aggrieved party's ability to sue the proper parties. Before addressing the merits of appellants' point, we will set out the standard of review for a summary judgment.

Standard of Review

The following factors guide our review of a summary judgment: (1) the pleadings and summary judgment evidence must establish that no genuine issue of material fact exists, and that the movant is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue, evidence favorable to the non-movant will be taken as true; and (3) every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985).

Upon appeal of a summary judgment, the question is "whether the summary judgment proof establishes, as a matter of law, that there is no genuine issue of material fact as to one or more of the essential elements of plaintiff's cause of action." Munoz v. Gulf Oil Co., 693 S.W.2d 372, 373 (Tex.1984). A defendant who moves for summary judgment must show that the plaintiff has no cause of action. A defendant may meet this burden by either (1) disproving at least one essential element of each theory of recovery or (2) conclusively proving all elements of an affirmative defense. Wornick Co. v. Casas, 856 S.W.2d 732, 733 (Tex.1993).

The Statute of Repose

The statute of repose, found in Section 16.009 of the Texas Civil Practice and Remedies Code and entitled "Persons Furnishing Construction or Repair of Improvements," states:

(a) A claimant must bring suit for damages ... against a person who constructs or repairs an improvement to real property not later than 10 years after the substantial completion of the improvement in an action arising out of a defective or unsafe condition of the real property or a deficiency in the construction or repair of the improvement.

(b) This section applies to suit for ...

(4) contribution; or

(5) indemnity.

TEX. CIV. PRAC. & REM.CODE ANN. § 16.009 (Vernon 1986). The statute of repose bars all claims after the prescribed ten-year period. Tumminello v. U.S. Home Corp., 801 S.W.2d 186, 187 (Tex.App.--Houston [1st Dist.] 1990, writ denied) (citing Hasty v. Rust Eng'g Co., 726 F.2d 1068, 1069 (5th Cir.1984)). It begins to run when the improvement is substantially completed, not when the damage or injury occurs or is discovered. Id. at 188 (citing McCulloch v. Fox & Jacobs, Inc., 696 S.W.2d 918, 924 (Tex.App.--Dallas 1985, writ ref'd n.r.e.)).

Whether the statute protects a subcontractor in this context depends upon the construction of the statute. Matters of statutory construction are questions of law for the court to decide. Johnson v. City of Fort Worth, 774 S.W.2d 653, 656 (Tex.1989). No Texas court has interpreted whether substantial completion of a subcontractor's share of a construction project is an improvement that will trigger the running of the statute of repose. Therefore, in the absence of controlling state law, the statute must be read consistently with its plain language, legislative history and statutory purpose. Sonnier v. Chisholm-Ryder Co., Inc., 909 S.W.2d 475, 482 (Tex.1995); see also TEX. GOV'T CODE ANN. § 311.023 (Vernon 1988) (in construing a statute, whether or not it is ambiguous on its face, court may consider among other matters the (1) object sought to be attained, (2) circumstances under which statute was enacted, (3) legislative history, (4) common law/former statutory provisions, including laws on same or similar subjects, (5) consequences of a particular construction, (6) administrative construction of statute, and (7) its title/preamble).

By its clear language, the statute protects subcontractors from liability after ten years, so long as they constructed or repaired an improvement to realty. See Williams v. U.S. Natural Resources, Inc., 865 S.W.2d 203, 205-06 (Tex.App.--Waco 1993, no writ) (statute protects "construction-industry professionals"); Id. at 209-11 (Vance, J., concurring) (statute should be available only to contractors, their subcontractors, and the agents, servants, and employees of each); Barnes v. J.W. Bateson Co., Inc., 755 S.W.2d 518, 521 (Tex.App.--Fort Worth 1988, no writ)(statute protects construction professionals within its purview from indefinite potential liability). Appellants do not dispute that Western and Braselton helped "construct" an "improvement," and therefore do not contest that they are within the category of persons protected by the statute. Rather, appellants dispute the court's determination that a subcontractor can be considered to have substantially completed an improvement for the purposes of the statute when the entire construction project is not completed. They contend that the improvement cannot be considered substantially complete if the larger project is not ready for its intended use, merely because the subcontractor has completed its share of the work.

Because this question is not answered on the face of the statute, we look next to the legislative history. In 1969, the Texas Legislature enacted a statute of repose applicable to architects and engineers. See TEX. CIV. PRAC. & REM.CODE ANN. § 16.008 (Vernon 1986). The statute had at its origin an intent to protect those who design improvements to realty. Sonnier, 909 S.W.2d at 482. In 1975, the language currently in section 16.009 was added by the Texas Legislature as a compliment to the existing statute of repose, so that it would also apply to those who constructed or repaired improvements to the realty that the architects and engineers designed. See TEX. CIV. PRAC. & REM.CODE ANN. § 16.009 (Vernon 1986); Sonnier, 909 S.W.2d at 482.

The sponsor of H.B. 1105, later codified as section 16.009, explained that the purpose of the statute was to avoid the situation "where a contractor builds a building or a construction project and he has a potential liability on that [improvement] until the day he dies." Petro Stopping Ctrs., Inc. v. Owens-Corning Fiberglas...