Grand Island School Dist. No. 2 of Hall County v. Celotex Corp.

• Decision Date: 29 May 1979
• Docket Number: No. 42052,42052
• Citation: 203 Neb. 559,279 N.W.2d 603
• Parties: , 26 UCC Rep.Serv. 939 GRAND ISLAND SCHOOL DISTRICT # 2 OF HALL COUNTY, Nebraska, a political subdivision, Appellant, v. The CELOTEX CORPORATION et al., Appellees.
• Court: Nebraska Supreme Court

Page 603

279 N.W.2d 603

203 Neb. 559, 26 UCC Rep.Serv. 939

GRAND ISLAND SCHOOL DISTRICT # 2 OF HALL COUNTY, Nebraska, a political subdivision, Appellant, v. The CELOTEX CORPORATION et al., Appellees.

No. 42052.

Supreme Court of Nebraska.

May 29, 1979.

Syllabus by the Court

1. Supreme Court: Appeal and Error. Consideration of the cause in this court is generally limited to errors assigned and discussed.

2. Limitations, Statute of: Time. Ordinarily, a statute of limitations begins to run as soon as the plaintiff has a right to bring suit. This is true even though the plaintiff may be ignorant of the existence of the cause of action.

3. Limitations, Statute of: Statutes: Time. The statute of limitations for an action based on alleged deficiencies in improvements to real property does not run during the time when the plaintiff reasonably could not discover the existence of the cause of action. § 25-223, R.S.Supp., 1978.

4. Limitations, Statute of: Time: Legislature. It is competent for the Legislature to change statutes subject to the limitation that an action already barred may not be revived and that an action may not be unreasonably cut off. The applicable statute of limitations is the one in force at the time the suit is brought.

5. Limitations, Statute of: Summary Judgments. Where pleadings and evidence presented conclusively indicate that the statute of limitations has run, summary judgment is appropriate.

6. Limitations, Statute of: Fraud: Pleadings. In order to avail himself of the rule that the statute of limitations for an action based on fraud does not begin to run until discovery of the facts constituting the fraud, plaintiff must allege in his petition the failure to discover.

7. Limitations, Statute of: Uniform Commercial Code: Warranty: Time. An action for breach of warranty in the sale of goods must be commenced within 4 years of tender of delivery. Failure to discover the breach prevents the running of the statute only when the warranty explicitly extends to future performance. § 2-725, U.C.C.

8. Uniform Commercial Code: Warranty. An implied warranty cannot "explicitly" extend to future performance. § 2-725, U.C.C.

9. Limitations, Statute of: Negligence: Statutes: Time. An action grounded in tort must be commenced within 4 years of accrual of the cause of action. § 25-207(3), R.R.S.1943.

10. Limitations, Statute of: Contracts: Statutes: Time. An action based on breach of an implied contract must be commenced within 4 years of accrual of the cause of action. § 25-206, R.R.S.1943.

11. Limitations, Statute of: Contracts: Statutes: Time. An action based on breach of a written contract must be commenced within 5 years of accrual of the cause of action. § 25-205, R.R.S.1943.

Clayton H. Shrout, of Shrout, Christian, Krieger & Merwald, Omaha, for appellant.

James A. Beltzer, of Luebs, Dowding, Beltzer & Leininger, Grand Island, for appellees Johnson Builders, Inc. and St. Paul Fire & Marine Insurance Company.

Robert L. Berry, of Kennedy, Holland, DeLacy & Svoboda, Omaha, for appellee Shaver and Company.

John B. Henley, of Henley & Henley, Colorado Springs, Colo., for appellees The Celotex Corporation, The Travelers Indemnity Company, and the Jim Walter Corporation.

W. G. Blackburn, of Cunningham, Blackburn, Von Seggern, Livingston & Francis, Grand Island, for appellee Krause Roofing and Sheet Metal, Inc.

Heard before BOSLAUGH, BRODKEY, and WHITE, JJ., and SPENCER, Retired Justice, and COADY, District Judge.

WHITE, Justice.

Appellant, Grand Island School District # 2, brought this action to recover damages arising from a leaky roof installed on the Barr Junior High School building. The appellees, defendants below, were sued under various theories of liability. Those involved in the design, supervision, construction, or supply of materials for the building or the roof were Johnson Builders, Inc. (hereinafter Johnson), Shaver and Company (hereinafter Shaver), Krause Roofing and Sheet Metal, Inc. (hereinafter Krause), and The Celotex Corporation (hereinafter Celotex). Johnson entered into a written contract with the school district as general contractor on the building. Johnson was to construct the building in accordance with the specifications of Shaver, the architect. Shaver also had the duty to inspect the work at intermittent stages. Johnson subcontracted the roofing work to Krause. Celotex supplied to Krause the roofing material known as the "Bond Ply" system. Also joined as defendants were: The Travelers Indemnity Company, which issued a limited guaranty bond on the roof; the St. Paul Fire and Marine Insurance Company, surety for Johnson under a performance and maintenance bond; and the Jim Walter Corporation, parent corporation to Celotex.

The defendant Krause demurred to plaintiff's amended petition, alleging it did not state facts sufficient to constitute a cause of action. The sustaining of the demurrer was not assigned as error in this court nor was it discussed in the plaintiff's extensive brief or its reply brief. The order sustaining the demurrer is therefore affirmed. Consideration of the cause in this court is generally limited to errors assigned and discussed. Rule 8a2(3), Revised Rules of the Supreme Court, 1977; Cofer v. Perkins, 199 Neb. 327, 258 N.W.2d 807.

Each of the other defendants moved for summary judgment on the basis that the various statutes of limitations had run. The District Court sustained the motions. We affirm.

Construction on Barr Junior High School began in 1966. In 1967, the roof on the building was completed. The building was occupied in the summer of that year and all construction was completed shortly after classes started in the fall. The first leaks in the roof appeared in late 1968. Then, according to the plaintiff, there began a cycle of complaints by the plaintiff to the defendants and independent parties, repairs to the roof which alleviated the leaks for a period of months, and then the appearance of new leaks. This cycle continued until July 1976 when an engineering consultant took samples of the roof and related to the school board its opinion that the insulation boards beneath the roofing membrane had not been taped; that the insulation and membrane were not in compliance with specifications; that there was little or no adhesion between the insulation boards and the underlying concrete deck; and that the roof had not been properly vented. This suit was instituted a month later on August 4, 1976, and about that same time the school board authorized replacement of the old roof. Other evidence of careless and improper installation was allegedly found when the old roof was removed.

The plaintiff alleged that the defendants, Johnson and Shaver, breached implied warranties and their written contracts with the plaintiff, and that they were negligent in failing to supervise and inspect the installation of the roof to insure that it would meet the contract specifications. Unless a more specific statute of limitations is applicable, actions in tort and actions upon implied contracts, (which would include implied warranty) must be brought within 4 years. §§ 25-206 and 25-207(3), R.R.S.1943. Actions on written contracts can only be brought within 5 years. § 25-205, R.R.S.1943. The arguments of the plaintiff raise the question of when these statutes of limitations start to run.

The traditional rule is that the statute begins to run as soon as the action accrues, and the cause is said to accrue when the aggrieved party has the right to institute and maintain a suit. In a contract action this means as soon as breach occurs, and in tort, as soon as the act or omission occurs. These rules would apply even though the plaintiff was then ignorant of the injury sustained or could not ascertain the amount of his damages. See 51 Am.Jur.2d, Limitation of Actions, s. 109, p. 681.

In 1976, the Legislature modified this "accrual" rule as it applies to improvements to real property and adopted instead a partial "discovery" rule.

Section 25-223, R.S.Supp., 1978, provides, in part: "Any action to recover damages based on any alleged breach of warranty on improvements to real property or based on any alleged deficiency in the design, planning, supervision, or observation of construction, or construction of an improvement to real property shall be commenced within Four years after any alleged act or omission constituting such breach of warranty or deficiency. If such cause of action is not discovered and could not be reasonably discovered within such four-year period, or within one year preceding the expiration of such four-year period, then the cause of action may be commenced within two years from the date of such discovery or from the date of discovery of facts which would reasonably lead to such discovery, whichever is earlier." (Emphasis supplied.) The statute's effective date was July 10, 1976, which was prior to the date on which this suit was commenced.

It is well settled that it is competent for the legislature to change statutes prescribing limitations to actions, and that the one in force at the time suit is brought is applicable to the cause of action. The only restriction on the exercise of this power is, that the legislature cannot remove a bar or limitation which has already become complete, and that no limitation shall be made to take effect on existing claims without allowing a reasonable time for parties to bring action before these claims are absolutely barred by a new enactment.' In this case the court held that there was a reasonable and sufficient time given to bring the action between the time of the passage of the act and the time when it took effect." Educational Service Unit No. 3 v. Mammel, O., S., H. & S., Inc., 192 Neb. 431, 222 N.W.2d 125, citing Horbach v. Miller, 4 Neb. 31 (1875).

It is clear that if the contract and warranty actions against Johnson and Shaver had accrued at the time of the breach, they were barred...