Graney v. Caduceus Props., LLC

• Decision Date: 21 June 2012
• Docket Number: No. 1D11–2700.,1D11–2700.
• Citation: 91 So.3d 220
• Parties: William G. GRANEY, P.E. and KTD Consulting Engineers, Inc., Appellants, v. CADUCEUS PROPERTIES, LLC, a Florida Limited Liability Company, and Tallahassee Neurological Clinic, P.A., a Florida Professional Association, Appellees.
• Court: Florida District Court of Appeals

91 So.3d 220

William G. GRANEY, P.E. and KTD Consulting Engineers, Inc., Appellants,

v.CADUCEUS PROPERTIES, LLC, a Florida Limited Liability Company, and Tallahassee Neurological Clinic, P.A., a Florida Professional Association, Appellees.

No. 1D11–2700.

District Court of Appeal of Florida, First District.

June 21, 2012.

Patrick R. Delaney and Rouselle A. Sutton, III, Orlando, for Appellants.

Martin B. Sipple and Robert N. Clarke, Jr., Ausley & McMullen, P.A., Tallahassee, for Appellees.

ON MOTION FOR REHEARING AND REHEARING EN BANC

ROWE, J.

We deny the motion for rehearing and rehearing en banc filed by appellees Caduceus Properties, LLC, and Tallahassee Neurological Clinic, P.A. No further motions from the parties will be entertained. On our own motion, however, we withdraw our previous opinion and substitute the following opinion in its place.

The appellants, William A. Graney (“Graney”) and KTD Consulting Engineers (“KTD”), appeal a final order of judgment entered in favor of Caduceus Properties (“Caduceus”) and Tallahassee Neurological Clinic (“TNC”) for claims arising out of the design, construction, and installation of a heating, ventilation, and air conditioning (“HVAC”) system on property owned by Caduceus and leased by TNC. Graney and KTD raise eight issues on appeal. Because one of the issues is dispositive, we decline to reach the remaining issues. Graney and KTD assert that the claims brought by Caduceus and TNC against them were barred by the statute of limitations. We agree, and for the reasons that follow, we reverse the judgment of the trial court.

Facts and Procedural History

This appeal arises from a civil action brought by TNC and Caduceus against Graney, KTD, and Michael Lee Gordon (“Gordon”).¹ Caduceus is a Florida limited liability company and the owner of the property which is the subject of the lawsuit. The property includes a single-story building occupied by TNC, a pain clinic and surgery center.

In 2003, TNC and Gordon (a professional architect) entered into a contract for design of improvements to the building for the pain clinic and surgery center. Gordon subcontracted with KTD (an engineering design consulting firm) and Graney (a professional engineer and principal of KTD) to design the HVAC system for the TNC clinic. TNC separately contracted with Kelly Brothers Sheet Metal to perform the installation of the HVAC system.

The certificate of occupancy for the building was issued in August 2005, and almost immediately, the HVAC system began to fail. TNC contacted Gordon, KTD, and Kelly Brothers with complaints concerning the system. Over the next ten months, the parties sought to ascertain the reasons for the failure of the HVAC system and made several efforts to remedy the problems. After those efforts proved unsuccessful, TNC entered into a contract with another contractor to design, procure, and install a replacement HVAC system.

On July 24, 2006, Caduceus filed suit against Gordon, seeking to recover damages for the malfunctioning HVAC system. On March 7, 2007, Gordon filed a third-party complaint against Graney and KTD.

On June 3, 2010, Caduceus and TNC initiated a direct action against third-party defendants Graney and KTD.² In their answer and affirmative defenses to the direct action, Graney and KTD raised the statute of limitations as an affirmative defense. At trial, Graney and KTD moved for involuntary dismissal based upon the statute of limitations defense. The trial court denied the motion, and ultimately entered judgment in favor of Caduceus and TNC. This appeal followed.

Analysis

Because the statute of limitations issue raised by Graney and KTD is a question of law dependent on the construction of the applicable statutes, our standard of review is de novo. See Bryson v. State, 42 So.3d 852, 853–54 (Fla. 1st DCA 2010).

The claims asserted against Graney and KTD are “founded on the design, planning or construction of an improvement to real property” and are, therefore, governed by section 95.11(3)(c), Florida Statutes, which provides a four-year limitations period. Pursuant to section 95.11(3)(c), for actions involving completed construction projects, the limitations period begins to run “from the date of actual possession by the owner, the date of issuance of the certificate of occupancy ... or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor ... whichever is latest.” Id. If, however, the action involves a latent defect, the time runs from the time the defectis discovered or should have been discovered with the exercise of due diligence.” Id.³

In this case, the certificate of occupancy was issued on August 5, 2005. The record reflects that Caduceus and TNC were aware of problems associated with the HVAC system by September 2005; therefore, the four-year statute of limitations for the claims against Graney and KTD ran no later than September 2009. Caduceus and TNC initiated their direct action against KTD and Graney on June 3, 2010, almost nine months after the statute of limitations had expired. The issue is then whether the direct action complaint relates back to the filing date of the original complaint brought by Caduceus and TNC against Gordon.

Florida Rule of Civil Procedure 1.190(c) provides that an amendment relates back to the date of the original pleading “[w]hen the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading.” There is no dispute here that the claims asserted against KTD and Graney in the direct action complaint “arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading.” The question presented in this case is whether an amendment relates back to the original complaint where a third-party defendant is made a primary defendant after the statute of limitations has run.

“Generally, the addition of a new party will not relate back to the original complaint.” Schwartz v. Wilt Chamberlain's of Boca Raton, 725 So.2d 451, 453 (Fla. 4th DCA 1999). Where the purpose of the amendment is to bring a new party into the suit, the relation-back doctrine does not apply, and dismissal on time-barred grounds is proper. Anderson v. Emro Mktg. Co., 550 So.2d 531, 532 (Fla. 1st DCA 1989). In Cabot v. Clearwater Construction, 89 So.2d 662 (Fla.1956), the Florida Supreme Court explained the relation-back doctrine as follows:

The general rule appears to be that whether an amendment of process or pleading changing the description of a party from a corporation to an individual or vice versa after the statute of limitations has run introduces a new party or new cause of action depends upon whether the misdescription is interpreted merely as a misnomer or defect in the characterization of the party or whether it is deemed an entire change of parties. If the former, the amendment relates back to the commencement of the action. If the latter, the amendment amounts to the institution of an entirely new action.

Id. at 663–64 (citations omitted).

Thus, an amendment will relate back where the defendant “knew or should have known that the plaintiff ... was guilty of a misnomer as concerns the correct identity of the defendant.” Kozich v. Shahady, 702 So.2d 1289, 1291 (Fla. 4th DCA 1997) (citations omitted); accord Rayner v. Aircraft Spruce–Advantage, Inc., 38 So.3d 817 (Fla. 5th DCA 2010); Schwartz v. Metro Limo, Inc., 683 So.2d 201 (Fla. 3d DCA 1996); Anderson v. Emro Mktg. Co., 550 So.2d 531, 532 (Fla. 1st DCA 1989) (“If ... this complaint merely corrected a misnomer, then application of the relation-back theory would have precluded dismissal on the ground that the suit was barred by the statute of limitations.”); Gray v. Executive Drywall, Inc., 520 So.2d 619, 620 (Fla. 2d DCA 1988) (barring amendment by plaintiff to add new defendant Executive Drywall where plaintiff originally sued Executive Plastering because Executive Plastering was not “a misnomer of the real owner of [Executive] Drywall's business”); Francese v. Tamarac Hosp. Corp., 504 So.2d 546 (Fla. 4th DCA 1987) (amendment permitted where plaintiff first named as defendant “University Community Hospital” at a specific address and later named “Tamarac Hospital Corporation d/b/a University Community Hospital” at the same address).

Similarly, an amendment to add a new party will relate back “where the originally named defendant is related to the proper defendant and, through its participation in the proceedings or otherwise, has led the plaintiff to believe the correct defendant was sued.” Schwartz, 683 So.2d at 203 (quoting Hohl v. Croom Motorcross, Inc., 358 So.2d 241 (Fla. 2d DCA 1978); accord Rayner, 38 So.3d at 820).⁴

Here, Caduceus and TNC can advance no argument that their failure to timely add Graney and KTD as defendants in the original action was the result of a misnomer or mistake as to the identities of the potential defendants. Caduceus and TNC were well aware of the identities of Graney and KTD and their roles in the design and approval of the HVAC system from the time the system began to fail in August or September 2005. Further, it is undisputed that Caduceus and TNC were aware of the potential liability of KTD and Graney when Gordon filed the third-party complaint, just over eight months after the original lawsuit was filed and at least two years before the statute of limitations ran.

Nor is this a case where the defendant misled the plaintiff into believing that the correct defendant was sued. Despite the absence of misnomer or mistake, however, Caduceus and TNC urge the court to hold that their direct action complaint against KTD and Graney related back to the original complaint filed against Gordon and invite the court to adopt the Fifth District's reasoning set forth in Gatins v. Sebastian Inlet Tax Dist., 453 So.2d 871 (Fla. 5th...