MBA Commercial Const., Inc. v. Roy J. Hannaford Co., Inc.

• Decision Date: 17 September 1991
• Docket Number: No. 71842,71842
• Citation: 1991 OK 87,818 P.2d 469
• Parties: 70 Ed. Law Rep. 665, 1991 OK 87 MBA COMMERCIAL CONSTRUCTION, INC., a Colorado corporation, Appellant, v. ROY J. HANNAFORD COMPANY, INC., an Oklahoma corporation; Aetna Insurance Company, a Connecticut corporation; Oklahoma State University, an agency of the State of Oklahoma; and Utica National Bank & Trust Company, a banking corporation, Defendants, Frankfurt-Short-Bruza Associates, P.C., Appellee. METRO REBAR INC., a Texas corporation, Appellant, v. ROY J. HANNAFORD COMPANY, INC., an Oklahoma corporation; Aetna Insurance Company, a Connecticut corporation; and Oklahoma State University, an agency of the State of Oklahoma, Defendants.
• Court: Oklahoma Supreme Court

Page 469

818 P.2d 469

70 Ed. Law Rep. 665, 1991 OK 87

MBA COMMERCIAL CONSTRUCTION, INC., a Colorado corporation, Appellant, v. ROY J. HANNAFORD COMPANY, INC., an Oklahoma corporation;

Aetna Insurance Company, a Connecticut corporation;

Oklahoma State University, an agency of the State of

Oklahoma; and Utica National Bank & Trust Company, a

banking corporation, Defendants,

Frankfurt-Short-Bruza Associates, P.C., Appellee.

METRO REBAR INC., a Texas corporation, Appellant, v. ROY J. HANNAFORD COMPANY, INC., an Oklahoma corporation;

Aetna Insurance Company, a Connecticut

corporation; and Oklahoma State

University, an agency of the

State of Oklahoma, Defendants.

No. 71842.

Supreme Court of Oklahoma.

Sept. 17, 1991.

Rehearing Denied Oct. 29, 1991.

On Certiorari From the Court of Appeals, Division 4.

The appellants were subcontractors for the construction of the 21st Century Center on the campus of Oklahoma State University in Stillwater, Oklahoma. After partial performance, subcontractors declared their contracts to be in default and terminated work. Subcontractors initiated separate actions to recover actual and consequential losses from OSU, the prime contractor and its insurer and an escrow depository and punitive damages from the prime contractor. By amended petitions, the subcontractors added the appellee/architect, Frankfurt-Short-Bruza Associates, P.C., as a party defendant. The trial court consolidated the actions. By motion for summary judgment, architect asserted the negligence claims were barred by the two-year limitation period in 12 O.S.1981, § 95 Third. Payne County District Court granted summary judgment in favor of the architect. The Court of Appeals affirmed.

CERTIORARI PREVIOUSLY GRANTED; OPINION OF THE COURT OF APPEALS VACATED; JUDGMENT OF THE TRIAL COURT REVERSED AND REMANDED WITH DIRECTIONS.

Brian J. Rayment, Blackstock Joyce Pollard & Montgomery, Tulsa, for appellants MBA Commercial Const., Inc. and Metro Rebar, Inc.

George D. Davis, McKinney, Stringer & Webster, P.C., Oklahoma City, for appellee Frankfurt-Short-Bruza Associates, P.C.

ALMA WILSON, Justice:

The dispositive issue in this appeal is: Whether a negligence claim accrues at the time of discovery of the negligent act even though the alleged resulting injury is sustained subsequent to the negligent act. We hold that for purposes of 12 O.S.1981, § 95 Third, a negligence claim accrues when any injury to the plaintiff, for which an action could proceed, is certain and not merely speculative.

In June, 1984, appellee, Frankfurt-Short-Bruza Associates, P.C. (FSB), an architectural and engineering firm, entered into a contract with Oklahoma State University (OSU) for the design of the two-building 21st Century Center on the OSU campus. Pursuant to the owner/architect contract, FSB was exclusively responsible for the design of the project and supervision of the project construction, including: 1) preparation of the schematic design, design development documents, working drawings and specifications; 2) assistance in the approval and bidding process; 3) full and overall responsibility for accuracy and contents of plans and specifications during all phases of construction; 4) general familiarity with construction work in progress; and, 5) approval of payments to contractor based on construction site observations. The contract provided for periodic payments to FSB throughout the phases of design, development and construction. In addition to the architect fee based on a percentage of the total cost of construction, the contract allowed additional payments for major revisions in drawings, specifications or other documents when the revisions are inconsistent with previous instructions and due to causes beyond control of the architect. ¹

The plans and specifications prepared by FSB were included in the bid of the public works construction project. Roy J. Hannaford Company, Inc. (prime contractor) was the successful bidder and entered into a contract with OSU for construction of the project. Subsequent to the design phase and the bid process, error in the architectural plans and specifications was discovered. The architectural plans and specs as bid required the buildings to be constructed to support a live load of 125 pounds per square foot which was inconsistent with other portions of the design. In November, 1985, the live load designations in the plans and specs were revised, reducing the load requirement in most areas of the buildings to 100 pounds per square foot.

In the summer of 1985, the prime contractor entered into contracts with appellant, MBA Commercial Construction, Inc. (MBA), for the concrete forming and bracing work and appellant, Metro Rebar, Inc. (Metro), for the post tension design, supply and rebar placement. After discovery of error in the architectural plans and specifications but prior to performance, the original contracts with MBA and Metro were revised. Under the revised contracts, the construction work by MBA and Metro was scheduled to be completed by March 31, 1986.

Revision of the architectural plans and specs required revision in the working drawings. These revisions caused delay in the construction of the project. Water drainage problems also caused delay in the construction. During these delays, MBA and Metro maintained equipment, supplies, materials and labor at the construction site. The corrected working drawings were approved after the scheduled completion date of March 31, 1986. Upon receiving the approved working drawings, MBA and Metro went to work. After performing approximately fifty percent of the work, on September 2, 1986, MBA declared its contract in default and ceased work thereunder. After performing approximately eighty percent of the work, on November 22, 1986, Metro declared its contract in default and ceased work. One reason MBA walked-off the construction project was that its invoice for costs after March 31, 1986, was rejected for payment. The record does not reflect whether FSB or the prime contractor or both rejected payment nor does it reveal whether Metro experienced similar refusal to pay construction costs.

MBA and Metro filed actions in the district court in Payne County, Oklahoma, seeking actual, consequential and punitive damages allegedly suffered as a result of delays in the construction progress due to the wrongful acts of the prime contractor in the construction of the two-building 21st Century Center. By second amended petition filed on February 26, 1988, MBA added FSB as a party defendant. MBA alleged that FSB negligently designed the project and negligently prepared the architectural plans and specifications for the two-building construction project and that FSB's negligence proximately caused actual and consequential damage to MBA. By amended petition, Metro also added FSB as a defendant asserting allegations and seeking damages similar to MBA.

The trial court consolidated the actions of MBA and Metro. FSB moved for summary judgment asserting that MBA and Metro's negligence claims were barred by the two-year limitation period in 12 O.S.1981, § 95 Third. The trial court granted summary judgment in favor of FSB. Subsequently, the trial court entered partial judgment relating to the issues between MBA and Metro and the prime contractor and its insurer, Aetna Insurance Company. Aetna initiated this appeal from the partial judgment. MBA and Metro counter-appealed, seeking relief from the denial of their motion for new trial on FSB's summary judgment. Resolutions of all controversies below are final, with the exception of the controversy between MBA and Metro and FSB. ²

The trial court entered a general summary judgment order in favor of FSB. ³ The Court of Appeals affirmed concluding that under the discovery rule the limitation period began to run when MBA and Metro discovered or should have discovered FSB's negligence in the preparation of the architectural plans and specifications. ⁴ We found merit in the dissent which expressed the view that the opinion of the Court of Appeals mistakenly equated discovery of the negligence with the actual accrual of the cause of action. We previously granted certiorari. Upon review of the record on appeal, we find the evidence insufficient to support summary judgment in favor of FSB and hold that the negligence claims alleged by MBA and Metro against FSB did not accrue until MBA and Metro suffered damages which were certain and not merely speculative. ⁵

Summary judgment is appropriate only when the depositions, admissions in the pleadings, stipulations, answers to interrogatories and requests for admissions, affidavits, and exhibits on file or filed with the motion for summary judgment show that there is no substantial controversy as to any material fact. Rules for District Courts of Oklahoma, 12 O.S.Supp.1990, ch. 2, app., Rule 13 (Amended by order of Oct. 30, 1984, eff. Nov. 1, 1984). Whether an action is barred by the applicable statutory time limitation is a question of fact to be determined upon the evidence in each case. American Insurance Union v. Jones, 135 Okla. 101, 274 P. 478, 479 (1929). The party asserting the limitations defense has the burden to present evidence reasonably tending to establish the time-bar. Id. And, an affirmative defense of the statute of limitations vests upon the running of the applicable limitation period. Trinity Broadcasting Corp. v. Leeco Oil Co., 692 P.2d 1364, 1367 (Okla.1984).

In accordance with the above authority, summary judgment on a statute of limitations defense in favor of the asserting party is appropriate where the evidence is sufficient to support a finding of fact of the time-bar and where the evidence establishes there is no dispute as to the time the limitation period began to run or the running of the limitation period.

In support of summary judgment, FSB asserts that the statute of limitations began to run against the negligence claims on the date MBA and Metro first...