McClincy v. Miller Roofing Enters., Inc.

• Decision Date: 07 May 2012
• Docket Number: No. 66375-5-I,66375-5-I
• Court: Washington Court of Appeals
• Parties: TIM McCLINCY, an individual, and McCLINCY BROTHERS FLOOR COVERING, INC., a Washington corporation, dba McCLINCY'S HOME DECORATING, Respondents, v. MILLER ROOFING ENTERPRISES, INC., Appellant.

TIM McCLINCY, an individual,and McCLINCY BROTHERS FLOOR COVERING, INC.,a Washington corporation, dba McCLINCY'S HOME DECORATING, Respondents,

v.MILLER ROOFING ENTERPRISES, INC., Appellant.

No. 66375-5-I

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

FILED: May 7, 2012

UNPUBLISHED

Cox, J. — Miller Roofing Enterprises, Inc. (Miller Roofing) appeals the decisions of the trial court following a bench trial. The trial court concluded that Miller Roofing breached one written and two oral contracts with Tim McClincy and McClincy Brothers Floor Covering, Inc. (McClincy Brothers). Based on these conclusions, the court entered judgment for substantial damages against Miller Roofing.

We hold that there is insufficient evidence to support the finding that Miller Roofing warranted the manufacture of either the torch down roof for 12 years or the metal roofs for 50 years. Accordingly, we reverse the judgment to the extent of the breach of the written contract claim.

We also hold that, on this record, it is unclear whether the oral contract claims are barred by the statute of limitations. It is unclear whether Miller Roofing waived the affirmative defense of untimely service of process. And it is also unclear when plaintiffs had notice of the defects underlying their claim for breach of the two oral contracts. Thus, liability is unclear.

We also note that the damages on which the breach of written contract claim is based are not segregated from the damages awarded for the breach of the oral contracts claims. Accordingly, on this record, any judgment for damages on the oral contract claims cannot stand.

For these reasons, we also reverse the judgment on the two breach of oral contract claims and remand for further proceedings.

Miller Roofing entered into a written contract with McClincy on June 16, 1997, for the construction and replacement of three roofs at the McClincy Brothers' commercial location. The building is owned by McClincy.

As part of the agreement, Miller Roofing agreed to re-roof all of the low pitched and flat roofs with rubber torch down roofing materials and all of the pitched roofs with Champion Snap-Lock metal roofing. The following provision of the agreement, which only Miller Roofing signed, follows 10 numbered contractual terms and states: "Roof guaranteed 5 years labor and 12 year manufacture on Torch down and 50 year manufacture waranty [sic] on metal."¹ Miller Roofing completed the roofing project in May 1998.

In January 2006, Miller Roofing orally agreed to fix some water leaks in the roofing. Miller Roofing returned on June 3, 2006, and performed additional repairs on the lower torch down roof.

During November and December 2007, severe weather caused substantial water intrusion and extensive damage to the building. In January 2008, a third party informed McClincy and McClincy Brothers that a cause of the damage was defective construction of the torch down roof by Miller Roofing.

On February 5, 2009, McClincy and McClincy Brothers commenced this action against Miller Roofing for breach of contract, negligence, violations of the Washington Product Liability Act (WPLA), fraudulent concealment, and breach of express and implied warranties. Miller Roofing never asserted that McClincy Brothers was not a proper party to this action and had no claim.

Miller Roofing moved for summary judgment. It argued that the breach of contract claim based on the June 1997 written contract was barred by the six-year statute of repose. It also claimed that the two 2006 oral agreements for repair work were barred by the three-year statute of limitations. The trial court denied the motion.

The case proceeded to a bench trial. After the close of the case's liability phase by McClincy and McClincy Brothers, Miller Roofing moved for dismissal of the claim related to the written contract. The trial court granted the motion, deciding that the "roof(s) installed by Miller Roofing Enterprises, Inc. were completed in 1998 and under the statute of repose (six years) any breach ofcontract claim expired in 2004."² But the court further ruled on the written contract claim as follows:

Under [sic] Plaintiff's theory that the Defendant stepped into the role of manufacturer for the Torch down roof may be reconsidered by this court upon a showing within the record presented to the court in trial; otherwise, the claim[] for breach of [the written] contract [is] hereby DISMISSED.³

At the trial's conclusion, the court entered findings of fact and conclusions of law. The court concluded that Miller Roofing warranted the manufacture of the torch down roof for a period of twelve years. It also concluded that Miller Roofing breached the written contract with McClincy and the two subsequent 2006 oral agreements. The court entered judgments for damages for all of these alleged breaches exceeding $1,387,000.

Miller Roofing appeals.

BREACH OF CONTRACT CLAIMS

Written Contract

Miller Roofing argues that the trial court erred in finding at the conclusion of trial that it warranted the torch down roof as a manufacturer under the parties June 1997 written contract. We agree.

A contract is actionable when it imposes a duty, that duty is breached, and the breach proximately causes damage to the one owed the duty.⁴ Failuretoperform a contractual duty constitutes a breach.⁵

The touchstone of contract interpretation is the parties' intent.⁶ Under the objective manifestation theory of contract interpretation, a court must attempt to ascertain the intent of the parties by focusing on the objective manifestations of the agreement, rather than the unexpressed subjective intent of the parties.⁷ Intent may be imputed based on the ordinary meaning of the words within the contract.⁸ Words in a contract are given their ordinary, usual, and popular meaning unless the entirety of the agreement clearly demonstrates a contrary intent.⁹ Extrinsic evidence may also be used to determine the parties' intent.¹⁰

We review de novo the trial court's interpretation of a contract.¹¹ A trial court's findings of fact are reviewed for substantial evidence.¹² Substantial evidence is evidence sufficient to persuade a fair-minded, rational person of thefinding's truth.¹³ Unchallenged findings of fact are verities on appeal.¹⁴ This court reviews de novo the trial court's conclusions of law to determine if they are supported by the findings of fact.¹⁵

Here, the June 1997 written contract required, among other things, the installation of torch down roofing.¹⁶ The contract stated "Roof guaranteed 5 years labor and 12 year manufacture on Torch down and 50 year manufacture waranty [sic] on metal."¹⁷

The parties do not appear to dispute that Miller Roofing guaranteed its labor on the roof for a period of 5 years. But a plain reading of the above language does not support the theory that Miller Roofing was to provide a warranty for manufacture of either the torch down roofing for 12 years or the metal roofing for 50 years.

We reach this conclusion by considering the definition of the word "manufacture." Under the objective theory of contract interpretation, we first ascertain the parties' intent based on the ordinary meaning of the word "manufacture."¹⁸ According to the American Heritage Dictionary, it means:

1.a. To make or process (a raw material) into a finished product, especially by means of a large-scale industrial operation. b. To make or process (a product), especially with the use of industrial machines. 2. To create, produce, or turn out in a mechanical manner . . . . 3. To concoct or invent; fabricate . . . . To make or process goods, especially in large quantities and by means of industrial machines.¹⁹

Based on this definition of "manufacture," Miller Roofing did not manufacture either the torch down roof or the metal roof. Rather, it only provided labor to install the roofs. Thus, it did not warrant the materials that were manufactured for either roof, the theory that served as the basis for the breach of the written contract claim.

Our view of the ordinary meaning of "manufacture" in this agreement is consistent with common law distinctions between manufacturers and those who construct improvements on real estate. In 1519-1525 Lakeview Boulevard Condominium Ass'n v. Apartment Sales Corp.,²⁰ the supreme court considered this distinction in the context of former RCW 4.16.310, the statute of repose. The court summarized the differences as follows:

This court has previously recognized that rational distinctions exist between manufacturers and people who construct improvements upon real estate. Recognized rational distinctions between these two classes include the following:

(1) Manufacturers have liability under products liability law, an independent area of law separate from basic negligence or breach of contract, and this area of law has its own statutes of limitation, which are keyed to the useful life of the product.

(2) Manufacturers produce standardized goods frompretested designs and in large quantities whereas contractors make a unique product designed to deal with the distinct needs of a particular piece of real estate.

(3) Manufacturers produce their goods in a controlled environment whereas contractors build improvements upon real estate in an ever-changing environment.

(4) Manufacturers do not contribute to the structural aspects of real estate improvements; nor do they engage in any of the construction activities enumerated in RCW 4.16.310.²¹

For these same reasons, the written contract does not impose any duty on Miller Roofing to warrant the manufacture of the torch down or metal roofs.

The trial court's ruling dismissing the breach of contract claim, subject to a further showing, is consistent with our view of the case. The court stated:

Under [sic] Plaintiff's theory that the Defendant stepped into the role of manufacturer for the Torch down roof may be reconsidered by this court upon a showing within the record presented to the court in trial;

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