National Hills Shop. Ctr., Inc. v. Insurance Co. of No. Am.

• Decision Date: 30 December 1970
• Docket Number: Civ. A. No. 1438.
• Citation: 320 F. Supp. 1146
• Parties: NATIONAL HILLS SHOPPING CENTER, INC., Plaintiff, v. The INSURANCE COMPANY OF NORTH AMERICA, Defendant and Third-Party Plaintiff, v. The CECO CORPORATION, Third-Party Defendant. J. Hal STOCKTON and William Ed Clark, d/b/a J. C. Stockton & Son, Third-Party Defendants and Fourth-Party Plaintiffs, v. Howell C. JONES, Jr., Stanford Woodhurst, Jr., Gilbert O'Brien and J. M. Conway d/b/a Conway Steel Construction Company, Fourth-Party Defendants. Stanford WOODHURST, Jr. and Gilbert O'Brien, Fifth-Party Plaintiffs, v. James C. SMITH, Fifth-Party Defendant.
• Court: U.S. District Court — Southern District of Georgia

320 F. Supp. 1146

NATIONAL HILLS SHOPPING CENTER, INC., Plaintiff, v. The INSURANCE COMPANY OF NORTH AMERICA, Defendant and Third-Party Plaintiff, v. The CECO CORPORATION, Third-Party Defendant.

J. Hal STOCKTON and William Ed Clark, d/b/a J. C. Stockton & Son, Third-Party Defendants and Fourth-Party Plaintiffs, v. Howell C. JONES, Jr., Stanford Woodhurst, Jr., Gilbert O'Brien and J. M. Conway d/b/a Conway Steel Construction Company, Fourth-Party Defendants.

Stanford WOODHURST, Jr. and Gilbert O'Brien, Fifth-Party Plaintiffs, v. James C. SMITH, Fifth-Party Defendant.

Civ. A. No. 1438.

United States District Court, S. D. Georgia, Augusta Division.

December 30, 1970.

William C. Reed, Augusta, Ga., for Insurance Co. of North America.

John D. Capers, Augusta, Ga., for The Ceco Corp.

W. Barry Williams, Augusta, Ga., for J. C. Stockton & Son.

ORDER

LAWRENCE, Chief Judge.

I earlier dealt with certain procedural aspects of this action. See National Hills Shopping Center, Inc. v. Insurance Company of North America, et al., D. C., 308 F.Supp. 248. The case is now before me on motions for summary judgment by Ceco, the fabricator of the allegedly defective bar joists, and by Stockton & Son, the general contractor.

In my order denying the motion to dismiss the third party proceeding I assumed that a right of action by a subrogated windstorm insurer exists where there is breach of a construction contract by the general contractor and where the fabricator supplies defective materials. I ruled that a recovery by National Hills on the windstorm policy would not, as a matter of law, preclude an action over by the insurer against parties whose breach of warranty and contract allegedly caused the collapse of the roof. I thought that the causation issue in the suit on the insurance policy and the causation issue in the third party action possessed qualitative differences.

Ceco now seeks summary judgment on the ground that any right of action for the breach of the contract is barred by the six year statute of limitations. Stockton has also raised the bar of the statute of limitations.

The construction contract between National Hills and Stockton was dated May 21, 1962 and the job was commenced that year. The building was completed and accepted by the owner before December 1st of the same year. The collapse of the roof occurred on July 9, 1968. The third party proceeding was filed by the insurer on December 30, 1968, more than six years after the completion of the building and acceptance of it by the owner.

Under Georgia law, actions on simple contracts in writing must be brought within six years. Ga.Code § 3-705. Actions on implied contracts must be filed within four years. Ga.Code § 3-706. The construction contract was not an instrument under seal since the body of it did not recite that fact. The period for bringing suit for breach of a specialty is twenty years. Ga.Code § 3-703. Under a 1968 statute the period for filing suits growing out of defects in design, planning or construction of improvement to real property is eight years after the substantial completion thereof. Ga. Code, Supp. § 3-1006. However, the Act does not appear to be retroactive and it expressly states:

"Nothing in this Act §§ 3-1006 through 3-1011 shall extend the period of limitations prescribed by the law of this State for the bringing of any action or postpone the time as of which a cause of action accrues."

Before discussing the limitations issue I will observe that insofar as the third party action against Ceco or Stockton is based upon the theory of implied warranty as to quality of materials furnished or as to workmanship it is extremely doubtful that any cause of action exists. In the case of the sale of an existing new house it has been held by the Georgia Court of Appeals that no implied warranty on the part of the vendor exists and that in the absence of express warranty as to quality or condition a suit by the vendee must fail. Walton v. Petty, 107 Ga.App. 753, 131 S.E.2d 655; Reynolds et al. v. Wilson, 121 Ga.App. 153, 173 S.E.2d 256.

Under Georgia law, the statute of limitations runs from the time the contract is broken "and not at the time the actual damage results or is ascertained." Mobley v. Murray County, 178 Ga. 388, 173 S.E. 680; Gould v. Palmer and Reed, 96 Ga. 798, 22 S.E. 583; Houser v. Farmers Supply Company, 6 Ga.App. 102, 64 S.E. 293. In Wellston Company v. Sam N. Hodges, Jr. & Company, 114 Ga.App. 424, 151 S.E.2d 481 the Court of Appeals said:

"The alleged negligent design and construction of the building in and of itself constituted a legal injury to the plaintiff, however slight the actual damages may have been at the time; this is true, notwithstanding the fact that the plaintiff had no knowledge of such wrongs having been committed until the roof collapsed some four years later. Mere ignorance of the facts constituting a cause of action does not prevent the running of the statute of limitation."

The Court went on to say:

"A right of action has its inception from the time that there has been a breach of duty; and this would entitle the party to file a suit for the breach, without regard to whether any actual damage had in fact resulted. Clearly, it cannot be seriously contended that if the plaintiff had discovered the negligence of the defendant at the time it was committed, it would have had no right of action against them simply because the building had not at that time fallen down."

In Hunt v. Star Photo Finishing Company, 115 Ga.App. 1, 153 S.E.2d 602 which involved a collapsed...