New Bern Associates v. Celotex Corp., 868SC1322

Docket NºNo. 868SC1322
Citation359 S.E.2d 481, 87 N.C.App. 65
Case DateSeptember 01, 1987
CourtCourt of Appeal of North Carolina (US)

Page 481

359 S.E.2d 481
87 N.C.App. 65
The CELOTEX CORPORATION, Defendant and Third-Party Plaintiff,
R.M. SAFFRAN, Individually and Trading as R.M. Saffran
Architect and Associates; Ferdinand A. Hepperle,
Individually and Trading as Ferdinand A. Hepperle Architect
and Planner; and T.A. Loving Company, a Corporation,
Third-Party Defendants.
No. 868SC1322.
Court of Appeals of North Carolina.
Sept. 1, 1987.

Page 482

[87 N.C.App. 66] Stith and Stith, P.A. by F. Blackwell Stith and Susan H. McIntyre, New Bern, for defendant and third-party plaintiff, Celotex Corp.

Warren, Kerr, Walston & Hollowell by John H. Kerr, III, Goldsboro, for third-party defendant, T.A. Loving Co.

GREENE, Judge.

Plaintiff New Bern Associates ("New Bern"), filed a complaint against defendant Celotex Corporation ("Celotex"), alleging breach of warranties in regard to a building owned by New Bern and roofed with material manufactured by Celotex. New Bern alleged the roof on its building was not watertight and leaked a great deal. Celotex filed a third-party complaint against R.M. Saffran and Ferdinand A. Hepperle, the architects who designed plaintiff's building, alleging their negligence in designing the building, and against T.A. Loving Company, the general contractor for the building, alleging its negligence in constructing the building. Celotex alleged the third-parties' negligent acts as the primary causes of any injury to plaintiff and asked for indemnification from third-party defendants or, in the alternative, for contribution.

Before trial, third-party defendant T.A. Loving filed a motion to dismiss Celotex's third-party complaint for failure to state a claim upon which relief could be granted. N.C.G.S. Sec. 1A-1, Rule 12(b)(6) (1983). T.A. Loving based its motion on the allegation that Celotex had failed to bring its third-party complaint within six years from the date of completion of construction as required by the applicable statute of repose, N.C.G.S. Sec. 1-50(5). Celotex's written ten-year warranty issued to New Bern states the building's completion date was 18 March 1975. Celotex filed its third-party complaint against T.A. Loving on 28 April 1986. The court considered the pleadings, Celotex's written warranty, and correspondence between the parties, found there to be no genuine issue of material fact and granted summary judgment for T.A. Loving pursuant to N.C.G.S. Sec. 1A-1, Rules 12(b) and 56, on the basis that the statute of repose, Section 1-50(5), barred Celotex's third-party complaint. Celotex excepted and appealed.

The issues before us are: 1) whether the judgment is immediately appealable, 2) whether summary judgment was error [87 N.C.App. 67] because the statute of repose, N.C.G.S. Sec. 1-50(5), does not bar actions for contribution and indemnification, and 3) whether summary judgment was error because there existed genuine issues of material fact.


The correct procedure for determining whether a given case is appealable

Page 483

was set out by this Court in Equitable Leasing Corp. v. Myers, 46 N.C.App. 162, 265 S.E.2d 240, appeal dismissed, 301 N.C. 92 (1980). There is a three-step analysis: 1) A judgment which is final to all claims and parties is immediately appealable. 2) If a judgment is not final as to all parties and claims, it is appealable if it is final to a party or issue and has been certified for appeal by the trial court under N.C.G.S. Sec. 1A-1, Rule 54(b). 3) If it is neither final to all claims and parties, nor final to a party or issue and certified for appeal, a judgment is immediately appealable if it affects a substantial right of the parties. Equitable Leasing Corp., 46 N.C.App. at 168-69, 265 S.E.2d at 245.

The judgment from which Celotex appeals is not final to all parties and claims. Although it is final to T.A. Loving and the question of its liability, the trial court did not certify it for appeal under Rule 54(b). It does, however, affect a substantial right and, on that basis, is appealable.

A "substantial right" is one "which will clearly be lost or irremediably adversely affected if the order is not reviewable before final judgment." Blackwelder v. Dept. of Human Resources, 60 N.C.App. 331, 335, 299 S.E.2d 777, 780 (1983). A judgment which creates the possibility of inconsistent verdicts on the same issue in different trials affects a substantial right. Bernick v. Jurden, 306 N.C. 435, 439, 293 S.E.2d 405, 408 (1982); Green v. Duke Power Co., 305 N.C. 603, 606, 290 S.E.2d 593, 595 (1982).

Here, the trial court's order granting summary judgment for T.A. Loving creates the possibility of inconsistent verdicts on the issue of T.A. Loving's negligence if it is not immediately appealed. Celotex's written warranty warrants against the roofing contractor's errors or mistakes in workmanship. In this suit, Celotex, as third-party plaintiff, may be held liable under its warranty for negligent work done by T.A. Loving; in a second trial [87 N.C.App. 68] against T.A. Loving, the jury may find T.A. Loving was not negligent. Thus, Celotex's right to have one jury decide the alleged negligence of T.A. Loving is a substantial right. The trial court's order granting T.A. Loving summary judgment is immediately appealable.


Celotex first argues the statute of repose does not bar an action for contribution or indemnification. This argument is without merit.

N.C.G.S. Sec. 1-50(5) governs actions to recover damages for any injury arising out of defective or unsafe improvements to real property. At the time the roof began to leak, this statute (hereinafter...

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