Pioneer Homestead Apartments III v. Sargent Eng'rs, Inc.

• Decision Date: 17 July 2018
• Docket Number: S-17-0302
• Citation: 421 P.3d 1074
• Parties: PIONEER HOMESTEAD APARTMENTS III, a Wyoming limited partnership, and Pioneer Homestead, a Wyoming non-profit corporation, Appellants (Plaintiffs), v. SARGENT ENGINEERS, INC., a Washington corporation, and Kari J. Moulton P.E., Appellees (Defendants).
• Court: Wyoming Supreme Court

421 P.3d 1074

PIONEER HOMESTEAD APARTMENTS III, a Wyoming limited partnership, and Pioneer Homestead, a Wyoming non-profit corporation, Appellants (Plaintiffs),

v.SARGENT ENGINEERS, INC., a Washington corporation, and Kari J. Moulton P.E., Appellees (Defendants).

S-17-0302

Supreme Court of Wyoming.

July 17, 2018

Representing Appellants: Mark D. Sullivan, Mark D. Sullivan, P.C., Wilson, Wyoming

Representing Appellees: Ryan Schwartz of Williams, Porter, Day & Neville, P.C., Casper, Wyoming

Before DAVIS, C.J., and BURKE^* , FOX, KAUTZ, and BOOMGAARDEN, JJ.

DAVIS, Chief Justice.

[¶1] Pioneer Homestead (Pioneer) is a non-profit corporation that operates low-income housing for senior citizens and persons with disabilities in Teton County. In 2005, Pioneer completed construction of its third apartment building, Pioneer Homestead III (PH III), and in 2013, it learned of a binding door and plaster cracks in a PH III unit. Upon investigation, Pioneer found numerous design deficiencies in the PH III plans, as well as deviations from those plans in the building’s construction.

[¶2] In 2015, Pioneer sued Sargent Engineers, Inc. (Sargent) for professional negligence in the structural engineering services it provided during the design phase of PH III’s construction, and Zeist Construction Management, LLC (ZCM) for breach of contract.¹ Sargent moved for summary judgment, asserting that Pioneer’s claims against it were time-barred, and the district court granted that motion. We find that disputed issues of material fact exist with respect to when Pioneer reasonably should have discovered Sargent’s alleged negligence, and we therefore reverse.

ISSUE

[¶3] Pioneer presents a single issue for our review, which we restate as:

Were there disputed issues of fact that precluded the district court from ruling that Pioneer’s claims were time-barred as a matter of law?

FACTS

[¶4] Pioneer operates Teton County’s only low-income housing development. Its complex consists of three apartment buildings that offer seventy-eight one-and-two-bedroom independent-living apartments. PH III has twenty-five units, and is Pioneer’s most recently constructed building.

[¶5] The construction of PH III began in April 2004 when Pioneer entered into a design/build contract with Idaho-based Superior Modular Systems (SMS). Pursuant to that contract, SMS was to supply modular units that were constructed off-site, deliver them to the PH III building site, and put them together there. Pioneer separately contracted with ZCM to manage the PH III project, and SMS separately contracted with Sargent to provide the required structural engineering plans and specifications for the project.

[¶6] On June 1, 2004, Sargent issued a stamped set of plans and specifications for the PH III project. The project then proceeded, and on August 15, 2005, after construction was completed, a certificate of occupancy was issued for the building. Pioneer then began accepting residents for the twenty-five PH III units.

[¶7] Pioneer encountered issues with PH III at three different times after it was occupied. The first of the concerns occurred in 2006, when residents of PH III noticed noises coming from the attic and wall spaces in the building. Pioneer investigated and found that birds were getting into the building through a vent that, due to an installation error, was stuck in an open position that allowed birds to enter that space. The vent was repaired, and birds were not thereafter able to enter the attic.

[¶8] The next concern was encountered in 2007. In the summer of that year, Pioneer’s property managers noticed some concrete cracking underneath a steel support beam in a covered parking area on the property’s north side. Upon learning of the cracking, Pioneer notified SMS, which then notified Sargent. It was ultimately determined that the steel beam in question was improperly attached to the concrete in a manner that failed to account for the expansion and contraction that would occur with temperature fluctuations. When the beam expanded and contracted, it caused the concrete to crack and weakened its load-bearing capacity.

[¶9] Sargent examined the defect, and on October 23, 2007, sent a letter to Pioneer explaining its observations and offering a solution for the problem. In response, Pioneer retained another engineer, F. Richard Scheerer of G & S Structural Engineers, to review Sargent’s proposed solution. Mr. Scheerer visited the apartment building, observed the problem, reviewed Sargent’s proposal, and agreed that Sargent’s solution was an "appropriate fix." Pioneer then made Sargent’s recommended repair.

[¶10] The final and most recent issue with PH III, which led to the present dispute, arose in the late spring of 2013 when Pioneer received a complaint from a PH III resident in Unit 210. The resident reported a gap in a corner of that unit’s drywall that was large enough to pass fingers through, and a sticking door. In response, Pioneer retained Y2 Consultants, Inc. (Y2), an engineering firm, to inspect the unit and determine the cause of those problems. Y2 performed a site visit on June 4, 2013, and reviewed the plans and specifications and performed its own calculations. On July 16, 2013, Y2 provided a written report of its findings, which were that there were significant design flaws in the plans and specifications for PH III, and defects in its construction.

[¶11] On April 7, 2015, Pioneer filed a complaint against ZCG and Sargent.² The complaint asserted a claim for breach of contract against ZCG and a claim of professional negligence against Sargent. As to the claim against Sargent, the complaint alleged:

26. Defendants Sargent Engineers, Inc. and Kari Moulton breached their duties in numerous respects including, without limitation:

a) Failing to design a properly sized glue laminated beam at the north carport entrance;

b) Failing to specify proper connections of the glue laminated beam;

c) Including a roof truss design with an inadequate snow load capacity;

d) Failing to specify proper and workable lateral connections between each modular unit;

e) Failing to calculate proper dead weight loads for the north wall of the structure; and

f) Failing to design a proper or adequate seismic and wind resistance system for the structure.

27. As a result of the negligence of Defendants Sargent Engineers, Inc. and Kari Moulton the Pioneer Homestead III building was damaged by buckling floors in some units, cracked interior sheetrock at some locations, shifting door frames throughout, and shifting unit walls along hallways.

[¶12] On July 8, 2016, Sargent filed a motion for summary judgment, contending that Pioneer’s claims against it were barred by the two-year statute of limitations applicable to claims for professional errors and omissions. Pioneer opposed Sargent’s motion with affidavits by Harry Lawroski, the Pioneer board member who oversaw the PH III project, and Jeffrey Hobson, the Y2 structural engineer who evaluated the PH III plans and specifications. Based on those affidavits, Pioneer argued that questions of disputed fact concerning whether Sargent’s negligence was reasonably discoverable within the two-year period of limitations precluded summary judgment.

[¶13] On December 12, 2016, the district court issued its summary judgment ruling, which granted Sargent’s motion. The court did not specifically discuss Pioneer’s supporting affidavits, but concluded:

For an extension of the two-year limitation to apply under Wyo. Stat. Ann. § 1-3-107(a)(i), the Plaintiffs have the burden of establishing either that the alleged act, error or omission was not reasonably discoverable within a two (2) year period; or that the claimant failed to discover the alleged act, error or omission within the two (2) year period despite the exercise of due diligence. Wyo. Stat. Ann. § 1-3-107(a)(i)(A) and (B). In this case, the Plaintiffs have not provided any admissible evidence showing that either of the exceptions under Wyo. Stat. Ann. § 1-3-107(a)(i) applies to the claims asserted against Defendants Sargent and Moulton in this case. The licensed or certified professional services (e.g ., the plans and specifications) provided by Defendants Sargent and Moulton were completed and available to Plaintiffs as of June 4, 2004. The Court finds and concludes as a matter of law that the claims asserted by the Plaintiffs against Defendants Sargent and Moulton are barred by the statute of limitations.

[¶14] On January 18, 2017, the district court issued a final order granting summary judgment to Sargent.³ Pioneer thereafter filed a timely notice of appeal to this Court.

STANDARD OF REVIEW

[¶15] This Court reviews a district court’s grant of summary judgment as follows:

We review a district court’s order granting summary judgment de novo and afford no deference to the district court’s ruling. Thornock v. PacifiCorp , 2016 WY 93, ¶ 10, 379 P.3d 175, 179 (Wyo. 2016). This Court reviews the same materials and uses the same legal standard as the district court. Id . The record is assessed from the vantage point most favorable to the party opposing the motion ..., and we give a party opposing summary judgment the benefit of all favorable inferences that may fairly be drawn from the record. Id . A material fact is one that would have the effect of establishing or refuting an essential element of the cause of action or defense asserted by the parties. Id .

White v. Wheeler , 2017 WY 146, ¶ 14, 406 P.3d 1241, 1246 (Wyo. 2017) (quoting The Tavern, LLC v. Town of Alpine , 2017 WY 56, ¶ 46, 395 P.3d 167, 178-79 (Wyo. 2017) ).

DISCUSSION

A. Two-Year Statute of Limitations and Exceptions

[¶16] Wyo. Stat. Ann. § 1-3-107 sets the statute of limitations for professional negligence claims, and it provides in relevant part:

(a) A cause of action arising from an act, error or omission in the rendering of licensed or certified professional or health care services shall be brought within the greater of the following times:

(i) Within two (2) years of

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