Reinke Mfg. Co., Inc. v. Hayes

• Decision Date: 12 March 1999
• Docket Number: E-H,No. S-98-101,S-98-101
• Citation: Reinke Mfg. Co., Inc. v. Hayes, 590 N.W.2d 380, 256 Neb. 442 (Neb. 1999)
• Parties: REINKE MANUFACTURING COMPANY, INC., A Nebraska Corporation, Appellant, v. Edward David HAYES, Doing Business AsEngineering, Appellee.
• Court: Nebraska Supreme Court

Page 380

590 N.W.2d 380

256 Neb. 442

REINKE MANUFACTURING COMPANY, INC., A Nebraska Corporation, Appellant, v.Edward David HAYES, Doing Business As E-H Engineering, Appellee.

No. S-98-101.

Supreme Court of Nebraska.

March 12, 1999.

Syllabus by the Court

1.Summary Judgment.Summary judgment is proper only when the pleadings, depositions, admissions, stipulations, and affidavits in the record disclose that there is no genuine issue as to any material fact or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.

2.Summary Judgment: Appeal and Error.In appellate review of a summary judgment, the court views the evidence in a light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence.

3.Limitations of Actions: Appeal and Error.Which statute of limitations applies is a question of law that an appellate court must decide independently of the conclusion reached by the trial court.

4.Limitations of Actions: Contracts.Nev.Rev.Stat. § 25-205(Reissue 1995) is a general statute of limitations for written contract claims.

5.Limitations of Actions: Malpractice.Nev.Rev.Stat. § 25-222(Reissue 1995) is a special statute of limitations for professional negligence.

6.Limitations of Actions: Contracts.Generally, absent a more specific statute, actions on written contracts may be brought within 5 years pursuant to Nev.Rev.Stat. § 25-205(Reissue 1995).

7.Limitations of Actions: Legislature: Intent.A special statute of limitations controls and takes precedence over a general statute of limitations because the special statute is a specific expression of legislative will concerning a particular subject.

8.Limitations of Actions: Malpractice.If all of a plaintiff's claims are based on a single professional relationship, they may not be separated into various parts to allow different periods of limitation to be applied.

9.Limitations of Actions: Malpractice: Torts: Contracts.If a plaintiff's claims are for professional malpractice, whether pled in tort or contract, the statute of limitations for professional negligence contained in Neb.Rev.Stat. § 25-222(Reissue 1995) applies.

10.Limitations of Actions.Neb.Rev.Stat. § 25-222(Reissue 1995) contains the limitations period applicable to an engineer rendering professional services.

11.Words and Phrases.In determining whether a particular act is of a professional nature or a professional service, the court must look to the nature of the act itself and the circumstances under which it was performed.

12.Words and Phrases.A professional act or service is one arising out of a vocation, calling, occupation, or employment involving specialized knowledge which is attained from often long and intensive preparation and instruction in skills and methods and the scientific, historical, and scholarly principles underlying such skills and methods.

13.Limitations of Actions: Malpractice.Nebraska follows the occurrence rule, under which a professional negligence suit accrues at the time of the act or omission causing injury.

14.Limitations of Actions: Malpractice.A cause of action for professional negligence accrues when the alleged act or omission in rendering or failure to render professional services takes place.

15.Malpractice: Damages: Words and Phrases.In a cause of action for professional negligence, legal injury is the wrongful act or omission which causes the loss; it is not damage, which is the loss resulting from the misconduct.

16.Limitations of Actions.A period of limitations begins to run upon the violation of a legal right, that is, when the aggrieved party has the right to institute and maintain suit.

17.Limitations of Actions: Appeal and Error.The point at which a statute of limitations begins to run must be determined from the facts of each case, and the decision of the district court on the issue of the statute of limitations normally will not be set aside by an appellate court unless clearly wrong.

18.Limitations of Actions: Malpractice.If the facts in a case are undisputed, the issue as to when the professional negligence statute of limitations began to run is a question of law.

19.Limitations of Actions: Damages.A limitation period may begin to run even though the nature and extent of the damages are not known.

20.Limitations of Actions.For a limitation period to begin to run, it is not necessary that a plaintiff have knowledge of the exact nature or source of a problem, but only that a problem exists.

21.Limitations of Actions: Damages.One need not know the full extent of one's damages before the limitation period begins to run, as a statute of limitations can be triggered at some time before the full extent of damages is sustained.

22.Limitations of Actions: Damages.Words and Phrases.In the context of statutes of limitations, "discovery" refers to the fact that one knows of the existence of an injury or damage, regardless of whether there is awareness of a legal right to seek redress in court.

23.Limitations of Actions: Words and Phrases.Discovery of an act or omission occurs when the party knows of facts sufficient to put a person of ordinary intelligence and prudence on inquiry which, if pursued, would lead to the discovery of facts constituting the basis of the cause of action.

24.Malpractice: Limitations of Actions.The discovery exception permits an action to be commenced within 1 year from discovery where the cause of action could not have reasonably been discovered during the 2-year limitation period of Nev.Rev.Stat. § 25-222(Reissue 1995).However, if facts are discovered that constitute the basis of a cause of action within 2 years from the alleged act of negligence, the discovery exception to the statute of limitations is inapplicable.

25.Limitations of Actions: Malpractice: Words and Phrases.In order for a continuous relationship to toll the statute of limitations regarding a claim for malpractice, there must be a continuity of the relationship and services for the same or related subject matter after the alleged professional negligence.

26.Limitations of Actions: Malpractice.In a cause of action for professional negligence, the continuous representation rule is inapplicable when a claimant discovers the alleged negligence prior to the termination of the professional relationship.

27.Limitations of Actions: Malpractice.In a cause of action for professional negligence, a party may not avail itself of the continuous representation rule if the tort committed is neither continuous nor unlikely to be discovered prior to the termination of the professional relationship.

Joseph H. Murray, of Germer, Murray & Johnson, Hebron, and Gregory C. Damman, Seward, for appellant.

Robert T. Grimit and Darin J. Lang, of Baylor, Evnen, Curtiss, Grimit & Witt, Lincoln, for appellee.

HENDRY, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

I.INTRODUCTION

HENDRY, C.J.

This is an action arising from a contract for engineering design services.Appellant, Reinke Manufacturing Company, Inc.(Reinke), appeals from an order granting summary judgment to appellee, Edward David Hayes, doing business as E-H Engineering (Hayes), on the basis that Reinke's claims were barred by the 2-year statute of limitations applicable to professional negligence, Nev.Rev.Stat. § 25-222(Reissue 1995).For the reasons that Reinke's professional negligence claims accrued more than 2 years prior to the filing of its cause of action and we find no exception tolling the statute of limitations, we affirm.

II.FACTUAL BACKGROUND

Reinke is a Nebraska corporation engaged in the manufacture and sale of agricultural center-pivot irrigation systems.On June 18, 1991, Reinke entered into an agreement for "engineering design services" with Hayes.The agreement established that Hayes would provide Reinke with engineering design services for the review, design, development, and documentation of the "CENTER PIVOT MASTER CONTROLLER SYSTEM"(the system).

In the spring of 1992, Reinke manufactured and sold approximately 35 center-pivot irrigation systems that were equipped with the system designed and developed by Hayes pursuant to the agreement.Thereafter, Reinke began receiving complaints from its customers regarding the system.After receiving these complaints, Reinke, with the assistance of Hayes, undertook to correct the reported problems.On November 7, Reinke created a document that detailed the alleged defects and deficiencies of the system which were known to Reinke at that time.

Reinke alleges that in February 1993, it decided to seek the assistance of another engineering firm to work with Hayes toward solving the reported problems with the system.On May 7, Reinke hired engineers from Applied Micro Technology to work on the system.Although Hayes contends that he had completed all design and engineering work or services for Reinke prior to November 16, 1992, Reinke alleges that Hayes continued to work on the system and consult with Reinke until July 1993.Reinke further asserts that it did not became aware of the full extent and magnitude of the defects contained in the system until July 1993, when the new engineers advised Reinke that it would take more than minor fine-tuning and adjustment to correct the problems its customers had reported.On November 17, 1993, Reinke wrote a letter to Hayes and made a specific demand for damages resulting from the alleged design defects.

III.PROCEDURAL BACKGROUND

On November 30, 1994, Reinke filed a petition in the district court for Thayer County, Nebraska, alleging that Hayes had been negligent and had breached his contract with Reinke.In response, Hayes filed a demurrer, which the court sustained on the ground that Reinke failed to allege a fundamental act of negligence...