Samuel Roberts Noble Foundation, Inc. v. Vick

• Decision Date: 13 October 1992
• Docket Number: No. 73757,73757
• Citation: 1992 OK 140,840 P.2d 619
• Parties: The SAMUEL ROBERTS NOBLE FOUNDATION, INC., Appellant, v. Alonzo VICK d/b/a Southern Oklahoma Testing and Engineering, Appellee.
• Court: Oklahoma Supreme Court

Page 619

840 P.2d 619

1992 OK 140

The SAMUEL ROBERTS NOBLE FOUNDATION, INC., Appellant, v. Alonzo VICK d/b/a Southern Oklahoma Testing and Engineering, Appellee.

No. 73757.

Supreme Court of Oklahoma.

Oct. 13, 1992.

Certiorari to the Court of Appeals, Division No. 3.

Certiorari granted to review the opinion of the Court of Appeals which reversed the trial court's grant of summary judgment. Defendant successfully asserted below that plaintiff's cause of action, advanced both on theories of tort and breach of contract, was barred by the statute of limitations. HELD: (1) that the limitations period of an action based on breach of a construction contract begins at the contract's completion; (2) that there remains a question of fact as to when this defendant last performed under his contract with plaintiff; and (3) the limitations period for professional negligence in construction begins when the defect is or should have been discovered.

CERTIORARI PREVIOUSLY GRANTED; COURT OF APPEALS OPINION VACATED; SUMMARY JUDGMENT AFFIRMED AS TO TORT THEORY; REVERSED AS TO CONTRACT THEORY; MATTER REMANDED.

George D. Davis, Connie M. Bryan, McKinney, Stringer & Webster, P.C., Oklahoma City, Michael A. Cawley, Thompson & Cawley, Ardmore, for appellant.

Patrick M. Ryan, Phillip G. Whaley, Ryan, Corbyn & Geister, Oklahoma City, for appellee.

SUMMERS, Justice:

The new administration building for the Noble Foundation in Ardmore was completed in August, 1984. Almost immediately the owners noticed signs that the foundation and slab had moved. This appeal deals only with the owner's suit against the soil engineer, filed January 23, 1989, and specifically with whether the Foundation's claims based on theories of breach of contract and/or professional negligence are barred by the statute of limitations. We hold that the District Court's order dismissing the case on that basis was correct as to the tort aspect, but in error as to that part of the claim based on contract. We affirm in part, reverse in part, and remand.

I. FACTS AND PROCEDURAL POSTURE

Defendant Alonzo Vick was the soil engineer who contracted with the Plaintiff Samuel Roberts Noble Foundation, Inc. to perform investigation and analysis in connection with the construction of the new building. He performed tests on the soil prior to the beginning of construction and gave an opinion as to what type of foundation should be used, for the benefit of the architect and general contractor. He completed his work and report in July 1983. In February of 1984 the general contractor consulted Vick again, and Vick furnished a report including test results on fill under the floor slab. The building was completed in August 1984.

It immediately began to show signs of an infirm foundation. Tiles popped up and doors began to stick. Plaintiff sued all parties involved in the construction ¹ after getting an independent company to evaluate the problem. This suit, sounding in both contract and tort, was brought in January 1989.

Vick moved for summary judgment based on the statute of limitations. He asserted that the contract theory was barred by the five-year statute on written contracts, and that the tort theory was barred by the two-year period, both as set forth in 12 O.S.1991 § 95. Vick stated that his contract was fully performed in July 1983, that the Foundation discovered the problem in 1984, and therefore the January, 1989 suit was barred as to both theories.

The Foundation urged that the statute of limitations for a construction contract does not begin until the construction is completed. Because it was completed in August 1984, the Foundation urged that suit for breach of contract was brought within five years and therefore timely. As for the tort action, the Foundation urged that although it was earlier aware of problems, it did not know of the exact source of the problems until 1987, and thus its claim in negligence was also timely.

The trial court ruled limitations barred the claim on both theories, and rendered judgment for Defendant. The Foundation filed a motion to reconsider, urging that newly-discovered evidence showed that Vick's contractual obligation was ongoing at least until February 1984. The trial court left the result undisturbed. Plaintiff appealed. The Court of Appeals reversed and reinstated the case, relying on Wills v. Black & West Architects, 344 P.2d 581 (Okla.1959) and 12 O.S.1991 § 109. We have granted certiorari.

II. THE CONTRACT ACTION

In its petition the plaintiff Foundation alleged the breach of a written contract entered into with defendant Vick for engineering work. Title 12 O.S.1991 § 95 (1st) states that an action upon any contract, agreement or promise in writing shall be Generally a cause of action accrues at the moment the party owning it has a legal right to sue. Loyal Order of Moose, Lodge 1785 v. Cavaness, 563 P.2d 143, 146 (Okla.1977). When applied to construction contracts the general rule is that the limitations period does not begin until the work is completed. Roberts v. Richard & Sons, 113 N.H. 154, 304 A.2d 364, 365 (1973). The completion of the construction is the accrual date for a plaintiff's claim for breach of contract against a general contractor. State v. Lundin, 91 A.D.2d 343, 459 N.Y.S.2d 904, 906-7 (1983). The rationale behind this rule is that there is no breach for defective performance if the defects can be remedied by the date of completion. Id. In Wills v. Black & West, 344 P.2d at 584, we applied that general rule when dealing with an architect who had contracted to plan and supervise a construction project. Relying on the date of completion, the trial court dismissed the action because more than five years had passed. We affirmed the dismissal, holding that the action was barred by the statute of limitations for written contracts.

brought within five years from the accrual of the action. Vick asserted that his contract was completed in July, 1983, and thus the action brought in January 1989 was time-barred. The Foundation, on the other hand, urges that Vick's contract was simply part of the general construction contract. The Foundation asserts that the limitations period for such construction contracts does not begin to run until the construction is completed.

The Foundation urges that this general rule should be applied to Vick. The Foundation apparently considers Vick's contract to be part of the entire construction contract. With this in mind, we first turn to the question of whether the general rule is the law of Oklahoma. In recent years there has been some judicial deviation from the rule. Many courts hold, as stated above, that the action accrues at the time of the breach, and the breach necessarily occurs at the completion of the building. See Roberts, 304 A.2d at 365; Twin Falls Clinic v. Hamill, 103 Idaho 19, 644 P.2d 341, 345 (1982); Burke v. Hamilton Beach Division Scovill Manu. Co., 424 A.2d 145, 149 (Me.1981); State v. Lundin, 459 N.Y.S.2d at 906; South Burlington School District v. Goodrich, 135 Vt. 601, 382 A.2d 220, 222-23 (1977).

But others hold that it is completion of the particular subcontract in question which starts the running of the time period as to that subcontract. Pioneer Roofing Co. v. Mardian Constr. Co., 152 Ariz. 455, 733 P.2d 652, 660 (Ariz.Ct.App.1986); State v. Holland Plastics Co., 111 Wis.2d 497, 331 N.W.2d 320, 325 (1983); Beckenstein v. Potter and Carrier, 191 Conn. 150, 464 A.2d 18, 22 (1983) (each of the above three cases holding that on contract action for faulty roof, time period began running on completion of roof). A third approach is that the limitations period begins upon substantial completion of the project. Mahony-Troast Constr. Co. v. Supermarkets Gen. Corp., 189 N.J.Super. 325, 460 A.2d 149, 151 (1983); Fort Oglethorpe Assoc. II Ltd. v. Hails Constr. Co., 196 Ga.App. 663, 396 S.E.2d 585, 586 (1990).

Finally, some courts have extended the "discovery rule" to the arena of contracts, and hold that the statute of limitations begins to run when the owner knows or should have known of the defect in construction. Under this view the time of the construction's completion and the time of the actual breach are irrelevant. Boghossian v. Ferland Corp., 600 A.2d 288, 290 (R.I.1991); Ehrenhaft v. Malcolm Price Inc., 483 A.2d 1192, 1203-4 (D.C.App.1984); Georgetowne Ltd. Partnership v. Geotechnical Serv. Inc., 230 Neb. 22, 430 N.W.2d 34, 37 (1988); Amodeo v. Ryan Homes, 407 Pa.Super. 448, 595 A.2d 1232, 1235 (1991); Filcek v. Utica Bldg. Co., 131 Mich.App. 396, 345 N.W.2d 707, 709 (1984) (discovery rule applies unless statute specifically prohibits it). ²

We prefer the general rule that the limitations period begins to run when the Similarly, under a discovery rule, a defendant is never completely certain that time has extinguished his liability. Whereas in tort this concern was remedied by Section 109, the Oklahoma architects' and builders' statute of repose, the law of contracts is not affected by this legislation. Were we to allow application of a discovery rule in contract cases, the legislatively-adopted public policy expressed by Section 109 of limiting a builder's liability after a certain time lapse would be defeated; a builder's liability for breach of contract could extend indefinitely. We reject extension of the discovery rule to suits for breach of contracts involving construction.

                contract is completed. 3  The other three views lend themselves to uncertainty.  For example, a plaintiff may not be aware of when a particular subcontract is finished.  See, e.g., Witherspoon v. Sides Constr.  Co., 219 Neb. 117, 362 N.W.2d 35 (1985).  The limitations period might begin for one or more subcontracts several months or years before the construction is completed
                

We believe Wills v. Black & West states the best rule: In a breach of contract action arising out of a construction contract, the statute of limitations begins at the completion of the construction...