Stribling Invs., LLC v. Mike Rozier Constr. Co.

• Decision Date: 14 January 2016
• Docket Number: No. 2013–CA–02145–SCT.,2013–CA–02145–SCT.
• Citation: 189 So.3d 1216
• Parties: STRIBLING INVESTMENTS, LLC v. MIKE ROZIER CONSTRUCTION COMPANY, INC.
• Court: Mississippi Supreme Court

189 So.3d 1216

STRIBLING INVESTMENTS, LLC

v.MIKE ROZIER CONSTRUCTION COMPANY, INC.

No. 2013–CA–02145–SCT.

Supreme Court of Mississippi.

Jan. 14, 2016.

Rehearing Denied May 5, 2016.

Mark D. Herbert, Jackson, Bradford Coleman Ray, Jackson, attorneys for appellant.

Charles G. Copeland, Timothy John Sterling, Ridgeland, attorneys for appellee.

EN BANC.

COLEMAN, Justice, for the Court:

¶ 1. Stribling Investments, LLC, sued Mike Rozier Construction Company, Inc., alleging negligence and negligent construction. The trial court granted Mike Rozier Construction's Motion for Summary Judgment and dismissed Stribling Investments' Complaint on the ground that Mike Rozier Construction did not owe a duty to Stribling Investments. Stribling Investments appeals. Holding that the trial court should consider whether the builder-vendor rule applies to Mike Rozier Construction Company, we reverse.

FACTS AND PROCEDURAL HISTORY

¶ 2. In December 2005, D.G. Gluckstadt, LLC (a nonparty to the suit), bought property on Yandell Road in Gluckstadt, Mississippi, and entered into a lease with Dollar General. Mike Rozier and his son formed D.G. Gluckstadt solely to buy property in Gluckstadt, build a Dollar General Store, and then sell the property and assign the Dollar General lease to a subsequent buyer.

¶ 3. The lease between D.G. Gluckstadt, as Lessor, and Dollar General, as Lessee, provided D.G. Gluckstadt with Dollar General's standard plans to build a store and parking lot. Specifically, the lease required D.G. Gluckstadt to

[c]onstruct a building per the attached Lessee approved site plan (showing building ingress and egress) using the Lessee's Prototype Design Package (both documents attached hereto and made a part of the Lease). Demised Premises to be complete, in compliance with all governing code authorities and ready for Lessee's immediate occupancy. Dimensions of Demised Premises to be as listed.

The Dollar General prototype plans included grading and paving options for the heavy-duty section of the parking lot, but provided an exception in the event that a certified geotechnical report specified an alternate method of construction.

¶ 4. D.G. Gluckstadt then sent a project budget to Dollar General to help determine the lease amount, calculating a $30,000 cost of building the parking lot. The project budget also stated that an additional $30,000 would be used for "earthwork," including grading, excavating, filling, and degrassing the site. D.G. Gluckstadt claims that it then hired Mike Rozier Construction Company, Inc. ("Rozier Construction"), to construct the building and the parking lot. Mike Rozier also owns Rozier Construction. No formal written agreement existed between Rozier Construction and D.G. Gluckstadt. According to Mike Rozier, "I do not write contracts to myself."

¶ 5. Before construction, Ladner Testing Laboratories was hired to test the soil and recommend the best way to build the parking lot. Rozier Construction did not follow the construction recommendations from Ladner Laboratories, nor did it excavate the ground according to the project budget. Rozier Construction degrassed the area for the parking lot, installed between three and eight feet of fill, and laid a slab. Rozier Construction did not check the moisture level of the soil. It also did not utilize any steel rebarb or geotechnical fabric to stabilize the parking lot. Rozier Construction claims that it informed D.G. Gluckstadt of all of the above, and that D.G. Gluckstadt waived the duty of workmanlike construction. Rozier Construction states that D.G. Gluckstadt "made an informed economic decision" to construct a less-expensive parking lot than that recommended by Ladner Laboratories and Dollar General's prototype plan, all considered with "full knowledge and appreciation of the costs and benefits of the construction design and methods."

¶ 6. Other than Mike Rozier's depositions, the record does not contain any evidence that Rozier Construction communicated the means of construction to D.G. Gluckstadt, let alone that D.G. Gluckstadt approved those means. In fact, during his deposition, Rozier stated that he was not sure whether he had ever seen the 2005 Ladner Report. Further, as Rozier owned both companies, for Rozier Construction to present facts and options to D.G. Gluckstadt would mean that Mike Rozier presented them to himself (and, perhaps, his son.)

¶ 7. In 2006, at the end of construction, D.G. Gluckstadt sold the building and land to Stribling Investments, LLC, and assigned to it the Dollar General lease. Prior to purchase, Stribling procured an inspection performed by a licensed contractor that did not reveal any visual cracks or other issues in the parking lot. The contract between D.G. Gluckstadt and Stribling did not disclose the subsoil conditions. The land sale contract between D.G. Gluckstadt and Stribling contained an "as-is clause" that stated:

It is understood and agreed that the property is being sold "as is"; that Buyer has, or will have prior to the Closing Date, Inspected the Property; and that neither Seller nor Agent makes any representation or warranty as to the physical condition or value of the Property or its suitability for Buyer's intended use.

After the lot began showing signs of deficiencies and deterioration and an April 2012 analysis and report from Ladner Testing Laboratories indicated poor construction, Stribling contacted Rozier Construction and made a demand for repairs. When Rozier Construction did not respond, Stribling filed suit against Rozier Construction in the Circuit Court of Madison County, alleging negligent design and negligent construction of the parking lot.

¶ 8. The trial judge granted summary judgment in favor of Rozier Construction. The trial judge found that "[t]he plaintiff has not shown any ‘summary judgment’ proof that the Defendant failed to construct the parking lot in question according to the specifications required according to its verbal contract with D.G." The instant appeal followed.

ISSUE

¶ 9. We address the issue of whether genuine issues of material fact exist and preclude summary judgment in favor of Rozier Construction. Resolving this question requires us to address the following:

I. Whether D.G. Gluckstadt indeed waived the duty owed by Rozier Construction such that Stribling cannot invoke it.

II. Whether the sale contract's "as-is" clause bars Stribling's suit against Rozier Construction.

STANDARD OF REVIEW

¶ 10. The grant or denial of a summary judgment motion is reviewed de novo. Town Creek Master Water Mgmt. Dist. of Lee, Pontotoc, Prentiss, Union Ctys. v. Webb, 93 So.3d 20, 24 (¶ 9) (Miss.2012). "[The] Court, as well as the trial court, considers all evidentiary matters before it-admissions in pleadings, answers to interrogatories, depositions, affidavits, etc." Rein v. Benchmark Constr. Co., 865 So.2d 1134, 1142 (¶ 24) (Miss.2004). The Court views the evidence in a light most favorable to the nonmoving party. "The moving party has the burden to show no genuine issue of material fact exists." Cade v. Beard, 130 So.3d 77, 81 (¶ 11) (Miss.2014). The opposing party must then set forth specific facts to show a genuine issue for trial. Id. Summary judgment is proper if "there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." Rein, 865 So.2d at 1142 (¶ 25).

ANALYSIS

¶ 11. We reverse the grant of summary judgment because whether Rozier Construction and D.G. Gluckstadt had a builder-vendor relationship serves as an issue of material fact. If so, D.G. Gluckstadt would be ineligible to "waive" Rozier Construction's duties to the first purchaser of the property. At the hearing on Rozier Construction's Motion for Summary Judgment, Stribling did not use the term "builder-vendor," but Stribling's main argument in opposition to the Motion was that Mike Rozier owned both companies and therefore could not give notice to himself of any defects, nor could he waive duties owed to himself when the purpose of the construction was for sale to another party.

¶ 12. For years, Mississippi has embraced the duty of workmanlike construction for homes.

The purchase of a home is quite frequently the most important and expensive investment that a family makes. Yet, most purchasers simply do not have the knowledge or expertise necessary to discover many defects. They must instead rely upon the honesty and expertise of the builder. Consequently, if the home is poorly constructed with latent defects, the purchaser may very well be subject to a major financial catastrophe against which he has no practical means of protecting himself.

Keyes v. Guy Bailey Homes, Inc., 439 So.2d 670, 671–72 (Miss.1983). In addition, contractors and construction companies have a duty to disclose defects in fills and subsoils upon which the construction is to take place, regardless of the commercial or residential nature of the construction.

Pike v. Howell, 748 So.2d 710, 712 (¶ 6) (Miss.1999) ; George B. Gilmore Co. v. Garrett, 582 So.2d 387, 393 (Miss.1991).

¶ 13. In Pike, the Court decided a case in which the owner of a gas station had alleged negligent construction of its concrete pad. The Court narrowed the issue on appeal, stating that "[q]uite simply, this case deals with notice and waiver." Id. at 712 (¶ 6). A contractor has a well-established duty to warn of defects in the subsoil, the Court stated, and Howell Building Supply had fulfilled that duty when it pointed out the problems to the owner. Id. By contrast, a contractor "does not perform his contractual obligations in a workmanlike manner if he fails to notify the owner of the existence of the condition." Id. (internal citation removed.) The Court held that, by then choosing to go ahead with her plans after hearing of the subsoil defects, the owner had waived objection to the subsoil defects and any harm that potentially might result in the gas station's concrete pad. Id. at 713 (¶ 8).

¶ 14. Rozier Construction argues that it had an oral contract...