Union Local Sch. Dist. v. Grae-Con Constr., Inc.

• Decision Date: 18 November 2019
• Docket Number: No. 17 BE 0043,17 BE 0043
• Parties: UNION LOCAL SCHOOL DISTRICT, BOARD OF EDUCATION, Plaintiff-Appellant, v. GRAE-CON CONSTRUCTION, INC., et al., Defendants-Appellees.
• Court: Ohio Court of Appeals

137 N.E.3d 122

2019 Ohio 4877

UNION LOCAL SCHOOL DISTRICT, BOARD OF EDUCATION, Plaintiff-Appellant,

v.GRAE-CON CONSTRUCTION, INC., et al., Defendants-Appellees.

No. 17 BE 0043

Court of Appeals of Ohio, Seventh District, Belmont County.

Dated: November 18, 2019

Atty. Gary W. Smith, Smith Law Firm, 316 South Main Street, P.O. Box 599, Woodsfield, Ohio 43793, for Plaintiff-Appellant and

Atty. John T. Murphy, Atty. P. Kohl Schneider, Atty. Colleen A. Mountcastle, Atty. Richard Rezie, Gallagher Sharp LLP, Sixth Floor Bulkley Building, 1501 Euclid Avenue, Cleveland, Ohio 44115, Atty. Melvin F. O'Brien, Atty. John R. Seeds, Dickie, McCamey & Chilcote, P.C., 2001 Main Street, Suite 501, Wheeling, West Virginia 26003; Atty. Scott J. Davis, Atty. Stephen C. Merriam, The Law Office of Stephen J. Proe, The Genesis Building, 6000 Lombardo Center, Suite 420, Seven Hills, Ohio 44131; Atty. David Patterson, Atty. Frederick Bills, Weston Hurd, LLP, 10 West Broad Street, Suite 2400, Columbus, Ohio 43215 for Defendants-Appellees.

BEFORE: Carol Ann Robb, Gene Donofrio, David A. D'Apolito, Judges.

OPINION AND JUDGMENT ENTRY

Robb, J. {¶1} Plaintiff-Appellant Union Local School District Board of Education appeals the decision of the Belmont County Common Pleas Court granting summary judgment in favor of Defendants-Appellees Grae-Con Construction Inc. and Fanning/Howey Associates Inc., the general contractor and the architectural firm, respectively, on the school building project. The trial court found the school district's breach of contract claims barred by the ten-year construction statute of repose in R.C. 2305.131. The school district originally argued this statute of repose is limited to tort claims and does not apply to contract claims, relying on the Ohio Supreme Court's Kocisko case, which found a former version of the statute applied to only tort claims. However, the Supreme Court recently ruled, in New Riegel Local School District Board of Education , that its prior case law on the statute of repose in R.C. 2305.131 was not stare decisis due to the differences in the statutory versions and that the current version applies to bar contract as well as tort claims.

{¶2} In a supplemental brief, the school district raises an issue the New Riegel Court refused to address, arguing a claim which accrued during the ten-year period is not affected by the statute of repose. This argument is overruled for the various reasons expressed herein.

{¶3} Alternatively, the school district contends the court could not constitutionally apply the statute of repose as it has the same effect as the prior version ruled unconstitutional in the Supreme Court's Brennaman case. However, the trial court was not precluded from applying the current statute of repose by Brennaman as that case is not stare decisis on the new statute of repose and the holding therein is no longer followed. Accordingly, the trial court's judgment is affirmed.

STATEMENT OF THE CASE

{¶4} The school district entered contracts to construct a new elementary school and renovate the middle and high schools. The contract with Fanning/Howey Associates Inc. for architectural, engineering, and construction administration services was entered in 1995. The school district hired Grae-Con Construction Inc. to serve as the general contractor on the project in 1996.

{¶5} A certificate of substantial completion was issued for the middle school on April 15, 1998 and signed by school district representatives on May 12, 1998 and August 6, 1998. The certificate said the date of substantial completion was October 31, 1997 and the owner assumed responsibility for maintenance and damage to the work as of that date. The parties agree these dates are also applicable to the high school.¹

{¶6} As to the elementary school, a certificate of substantial completion was issued on October 5, 1998 and signed by the school district on October 19, 1998. This certificate said the owner assumed responsibility for maintenance and damage to the work on the following dates of substantial completion: July 21, 1998 for the elementary school, August 26, 1998 for the kitchen, and September 24, 1998 for the site work.

{¶7} In 2008, the elementary school experienced noxious odors, discolored walls, and mold, and the high school experienced water infiltration and other damage. On July 23, 2012, the school district filed a complaint against the general contractor and the architectural firm as a result of these issues with the elementary and high schools. The complaint stated that inspections and testing (performed in 2008 after experiencing the problems) revealed defects in the construction of the elementary and high school buildings which allowed water to infiltrate and to damage interior and exterior surfaces. The school district alleged breach of contract for failure to perform in a workmanlike manner, to substantially perform all contracted work, and to complete it in accordance with warranties, industry standards, and any applicable codes.

{¶8} The defendants filed motions for summary judgment, arguing the school district's claims were barred by the ten-year construction statute of repose in R.C. 2305.131(A)(1), which period began on the date of substantial completion. The defendants observed: the dates specifically set forth in the certificates as the substantial completion dates were October 31, 1997 for the high school and July 21, 1998 for the elementary school; even using the later dates when the certificates were signed, the time in R.C. 2305.131 still expired before the complaint was filed; although the statute of repose provides extra time to a plaintiff who discovers the issue in the final two years of the ten-year period, the school district failed to file the complaint within two years of the 2008 discoveries as required by R.C. 2305.131(A)(2).

{¶9} In applying the statute of repose to the school district's contract claims, the defendants urged that the statute was not limited to tort claims. They asserted the Supreme Court's Kocisko case, which held the prior version of the statute applied only to tort actions, was not precedent on the current version of the statute, which was very different. The defendants preemptively argued that the Supreme Court's Brennaman case (which found R.C. 2305.131 violated the constitutional right-to-remedy clause for a tort plaintiff who was injured after the statutory period expired) was not binding as it applied to a prior and different version of the statute.²

{¶10} The school district's memorandum in opposition to summary judgment said it was not pursuing a tort claim, the statute of repose only barred tort claims, and without an applicable statute of repose, its contract claims were subject only to the 15-year statute of limitations (which allegedly had not yet run). The school district claimed the current statute of repose was substantially similar to the prior version and the court was thus bound by Ohio Supreme Court law such as Kocisko , which held the prior version of the statute was inapplicable to contract claims.

{¶11} The school district also briefly stated the current statute could not be constitutionally applied to deny their cause of action as it has the same effect as the prior version of the statute which was ruled unconstitutional in the Ohio Supreme Court's Brennaman case. In reply, the defendants argued that not only was Brennaman inapplicable to the new statute of repose, but the Supreme Court effectively overruled Brennaman in later cases.

{¶12} On October 19, 2017, the trial court granted summary judgment for the defendants. The court found: the work was completed in 1998, with the last certificate of substantial completion provided in October 1998; the school district discovered problems with both buildings in 2008, which was three years after the statute of repose went into effect; the complaint was not filed until 2012; and the school district stipulated that the complaint set forth only contract claims. The court concluded the plain language of R.C. 2305.131 applied not only to tort claims but also to contract claims and the school district's claims were barred by the ten-year construction statute of repose.³

{¶13} The school district filed this timely appeal, and briefing closed on May 30, 2018. On August 3, 2018, we issued a stay pending the release of a pertinent case which had been accepted for review by the Ohio Supreme Court. On July 17, 2019, the Supreme Court issued its decision in New Riegel Local School Dist. Bd. of Edn. v. Buehrer Group Architecture & Eng. Inc. , 157 Ohio St. 3d 164, 2019-Ohio-2851, 133 N.E.3d 482. We ordered any supplemental briefs addressing the ramifications of the New Riegel decision to be filed within 30 days of the release of the Supreme Court's decision. Timely supplemental briefs were filed by the defendants on August 16, 2019. The school district filed an untimely supplemental brief on September 17, 2019 but leave was granted to file instanter.

STATUTE OF REPOSE

{¶14} Although a statute of repose and a statute of limitations both limit the time during which one must be prepared to defend a claim, they have distinct applications. Antoon v. Cleveland Clinic Found. , 148 Ohio St.3d 483, 2016-Ohio-7432, 71 N.E.3d 974, ¶ 11, citing CTS Corp. v. Waldburger , 573 U.S. 1, 7, 134 S.Ct. 2175, 2182, 189 L.Ed.2d 62 (2014). A statute of limitations provides "a time limit for suing in a civil case, based on the date when the claim accrued (as when the injury occurred or was discovered)." Antoon , 148 Ohio St.3d 483, 71 N.E.3d 974, quoting Black's Law Dictionary 1636 (10th Ed.2014). See also CTS Corp. , 573 U.S. at 8, 134 S.Ct. 2175 (a statute of limitations requires the diligent prosecution of known claims). For instance, the statute of limitations applicable to written contracts stated (at the time⁴ ) that the action "shall be brought within fifteen years after the cause thereof accrued." R.C. 2305.06.

{¶15} "A statute of repose, on the...