Utilities Bd. of Opp v. Shuler Bros., Inc.

• Court: Alabama Supreme Court
• Writing for the Court: PER CURIAM.
• Citation: Utilities Bd. of Opp v. Shuler Bros., Inc., 138 So.3d 287 (Ala. 2013)
• Decision Date: 23 August 2013
• Docket Number: 1111558.
• Parties: UTILITIES BOARD OF the CITY OF OPP v. SHULER BROTHERS, INC.

138 So.3d 287

UTILITIES BOARD OF the CITY OF OPP

v.SHULER BROTHERS, INC.

1111558.

Supreme Court of Alabama.

June 21, 2013.

Rehearing Denied Aug. 23, 2013.

James H. Pike of Shealy, Crum & Pike, P.C., Dothan, for appellant.

H. Hampton Baxley of Ramsey, Baxley & McDougle, Dothan, for appellee.

PER CURIAM.

The Utilities Board of the City of Opp (“the Utilities Board”), the third-party defendant below, appeals from the Houston Circuit Court's August 9, 2012, order denying its motion to dismiss, on statute-of-limitations grounds, the third-party complaint filed against it by Shuler Brothers, Inc. We affirm in part, reverse in part, and remand.

Facts and Procedural History

On January 18, 2012, Alabama Electric Company, Inc. of Dothan (“AEC”) filed a complaint against Shuler Brothers, which owns and operates a wood-chipping operation. In the complaint, AEC stated claims seeking recovery for work and labor done and alleging breach of contract after Shuler Brothers refused to pay an invoice for repairs AEC had made to Shuler Brothers' chipper motor. On March 23, 2012, Shuler Brothers filed an answer to the complaint and a counterclaim alleging negligence and seeking recovery for lost income.

On March 27, 2012, Shuler Brothers filed a third-party complaint against the Utilities Board seeking recovery for loss of income and $145,545 for repairs to the chipper motor. In the third-party complaint, Shuler Brothers alleged that, in December 2009, it contacted AEC and asked it to remove and repair a large chipper motor that had recently failed. AEC performed the requested repair work, reinstalled the motor on January 20, 2010, and submitted an invoice for $75,000, which Shuler Brothers promptly paid.

Shuler Brothers also alleged that, on or about February 22, 2010, the motor suffered another failure, and it asked AEC to repair it. AEC performed the requested repair work, reinstalled the motor at Shuler Brothers' facility on March 11, 2010, and attempted to restart it. However, immediately after it was restarted, the motor suffered what appeared to be the same failure as before, and Shuler Brothers asked AEC to repair it, which AEC did.

According to paragraph 8 of Shuler Brothers' third-party complaint:

“[O]n March 23, 2010, [AEC] reinstalled the motor and, during start-up, was forced to shut it down before the engine failed again. [Shuler Brothers] contacted the Third–Party Defendant, the Utilities Board of the City of Opp, ... to investigate the incoming line problem. [T]he lineman from the [Utilities Board] discovered and replaced ‘3 crimped connectors' on the incoming side of the meter and pole that were loose, cracked and showing signs of recent and old arcing damage.”

Shuler Brothers alleged that the Utilities Board was negligent in maintaining the power lines going into Shuler Brothers' facility. It also alleged that it was foreseeable that, if the chipper motor failed, Shuler Brothers' business would be shut down and Shuler Brothers would lose income as a result. Therefore, it alleged that the Utilities Board owed it for the cost of the repairs AEC had sued it for. Finally, Shuler Brothers alleged that it did not discover the Utilities Board's negligence until it was served with the complaint by AEC.¹

On April 30, 2012, the Utilities Board filed a motion to dismiss the third-party complaint on statute-of-limitations grounds pursuant to Rule 12(b)(6), Ala. R. Civ. P. Specifically, it asserted that the negligence claim was governed by the two-year statute of limitations found in § 6–2–38, Ala.Code 1975. It also asserted that, even though Shuler Brothers suggested that it did not discover the Utilities Board's alleged negligence until it was served with the complaint by AEC, paragraph 8 of the third-party complaint, quoted above, established that Shuler Brothers should have been aware of the Utilities Board's alleged negligence as early as March 23, 2010. Therefore, the Utilities Board asserted that the third-party complaint, which was filed on March 27, 2012, was barred by the applicable two-year statute of limitations and should be dismissed.

On June 6, 2012, Shuler Brothers, which was represented by new counsel, amended its third-party complaint to add a claim alleging breach of contract. It alleged:

“[Shuler Brothers] avers that a contract existed/exists between the [Utilities Board] and [Shuler Brothers] whereby the [Utilities Board] had/has the duty to provide electrical power/service in a manner consistent with the safe and proper operation of [Shuler Brothers'] manufacturing facility as contracted. Said contract exists by virtue of the [Utilities Board] undertaking the responsibility to provide electrical power/service to [Shuler Brothers'] facility and the timely and consistent payments made by [Shuler Brothers] to the [Utilities Board] for the electrical power consumed.”

On June 7, 2012, Shuler Brothers filed a response in opposition to the Utilities Board's motion to dismiss the third-party complaint. It argued that, even though it included allegations in its complaint about the Utilities Board's replacing “3 crimped connectors,” it did not know at that time that the Utilities Board's negligence regarding the condition of the power line caused the chipper motor to malfunction. Shuler Brothers also argued that, even when it filed its counterclaim on March 23, 2012, it did not know whether the damage it suffered was caused by the negligence of AEC or of the Utilities Board. Therefore, citing Desouza v. Lauderdale, 928 So.2d 1035 (Ala.Civ.App.2005), it argued that there were genuine issues of material fact as to when its injury was first discovered and that those issues precluded a judgment on statute-of-limitations grounds.

The Utilities Board filed a motion to dismiss the amended third-party complaint, arguing that, for the reasons detailed hereinafter, Shuler Brothers' claims were barred by the two-year statute of limitations set forth in § 6–2–38( l ), Ala.Code 1975. Citing Rumford v. Valley Pest Control, Inc., 629 So.2d 623, 627 (Ala.1993), the Utilities Board asserted that, “ ‘[g]enerally, a cause of action for injury or damage to property accrues, so as to start the running of limitations, on the date of the injury or damage.’ ” (Quoting 54 C.J.S. Limitations of Actions § 176 (1987).) Also, citing Singer Asset Finance Co. v. Connecticut General Life Insurance Co., 975 So.2d 375, 382 (Ala.Civ.App.2007), it asserted that, although Shuler Brothers attempted to avoid the limitations bar by alleging that it did not discover the Utilities Board's negligence until it was served with the complaint, “there is no ‘discovery rule’ for negligence claims that would toll the running of the statute of limitations from the time the cause of action was ‘discovered’ by the plaintiff.” Regarding the breach-of-contract claim, the Utilities Board argued that Shuler Brothers' claim sounded in tort, rather than in contract, and that, therefore, the two-year limitations period set forth in § 6–2–38( l ), Ala.Code 1975, applied. The Utilities Board asserted that all the damage occurred on or before March 11, 2010, and that the statute of limitations commenced no later than that date. Therefore, it concluded that, because Shuler Brothers waited until March 27, 2012, to file its third-party complaint against it, its claims were barred by the two-year statute of limitations.

After conducting a hearing during which the parties presented arguments concerning the motion to dismiss, the trial court accepted briefs from the parties. Thereafter, it entered an order denying the Utilities Board's motion in which it explained: “Because factual issues remain as to when Shuler [Brothers] discovered that [its] damage[ ] may be the result of action/inaction or conduct by [the Utilities Board,] [its] motion to dismiss is ... denied.” The Utilities Board filed a motion to reconsider, which the trial court summarily denied.

The Utilities Board asked the trial court to certify its denial of the motion to dismiss for an appeal by permission pursuant to Rule 5, Ala. R.App. P. The trial court entered the requested certification, and the Utilities Board filed a petition for permissive appeal in this Court. This Court granted the petition and ordered answer and briefs.

Standard of Review

“ ‘The appropriate standard of review under Rule 12(b)(6)[, Ala. R. Civ. P.,] is whether, when the allegations of the complaint are viewed most strongly in the pleader's favor, it appears that the pleader could prove any set of circumstances that would entitle [it] to relief. Raley v. Citibanc of Alabama/Andalusia, 474 So.2d 640, 641 (Ala.1985); Hill v. Falletta, 589 So.2d 746 (Ala.Civ.App.1991). In making this determination, this Court does not consider whether the plaintiff will ultimately prevail, but only whether [it] may possibly prevail. Fontenot v. Bramlett, 470 So.2d 669, 671 (Ala.1985); Rice v. United Ins. Co. of America, 465 So.2d 1100, 1101 (Ala.1984). We note that a Rule 12(b)(6) dismissal is proper only when it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief. Garrett v. Hadden, 495 So.2d 616, 617 (Ala.1986); Hill v. Kraft, Inc., 496 So.2d 768, 769 (Ala.1986).’

“Nance v. Matthews, 622 So.2d 297, 299 (Ala.1993).”

DGB, LLC v. Hinds, 55 So.3d 218, 223 (Ala.2010).

“ ‘Inasmuch as the issue before us is whether the trial court correctly denied a Rule 12(b)(6), Ala. R. Civ. P., motion to dismiss, “[t]his Court must accept the allegations of the complaint as true.” Creola Land Dev., Inc. v. Bentbrooke Housing, L.L.C., 828 So.2d 285, 288 (Ala.2002). Moreover, as the defendants sought only a Rule 12(b)(6) dismissal without resort to facts supplied by affidavit or other evidentiary material outside the allegations of the complaint, and as the trial court accordingly treated the motion only as what it was, a motion to dismiss and not a motion for summary judgment with...