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Contract – Limitations – Home Defects

Williams v. Houses of Distinction, Inc. (Lawyers Weekly No. 11-07-0639, 23 pp.) (Sam Ervin IV, J.) Appealed from Brunswick County Superior Court (Ola Lewis, J.) N.C. App. Click here for the full-text opinion

Holding: A judge should not have dismissed, on statute of limitations grounds, breach of contract and warranty claims brought by the plaintiff purchasers of a home constructed by the defendant, where a genuine issue exists regarding when the plaintiffs knew or reasonably should have known about the damage.

Limitations Issue

Because plaintiffs’ negligence-based claims stem from defendant’s allegedly deficient performance of its contractual obligations to plaintiffs, and since none of the Ports Authority v. Roofing Co., 294 N.C. 73, 240 S.E.2d 345 (1978), exceptions are applicable given the facts before us, we conclude that plaintiffs have no valid negligence claims against defendant and that the trial court properly granted summary judgment in favor of defendant with respect to these claims.

With regard to plaintiffs’ breach of contract and breach of warranty claims, the record contains evidence tending to show that plaintiffs noticed and reported leaks in the residence’s windows and doors to defendant, who, in turn, had some repairs performed and instructed plaintiffs to contact the distributor directly in order to obtain the performance of other repairs. Plaintiffs followed defendant’s directive, leading to the making of repairs and the giving of assurances that the root of the problem that plaintiffs were experiencing stemmed from the products utilized during the construction of the residence rather than the manner in which the residence had been constructed and the relevant products installed.

In Baum v. John R. Poore Builder, Inc., 183 N.C. App. 75, 643 S.E.2d 607 (2007), we held that, “viewing the evidence submitted to the trial court in the light most favorable to [the plaintiffs’] position,” the facts did not establish that the statute of limitations had run as a matter of law, since “at least an inference can be drawn that the limitations period [did not begin to run in June 2000, and therefore] the issue [was] for the jury to determine.” Given the similarities between the facts at issue in Baum and the facts at issue here, we conclude that, in this case, as in Baum, we are faced with a “genuine issue[] of material fact as to when Plaintiffs knew or reasonably should have known about the damage …, such that the evidence was sufficient on the question of when the three-year statute of limitations began to run to submit the issue to a jury for determination.”

We conclude that, when the record is considered in the light most favorable to plaintiffs, there is a genuine issue of material fact as to when physical damage to plaintiffs’ home sufficient to put plaintiffs on notice of the existence of their claims against defendant became apparent or ought reasonably to have become apparent to plaintiffs. As a result, the point in time at which the defects in question became or should have become apparent to plaintiffs is genuinely in dispute between the parties, so that the date upon which the statute of limitations began to run should be decided by a jury at trial rather than by the court as a matter of law in connection with its consideration of a motion for summary judgment.

Thus, we conclude that the trial court erred by granting summary judgment in favor of defendant with respect to plaintiffs’ breach of contract and breach of warranty claims.

Based on our conclusion that plaintiffs’ negligence claims stemmed from the performance of a contractual obligation, we conclude that that portion of the trial court’s order granting summary judgment in favor of defendant with respect to plaintiffs’ negligence-based claims should be affirmed.

However, in light of our conclusion that the record discloses the existence of a genuine issue of material fact with respect to whether plaintiffs knew or should reasonably have known of the construction-related defects in their residence more than three years prior to the filing of their complaint, we find that the trial court erred in determining that plaintiffs’ breach of contract and breach of warranty claims were time-barred as a matter of law. Instead, the date upon which the defects in question became or should have become apparent to plaintiffs constitutes an issue of fact that should be resolved by the jury at trial, with the jury’s answer to that question treated as determinative of the merits of defendant’s statute of limitation defense.

Thus, we affirm the trial court’s order in part and reverse in part and remand this case for further proceedings.


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