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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the
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NO. COA02-352
NORTH CAROLINA COURT OF APPEALS
Filed: 18 March 2003
WILLIAM R. WHITEHURST, and wife, MARY DARLENE WHITEHURST,
Plaintiffs
v
.
HURST BUILT, INC.; CARL E. SMITH, d/b/a SELECT STUCCO; and STO
CORP.,
Defendants
Appeal by plaintiffs from judgment entered 18 October 2001 by
Judge Abraham Penn Jones in Wake County Superior Court. Heard in
the Court of Appeals 7 January 2003.
Lewis & Roberts, PLLC, by Daniel K. Bryson and Kurt F.
Hausler, for plaintiffs-appellants.
Dean & Gibson, L.L.P., by Christopher J. Culp, for defendant-
appellee, Hurst Built, Inc.
Dinsmore & Shohl, L.L.P., by Joseph N. Tucker, for defendant-
appellee, Hurst Built, Inc.
GEER, Judge.
This appeal addresses the application of the statute of repose
in N.C. Gen. Stat. § 1-50(a)(5)a to claims arising out of the
installation of a synthetic stucco system on a house. We hold that
the superior court properly granted defendant's motion to dismiss
when the complaint was filed more than six years after substantial
completion of the house and, according to the complaint, the only
acts subsequent to completion were repairs.
(See footnote 1)
In January 1992, plaintiffs Mr. and Mrs. Whitehurst entered
into a contract with defendant Hurst Built, Inc. ("Hurst") for the
construction and purchase of a house. Hurst served as the general
contractor for the Whitehursts' house and employed Select Stucco to
apply a synthetic stucco system (also known as EIFS) on the
exterior. The Whitehursts moved into the house after the closing
on 12 August 1992.
The complaint alleges that between August 1992 and the summer
of 1994, the Whitehursts experienced several moisture intrusion
problems with their house. Upon discovery of each problem, they
notified Hurst, which then on several occasions performed or
directed repairs. In the summer of 1994, Hurst agreed to test the
house for moisture intrusion by removing sections of the EIFS, but
found no moisture visible on the sheathing. Select Stucco replaced
the removed EIFS and Hurst assured the Whitehursts that they would
experience no problems with the EIFS if they caulked and painted
the house every three to five years.
In January 1996, the Whitehursts notified Hurst that there
were several areas at the rear of their house where the EIFS
appeared to be pulling away. After Hurst and Select Stucco made
repairs to the problem areas, Select Stucco reported to the
Whitehursts that they had found no moisture intrusion.
In mid-June 1996, because of reports in the media regarding
problems with synthetic stucco houses and because of their owncontinuing problems, the Whitehursts became concerned that the EIFS
on their house was either defective or defectively applied.
Plaintiffs, therefore, had Prime South Homes, Inc. inspect their
house. Prime South found elevated moisture readings and concluded
that the EIFS had been improperly applied.
Plaintiffs filed suit three years later on 4 June 1999,
alleging that they had notified defendants of the moisture-related
damage as well as their concerns about defective EIFS, but that
defendants had failed to perform the necessary "remedial
activities" to correct the defects. Plaintiffs were required to
remove the EIFS on their own, repair the damage, and install new
exterior siding. With respect to Hurst, plaintiffs alleged
negligence, breach of express warranty, breach of implied
warranties of habitability and good workmanship, breach of
contract, breach of implied warranty of merchantability, negligent
misrepresentation, breach of implied warranty of fitness for
particular purpose, unfair and deceptive trade practices, and
negligence per se.
On 10 August 1999, defendant made a motion to dismiss pursuant
to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure on
the ground that the real property improvement statute of repose and
the applicable statutes of limitation barred plaintiffs' claims.
Plaintiffs filed no response to defendant's motion to dismiss. At
the 4 October 1999 hearing on defendant's motion, plaintiffs and
their counsel failed to appear. On the next scheduled hearing
date, 10 December 1999, neither plaintiffs nor their counselappeared and the court entered an order granting defendant's motion
to dismiss with prejudice.
Thereafter, plaintiffs filed a motion to reconsider and a
rehearing on defendant's motion to dismiss was held 3 July 2001.
After rehearing the matter, the trial court declined to reverse its
initial order of dismissal.
Standard of Review
"When a party files a motion to dismiss pursuant to N.C. Gen.
Stat. § 1A-1, Rule 12(b)(6), the question for the court is whether,
as a matter of law, the allegations of the complaint, treated as
true, are sufficient to state a claim upon which relief may be
granted under some legal theory, whether properly labeled or not."
Grant Constr. Co. v. McRae, 146 N.C. App. 370, 373, 553 S.E.2d 89,
91 (2001) (quoting
Harris v. NCNB, 85 N.C. App. 669, 670-71, 355
S.E.2d 838, 840 (1987)). The court must construe the complaint
liberally and "should not dismiss the complaint unless it appears
beyond a doubt that the plaintiff could not prove any set of facts
to support his claim which would entitle him to relief."
Block v.
County of Person, 141 N.C. App. 273, 277-78, 540 S.E.2d 415, 419
(2000). The appellate court conducts a
de novo review of the
pleadings to determine their legal sufficiency and decides whether
the trial court's ruling on the motion to dismiss was erroneous.
Statute of Repose
The North Carolina real property improvement statute of repose
provides: No action to recover damages based upon or
arising out of the defective or unsafe
condition of an improvement to real property
shall be brought more than six years from the
later of the specific last act or omission of
the defendant giving rise to the cause of
action or substantial completion of the
improvement.
N.C. Gen. Stat. § 1-50(a)(5)a.
(See footnote 2)
"The repose period begins to run
when an event occurs, regardless of whether or not there has been
an injury."
Bryant v. Don Galloway Homes, Inc., 147 N.C. App. 655,
657, 556 S.E.2d 597, 600 (2001). Plaintiffs had the burden of
showing that they brought this action within six years of either
(1) the substantial completion of the house; or (2) the specific
last act or omission of defendant giving rise to their causes of
action.
Nolan v. Paramount Homes, Inc., 135 N.C. App. 73, 76, 518
S.E.2d 789, 791 (1999),
disc. review denied, 351 N.C. 359, 542
S.E.2d 214 (2000).
The Whitehursts correctly concede that they filed suit more
than six years after "substantial completion" of their house since
they were able to move into the house in August 1992. Plaintiffs
argue, however, that their complaint sufficiently alleged that the
last act or omission of defendant occurred within six years of the
date of the filing of their complaint. We disagree.
Since the complaint was filed on 4 June 1999, we must
determine what acts or omissions the complaint alleges as occurring
during the six-year period beginning 4 June 1993. In
Nolan, 135N.C. App. at 79, 518 S.E.2d at 793, this Court stated, "In order to
constitute a last act or omission, that act or omission must give
rise to the cause of action."
With respect to EIFS or moisture
damage, the bases for plaintiffs' causes of action, the complaint
alleges three instances in which Hurst arguably acted after 4 June
1993. The complaint refers generally to "several moisture
intrusion problems" occurring between August 1992 and summer 1994
and alleges that Hurst, when notified of the problem, "visited the
house to perform or direct repairs." In summer 1994, Hurst tested
for moisture intrusion, but found none. In January 1996, the EIFS
was pulling away from the house and Hurst "made repairs to the
affected areas." The viability of plaintiffs' complaint hinges on
whether the 1992-1994 and January 1996 "repairs" are sufficient to
constitute a last act or omission under N.C. Gen. Stat. § 1-
50(a)(5)a.
This Court has already answered that question in
Monson v.
Paramount Homes, Inc., 133 N.C. App. 235, 515 S.E.2d 445 (1999).
After considering allegations indistinguishable from those in this
case, this Court held: "A duty to complete performance may occur
after the date of substantial completion, however, a 'repair' does
not qualify as a 'last act' under N.C. Gen. Stat. § 1-50(5)[sic]
unless it is required under the improvement contract by agreement
of the parties."
Id. at 241, 515 S.E.2d at 450. The
Monson Court
explained that "[t]o allow the statute of repose to toll or start
running anew each time a repair is made would subject a defendant
to potential open-ended liability for an indefinite period of time,defeating the very purpose of statutes of repose such as N.C. Gen.
Stat. § 1-50(5)[sic]."
Id. at 240, 515 S.E.2d at 449. We are
bound by
Monson. Since, according to plaintiffs' complaint, the
only work performed on plaintiffs' house after 1993 was "repairs,"
we cannot classify those acts as a "last act or omission" under
N.C. Gen. Stat. § 1-50(a)(5)a.
(See footnote 3)
While plaintiffs argue that Hurst's work on the house in
January 1996 was done in order to complete the house in accordance
with the terms of the initial contract, the complaint contains no
allegation that the purchase agreement contained an explicit repair
obligation apart from any duty existing pursuant to warranty.
Without such an allegation, this case cannot be distinguished from
Monson.
See Monson, 133 N.C. App. at 239, 515 S.E.2d at 448
(finding statute of repose applicable even "[a]ssuming
arguendo
that a continuing duty of repair existed pursuant to a warranty");
Nolan, 135 N.C. App. at 77-78, 518 S.E.2d at 792 (because implied
warranties related to improper construction of home, statute of
repose began to run on the last day defendant performed
construction). Even after liberally construing the pleadings and
treating plaintiffs' allegations as true, we cannot conclude that
defendant's actions subsequent to June 1993 were anything otherthan a repair. Thus, we find that the trial court did not err in
granting defendant's motion to dismiss.
Affirmed.
Judges McCULLOUGH and BRYANT concur.
Footnote: 1 Plaintiffs originally sued three defendants, including
appellee Hurst Built, Inc. (the builder), Sto Corp. (the
manufacturer of the synthetic stucco system), and Select Stucco
(the contractor who applied the stucco). The present appeal
involves only Hurst Built, Inc. Plaintiffs dismissed their claimsagainst Sto Corp. and the trial court granted Select Stucco's
motion to dismiss, from which order plaintiffs did not appeal.
Footnote: 2 The parties have focused solely on the
applicability of the
statute of repose. We do not, therefore, address whether any of
plaintiffs' claims would also have been barred by the applicable
statutes of limitation.
Footnote: 3 Plaintiffs contend in their brief that no moisture intrusion
occurred prior to the repairs in January 1996 and that the repairs
necessarily, therefore, caused the moisture problem. This
contention is inconsistent with the complaint, which describes
"moisture intrusion problems" occurring as early as August 1992 and
"continuing" through mid-June 1996.
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