STAGG N. SANDERS,
v . No. 05 CVD 983
GRAY, INCORPORATED and
PROTECTIVE EQUIPMENT, INC.,
Manning, Fulton & Skinner, P.A., by Michael S. Harrell, for
Dean & Gibson, LLP, by Thomas G. Nance, for defendants- appellees.
Stagg N. Sanders (plaintiff) appeals from an order granting a motion to dismiss in favor of Gray, Incorporated and Protective Equipment, Inc. (collectively defendants) on the grounds that plaintiff's claims were barred by the Statute of Repose. We affirm.
On 12 August 1997, plaintiff executed a contract agreeing to pay defendants to install and monitor a security system for plaintiff's home. By 30 August 1997, defendants completed installing the security system. Plaintiff made timely payments. In August of 2001, defendants made some changes and upgraded plaintiff's security system.
Sometime after the security system was originally installed, plaintiff noticed a leak in her dining room. Although plaintiff hired contractors to inspect and repair the leak, the leak reoccurred. In October 2004, plaintiff hired another contractor, Danny Varner (Mr. Varner), to identify the cause of the leak. After Mr. Varner inspected the problem, he reported that the leak was caused by defendants' improper installation of the security system.
On 9 September 2005, less than one year after learning the cause of the leak, plaintiff filed an action against defendants alleging breach of contract, breach of implied warranty, and negligence. On 8 February 2006, defendants filed a motion to dismiss, or alternatively, a motion for summary judgment on the grounds that plaintiff's claims were barred by the Statute of Repose. On 3 April 2006, the trial court granted defendants' motion to dismiss concluding that plaintiff's claims were barred by the Statute of Repose pursuant to N.C. Gen. Stat. § 1-50. Plaintiff appeals.
As an initial matter, plaintiff argues that the trial court considered matters outside the pleading converting the motion to dismiss into a motion for summary judgment. North Carolina Rules of Civil Procedure Rule 12(b)(6) provides:
If, on a motion asserting the defense numbered (6), to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading arepresented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
N.C. Gen. Stat. § 1A-1, Rule 12(b)(6) (2006).
In the case before us, defendants submitted a motion to dismiss and the affidavit of Steve Howell (Howell), defendants' president, for the trial court to consider. In opposition to defendants' motion to dismiss, plaintiff submitted an affidavit with exhibits to the trial court. The record indicates that trial court reviewed the affidavits and exhibits submitted by both parties before it granted defendants' motion to dismiss. Since the trial court considered matters outside of the pleadings, defendants' Rule 12(b)(6) motion was converted into a motion for summary judgment. See Kemp v. Spivey, 166 N.C. App. 456, 462, 602 S.E.2d 686, 690 (2004) (Based on the trial court's consideration of matters in addition to the complaint, defendant's Rule 12(b)(6) motion was . . . converted into a motion for summary judgment.).
The standard of review for an order granting summary judgment is whether there is any genuine issue of material fact and whether the moving party is entitled to judgment as a matter of law. Coleman v. Town of Hillsborough, 173 N.C. App. 560, 563-64, 619 S.E.2d 555, 558 (2005). An issue is material if the facts alleged would constitute a legal defense, or would affect the result of the action, or if its resolution would prevent the party against whom it is resolved from prevailing in the action. Bryant v. Don Galloway Homes, Inc., 147 N.C. App. 655, 657, 556 S.E.2d 597, 599-600 (2001) (internal quotations omitted). An issue is genuine if it is supported by substantial evidence. Id.
Plaintiff argues the trial court erred in granting summary judgment on the basis that the complaint was barred by the Statute of Repose. Plaintiff argues there was an issue of fact as to when the last act occurred giving rise to the cause of action. Specifically, plaintiff argues the statute began to run in August of 2001, four years after the installation, when defendants made major changes to the security system and upgraded the system rather than August of 1997, the installation date. We disagree.
North Carolina General Statutes § 1-50(a)(5) provides in relevant part:
(5)a. 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) (2006). The statute further provides that an action based upon or arising out of the defective or unsafe condition of an improvement to real property includes . . . [a]ctions to recover damages for the negligent construction or repair of an improvement to real property[.] N.C. Gen. Stat. . 1- 50(b) (2006). Substantial completion is defined as that degree of completion of a project, improvement or specified area or portion thereof . . . upon attainment of which the owner can use the same for the purpose for which it was intended. N.C. Gen. Stat. . 1-50(c) (2006). A Statute of Repose is a condition precedent that must be specially pled. Tipton & Young Construction Co. v. Blue Ridge Structure Co., 116 N.C. App. 115, 118, 446 S.E.2d 603, 605 (1994). It is a substantive limitation that establishes a time frame in which an action must be brought to be recognized. Bryant, 147 N.C. App. at 657, 556 S.E.2d at 600. The repose period begins to run when an event occurs, regardless of whether or not there has been an injury. Id.
Whether a statute of repose has run is a question of law. Mitchell v. Mitchell's Formal Wear, Inc., 168 N.C. App. 212, 215, 606 S.E.2d 704, 706 (2005). Summary judgment is proper if the pleadings or proof show without contradiction that the statute of repose has expired. Id. (internal quotations omitted). The moving party has the burden of producing evidence sufficient to show that summary judgment is justified. Id. The burden then shifts to the non-moving party to set forth specific facts showing that there is a genuine issue for trial. Id. (quotations omitted). In order to constitute a last act or omission [for purposes of the statute of repose], that act or omission must give rise to the cause of action. Nolan v. Paramount Homes, Inc., 135 N.C. App. 73, 79, 518 S.E.2d 789, 793 (1999).
In the case before us, the pleadings, affidavits, and other documentary evidence suggest August 1997 was the date of the act that gave rise to plaintiff's cause of action. The contract was executed on 12 August 1997. At the hearing, defendants submitted an affidavit by Mr. Howell stating that all work performed pursuantto the contract was completed by 30 August 1997. Mr. Howell's affidavit was supported by plaintiff's own allegation that the installation was completed shortly after the contract was executed. Further, plaintiff's complaint specifically alleged that the leak was discovered after defendants installed the security system. Plaintiff's complaint did not allege that the leak was caused by the upgrade to the security system. Based on plaintiff's allegations, the cause of the leak was the initial installation of the security system and not any subsequent repairs or upgrades. Therefore, the last act giving rise to plaintiff's cause of action was the initial security installation completed in August of 1997. Plaintiff filed her complaint 9 September 2005, over eight years from the date the contract was completed. Therefore, plaintiff's cause of action was filed after the period of repose had expired and the trial court did not err by granting summary judgment in favor of defendants.
Finally, plaintiff contends that defendants waived enforcement of any Statute of Repose by admitting that the statute was not a bar to plaintiff's action and that defendants are equitably estopped from asserting the Statute of Repose as a defense. We disagree.
The doctrine of equitable estoppel may bar application of the Statute of Repose. Bryant v. Adams, 116 N.C. App. 448, 460, 448 S.E.2d 832, 838 (1994). (Equitable estoppel may also defeat a defendant's statute of repose defense.). In order for equitable estoppel to bar application of the statute of [repose], a plaintiffmust have been induced to delay filing of the action by the misrepresentations of the defendant. Jordan v. Crew, 125 N.C. App. 712, 720, 482 S.E.2d 735, 739 (1997).
In the case before us, defendants' attorney agreed to a tolling agreement which required either party to give notice that the tolling agreement would expire 30 days subsequent to the notice. The e-mail expressly referenced the Statute of Repose. Defendants' attorney did not induce plaintiff through misrepresentations to delay filing the action because plaintiff's complaint was already barred by the Statute of Repose at the time the agreement was entered into. In order for plaintiff to comply with the Statute of Repose, plaintiff was required to file her action by August of 2003. However, plaintiff filed the action in September of 2005, more than two years after the Statute of Repose barred her claims. The tolling agreement did not cause plaintiff to delay filing the action; neither was plaintiff induced to rely upon the agreement to file the action after the expiration of the Statute of Repose time period. Therefore, this assignment of error is overruled.
The order of the trial court granting summary judgment in favor of defendants is affirmed.
Judges GEER and JACKSON concur.
Report per Rule 30(e).
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