Denny Express Vinyl Siding, Inc. v. Boatright Roofing and General Contracting, Inc.

Citations: 808 S.E.2d 1; 343 Ga. App. 235Docket: A17A1237; A17A1238

Court: Court of Appeals of Georgia; October 19, 2017; Georgia; State Appellate Court

Original Court Document: View Document

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Motions for reconsideration must be physically received within ten days of the decision date to be timely filed. In the case of Demere Marsh Associates, LLC et al. v. Boatright Roofing and General Contracting, Inc. et al. and Denny Express Vinyl Siding, Inc. v. Boatright Roofing and General Contracting, the Court of Appeals of Georgia addressed appeals involving allegations of negligent construction, misrepresentation, and breach of contract related to the Shadow Brooke Village Condominiums in St. Simons Island. The Shadow Brooke Village Condominium Owners’ Association filed the suit against the developer, general contractor, and subcontractors, claiming substantial water damage due to design modifications and improper materials used during construction.

The court found that (1) the Association's claims are largely barred by the statute of limitations, except for claims related to building 15; (2) the trial court's spoliation ruling allows the jury to determine if spoliation occurred, which the court deemed incorrect; and (3) the court cannot provide an advisory opinion regarding the trial court's summary judgment favoring the roofing subcontractor. The standard for summary judgment requires the moving party to show no genuine issue of material fact exists, allowing judgment as a matter of law, while the nonmoving party must present specific evidence to create a triable issue. The Project involved 15 residential buildings completed between 2001 and 2009, with occupancy certificates issued for buildings one through fourteen between January 2003 and September 2008. The Association's claims stem from modifications made by the developer and general contractor that allegedly caused water intrusion and structural instability.

The developer and general contractor initiated a cross-claim against the roofing subcontractor for indemnity/contribution and a notice of apportionment. The roofing subcontractor requested summary judgment, asserting that the Association's claims against it were time-barred under the statute of limitations. The appellants sought partial summary judgment, arguing that both the four-year statute of limitation and the eight-year statute of repose barred the Association’s claims concerning 14 out of 15 buildings. They also sought sanctions for spoliation of evidence, alleging that the Association destructively tested and discarded crucial evidence after filing suit.

The trial court ruled in favor of the roofing subcontractor, granting summary judgment against the Association. It partially granted and denied the appellants' motions for summary judgment. Specifically, for buildings 3 to 7, completed between July 2003 and August 2004, the court determined that the statute of repose barred the Association's claims, including attorney fees. Regarding the remaining nine buildings, the court found a genuine issue of material fact as to the Association's awareness of construction issues by October 2008, allowing claims under OCGA § 9-3-30 (b) to proceed.

For the vinyl-siding subcontractor, the court ruled that the Association's claims on buildings 2, 9, and certain units of building 8 were barred by the statute of repose, but there were genuine issues of material fact concerning buildings 14 and 15 and additional units of building 8. The trial court's rulings on spoliation motions were granted in part but did not include dismissal of the plaintiff's case.

In Case No. A17A1237, the developer and general contractor appeal the summary judgment granted to the roofing subcontractor and the partial denials of their motions. In Case No. A17A1238, the vinyl-siding subcontractor appeals similar orders. The appellants assert that the trial court erred in denying summary judgment regarding the Association's claims of defective vinyl siding, arguing that the Association was aware of the defects by September 2008, and contend that the synthetic siding exception in OCGA § 9-3-30 (b) does not revive the time-barred claims. The Association counters that the discovery of defects did not occur until mid-2012, and the relevant statute of limitations for negligent construction is outlined in OCGA § 9-3-30 (a), requiring actions to be filed within four years of the right of action accruing.

In Georgia, the statute of limitations for a cause of action begins when the plaintiff could first maintain a successful action. For property damage from construction, this typically occurs at the defendant-contractor's substantial completion of the project, as damages become ascertainable to the plaintiff-owner at that time. However, OCGA § 9-3-30 (b) provides an exception for synthetic exterior siding, where the cause of action accrues upon discovery of damage or when it should have been discovered through reasonable diligence.

In the case of Scully, homeowners sued for damages caused by defective synthetic stucco siding. The Georgia Supreme Court upheld the trial court's summary judgment in favor of the builder, determining that the homeowners were aware of potential issues with their siding as early as November 1997 due to media reports. They only took action after hiring an expert in 1999, yet their lawsuit filed in October 2002 was barred by the four-year statute of limitations, which expired in November 2001.

The trial court in the current case applied OCGA § 9-3-30 (b) broadly to include synthetic siding beyond stucco. It distinguished this case from Scully, noting that the current Association had not conceded awareness of potential issues with their buildings as the Scully homeowners had. The court found that there was a factual dispute regarding when the Association knew or should have known about significant damage, particularly relating to roof leaks and water damage, suggesting that this determination could not be resolved through summary judgment.

The trial court made an error in determining that there was a material issue of fact regarding whether the Association was aware, or should have been aware with reasonable diligence, of the defects before October 18, 2008. The court misinterpreted the precedent set in Scully, which clarifies that the statute of limitations for claims arising from negligent installation of synthetic stucco siding begins when the claimant should have reasonably discovered damage to their property. Evidence indicates that potential issues with improperly installed vinyl siding were noted well before the specified date, obligating the Association to act with reasonable diligence to protect its interests.

In its second amended complaint, the Association alleges multiple negligent acts by the developer and general contractor, including failing to install necessary moisture barriers, improperly applying stucco finishes, and not coordinating materials to prevent moisture infiltration, leading to damage of structural components. The complaint also claims that the vinyl-siding subcontractor breached professional standards during installation, resulting in further damage. Homeowners had reported water intrusion issues as early as 2004, with documented work orders indicating investigations of persistent leaks and damage. A February 2007 report highlighted serious defects in the roofs and siding, including improperly installed metal ridge caps and caulking, necessitating urgent repairs by qualified professionals.

Vinyl siding and soffit installation is inadequate, with gaps, improper fit, and damage observed in multiple locations. There is a color inconsistency in the trim, and aluminum cladding blistering is present on columns at screen porches across several buildings. These issues require quality repairs or replacements. On October 22, 2008, Ron Clark informed Robert Jenkins, developer and general contractor, about severe water damage to supporting ceiling beams in Building #150, indicating ongoing water retention and deterioration. Despite Jenkins’ assurance that issues were minor and addressed, Clark later discovered continued water leakage from a cantilever beam, suggesting unresolved defects in construction. Clark, who joined the Association Board in 2009 and became president in 2010, stated that he was unaware of any construction defects or water intrusion until July 2012. A significant discovery of water damage, including mushrooms on a wooden support beam, prompted the Association to hire architect R. Allen Lougheed to assess damage across buildings. Clark noted that the Association was established in 2002, with Jenkins controlling the Board until 2008, and Jenkins' wife on the Board until 2010. Additionally, Flo Vining, another Board member, affirmed that there were no visible water intrusion signs from 2003 until the stucco removal in 2012.

No unit owner had raised concerns about water intrusion or construction defects at Annual Homeowners Meetings until a mushroom was found on Building 109 in 2012. The Association maintains that complaints from unit owners were merely isolated punch-list issues, not indicative of serious structural problems. However, the legal precedent set by Scully requires homeowners to exercise reasonable diligence upon discovering potential problems, which applies here as complaints about water intrusion began as early as 2004. A report from the A. L. Trogdon Company in 2007 documented issues related to improperly installed flashings and vinyl siding—issues that the Association later claimed. After becoming aware of these problems, the Association was required to act diligently in protecting its legal rights, with a four-year statute of limitations for negligence claims starting from February 12, 2007, and expiring on February 12, 2011. The Association did not file suit until October 2012, leading to a conclusion that the trial court erred in denying summary judgment on the negligence claims related to buildings 1, 2, and 8-14.

Furthermore, the trial court denied summary judgment on the Association’s claims for attorney fees, stating that evidence could suggest bad faith on the part of the general contractor and developer. However, the trial court's previous findings about an affidavit lacking probative value were upheld, and Jenkins’ testimony that he was unaware of defects until 2011 or 2012 did not create a material issue of fact. The Association's own records indicated potential issues that should have prompted action. Consequently, the decision to reverse the trial court’s denial of summary judgment on the Association’s claims also applies to the attorney fees claims related to the same buildings. Lastly, the appellants raised concerns about a "full and final judgment" in favor of the roofing subcontractor affecting their cross-claims for contribution and indemnity, rendering the implications of this judgment unclear.

Appellants argue that the roofing subcontractor does not qualify as a settling party under OCGA § 51-12-33 (d) and seek clarification regarding their rights. The subcontractor counters that appellants cannot claim contribution under OCGA § 51-12-33 (b) as they are not joint tortfeasors unless a jury finds them negligent. Any negligence attributed to the subcontractor would be assessed separately by the jury. The subcontractor last worked on the project in 2008 or 2009 and was dissolved in 2010. The Association filed a negligence claim against the subcontractor in April 2015, but it was not served until May 2016. The subcontractor moved for summary judgment on statute of limitations grounds, which went unopposed, resulting in a court ruling in favor of the subcontractor. Appellants claim the issue of apportionment was not specifically addressed by the trial court, and thus, there is no ruling for review. The court notes it does not provide advisory opinions and has not been presented with a trial outcome affecting apportionment claims. Finally, appellants assert the trial court erred by not making findings on spoliation despite acknowledging that the Association had spoliated evidence.

Appellants filed motions for sanctions due to alleged spoliation of evidence by the Association, claiming that the Association removed siding and conducted destructive testing without informing them after litigation commenced. The Association's expert, Alan Lougheed, confirmed that significant alterations were made to the buildings, including removing siding and cutting samples. The trial court partially granted the motions but did not dismiss the Association’s case. Instead, it indicated a willingness to instruct the jury on spoliation law and allow them to determine factual findings related to spoliation.

The trial court is responsible for making factual determinations regarding spoliation and should not delegate this responsibility to the jury. The appellate court criticized the trial court for potentially allowing the jury to make findings on spoliation, emphasizing that it is the trial court’s duty to assess spoliation, bad faith, and the importance of the affected evidence. The court outlined potential remedies for spoliation, including creating a rebuttable presumption that the spoliated evidence would be harmful to the spoliator, dismissing the case, or excluding related testimony.

In Case No. A17A1237, the appellate court reversed the trial court’s denial of summary judgment for appellants on buildings 1 through 14. In Case No. A17A1238, it affirmed the denial of summary judgment for the vinyl-siding subcontractor regarding building 15, but reversed the denial concerning buildings 8 and 14. The appellate court also reversed the trial court's spoliation order that allowed jury findings on spoliation. Lastly, the court declined to provide an advisory opinion on the implications of a "full and final judgment" related to the roofing subcontractor on the appellants’ claims. The judgment was affirmed in part and reversed in part.