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Demere Marsh Associates, LLC v. Boatright Roofing and General Contracting, Inc.

Court of Appeals of Georgia, Fourth Division

October 19, 2017

DEMERE MARSH ASSOCIATES, LLC et al.
v.
BOATRIGHT ROOFING AND GENERAL CONTRACTING, INC. et al.DENNY EXPRESS VINYL SIDING, INC.
v.
BOATRIGHT ROOFING AND GENERAL CONTRACTING, INC. et al.

          DILLARD, C. J., RAY, P. J. and SELF, J.

          Self, Judge.

         These appeals arise from a suit alleging negligent construction, misrepresentation, and breach of contract involving the Shadow Brooke Village Condominiums in St. Simons Island, Georgia (the "Project") filed against the developer, general contractor, a roofing subcontractor, and a vinyl-siding contractor by the Shadow Brooke Village Condominium Owners' Association (the "Association"). The issues on appeal involve whether the Association's claims are barred by the statute of limitation, sanctions for spoliation, and the effect of a "full and final judgment" entered in favor of the roofing subcontractor. For the reasons explained below, we conclude that (1) the Association's claims are barred by the statute of limitation, except with regard to building 15; (2) the trial court's order on spoliation should be reversed to the extent it allows the jury to make findings of fact as to whether spoliation occurred; and (3) this Court cannot issue an advisory opinion regarding the trial court's grant of summary judgment to the roofing subcontractor.

To prevail at summary judgment, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the nonmovant's favor, warrant judgment as a matter of law. A defendant who will not bear the burden of proof at trial need only show an absence of evidence to support an essential element of the nonmoving party's case. If the moving party discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue.

(Citation, punctuation, and footnote omitted.) Danjor, Inc. v. Corporate Constr., 272 Ga.App. 695, 695-696 (613 S.E.2d 218) (2005). "A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant."[1] (Citation and punctuation omitted.) Costrini v. Hansen Architects, 247 Ga.App. 136 (543 S.E.2d 760) (2000).

         The record shows that the Project consists of 15 residential buildings, each comprised of six separate condominium units, for a total of 90 units, and a clubhouse. Construction of the buildings began in 2001, and was completed between 2003 and 2009, with buildings one through fourteen receiving certificates of occupancy between January 2003 and September 2008. Demere Marsh Associates, LLC (the "developer") was the developer, Sea Oaks, Inc. (the "general contractor") was the general contractor, Denny Express Vinyl Siding, Inc. (the "vinyl-siding subcontractor, " collectively "appellants") was a subcontractor of the developer hired to install vinyl siding on buildings 2, 8, 9, 14, and 15, and Boatright Roofing and General Contracting, Inc. (the "roofing subcontractor") was the subcontractor that installed the roofs on some of the buildings for the Project.

         On October 18, 2012, the Association sued the developer, general contractor, and both subcontractors, among others, alleging that negligent construction caused substantial damage to the buildings, particularly water damage. The crux of the complaint is that "[d]uring construction of the condominium complex, [the developer and general contractor] modified the design of the buildings and used materials that were not specified by the architect . . . and as a result, there was water intrusion and decay which has left the buildings unstable and at risk of collapse." The developer and general contractor filed a cross-claim against the roofing subcontractor for indemnity and/or contribution and a notice of apportionment.

         The roofing subcontractor moved for summary judgment on the ground that all of the Association's claims against it were barred by the statute of limitation. The appellants moved for partial summary judgment on the ground that the applicable four-year statute of limitation and eight-year statute of repose barred the Association's claims with regard to 14 of the 15 buildings.[2] Appellants also moved for sanctions for spoliation of evidence, on the ground that the Association "engaged in extensive destructive testing including the removal and discarding of material elements of evidence from the exterior facades" of the buildings after it filed suit against the appellants.

         The Association consented to the entry of summary judgment in favor of the roofing subcontractor, and the trial court granted the motion, entering final judgment in favor of the roofing subcontractor and against the Association. The trial court granted in part and denied in part the remaining motions for summary judgment. As to buildings 3, 4, 5, 6, and 7, all of which were completed between July 2003 and August 11, 2004, the trial court determined that the statute of repose barred all of the Association's claims including for attorney fees under OCGA § 13-6-11. As to the developer's and general contractor's liability in connection with the remaining nine buildings, the trial court found that there was a genuine issue of material fact as to whether the Association knew or should have known of the construction problems by October 2008, and that "OCGA § 9-3-30 (b) (1) applies to protect the Association's claims from the four-year statute of limitation." As to the vinyl-siding subcontractor, the trial court concluded that the Association's claims regarding buildings 2, 9, and units 100, 101, and 300 of building 8 were barred by the statute of repose; it found genuine issues of material fact regarding buildings 14 and 15, as well as units 200, 201, and 301 of building 8 on the same ground set forth against the developer and general contractor. With regard to the spoliation motions, the trial court's order stated that they were granted in part and denied in part, but it "decline[d] to impose the sanction of dismissal of plaintiff's case."

         In Case No. A17A1237, the developer and general contractor appeal the order granting summary judgment to the roofing subcontractor, as well as the orders partially denying their motion for summary judgment, the vinyl-siding subcontractor's motion for summary judgment, and the motions for sanctions for spoliation of evidence. In Case No. A17A1238, the vinyl-siding subcontractor appeals the same orders.

         1. Appellants contend that the trial court erred in denying summary judgment on the Association's claims related to defective/improperly installed vinyl siding on buildings 1, 2, and 8-14, because there is no dispute that the Association knew or should have known of alleged construction defects on or before September 8, 2008.

          Appellants argue that the synthetic siding exception set forth in OCGA § 9-3-30 (b) (1) does not revive the Association's "otherwise time-barred claims" as to these buildings and that the trial court erred in its reading of Scully v. First Magnolia Homes, 279 Ga. 336 (614 S.E.2d 43) (2005). The Association responds that the discovery of defects in the Project did not occur until approximately June or July of 2012, when a unit owner noticed water damage and mushroom growth on the tabby finish covering a wooden support beam on building 2.

         The statute of limitation applicable to the Association's claim for negligent construction is found in OCGA § 9-3-30 (a), and provides that "[a]ll actions for trespass upon or damage to realty shall be brought within four years after the right of action accrues." OCGA § 9-3-30 (a). See Danjor, supra, 272 Ga.App. at 698 (2). The general rule for determining when a cause of action accrues and the statute of limitation begins to run is well-settled in Georgia: The true test to determine when a cause of action accrues is to ascertain the time when the plaintiff could first have maintained his or her action to a successful result. (Punctuation and footnote omitted.) Scully, supra, 279 Ga. at 337 (1). "Damage to property arising out of construction is generally considered to occur at the time of the defendant-contractor's 'substantial completion' of the project, because damages usually become immediately ascertainable to the plaintiff-owner at that time." Colormatch Exteriors, Inc. v. Hickey, 275 Ga. 249, 251 (1) (569 S.E.2d 495) (2002). However, OCGA § 9-3-30 (b) (1) provides for an exception in the case of synthetic exterior siding: "The causes of action . . . for recovery of damages to a dwelling due to the manufacture of or the negligent design or installation of synthetic exterior siding shall accrue when the damage to the dwelling is discovered or, in the exercise of reasonable diligence, should have been discovered, whichever first occurs."

         In Scully, the homeowners purchased a home constructed with synthetic stucco siding. When they discovered that the siding was defective and had damaged the underlying structure, they sued the builder for breach of contract and negligence. The trial court granted summary judgment to the builder finding that both claims were barred by the applicable statutes of limitation. This Court affirmed, and on the issue of negligence, the Georgia Supreme Court affirmed our decision, finding that we correctly held that the "statute of limitations for [the homeowners'] tort claim commenced running when [the homeowners], through the exercise of reasonable diligence, should have discovered that their home was being damaged due to defective synthetic stucco siding." Id. at 336-337. In so holding, our Supreme Court noted that in November 1997, the homeowners "became aware through media accounts that faulty stucco siding installed on homes such as theirs was causing moisture damage to houses." Id. at 337. After hearing these accounts, the homeowners asked a neighborhood real estate agent if they should be concerned and were told the concerns were exaggerated. Two years later, in November 1999, the homeowners, prompted by further media accounts, hired an expert who confirmed the defective siding. The homeowners sued on October 8, 2002.

In affirming our decision, the Georgia Supreme Court found that
[b]y their own admission, the [homeowners] were aware of potential problems with their stucco siding no later than November 1997. Once they learned of this potential problem, they were obligated to exercise reasonable diligence to protect their interest in their home and their legal rights. At the same time, the four-year statute of limitations on their negligence claim began to run. The statute expired in November 2001, and the [homeowners'] suit alleging negligence was filed almost a year later, on October 8, 2002.

(Emphasis supplied.) Id. at 339 (2).

         Here, the trial court applied OCGA § 9-3-30 (b) (1) to the synthetic exterior siding at issue in this case, refusing to "read OCGA § 9-3-30 (b) (1) so narrowly as to restrict its application to stucco siding only." The trial court also found Scully distinguishable on the ground that the homeowners in that case conceded that they were aware of potential problems with their stucco siding over four years before they filed suit, ...


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