Adams v. Manchester Park
291 Neb. 978
| Neb. | 2015Background
- James and Rebecca Adams contracted with Southfork Homes to build a house on a lot graded by Manchester; grading/soil compaction occurred in 2003. The home was substantially completed and final walk-through occurred on September 19, 2007. Southfork issued a 1-year express warranty on September 20, 2007.
- Within a year homeowners observed defects (cracks, leaks, windows) and delayed complaining until the 1-year warranty expired; Southfork attempted repairs but problems persisted.
- Specialists reported possible foundation problems in December 2009 and soil compaction deficiencies in July 2011. The Adamses sued Southfork and Manchester on September 22, 2011, alleging defective construction, breach of implied warranties, negligence, fraudulent concealment, and breach of the 1-year express warranty.
- Defendants moved for summary judgment under Neb. Rev. Stat. § 25-223 (4-year statute for construction/improvement claims). The district court held the 4-year period began in 2003 (soil compaction) and, applying the discovery rules, concluded the suit filed in 2011 was time-barred; summary judgment for defendants was entered.
- The Nebraska Court of Appeals affirmed as to Manchester but reversed as to Southfork, holding the 4-year period began at expiration of the 1-year express warranty (Sept. 20, 2007), so the action against Southfork was timely.
- The Nebraska Supreme Court granted further review and reversed the Court of Appeals, holding § 25-223 runs from substantial completion (Sept. 19, 2007) for claims grounded in defective workmanship, so the 2011 suit was untimely; it also rejected the fraudulent concealment claim as a matter of law.
Issues
| Issue | Plaintiff's Argument (Adams) | Defendant's Argument (Southfork) | Held |
|---|---|---|---|
| When does the § 25-223 4-year limitations period begin for defective-workmanship claims? | Limitations began at expiration of the 1-year express warranty (Sept. 20, 2007). | Period begins at substantial completion of the project (Sept. 19, 2007). | Begins at substantial completion; claims time-barred. |
| Does an earlier act (2003 soil compaction) start the § 25-223 clock? | No — homeowners had no knowledge of grading in 2003 and weren’t in position to discover defects then. | Yes — the alleged act/omission occurred in 2003 when soil was improperly compacted. | For workmanship-based claims, the clock does not run from the specific earlier act but from substantial completion. |
| Does the discovery exception in § 25-223 save the action? | Homeowners relied on discovery exception because defects weren’t discovered within 4 years after the act. | Defendants argued homeowners discovered defects by Dec. 2009, which was within the 4-year window after substantial completion. | Discovery occurred by Dec. 2009, so the discovery exception does not apply. |
| Was the fraudulent concealment claim sufficient to toll the statute? | Plaintiffs asserted Southfork concealed defects, preventing timely suit. | Defendants argued no concealment; plaintiffs knew of foundation issues by Dec. 2009. | Fraudulent concealment claim fails as a matter of law; no tolling. |
Key Cases Cited
- Witherspoon v. Sides Constr. Co., 219 Neb. 117 (workmanship-based construction claims accrue at completion, not at date of individual act)
- Board of Regents v. Lueder Constr. Co., 230 Neb. 686 (express warranty issuance does not delay accrual of workmanship-based claims; accrual at substantial completion)
- Andres v. McNeil Co., 270 Neb. 733 (§ 25-223 is the special limitations statute governing construction/improvement claims)