B. Mahler Interests, LP v. DMAC Construction, Inc.
14-15-00061-CV
| Tex. App. | Dec 9, 2015Background
- Mahler hired DMAC as general contractor (contract signed Nov. 29, 2005) for Briscoe Manor; work (doors, certain flooring, porch roofs) was substantially complete by Oct. 25, 2006 and finally complete by Jan. 31, 2008.
- Mahler waited until Oct. 26, 2012—over four years after completion—to sue for breach of contract and breach of warranty based on the doors, flooring, and porch roofs.
- In April–August 2007 Mahler obtained product specs/warranty info for the doors and retained an inspector/engineer who reported porch‑roof sagging and noted doors might be interior grade; Mahler discussed these issues with DMAC and requested limited corrective work in 2007–2008.
- Mahler admits he obtained the door manufacturer’s specifications and warranty information in April 2007 and that DMAC left excess flooring (with manufacturer info) on site; Mahler also admits noticing porch‑roof sag by 2007 and emailing DMAC about framing on Jan. 1, 2008.
- DMAC moved for summary judgment on statutes of limitations, arguing (a) claims accrued at delivery/substantial completion under the UCC and AIA contract clause; (b) the discovery rule and fraudulent concealment do not apply because issues were discoverable and Mahler had or should have had notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Mahler’s breach of contract/warranty claims time‑barred by the four‑year statute? | Mahler contends limitations should be tolled by discovery rule or fraudulent concealment. | DMAC argues claims accrued at delivery/substantial completion and thus are time‑barred absent tolling; discovery rule and concealment inapplicable. | Court granted summary judgment for DMAC: claims barred—limitations expired before suit. |
| Does the discovery rule defer accrual? | Mahler argues latent defects/supporting evidence justify delayed accrual. | DMAC argues discovery rule is contractually precluded, and injuries were not inherently undiscoverable—Mahler knew or should have known by 2007. | Discovery rule inapplicable: contract clause and facts show accrual by 2007/2008. |
| Does the contract (AIA General Conditions §13.7.1) eliminate delayed accrual? | Mahler argues it should not be bound (unsophisticated, unrepresented). | DMAC contends the clause validly fixes accrual at substantial completion and bars delayed accrual. | Clause enforced; parties bound—contract eliminates delayed accrual argument. |
| Can fraudulent concealment toll limitations? | Mahler alleges DMAC concealed facts about doors and floors and (in amended pleading) porches. | DMAC shows Mahler’s own testimony that DMAC made no misrepresentations, Mahler received manufacturer info in 2007, and Mahler had notice of porch sag—so no concealment or reasonable reliance. | Fraudulent concealment fails: Mahler did not plead concealment as to porches in the live petition; no evidence of concealment, intent, or reasonable reliance. |
Key Cases Cited
- Shell Oil Co. v. Ross, 356 S.W.3d 924 (Tex. 2011) (fraudulent concealment tolling requires proof of concealment and reasonable reliance)
- BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59 (Tex. 2011) (reliance unreasonable where plaintiff could have discovered truth through reasonable diligence)
- PPG Indus., Inc. v. JMB/Houston Ctrs. Partners Ltd. P’ship, 146 S.W.3d 79 (Tex. 2004) (discovery rule does not defer accrual once plaintiff knew enough to seek remedy)
- Via Net v. TIG Ins. Co., 211 S.W.3d 310 (Tex. 2006) (discovery‑rule applies only to inherently undiscoverable injuries; contracting parties bear duty to exercise diligence)
- HECI Expl. Co. v. Neel, 982 S.W.2d 881 (Tex. 1998) (availability of investigative sources defeats inherently undiscoverable claim)
- Bayou Bend Towers Council of Co‑Owners v. Manhattan Const. Co., 866 S.W.2d 740 (Tex. App.—Houston [14th Dist.] 1993) (notice of facts sufficient to terminate estoppel effect of fraudulent concealment)
- Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732 (Tex. 2001) (party receiving information must exercise additional diligence to protect its interests)