East Side Lutheran Church of Sioux Falls v. Next, Inc.
852 N.W.2d 434
S.D.2014Background
- East Side Lutheran Church contracted with NEXT in April 2002 for a church addition and renovations; Brown and Fiegen served as architect and general contractor respectively; Dalsin subcontracted roof work; project completed August 2003.
- Post-construction water infiltration and related problems manifested throughout the building (ice dams, leaks, voltage, ventilation issues); issues culminated in this litigation.
- Plaintiff sued NEXT in July 2010 for various design/construction defects; NEXT, Brown, Fiegen, and Dalsin moved for summary judgment on the six-year limitations period (SDCL 15-2-13).
- Court held that the six-year limitations period began in 2004 for any water-infiltration-related claims and that East Side’s suit in 2010 was time-barred unless accrual was tied to later-discovered design/construction defects.
- Circuit court also granted summary judgment on equitable estoppel; on appeal, the court reversed as to accrual for design/construction claims and remanded for fact-finding, while affirming denial of equitable estoppel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did accrual occur for East Side’s design/construction claims? | East Side argues accrual occurred in 2010 when design defects were discovered. | Defendants contend accrual occurred by 2004 due to actual/constructive notice from water infiltration. | Material-fact question; remanded to determine accrual timing. |
| Did water infiltration constitute constructive notice to trigger accrual of design/construction claims? | Actual notice of infiltration could not automatically trigger all related claims. | Water infiltration put East Side on notice for related defects; all claims anatomically tied to infiltration accrue earlier. | Genuine issue of material fact; must parse which claims relate to infiltration. |
| Was equitable estoppel proper to toll the statute? | NEXT’s assurances created reliance that repairs would occur. | No misrepresentation or concealment proven; statements were efforts to fix the problem. | Equitable estoppel properly denied. |
Key Cases Cited
- Strassburg v. Citizens State Bank, 581 N.W.2d 510 (1998 S.D. 72) (statute accrual based on notice; accrual is fact-specific)
- Huron Ctr., Inc. v. Henry Carlson Co., 650 N.W.2d 544 (2002 S.D. 103) (notice and accrual issues reserved for trial; obvious defects and notice)
- Spencer v. Estate of Spencer, 759 N.W.2d 539 (2008 S.D. 129) (cause of action accrues when right to sue arises)
- Dakota, Minn. & E. R.R. Corp. v. Acuity, 720 N.W.2d 655 (2006 S.D. 72) (multiple warranties or breaches under same contract; accrual can vary by claim)
- Jandreau v. Sheesley Plumbing & Heating Co., Inc., 324 N.W.2d 266 (S.D. 1982) (repair efforts do not extend contract limitations period)
- Cooper v. James, 627 N.W.2d 784 (2001 S.D. 59) (equitable estoppel requires clear and convincing proof of misrepresentation/ concealment)
- Strassburg v. Citizens State Bank, 581 N.W.2d 510 (1998 S.D. 72) (notice/accual timing; for which claims accrual date is fact-specific)
- St. Pierre v. State ex rel. S.D. Real Estate Comm’n, 813 N.W.2d 151 (2012 S.D. 25) (claims and proofs; pleadings vs. evidence in factual determinations)