LTL Acres Limited Partnership v. Butler Manufacturing Co.
136 A.3d 682
| Del. | 2016Background
- LTL Acres owned a retail building completed in 2006; Butler supplied pre-engineered metal building components and Dryvit supplied an exterior insulation and finish system (EIFS) with a 10-year limited warranty.
- The building experienced water infiltration and EIFS cracking/delamination beginning soon after completion and continuing through 2012–2013.
- LTL sued Butler and Dryvit in July 2013 for breach of warranty, breach of contract, and negligence (Butler); breach of warranty and contract (Dryvit).
- Superior Court granted summary judgment for Butler under 10 Del. C. § 8127 (six-year statute for improvements to real property), finding Butler had specially engineered the system.
- Superior Court also granted summary judgment for Dryvit under 6 Del. C. § 2-725 (four-year UCC limitations), concluding the Dryvit warranty was not an explicit warranty of future performance and thus accrued at tender/delivery.
- Delaware Supreme Court affirmed the result as to Butler, but reversed as to Dryvit, holding the Dryvit warranty did explicitly extend to future performance so accrual awaits discovery of the breach; remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Butler "furnished construction" of an improvement to real property under 10 Del. C. § 8127, triggering a 6-year statute | Butler only supplied materials; § 8127 inapplicable | Butler specially engineered and fabricated system components; § 8127 applies | Butler furnished construction; § 8127 applies; summary judgment for Butler affirmed |
| Whether Dryvit's 10-year warranty "explicitly extends to future performance" under 6 Del. C. § 2-725 so accrual is discovery-based | Warranty is for future performance; accrual upon discovery of breach | Warranty limits remedy to repair/replace so accrual occurred at tender/delivery | Warranty expressly promises future performance (uses "will"); accrual awaits discovery; summary judgment for Dryvit reversed and remanded |
| Whether limiting the remedy to repair or replacement precludes finding a future-performance warranty | N/A (LTL accepted limited remedy but argued explicit future-performance language controls) | Remedy limitation means warranty is only remedial, not future-performance | Limitation on remedy is not dispositive; explicit warranty language controls |
| Whether the Superior Court needed factual findings on discovery timing for Dryvit breach | Accrual is discovery-based; factual determination required | Accrual occurred at delivery; no further factual inquiry needed | Superior Court erred by treating accrual as delivery-based; remand required to determine discovery timing |
Key Cases Cited
- City of Dover v. Int’l Tel. & Tel. Corp., 514 A.2d 1086 (Del. 1986) (defendant’s off-site fabrication can constitute furnishing construction of an improvement)
- Lank v. Moyed, 909 A.2d 106 (Del. 2006) (standard of appellate review for summary judgment)
- R.W. Murray Co. v. Shatterproof Glass Corp., 697 F.2d 818 (8th Cir. 1983) (limitation of remedy to repair/replace is not dispositive on whether warranty extends to future performance)
- Joswick v. Chesapeake Mobile Homes, Inc., 747 A.2d 214 (Md. Ct. Spec. App. 2000) (contrasting authority holding repair/replace remedy indicates warranty is not one of future performance)