Steven M. Bernard v. 3 Chisolm Street Homeowners Association, 2019-001100

Background

In 2015 Steven and Deborah Bernard (on behalf of themselves and similarly situated unit owners) sued the 3 Chisolm Street Homeowners' Association (HOA) for breach of duty, negligence, and gross negligence, alleging the HOA failed to timely sue for construction/foundation defects and the owners therefore bore repair costs.
The HOA previously filed a 2009 water intrusion lawsuit that was dismissed in June 2011 on statute-of-limitations grounds; unit owners had been told the HOA's limitations period for construction defects expired in April 2006.
A January 30, 2008 letter (and the June 2011 dismissal) were central to whether plaintiffs were on notice of a possible claim against the HOA.
Plaintiffs filed the 2015 action on January 2, 2015; the trial court granted summary judgment for the HOA on statute-of-limitations grounds.
On appeal plaintiffs argued the 2008 letter and the 2011 dismissal did not start the limitations period and that tolling or other doctrines should apply; the Court of Appeals affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Jan. 30, 2008 letter triggered the statute of limitations	Bernard: letter did not put them on notice so as to start the limitations period	HOA: letter (and other information) put owners on notice so limitations began	Court: Jan. 30, 2008 (or at latest June 2011) put plaintiffs on notice and began the limitations period
Whether the June 9, 2011 dismissal (of HOA's 2009 suit) tolled accrual or was required before plaintiffs knew of injury	Bernard: appeal/dismissal should toll or be required for accrual	HOA: no tolling — plaintiffs need not await adverse ruling on unrelated appeal to know injury	Court: appeal did not toll accrual; plaintiffs did not need to wait for that adjudication
Whether plaintiffs reasonably should have known they would bear repair costs (exercise of reasonable diligence)	Bernard: they lacked sufficient notice or knowledge to bring suit earlier	HOA: facts and communications (April 2006 notice, 2008 letter, 2011 dismissal) put plaintiffs on inquiry notice	Court: plaintiffs should have known by Jan. 30, 2008 or June 2011 through reasonable diligence; statute barred suit
Which statute governs the limitations period (§ 15-3-530(5) vs § 33-31-830(f)) and whether result differs	Bernard: argued statutory framework inapplicable or tolled	HOA: either statute yields at most a three-year period; plaintiffs' suit is time-barred	Court: did not need to decide which statute controls because both provide at most a three-year limit and plaintiffs are barred under either

Key Cases Cited

Dillon Cnty. Sch. Dist. No. Two v. Lewis Sheet Metal Works, Inc., 286 S.C. 207 (Ct. App. 1985) (applies discovery rule to accrual of statute of limitations)
Atlas Food Sys. & Servs., Inc. v. Crane Nat. Vendors Div. of Unidynamics Corp., 319 S.C. 556 (1995) (addresses prior treatment of discovery-rule accrual; noted in opinion as overruling on other grounds)
Cline v. J.E. Faulkner Homes, Inc., 359 S.C. 367 (Ct. App. 2004) (clarifies that accrual under discovery rule occurs when plaintiff discovers or should have discovered injury through reasonable diligence)
Allwin v. Russ Cooper Assocs., Inc., 426 S.C. 1 (Ct. App. 2019) (‘‘reasonable diligence’’ requires some promptness once on notice of a potential claim)
Dorman v. Campbell, 331 S.C. 179 (Ct. App. 1998) (defines ‘‘exercise of reasonable diligence’’ and when limitations begin to run)
Dean v. Ruscon Corp., 321 S.C. 360 (1996) (extent of injury need not be comprehended for accrual; discovery rule accrues when cause might be known)
Crystal Ice Co. of Columbia, Inc. v. First Colonial Corp., 273 S.C. 306 (1979) (principal is charged with constructive knowledge of material facts known by agent)
Faulkner v. Millar, 319 S.C. 216 (1995) (notice to attorney is notice to client)
Hagood v. Sommerville, 362 S.C. 191 (2005) (court may decline other rulings when a dispositive issue resolves the appeal)