Tuslaw Local School Dist. Bd. of Edn. v. CT Taylor Co., Inc.
135 N.E.3d 1162
Ohio Ct. App.2019Background
- Tuslaw Board sued MKC (designer), CT Taylor (contractor), and Hartford (surety) in Jan. 2018 alleging defective roof/building envelope at a high school completed by Dec. 2005, seeking damages and bond recovery.
- Claims pleaded: breach of contract against MKC (Design Contract) and CT Taylor (General Trades Contract), and claim against Hartford as surety for CT Taylor.
- Complaint attached portions of the Ohio School Design Manual (OSDM), the design and trade contracts, and documents indicating final payment and release of liens in Dec. 2005.
- Defendants moved to dismiss under Civ.R. 12(B)(6) asserting the claims are barred by Ohio’s ten-year statute of repose, R.C. 2305.131.
- Trial court granted dismissal; Board appealed arguing the statute of repose applies only to torts, that accrual and longer contract statutes of limitation control, that an express 40-year OSDM warranty saves its claims, and that Hartford’s bond liability is independent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether R.C. 2305.131 applies to breach of contract claims | R.C. 2305.131 is limited to tort claims; Kocisko supports that view | Statute’s plain language and legislative intent apply to actions for property damage arising from improvements, including contract claims | Statute of repose applies to contract claims; Rohrer precedent followed, Board’s first assignment overruled |
| Whether Board’s claims accrued within the 10-year repose period | Accrual means only start of limitations; Board had 15-year contractual limitations from accrual | R.C. 2305.131 is a true statute of repose extinguishing causes of action not discovered/commenced within 10 years (with limited 2-year discovery extension) | Claims extinguished by repose more than 10 years after substantial completion; accrual argument rejected |
| Whether express-warranty exception (R.C. 2305.131(D)) saves the claim | OSDM creates a 40-year warranty so claims fall within the express-warranty carve-out | Board did not plead breach of express warranty and did not raise warranty theory below for some defendants | Board failed to plead warranty elements and waived the argument as to CT Taylor and Hartford; exception inapplicable |
| Whether surety (Hartford) is independently liable despite principal’s defense | Bond is an independent obligation; surety liability exists even if contractor has defense | Surety’s liability is coextensive with principal; surety may assert principal’s defenses including repose | Claim against Hartford fails because principal’s claim (CT Taylor) is barred by repose; fourth assignment overruled |
Key Cases Cited
- Kocisko v. Charles Shutrump & Sons Co., 21 Ohio St.3d 98, 488 N.E.2d 171 (Ohio 1986) (previous version of R.C. 2305.131 construed as applying to tort claims)
- O'Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242, 327 N.E.2d 753 (Ohio 1975) (12(B)(6) standard: dismissal only if no set of facts would entitle plaintiff to relief)
- Byrd v. Faber, 57 Ohio St.3d 56, 565 N.E.2d 584 (Ohio 1991) (court must accept complaint allegations as true on motion to dismiss)
- Greeley v. Miami Valley Maintenance Contractors, Inc., 49 Ohio St.3d 228, 551 N.E.2d 981 (Ohio 1990) (standard of review for motion to dismiss)
- State v. Moore, 154 Ohio St.3d 94, 111 N.E.3d 1146 (Ohio 2018) (principle against statutory interpretations rendering portions meaningless)
- Holben v. Interstate Freight Sys., 31 Ohio St.3d 152, 509 N.E.2d 938 (Ohio 1987) (surety may assert defenses available to principal)
- State v. Herbert, 49 Ohio St.2d 88, 358 N.E.2d 88 (Ohio 1976) (surety liability is dependent on principal’s liability)