BANKERS STANDARD INSURANCE COMPANY, a Pennsylvania company v. JTEC, INC., a Wyoming corporation
S-24-0168
IN THE SUPREME COURT, STATE OF WYOMING
May 1, 2025
2025 WY 51
JAROSH, Justice.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of typographical or other formal errors so correction may be made before final publication in the permanent volume.
JAROSH, Justice.
[¶1] This matter comes before the Court as a certified question of state law from the United States Court of Appeals for the Tenth Circuit. The question asks when a professional’s act, error, or omission occurred under
CERTIFIED QUESTION
[¶2] We agreed to answer the following certified question:
When does a professional’s “act, error[,] or omission” occur under
Wyo. Stat. Ann. § 1-3-107 in a tort action (1) between parties not in contractual privity; (2) alleging an engineer negligently designed a component part of an engineering plan; where (3) the engineer submitted several sets of plans, each containing the allegedly defective design?
FACTS
[¶3] When answering certified questions of law through
[¶4] JTEC is a licensed professional engineering firm in Wyoming. In August 2017, JTEC contracted with an architectural firm, Studio Plaid, to design a water mechanical system for the Fairway Lodge housing development in Jackson, Wyoming. That same month, JTEC stamped its first design plans and submitted them to local officials with a building permit application.1 JTEC made additional revisions to the design plans and, on March 1, 2018, produced and stamped its third revision, which included a water entry detail2 which placed a pressure reducing valve (PRV) downstream of a water filter and filter housing at each residence. JTEC sent its sixth (and final) set of engineer-stamped design plans to Studio Plaid on May 31, 2018. Although the sixth revision included small changes from previous versions, the water entry detail did not change from the third revision. After May 31, 2018, JTEC did not submit any other changes to the mechanical plans under its contract with Studio Plaid.
[¶5] Lauren and David Grossman purchased a Fairway Lodge home in January 2019 and insured the property through Bankers Standard Insurance Company (Bankers).
[¶6] In early June 2019, plumbers followed JTEC’s design plans and installed the PRV downstream from the water filter and housing at the Grossmans’ home. The Certification Order does not indicate which set of engineering plans the plumbers used. The Grossmans moved into their new home in late June 2019.
[¶7] On May 7, 2020, water flooded the Grossmans’ home. The Grossmans’ plumber determined the water-filter housing had failed because the plumbing had been installed incorrectly. Specifically, Bankers allege that JTEC’s placement of the PRV downstream of the water filter exposed the water filter to water pressure it was not designed to withstand. Bankers paid the Grossmans for the damage to their home in accordance with their insurance policy, obtained the right of subrogation, and initiated the underlying action on May 6, 2022. In addition to asserting claims against the general contractor that built the home and the plumber responsible for installing the water entry detail, Bankers sued JTEC, alleging it negligently designed the water entry detail.
[¶8] JTEC moved for summary judgment, arguing Bankers’ action was barred by the limitation period in
[¶9] The district court agreed with JTEC, granted its summary judgment motion, and dismissed Bankers’ claim against the engineering firm. At Bankers’ request, the district court then stayed the litigation against the other defendants pending appeal to the Tenth Circuit.
[¶10] The Tenth Circuit issued its Certification Order on July 1, 2024, and it was filed with this Court on July 11, 2024. We agreed to answer the certified question on July 18, 2024. Following briefing by the parties, this Court heard oral argument on January 14, 2025.
STANDARD OF REVIEW
[¶11] “Certified questions are governed by
[¶12] The certified question before the Court presents an issue of statutory interpretation. Questions of statutory interpretation are subject to de novo review. Id. (citing Phoenix Vintners, LLC v. Noble, 2018 WY 87, ¶ 10, 423 P.3d 309, 312 (Wyo. 2018)). Certified questions are questions of law reviewed de novo. Palm-Egle v. Briggs, 2024 WY 31, ¶ 11, 545 P.3d 828, 832 (Wyo. 2024)
DISCUSSION
[¶13] The certified question requires this Court to examine the language in
§ 1-3-107. Act, error or omission in rendering professional or health care services.
(a) A cause of action arising from an act, error or omission in the rendering of licensed or certified professional or health care services shall be brought within the greater of the following times:
(i) Within two (2) years of the date of the alleged act, error or omission, except that a cause of action may be instituted not more than two (2) years after discovery of the alleged act, error or omission, if the claimant can establish that the alleged act, error or omission was:
(A) Not reasonably discoverable within a two (2) year period; or
(B) The claimant failed to discover the alleged act, error or omission within the two (2) year period despite the exercise of due diligence.
***
(iv) If under paragraph (i) or (ii) of this subsection, the alleged act, error or omission is discovered during the second year of the two (2) year period from the date of the act, error or omission, the period for commencing a lawsuit shall be extended by six (6) months.
[¶14] The primary objective in statutory interpretation “is to give effect to the legislature’s intent.” Sinclair Wyoming Refining Co., 486 P.3d at 994 (quoting Cheyenne Newspapers, Inc. v. Bd. of Trustees of Laramie County. Sch. Dist. No. 1, 2016 WY 113, ¶ 10, 384 P.3d 679, 682 (Wyo. 2016)). This Court’s longstanding method of statutory interpretation begins by first determining if the statute in question is “clear and unambiguous” or “ambiguous or subject to varying interpretations.” Id. (quoting Ultra Res., Inc. v. Hartman, 2010 WY 36, ¶ 69, 226 P.3d 889, 916 (Wyo. 2010)).
[¶15] “A statute is unambiguous if its wording is such that reasonable persons are able to agree as to its meaning with consistency and predictability. A statute is ambiguous only if it is found to be vague or uncertain and subject to varying interpretations.” Vahai v. Gertsch, 2020 WY 7, ¶ 27, 455 P.3d 1218, 1227 (Wyo. 2020) (quoting State v. Bannon Energy Corp., 999 P.2d 1306, 1308-09 (Wyo. 2000)).
[¶16] “[D]ivergent opinions among parties as to the meaning of a statute may be evidence of ambiguity but [are] not conclusive. Ultimately, whether a statute is ambiguous is a matter of law determined by the court.” Wyoming Med. Ctr., Inc. v. Wyoming Ins. Guar. Ass’n, 2010 WY 21, ¶ 19, 225 P.3d 1061, 1066 (Wyo. 2010) (citing Kennedy Oil v. Dep’t of Revenue, 2008 WY 154, ¶ 10, 205 P.3d 999, 1003 (Wyo. 2008)).
I. In a tort action, the absence of contractual privity is not relevant in determining when the limitation in § 1-3-107 attaches.
[¶17] Implied in the certified question is whether the absence of contractual privity effects when the statute of limitation attaches to a professional’s act, error, or omission in a tort action under
[¶18] We start with the plain meaning of the language in the statute. Sinclair Wyoming Refining Co., 486 P.3d at 995. This Court has interpreted
[¶19] Section 107(a) addresses “[a] cause of action arising from an act, error or omission in the rendering of licensed or
[¶20] Tellingly, the parties do not argue
[¶21] The unambiguous text in
[¶22] Therefore, in a tort-based professional malpractice action, the absence of contractual privity is not relevant in determining when the statute of limitation attaches to an alleged act, error, or omission by a licensed professional.4
II. In a tort action, the limitation in § 1-3-107 attaches to the design that was the legal cause of the plaintiff’s injuries.
[¶23] We have already determined that the limitation in
[¶24] “When the cause of action for professional negligence sounds in tort, the elements are (1) the duty of the professional to use such skill, prudence, and diligence as other members of the profession commonly possess and exercise; (2) a breach of that
[¶25] Bankers’ claim against JTEC rests exclusively in tort and its second amended complaint alleges JTEC breached its duty when “it failed to design the mechanical system with good engineering practices and standards” and its failure to design the mechanical system was the direct and proximate cause of the Grossmans’ damages. The amended complaint does not allege a particular version of the water entry detail designed by JTEC was the source of the alleged failure.
[¶26] The parties do not dispute engineers are licensed professionals for the purpose of
[¶27] Given the parties’ general agreement on these matters, this Court turns its attention to the third element of a professional negligence claim, proximate cause, which responds to the remaining portion of the certified question.
A. An engineer’s seal is evidence that a professional service was rendered but, in isolation, does not conclusively determine when the statute of limitation attaches.
[¶28] Bankers argues “the clearest date” of the alleged design error occurred “no later than” March 1, 2018, when JTEC stamped its third revision. The third revision of the design was the first documented instance in the record where the water filter and housing were placed upstream from the PRV. Bankers maintains this Court has held the use of a professional engineer’s stamp or seal on a negligent plan constitutes the relevant act, error, or omission under
[¶29] Bankers argues our ruling in Pioneer Homestead indicates courts have used an engineer’s stamp date as the decisive date to determine when an act of negligence occurred under
[¶30] In Wyoming, licensed engineers must affix their seal on original and non-original “copies, tracings or other documents” as required by
[¶31] A professional engineer’s seal is evidence of rendering a professional service in Wyoming.
[¶32] However, the presence of an engineer’s seal alone does not resolve which design triggered the statute of limitation when each version bears both the engineer’s seal and the same alleged design error. Common sense dictates a legal claim cannot have two different dates triggering the applicable statute of limitation. Cf. Duke v. Housen, 589 F.2d 334, 343 (Wyo. 1979) (recognizing “[a] single act of negligence creates only one cause of action[.]“). While an engineer’s seal is evidence of rendering professional services, it does not necessarily reveal which design or revision was ultimately used by a manufacturer or contractor. Here, the engineer’s seal does not reveal whether the plumbing subcontractor relied upon the third revision of JTEC’s design plans related to the water entry detail, the fourth revision, the sixth revision, or some other version. In other words, the seal reveals nothing about causation. Therefore, we find a professional engineer’s seal or stamp, in and of itself, inconclusive in calculating the statute of limitation when used on multiple versions of designs that all contain the same alleged deflect or flaw.
B. The statute of limitation in § 1-3-107 attaches to the design that was a substantial factor in bringing about the alleged injury.
[¶33] Bankers argues the operative act of negligence triggering the statute of limitation occurred “no later than” March 1, 2018, because that is the first documented instance where JTEC stamped a design with the filter and housing upstream from the PRV. JTEC argues the statute of limitation attached May 31, 2018, when its professional services ended, and the final design was submitted to Studio Plaid.
[¶34] The Wyoming and Nebraska professional malpractice statutes share similarities.7 As such, we have cited
[¶35] Nebraska embraces the “occurrence rule” to determine when the statute of limitation attaches under
[¶36] The Nebraska Supreme Court’s ruling in Reinke demonstrates how the occurrence rule was applied in a case involving engineering designs. See Reinke Mfg. Co., Inc. v. Hayes, 590 N.W.2d 380 (Neb. 1999). There, a manufacturer hired an engineer to design a center pivot irrigation system for agricultural users. Id. at 385. After the engineer completed its work, and the center pivots were constructed with the design, the manufacturer received complaints from its consumers about the units. Id. The manufacturer initially worked with the design engineer to resolve the issue and even documented the defect internally before seeking outside assistance. Id. By the time the manufacturer filed suit, more than two years had elapsed since the engineer completed the center pivot design with the alleged defect. Id.
[¶37] The manufacturer maintained it did not sustain a legal injury until after it had given the engineer an opportunity to resolve the problem with faulty center pivots. Id. at 388. The engineer argued the manufacturer’s allegations related only to the initial design of the
system, therefore, any legal injury occurred when the design was delivered (and before manufacturing) because that constituted the last instance in which the engineer could have failed in rendering services as a licensed professional. Id. at 388-89.
[¶38] The Nebraska Supreme Court started by considering which act led to the manufacturer’s injury. Id. at 389. Recognizing a “[l]egal injury is the wrongful act or omission which causes the loss[,] it is not damage, which is the loss resulting from the misconduct[,]” the court then reviewed the manufacturer’s allegations. Id. (citing Rosnick, 357 N.W.2d at 190). That court agreed with the engineer that the manufacturer’s allegations only related to the design of the mechanical system and found the alleged error was “manifested in the design” of that system. Id. at 389. It then concluded “any act or occurrence of negligence in the design of the system occurred by the date [the engineer] had delivered the design to [the manufacturer] to begin manufacturing.” Id.
[¶39] As a result, Nebraska courts recognize “[a] period of limitations begins to run upon the violation of a legal right, that is, when the aggrieved party has the right to institute and maintain a suit.” Reinke, 590 N.W.2d at 389 (citing Witherspoon v. Sides Constr. Co., 362 N.W.2d 35 (Neb. 1985)). The Wyoming Supreme Court has long taken a similar approach, stating the general rule that the statute of limitation attaches to the wrongful act affording a legal remedy because “[the] act itself is regarded as the ground of the action[ ] and is not legally severable from its consequences.” Duke v. Housen 589 P.2d 334, 343 (Wyo. 1979).
[¶40] Our prior interpretations of
[¶41] We did not need to apply our interpretation in Lucky Gate Ranch because the action was time barred regardless of whether
[¶42] Wyoming and Nebraska case law offer insight into addressing the scenario presented by the certified question. When presented with several sets of engineering plans, each containing the same alleged defective design, the court starts with the allegations in the complaint to determine what act, error, or omission led to the alleged injury. See
[¶43] Put differently, the limitation in
[¶44] In some instances, a complaint may allege an engineer negligently designed a defective component on a specific date or in an earlier version before the plans were completed. There, the statute of limitation would attach to an alleged act of negligence associated with the earlier design assuming the plaintiff can sustain the cause of action by demonstrating the particular revision was the legal cause of the alleged injuries or damages. See Rino, ¶ 19, 55 P.3d at 20 (identifying the elements for establishing a professional malpractice cause of action in tort); see also, ABC Builders, Inc. v. Phillips, 632 P.2d 925, 931 (Wyo. 1981) (same).
[¶45] We decline Bankers’ invitation to apply the principle from Metzger that states, “where two constructions as to the limitation period are possible, the courts prefer the one which gives the longer period in which to prosecute the action.” Metzger v. Kalke, 709 P.2d 414, 417 (Wyo. 1985). Bankers’ argument ignores the preceding sentence in Metzger which provides this Court is “mindful that the statute of limitations represents legislative and public policy controlling the right to litigate and that we must give full force to the applicable statute without regard to the merits of a particular claim.” Metzger, 709 P.2d at 417. Although the parties dispute which revision to the water entry detail triggered the statute of limitation, their arguments do not present a concrete conflict with
[¶46] Finally, we emphasize analysis of a statute of limitation is case and fact specific. See Irene v. Seneca Ins. Co., Inc., 2014 WY 145, ¶ 22, 337 P.3d 483, 491-92 (Wyo. 2014) (stating when facts are in dispute “the applicability of a statute of limitations involves a mixed question of law and fact“) (citation omitted); see also Gordon v. Connell, 545 N.W.2d at 774-75 (stating “[t]he point at which a statute of limitations begins to run must be determined from the facts of each case[.]“). The Certification Order does not indicate which set of engineering plans were used to install the water entry detail at the Grossmans’ residence (i.e., which plan was a substantial factor in bringing about the Grossmans’ injuries). Thus, we cannot determine which revision was the legal cause of Bankers’ alleged injuries based on the facts presented.
CONCLUSION
[¶47] In summary, we answer the certified question as follows:
- For purposes of
§ 1-3-107 , the absence of contractual privity is not relevant in determining when the statute of limitation attaches in a tort action. - In a cause of action alleging an engineer negligently designed a component part of an engineering plan, and when the engineer submitted several sets of plans, each containing the allegedly defective design, the statute of limitation in
§ 1-3-107 attaches to the design that was the legal cause of the alleged injuries. The legal cause is the alleged act, error, or omission that was a substantial factor in bringing about the plaintiffs’ injuries. We do not have sufficient facts to determine which set of engineering plans were used by the plumber to install the PRV at the Grossmans’ residence.
JAROSH, Justice.