EAST SIDE LUTHERAN CHURCH OF SIOUX FALLS, Sоuth Dakota, a South Dakota Nonprofit Corporation v. NEXT, INC., a South Dakota Corporation, Defendant, Third-Party Plaintiff and Appellee, v. Fiegen Construction Co., a South Dakota Corporation and Brown Architecture & Design Co. n/k/a Studio 360 Architecture, Inc., a Nebraska Corporation, Third-Party Defendants, Fourth-Party Plaintiffs and Appellees, v. M.J. Dalsin Co. of S.D., Inc., Fourth-Party Defendant, Fifth-Party Plаintiff and Appellee, v. Jeff Prins d/b/a AJ Construction, Fifth-Party Defendant.
No. 26776.
Supreme Court of South Dakota.
Argued April 29, 2014. Decided Aug. 6, 2014.
2014 S.D. 59
Paul W. Tschetter, Roger A. Sudbeck, Boyce, Greenfield, Pashby & Welk, LLP, Sioux Falls, South Dakota, Attorneys for defendant, third-party plaintiff and appellee NEXT, Inc.
Derek A. Nelson, William P. Fuller, Fuller & Williamson, LLP, Sioux Falls, South Dakota, Attorneys for third-party defendant, fourth-party plaintiff and appellee Brown Architecture & Design Co.
Michael L. Luce, Murphy, Goldammer & Prendergast, LLP, Sioux Falls, South Dakota, Attorneys for third-party defendant, fourth-party plaintiff and appellee Fiegen Construction Co.
Gregory J. Erlandson, Bangs, McCullen, Butler, Foye & Simmons, LLP, Rapid City, South Dakota, Attorneys for fourth-party defendant, fifth-party plaintiff and appellee M.J. Dalsin Co. of S.D., Inc.
SEVERSON, Justice.
Background
[¶ 2.] In April 2002, East Side contracted with NEXT, Inc. (NEXT) for construction of a new addition to East Side’s church and renovation to its existing struc
[¶ 3.] In the months immediately fоllowing the project’s completion, East Side experienced a variety of problems throughout the structure. The problems included ice dams, bats in the church, chipping concrete, hail penetration, and drainage issues, but the overriding problem was water infiltration.2 The water infiltration persisted and resulted in this litigation.
[¶ 4.] East Side and NEXT communicated about, and NEXT attempted to eradicate, the water infiltration from the date of the project’s completion until May 2009. On January 23, 2009, NEXT’s attorney sent a letter to East Side explaining that Fiegen and Dalsin were “unwilling to perform any additional work[,]” and that NEXT had, without admitting liability, “notified its insurance carrier of a potential claim.” Later that spring, on May 28, 2009, NEXT’s attorney informed East Side’s attorney that NEXT “will be undertаking no additional repairs to” the church. The letter further stated that East Side “will need to either undertake its own repairs and proceed with litigation or contact Fiegen and Dalsin regarding any such repairs.”
[¶ 5.] In March 2010, East Side hired Michael Ollerich of American Technical Services. Ollerich’s reports confirmed that the church was experiencing water infiltration. Olleriсh’s reports further indicated the project’s design contained structural errors; the work completed contained construction errors; and the structure was experiencing ventilation and insulation problems. East Side filed suit against NEXT in July 2010.3
[¶ 6.] NEXT, Brown, Fiegen, and Dalsin (Defendants) moved for summary judgment on the basis that East Side filed its suit outside of the six-year statute of limitations. See
[¶ 7.] East Side opposed summary judgment and argued that its lawsuit is based in part on the project’s structural design errors and construction errors. Because it did not know of the structural design errors and construction errors until Ollerich’s 2010 reports, it argued its claims
[¶ 8.] The circuit court granted summary judgment to Defendants on the statute of limitations issue because East Side “had actual or constructive notice of a causе of action immediately after the substantial completion [of the project] in August of 2003.” The circuit court also granted summary judgment to Defendants on the issue of equitable estoppel because there was no “genuine issue of material fact regarding whether or not any of the [D]efendants misrepresented or concealed material facts from [East Side] in оrder to induce [East Side] to change its position in reliance upon either those misrepresentations or that concealment.” East Side now appeals to this Court arguing the circuit court’s rulings on the statute of limitations and equitable estoppel were error.4
Decision
Statute of limitations
[¶ 9.] The parties agree that the six-year statute of limitations prescribed by
[¶ 10.] A claim accrues when a plaintiff has actual or constructive notice of a cause of action. Strassburg v. Citizens State Bank, 1998 S.D. 72, ¶ 10, 581 N.W.2d 510, 514. “Actual notice cоnsists in express information of a fact.”
[¶ 11.] “Because the point at which a period of limitations begins to run must be decided from the facts of each case, statute of limitations questions are normally left for a jury.” Strassburg, 1998 S.D. 72, ¶ 7, 581 N.W.2d at 513 (citation omitted); see also Wissink v. Van De Stroet, 1999 S.D. 92, ¶ 11, 598 N.W.2d 213, 215 (citations omitted) (“This Court has recognized that, generally, statute of limitations questions are left for the jury.”); Huron Ctr., Inc. v. Henry Carlson Co., 2002 S.D. 103, ¶ 11, 650 N.W.2d 544, 548 (citation omitted) (“[T]he question of when accrual occurred is one of fact genеrally reserved for trial.”). “Here, we must ascertain whether there is any genuine issue of material fact concerning the date the
[¶ 12.] There is no genuine issue of material fact concerning East Side’s аctual notice of the water infiltration prior to July 2004. It is undisputed East Side knew water infiltration existed throughout the building almost immediately after construction was completed in August 2003. Because East Side’s actual notice of the water infiltration gave rise to a situation where East Side could have filed suit and sought relief, any claim with a sufficient relationship to the water infiltration so as to put East Side on constructive notice of that claim (water infiltration claim) accrued and statutorily lapsed prior to East Side’s July 2010 lawsuit. See Spencer v. Estate of Spencer, 2008 S.D. 129, ¶ 16, 759 N.W.2d 539, 544 (citation omitted) (“A cause of action accrues when the right to sue arises.”).
[¶ 13.] We must next determine whether accrual of the water infiltration claims encompasses all of East Side’s alleged design and construction error claims, and whether that is a factual or legal question.5 East Side contends this case presents “different acts constituting breaches of contract,” which result “in separate or different damages” that “give rise to separately accrued claims.” East Side argues that “[m]any of the structural deficiencies and defects [discovered in 2010] had nothing to do with water infiltration[,]” and as a result, there is a factual dispute as to when the different claims accrued. Defendants argue that the water infiltration places East Side, as a matter of law, on constructive notice of any other defect in the building. Defendants contend there have not been different acts constituting separate breaches of contract, but only East Side learning the full extent of its damages.6
[¶ 14.] A claim can accrue “even when one may not yet know all the
[¶ 15.] East Side had actual notice of the water infiltration throughout its building prior to July 2004. Whether that actual notice is enough to put East Side on constructive notice of its structural design error and construction error claims (making the structural design error and construction errоr claims accrue prior to July 2004), and whether that determination is a question of fact or law, is the heart of this case. Because what a reasonably prudent person should inquire into when learning of water infiltration can differ depending on the circumstances, we conclude there is a genuine issue of material fact as to when East Side’s structural design error and cоnstruction error claims accrued. Huron Ctr., 2002 S.D. 103, ¶ 11, 650 N.W.2d at 548 (providing when accrual occurs is a question of fact reserved for trial). As a result, it is up to the trier of fact to determine whether East Side’s actual notice of the water infiltration constitutes a sufficient circumstance to put a prudent person on inquiry of each of the construction error and design error claims East Side сomplains of, i.e., which of East Side’s claims are barred by the statute of limitations because of the relationship to the water infiltration. See Strassburg, 1998 S.D. 72, ¶ 10, 581 N.W.2d at 514; see also
[¶ 16.] Defendants ask us to rule as a matter of law that East Side possessed constructive notice of its design error and construction error claims. In doing so, Defendants state Ollerich’s reports did not outline separate and distinct causes of action, but rather outlined the full extent of East Side’s damages. Defendants argue that the water infiltration was such an obvious manifestation of a defect that all reasonably prudent persons would be put on inquiry about underlying problems with the design and construction of the building. See Huron Ctr., 2002 S.D. 103, ¶ 16, 650 N.W.2d at 549 (“There is, however, no evidence of the initial severity of the problems, whether it was possible that they could have been dismissed as simple maintenance, or at what point the problems became such that Huron Center should have known they were beyond routine re
Equitable Estoppel
[¶ 17.] Equitable estoppel will only be applied when all four elements are proven by clear and convincing evidence: (1) Defendants made false representations to or concealed material facts from East Side; (2) East Side did not have knowledge of the real faсts; (3) the misrepresentations or concealment was made with the intention that it should be acted upon; and (4) East Side relied upon those misrepresentations or concealment to its prejudice or injury. See Wilcox v. Vermeulen, 2010 S.D. 29, ¶ 19 n. 7, 781 N.W.2d 464, 471 n. 7 (citations omitted); see also Cooper v. James, 2001 S.D. 59, ¶ 16, 627 N.W.2d 784, 789 (citations omitted).
[¶ 18.] East Side contends that NEXT lulled East Side “into a false sense of security” when NEXT continually reassured East Side that the water infiltration would be fixed. East Side contends this crеates a question of fact preventing summary judgment. See Cooper, 2001 S.D. 59, ¶¶ 17-18, 627 N.W.2d at 789. We disagree. Even if East Side was lulled into a false sense of security that its problems would be fixed, it fails to identify a single fact demonstrating that Defendants misrepresented or concealed material facts. Indeed, NEXT, on numerous occasions, attempted to fix the water infiltration and even stated that it did not know why the infiltration continued. In addition, East Side had knowledge of the real facts of the case—that there was leaking throughout the building.
[¶ 19.] Even if Defendants’ actions to fix the water infiltration were misrepresentations intended to be relied upon, East Side could not have reasonably relied on those representations.7 In January 2009, NEXT informed East Side it had submitted a claim to its insurer. In May 2009, NEXT informed East Sidе that NEXT would not be undertaking any additional repairs to the church. The May 2009 letter further stated that East Side “will need to either undertake its own repairs and proceed with litigation or contact Fiegen and Dalsin regarding any such repairs.” These communications were given within the statute of limitations for any water infiltration claim. Therefore, equitable estoppel was properly denied by the circuit court.
[¶ 21.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and WILBUR, Justices, concur.
Notes
De Smet Farm Mut. Ins. Co. of S.D. v. Busskohl, 2013 S.D. 52, ¶ 11, 834 N.W.2d 826, 831 (citation omitted).We must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.