FORSYTH MEMORIAL HOSPITAL, INC., A NORTH CAROLINA NONPROFIT CORPORATION, AND CAROLINA MEDICORP, INC., A NORTH CAROLINA NONPROFIT CORPORATION, V. ARMSTRONG WORLD INDUSTRIES, INC., A PENNSYLVANIA CORPORATION
No. 319PA92
IN THE SUPREME COURT OF NORTH CAROLINA
Filed 17 June 1994
[336 N.C. 438 (1994)]
1. Pleadings § 108 (NCI4th) — Rule 12(b)(6) motion to dismiss — statute of limitations or repose
A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint by presenting the question whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief can be granted under some recognized legal theоry. A statute of limitation or repose may be the basis of a Rule 12(b)(6) dismissal if on its face the complaint reveals the claim is barred.
Am Jur 2d, Pleading §§ 226 et seq.
2. Limitations, Repose, and Laches § 33 (NCI4th) — installation of flooring — improvement to real property — furnishing of materials
Upon installation, vinyl flooring became an improvement to plaintiffs’ real property within the meaning of the real property improvement statute of repose,
Am Jur 2d, Building and Construction Contracts § 114.
3. Limitations, Repose, and Laches § 29 (NCI4th) — floor coverings containing asbestos — manufacturer as materialman — applicable statute of repose
The real property improvement statute of repose,
Am Jur 2d, Building and Construction Contracts § 114; Products Liability §§ 909-923.
What statute of limitations governs action by contractee for defective or improper performance of work by private building contractor. 1 ALR3d 914.
4. Limitations, Repose, and Laches §§ 27, 29 (NCI4th) — improvement to real property — remote manufacturer — applicable statute of repose
If defendant were only a remote manufacturer whose materials found their way to рlaintiffs’ job site indirectly through the commerce stream, defendant would not be a materialman and would not have furnished materials on the job site within the meaning of the real property improvement statute of repose. In such a case, the products liability, rather than the real property improvement, statute of repose would apply to plaintiffs’ claim based on materials containing asbestos used in the construction of an addition to plaintiffs’ hospital.
Am Jur 2d, Building and Construction Contracts § 114; Products Liability §§ 909-923.
What statute of limitations governs action by contractee for defective or improper performance of work by private building contractor. 1 ALR3d 914.
The six-year limitation of
Am Jur 2d, Building and Construction Contracts § 114.
6. Limitations, Repose, and Laches §§ 15, 31 (NCI4th) — improvement to real property — statute of repose — inapplicability to claim for willful and wanton negligence
The statute of repose for claims involving nonapparent property damage,
Am Jur 2d, Building and Construction Contracts § 114; Limitation of Actions § 135.
What statute of limitations governs action by contractee for defective or improper performance of work by private building contractor. 1 ALR3d 914.
Justice MEYER dissenting.
Haywood, Denny, Miller, Johnson, Sessoms & Patrick, by Michael Patrick, for Plaintiff/appellant.
Hutchins, Tyndall, Doughton and Moore, by H. Lee Davis, Jr. and Thomas J. Doughton, for Defendant/appellee.
EXUM, Chief Justice.
This is an action arising out of the purchase and installation on plaintiffs’ premises of asbеstos-contaminated construction materials allegedly furnished by defendant. Plaintiffs filed suit sounding in negligence, breach of implied warranty and willful and wanton disregard for the rights of plaintiffs and others similarly situated. The issue presently dividing the parties concerns which statute of repose governs the action and whether such statute of repose time bars the claim. Because under plaintiffs’ allegations, they may be able to prove that defendant, as a materialman, supplied directly to the jobsite the offending materials, plaintiffs’ claim may be governеd exclusively by the real property improvement statute of repose,
Plaintiffs own and operate a hospital in Forsyth County known as Forsyth Memorial Hospital, Inc. Plaintiffs filed this action on 30 August 1990 in Forsyth County Superior Court, alleging that “[f]loor tile and sheet vinyl flooring manufactured, sold and furnished by defendant was installed during the construction of certain parts of the hospital,” including an addition constructed in 1976 and 1977. During hospital renovations in 1989-90, plaintiffs discovered that some of the flooring materials supplied by defendant contained asbestos, an allegedly known hazardous material, and that plaintiffs were forced to incur additional costs resulting from its removal. The complaint further alleged that at the time of the manufacture
In praying for both compensatory and punitive damages, plaintiffs alleged negligence, breach of implied warranty and intentional, willful and wanton disregard of the rights of plaintiffs and others similarly situated. The superior court dismissed the action on defendant‘s Rule 12(b)(6) motiоn and the Court of Appeals affirmed. We now reverse in part the Court of Appeals and hold plaintiffs’ claim for willful and wanton misconduct was wrongfully dismissed.
[1] Because this appeal is before us by way of the Court of Appeals on a motion to dismiss for failure to state a claim upon which relief can be granted, we take all allegations of fact as true. Amos v. Oakdale Knitting Co., 331 N.C. 348, 351, 416 S.E.2d 166, 168 (1992). A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint by presenting “the question whether, as a matter of law, the allegations of the complaint, treatеd as true, are sufficient to state a claim upon which relief can be granted under some [recognized] legal theory.” Lynn v. Overlook Dev., 328 N.C. 689, 692, 403 S.E.2d 469, 471 (1991). A statute of limitation or repose may be the basis of a 12(b)(6) dismissal if on its face the complaint reveals the claim is barred. Oates v. Jag, 314 N.C. 276, 333 S.E.2d 222 (1985); F.D.I.C. v. Loft Apartments, 39 N.C. App. 473, 250 S.E.2d 693, disc. rev. denied, 297 N.C. 176, 254 S.E.2d 39 (1979); Travis v. McLaughlin, 29 N.C. App. 389, 224 S.E.2d 243, disc. rev. denied, 290 N.C. 555, 226 S.E.2d 513 (1976); Teague v. Asheboro Motor Co., 14 N.C. App. 736, 189 S.E.2d 671 (1972); Wright & Miller, Federal Practice and Procedure: Civil § 1357, at 608 (1969).
Analyzing the sufficiency of plaintiffs’ claim first requires a determination of the applicable statute of repose. The Cоurt of Appeals held, and we agree, that plaintiffs’ complaint was governed by the real property improvement statute of repose,
a. No action to recover damages based upon or arising out of the defective or unsafe сondition of an improvement to real property shall be brought more than six years from the later of the specific last act or omission of the defendant giving rise to the cause of action or substantial completion of the improvement.
b. For purposes of this subdivision, an action based upon or arising out of the defective or unsafe condition of an improvement to real property includes:
. . . .
9. Actions against any person furnishing materials, or against any person who develops real property or who performs or furnishes the design, plans, specifications, surveying, supervision, testing or observation of construction, or construction of an improvement to real property, or a repair to an improvement to real property.
[2] We conclude, as did the Court of Appeals, that upon installation the vinyl flooring became an improvement to plaintiff‘s real property. We also conclude that the phrase, “any person furnishing materials,” refers to a materialman who furnished materials to the jobsite either directly to the owner of the premises or to a contractor or subcontractor on the job.
Our conclusion finds support in other jurisdictions. See Snow v. Harnischfeger Corp., 823 F. Supp. 22, 25 (D. Mass. 1993) (defendant‘s “particularized service in designing and constructing [the materials] installed . . . makes it an actor within the protection of the Massachusetts statute of repose“); City of Dover v. International Tel. and Tel. Corp., 514 A.2d. 1086, 1089 (Del. Super Ct. 1986) (defendant “was more than a mere supplier of [the materials], because [defendant] fabricated the [materials] it delivered” to plaintiff). But see Independent School District #197 v. W.R. Grace & Co., 752 F. Supp. 286 (D. Minn. 1990); Cape Henry Towers, Inc. v. National Gypsum Co., 229 Va. 596, 331 S.E.2d 476 (1985) (extending statute оf repose to apply to even remote manufacturers); Corbally v. W.R. Grace & Co., 993 F.2d 492 (5th Cir. 1993);
[3] Defendant contends that section 1-50(5) is not applicable to plaintiffs’ claim because the statute was not intended to cover actions against manufacturers of products. Although plaintiffs’ complaint alleged that defendant manufactured, sold and furnished material purchased by plaintiffs, defendant contends it did not allege defendant directly sold material to plaintiffs or to the contractor who installed the material. Defendant submits plaintiffs’ claim should be governed by
(6) No action for the recovery of damages for personal injury, death or damage to property based upon or arising out of any alleged defect or any failure in relation to a product shall be brought more than six years after the date of initial purchase for use or consumption.
Insofar as plaintiffs’ claims are concerned, the difference in the two statutes of repose, as we will show, is this: The real property improvement statute of repose expressly exempts all claims sounding in fraud or willful and wanton misconduct, whereas the products liability statute of repose contains no such exemption.
[4] Defendant construes plaintiffs’ complaint too narrowly. “A complaint should not be dismissed under Rule 12(b)(6) ‘. . . unless it affirmatively appears that the plaintiff is entitled to no relief under any state of facts which could be prеsented in support of the claim.’ ” Ladd v. Estate of Kellenberger, 314 N.C. 477, 481, 334 S.E.2d 751, 755 (1985) (quoting Presnell v. Pell, 298 N.C. 715, 719, 260 S.E.2d 611, 613 (1979)). We agree that if defendant were only a remote manufacturer whose materials found their way to plaintiffs’ jobsite indirectly through the commerce stream, then defendant would not be a materialman and would not have furnished materials on the jobsite within the meaning of the statute. In such a case, the products liability, rather than the real property improvement, statute of repose would apply. Plaintiffs’ complaint, however, which alleges that the installed “floor tile and sheеt vinyl flooring was manufactured, sold and furnished by ARMSTRONG” would permit plaintiffs to prove that defendant not only manufactured the flooring but also was a materialman for the job. Thus, the viability of plaintiffs’ claim vis-a-vis the real property improvement statute of repose will rest on plaintiffs’ ability to prove that defendant was a materialman, furnishing the offending material to the jobsite, rather than a remote manufacturer. Should plaintiffs prove only that defendant was a remote manufacturer and not a materialman, then the products liability statute of reposе,
[5] Assuming, without deciding, that plaintiffs will be able to prove that defendant was a materialman for the real property improvements, we now address the application of the real property improvement statute of repose to plaintiffs’ claims. The Court of Appeals held, and we agree, that the six-year limitation of section 1-50(5)(a) barred plaintiffs’ claims for breach of warranty and negligence. As for plaintiffs’ claim of willful and wanton behavior,
The limitation prescribed by this subdivision shall not be asserted as a defense by any person who shall have been guilty of fraud, or willful or wanton negligence in furnishing materials, in developing real property, in performing or furnishing the design, plans, specifications, surveying, supervision, testing or observation of construction, or construction of an improvement to real property, or a repair to an improvement to real property, or to a surety or guarantor of any of the foregoing persons, or to any person who shall wrongfully conceal any such fraud, or willful or wanton negligence.
Unless otherwise provided by statute, for personal injury or physical damage to claimant‘s property, the cause of action, except in causes of actions refеrred to in
G.S. 1-15(c) , shall not accrue until bodily harm to the claimant or physical damage to his property becomes apparent or ought reasonably to have become apparent to the claimant, whichever event first occurs. Provided that no cause of action shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action.
[6] We conclude section 1-52(16) has no application to a claim arising out of improvement to real property. Rather, the rеal property improvement statute of repose applies exclusively to all claims based upon or arising out of the defective or unsafe condition of an improvement to real property. We believe that by providing in
We find our resolution of this issue supported by Feibus & Co. v. Construction Co., 301 N.C. 294, 271 S.E.2d 385 (1980), reh‘g denied, 301 N.C. 727, 274 S.E.2d 228 (1981). In Feibus, this Court considered the applicability of
Except where otherwise provided by statute, a cause of action, other than onе for wrongful death or one for malpractice arising out of the performance of or failure to perform professional services, having as an essential element bodily injury to the person or defect in or damage to the property which originated under the circumstances making the injury, defect or damage not readily apparent to the claimant at the time of its origin, is deemed to have accrued at the time the injury was discovered by the claimant, or ought reasonably to have been discovered by him, whichever еvent first occurs; provided that in such cases the period shall not exceed 10 years for the last act of the defendant giving rise for relief.
The circumstances here are essentially the same as those addressed in Feibus. As with its predecessor, the terms of section 1-52(16) apply “unless otherwise provided by statute.” Therefore, since section 1-50(5) is the statute of repose governing actions against a materialman arising out of improvement to real property, it applies to the exclusion of 1-52(16).
Defendant contends this Cоurt previously has held that where the limitation in section 1-50(5) does not apply, the limitation periods codified in section 1-52(16) are applicable.
We do not agree. By this statement, the Court in Rowan merely conjectured as to the case‘s result were the Court to have sustained USG‘s contentions. The Court did not expressly, or by implication, rule on which statute of repose might be applicable.
For the foregoing reasons, the decision of the Court of Appeals is affirmed as to disposition of plaintiffs’ negligence and breach of warranty claims, and reversed as to disposition of plaintiffs’ claim sounding in willful and wanton misconduct, and remanded to the Court of Appeals for remand to Superior Court for further proceedings consistent with this opinion.
AFFIRMED IN PART; REVERSED IN PART; REMANDED.
Justice MEYER dissenting.
I dissent from the majority‘s opinion determining that there is no statute of repose for fraudulent or willful or wanton negligence
No action for the recovery of damages for personal injury, death or damage to property based upon or arising out of any alleged defect or any failure in relation to a product shall be brought more than six years after the date of initial purchase for use or consumption.
Since 1979, Chapter 99B and
The majority concludes that
Assuming arguendo, however, that
[u]nless otherwise provided by statute, for personal injury or physical damage to claimant‘s property, the cause of action . . . shall not accrue until bodily harm to the claimant or physical damage to his property becomes apparent or ought reasonably to have become apparent to the claimant, whichever event first occurs. Provided that no cause of action shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action.
The majority‘s opinion will indefinitely extend liability for manufacturers who deliver their own goods. “Such a result would certainly defeat the intent of the legislature to limit the manufacturer‘s liability at some definite point in time.” Tetterton, 314 N.C. at 56, 332 S.E.2d at 74. I simply cannot believe that the legislature intended that there be no statute of repose whatsoever for such claims as are now before the Court.
I would affirm the Court of Appeals, finding that the plaintiff‘s claim was barred either by
