NEW RIEGEL LOCAL SCHOOL DISTRICT BOARD OF EDUCATION, APPELLEE, v. BUEHRER GROUP ARCHITECTURE & ENGINEERING, INC., ET AL., APPELLANTS.
Nos. 2018-0189 and 2018-0213
SUPREME COURT OF OHIO
July 17, 2019
2019-Ohio-2851
FRENCH, J.
Submitted March 5, 2019
NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
SLIP OPINION NO. 2019-OHIO-2851
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as New Riegel Local School Dist. Bd. of Edn. v. Buehrer Group Architecture & Eng., Inc., Slip Opinion No. 2019-Ohio-2851.]
Contracts—Construction statute of repose,
APPEALS from the Court of Appeals for Seneca County, No. 13-17-04, 2017-Ohio-8522, and Nos. 13-17-03 and 13-17-06, 2017-Ohio-8521.
{¶ 1} These consolidated appeals ask whether Ohio‘s construction statute of repose,
Facts and Procedural Background
{¶ 2} These appeals arise from the design and construction of a public-school building (the “Project“) for the New Riegel Local School District. The Project, which was substantially completed and approved for occupancy in December 2002, was built as part of the Ohio Classroom Facilities Assistance Program, administered by the Ohio School Facilities Commission. Appellee, the New Riegel Local School District Board of Education (“New Riegel“), alleges that condensation, moisture intrusion, and other deficiencies exist in various areas of the Project, as a result of improper design and construction.
{¶ 3} The Buehrer Group Architecture & Engineering contracted with New Riegel to provide design services for the Project; New Riegel alleges that the subsequently incorporated Buehrer Group Architecture & Engineering, Inc. (collectively, with the unincorporated entity, “the Buehrer Group“), adopted, benefited from, and provided services for New Riegel on the contract. Studer-Obringer, Inc., and Charles Construction Services, Inc., served as the general-trades contractor and the roofing contractor, respectively, on the Project, pursuant to contracts with the state; New Riegel was an intended beneficiary of those contracts. In January 2015, New Riegel served the Buehrer Group, Studer-Obringer, and Charles Construction with notices of claims regarding alleged defects in the school building. The Buehrer Group, Charles Construction, Studer-Obringer, and Ohio
{¶ 4} New Riegel filed this action in April 2015.1 New Riegel‘s second amended complaint asserts claims against the Buehrer Group, the Estate of Huber H. Buehrer, Studer-Obringer, Charles Construction, American Buildings Company d.b.a. Architectural Metal Systems, and Ohio Farmers. As relevant here, New Riegel alleges claims for breach of contract against the Buehrer Group, Studer-Obringer, and Charles Construction; a claim for breach of express warranty against Charles Construction; and claims against Ohio Farmers on its surety bonds. It alleges that the Buehrer Group, Studer-Obringer, and Charles Construction “failed to provide [services or work] in conformance to the terms of” their contracts and that Studer-Obringer and Charles Construction failed to conform “with the requisite standard of care to perform in a workmanlike manner.” New Riegel alleges that as a result, it has incurred damages, including damages for “physical damage to property.”
{¶ 5} In their answers and/or motions for judgment on the pleadings, appellants argued that the statute of repose in
{¶ 7} This court accepted and consolidated appellants’ discretionary appeals. 152 Ohio St.3d 1478, 2018-Ohio-1990, 98 N.E.3d 293. Although phrased differently by different appellants, the accepted propositions of law essentially ask this court to hold (1) that
Standard of Review
{¶ 8} The trial court entered judgment on the pleadings for appellants pursuant to
Analysis
{¶ 9} The overarching issue before this court is the meaning of the current version of
The evolution of R.C. 2305.131
{¶ 10} The General Assembly first enacted
{¶ 11} A statute of repose is a statute that bars “any suit that is brought after a specified time since the defendant acted * * *, even if this period ends before the
{¶ 12} This court first addressed
No action to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained as a result of said injury, shall be brought against any person performing services for or furnishing the design, planning, supervision of construction, or construction of such improvement to real property, more than ten years after the performance or furnishing of such services and construction. This limitation does not apply to actions against any person in actual possession and control as owner, tenant, or otherwise of the improvement at the time the defective and unsafe condition of such improvement constitutes the proximate cause of the injury or damage for which the action is brought.
Am.S.B. No. 307, 134 Ohio Laws, Part I, 529, 530.
{¶ 13} We noted in Kocisko that the 1971 version of
{¶ 14} In 1994, this court held that the 1971 version of
{¶ 15} In 1996, partly in response to Brennaman, the General Assembly repealed the 1971 version of
(A)(1) Notwithstanding an otherwise applicable period of limitations specified in this chapter and except as otherwise provided in divisions (A)(2), (A)(3), (C), and (D) of this section, no cause of action to recover damages for an injury to real or personal property, bodily injury, or wrongful death that arises out of a defective and unsafe condition of an improvement to real property
* * * shall accrue against a person who performed services for the improvement to real property or a person who furnished the design, planning, supervision of construction, or construction of the improvement to real property later than fifteen years from the date of the performance of the services or the furnishing of the design, planning, supervision of construction, or construction.
Am.Sub.H.B. No. 350 (“H.B. 350“), 146 Ohio Laws, Part II, 3867, 3917.
{¶ 16} Whereas the 1971 version of
{¶ 17} In 2004, the General Assembly enacted the current version of
(A)(1) Notwithstanding an otherwise applicable period of limitations specified in this chapter or in section 2125.02 of the Revised Code and except as otherwise provided in divisions (A)(2),
(A)(3), (C), and (D) of this section, no cause of action to recover damages for bodily injury, an injury to real or personal property, or wrongful death that arises out of a defective and unsafe condition of an improvement to real property * * * shall accrue against a person who performed services for the improvement to real property or a person who furnished the design, planning, supervision of construction, or construction of the improvement to real property later than ten years from the date of substantial completion of such improvement.
Am.Sub.S.B. No. 80, 150 Ohio Laws, Part V, at 7937-7938. The General Assembly recognized that the availability of evidence pertaining to an improvement to real property more than ten years after completion is problematic and that it is an unacceptable burden to require the maintenance of records and documentation pertaining to an improvement to real property for more than ten years after completion. Id. at Section 3(B)(3) and (4), 150 Ohio Laws, Part V, at 8029. It intended the current version of
Stare decisis
{¶ 18} The Third District held that stare decisis required it to follow Kocisko and to hold that the current version of
{¶ 19} Considerations of stare decisis are particularly apt in the area of statutory construction because if the legislature disagrees with a court‘s interpretation of a statute, it may amend the statute. Pearson v. Callahan, 555 U.S. 223, 233, 129 S.Ct. 808, 172 L.Ed.2d 565 (2009); Rocky River v. State Emp. Relations Bd., 43 Ohio St.3d 1, 6, 539 N.E.2d 103 (1989). But questions about the applicability of stare decisis arise when, as here, the legislature has amended a statute subsequent to a judicial interpretation of the statute. Appellants argue that stare decisis should not be applied here, because the General Assembly repealed the version of
{¶ 20} We do not apply stare decisis to strike down legislation merely because it is similar to a previous enactment that we found unconstitutional. Groch v. Gen. Motors Corp., 117 Ohio St.3d 192, 2008-Ohio-546, 883 N.E.2d 377, ¶ 104. “To be covered by the blanket of stare decisis, the legislation must be phrased in language that is substantially the same as that which we have previously invalidated.” Id., citing Arbino v. Johnson & Johnson, 116 Ohio St.3d 468, 2007-Ohio-6948, 880 N.E.2d 420, ¶ 22-23. In Stetter v. R.J. Corman Derailment Servs., L.L.C., 125 Ohio St.3d 280, 2010-Ohio-1029, 927 N.E.2d 1092, ¶ 39, we conducted “a fresh review” of a statute that, despite a resemblance to previous legislation, differed from the prior statute “in significant and important ways.” See also State v. Bodyke, 126 Ohio St.3d 266, 2010-Ohio-2424, 933 N.E.3d 753, ¶ 33 (lead opinion) (“as a threshold question, we must determine whether the statute and facts presented today are the same as those presented in precedent“).
{¶ 21} New Riegel argues that Kocisko remains controlling because the 1971 and the current versions of
{¶ 22} The current version of
R.C. 2305.131 applies to both contract and tort claims
{¶ 23} Now, freed from the constraints of Kocisko, we turn to the current version of
{¶ 24} “The primary goal of statutory construction is to ascertain and give effect to the legislature‘s intent in enacting the statute.” State v. Lowe, 112 Ohio St.3d 507, 2007-Ohio-606, 861 N.E.2d 512, ¶ 9. We read words and phrases in a statute according to rules of grammar and common usage and in the context of the whole statute.
{¶ 25}
{¶ 26} Reading the current version of
{¶ 27}
{¶ 28} Moreover, the General Assembly explicitly tied the commencement of the repose period to contractual performance. The ten-year repose period established in
{¶ 29} Perhaps the most persuasive indication that the General Assembly did not intend generally to exclude contract actions from the construction statute of repose, however, is found in
{¶ 30} Reading
Whether R.C. 2305.131 bars New Riegel‘s claims is not before this court
{¶ 31} In an argument that goes beyond either proposition of law that this court accepted, New Riegel argues that even if
{¶ 32} We do not decide the effect on these cases of our holding that
Conclusion
{¶ 33} For these reasons, we reverse the judgments of the Third District Court of Appeals and remand these cases to that court to address New Riegel‘s remaining arguments.
Judgments reversed and causes remanded.
O‘CONNOR, C.J., and FISCHER and DONNELLY, JJ., concur.
KENNEDY, J., concurs in part and dissents in part, with an opinion joined by DEWINE, J.
STEWART, J., dissents, with an opinion.
KENNEDY, J., concurring in part and dissenting in part.
{¶ 34} Because
{¶ 35} I write separately, however, to address the assertion that
{¶ 36} Contrary to the majority‘s analysis, this statutory-construction argument responds directly to the propositions of law that we accepted for review. We cannot decide the issue presented in this case without addressing the school board‘s argument. Moreover, an appellee such as the school board can defend a judgment of the court of appeals with arguments that were not passed on by that court, see O‘Toole v. Denihan, 118 Ohio St.3d 374, 2008-Ohio-2574, 889 N.E.2d 505, ¶ 94, and “[r]eviewing courts are not authorized to reverse a correct judgment on the basis that some or all of the lower court‘s reasons are erroneous,” Goudlock v. Voorhies, 119 Ohio St.3d 398, 2008-Ohio-4787, 894 N.E.2d 692, ¶ 12, quoting State ex rel. McGrath v. Ohio Adult Parole Auth., 100 Ohio St.3d 72, 2003-Ohio-5062, 796 N.E.2d 526, ¶ 8. The school board‘s argument is therefore properly before this court, and reaching it is necessary to decide this case. This court‘s remand of the case does nothing more than add further delay in resolving this matter.
{¶ 37} In Oaktree Condominium Assn., Inc. v. Hallmark Bldg. Co., 139 Ohio St.3d 264, 2014-Ohio-1937, 11 N.E.3d 266, we considered whether the application of
{¶ 38} The school board nonetheless asks us to construe the phrase “no cause of action * * * shall accrue,”
{¶ 39} However, we may not read individual words of a statute in isolation; rather, we are obligated “to evaluate a statute ‘as a whole and giv[e] such interpretation as will give effect to every word and clause in it. No part should be treated as superfluous unless that is manifestly required, and the court should avoid that construction which renders a provision meaningless or inoperative.‘” Boley v. Goodyear Tire & Rubber Co., 125 Ohio St.3d 510, 2010-Ohio-2550, 929 N.E.2d 448, ¶ 21, quoting State ex rel. Myers v. Spencer Twp. Rural School Dist. Bd. of Edn., 95 Ohio St. 367, 373, 116 N.E. 516 (1917). “‘“[S]ignificance and effect should, if possible, be accorded to every word, phrase, sentence and part of an act.“‘” Id., quoting Weaver v. Edwin Shaw Hosp., 104 Ohio St.3d 390, 2004-Ohio-6549, 819 N.E.2d 1079, ¶ 13, quoting Wachendorf v. Shaver, 149 Ohio St. 231, 78 N.E.2d 370 (1948), paragraph five of the syllabus.
{¶ 40} Construing
Notwithstanding an otherwise applicable period of limitations specified in this chapter or in section 2125.02 of the Revised Code, a claimant who discovers a defective and unsafe condition of an improvement to real property during the ten-year period specified in division (A)(1) of this section but less than two years prior to the expiration of that period may commence a civil action to recover damages as described in that division within two years from the date of the discovery of that defective and unsafe condition.
Similarly,
Notwithstanding an otherwise applicable period of limitations specified in this chapter or in section 2125.02 of the Revised Code, if a cause of action that arises out of a defective and unsafe condition of an improvement to real property accrues during the ten-year period specified in division (A)(1) of this section and the plaintiff cannot commence an action during that period due to a disability described in section 2305.16 of the Revised Code, the plaintiff may commence a civil action to recover damages as described in that division within two years from the removal of that disability.
{¶ 41} Construing the statute of repose as not applying to causes of action that accrued within the ten-year repose period renders these two exceptions meaningless and inoperative. As the Fifth District Court of Appeals has explained,
{¶ 42} Moreover, in uncodified law, the General Assembly repeatedly described
{¶ 43} It is therefore manifest that the General Assembly understood
{¶ 44} The plain language of
DeWine, J., concurs in the foregoing opinion.
STEWART, J., dissents.
{¶ 45} I respectfully dissent from the majority‘s holding that
{¶ 46} The majority concedes that the current version of
{¶ 47} After we held in Kocisko that former
{¶ 48} Under the rules that the General Assembly enacted to guide courts when interpreting statutes, we are constrained to construe the amendments to
{¶ 49} Finding no support for its interpretation of
As used in this section, “substantial completion” means the date the improvement to real property is first used by the owner or tenant of the real property or when the real property is first available for use after having the improvement completed in accordance with
the contract or agreement covering the improvement, including any agreed changes to the contract or agreement, whichever occurs first.
{¶ 50} The “substantial completion” of a contract or agreement to construct an improvement to property triggers the initiation of the repose period.
{¶ 51} The majority suggests that a party may seek damages for injury to property in a contract action but cites no authority from this court in support of that proposition. The breach-of-contract claims brought in this action sought economic damages—that is, the benefit of the bargain had the school building been designed and constructed according to applicable state standards. The “economic loss” doctrine states that when parties are in privity of contract and one party allegedly suffers purely economic damages as a result of an alleged breach of that contract, that party‘s exclusive remedy is in the law of contracts and no action is cognizable in tort. Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins. Co., 42 Ohio St.3d 40, 45, 537 N.E.2d 624 (1989). “‘When the promisee‘s injury consists merely of the loss of his bargain, no tort claim arises because the duty of the promisor to fulfill the term of the bargain arises only from the contract.‘” Id., quoting Battista v. Lebanon Trotting Assn., 538 F.2d 111, 117 (6th Cir.1976). Here, the plaintiff-school district did not allege that the defendants engaged in any tortious conduct that caused
{¶ 52} Although the majority asserts that Kocisko was “shortsighted,” majority opinion at ¶ 25, Kocisko is consistent with decisions construing similar statutes of repose in other states. The Michigan Supreme Court considered a similarly worded construction statute of repose—former
“[T]his statute was enacted primarily to limit the engineers’ and architects’ exposure to litigation by injured third persons as evidenced by the legislation‘s timing and relation to case law. * * * If there is no causal connection between the defective condition and the injury, the provision does not apply. Similarly, where the suit is for deficiencies in the improvement itself, the injury is the defective condition, hence, the injury does not ‘arise out of’ the defective condition, but, rather, it is the condition. Therefore, claims for deficiencies in the improvement itself do not come within the scope of this special statute of limitation.”
{¶ 53} And in Fid. & Deposit Co. of Maryland v. Bristol Steel & Iron Works, Inc., 722 F.2d 1160 (4th Cir.1983), the United States Court of Appeals for the Fourth Circuit construed
{¶ 54} We have acknowledged the General Assembly‘s prerogative, as the “ultimate arbiter of public policy,” to “refine[] Ohio‘s tort law to meet the needs of our citizens.” Groch v. Gen. Motors Corp., 117 Ohio St.3d 192, 2008-Ohio-546, 883 N.E.2d 377, ¶ 102, quoting Arbino v. Johnson & Johnson, 116 Ohio St.3d 468, 2007-Ohio-6948, 880 N.E.2d 420, ¶ 21, quoting State ex rel. Cincinnati Enquirer, Div. of Gannett Satellite Information Network v. Dupuis, 98 Ohio St.3d 126, 2002-Ohio-7041, 781 N.E.2d 163, ¶ 21. In the years following Kocisko, the General Assembly could easily have added contract actions to
Had the General Assembly intended § 8.01-250 to apply to actions for breach of contract, it could have added “breach of contract” to the enumerated actions in the statute or it could have
omitted the words “to recover for any injury to property, real or personal, or for bodily injury or wrongful death.” It did neither. Inclusio unius est exclusio alterius.
BurgerBusters, Inc. v. Ratley Constr. Co., Inc., 45 Va.Cir. 133, 135 (1998), citing Fid. & Deposit Co. at 1162.
{¶ 55} Indeed, in Minnesota, a former version of that state‘s construction statute of repose,
{¶ 56} The General Assembly has the power to adopt a statute of repose and define the parameters of that law. We should not take it upon ourselves to do that which the legislature has chosen not to do. I would conclude that given the absence of any amendment to supersede our holding in Kocisko,
Bricker & Eckler, L.L.P., Christopher L. McCloskey, Tarik M. Kershah, and Bryan M. Smeenk, for appellee.
Gallagher Sharp, L.L.P., P. Kohl Schneider, and Richard C.O. Rezie, for appellant Charles Construction Services, Inc.
Ritter, Robinson, McCready & James, Ltd., Shannon J. George, and Matthew T. Davis, for appellant Studer-Obringer, Inc.
McNeal, Schick, Archibald & Biro Co., L.P.A., Brian T. Winchester, and Patrick J. Gump, for appellants Buehrer Group Architecture & Engineering, Inc., Estate of Huber H. Buehrer, and Buehrer Group Architecture & Engineering.
Singerman, Mills, Desberg & Kauntz Co., L.P.A, Michael R. Stavnicky, and Stephen L. Byron, urging affirmance for amici curiae County Commissioners Association of Ohio, Ohio Municipal League, Ohio Township Association, Erie County, and Ohio School Boards Association.
Paul W. Flowers Co., L.P.A., Paul W. Flowers, and Louis E. Grube, urging affirmance for amicus curiae Ohio Association for Justice.
Murray & Murray Co., L.P.A., Dennis E. Murray Sr., Charles M. Murray, and Donna J. Evans, urging affirmance for amicus curiae Timothy Betton.
Graff and McGovern, L.P.A., and Luther L. Liggett Jr., urging reversal for amici curiae AIA Ohio and Ohio Society of Professional Engineers.
Vorys, Sater, Seymour & Pease, L.L.P., Natalia Steele, and Thomas E. Szykowny, urging reversal for amici curiae Ohio Insurance Institute, Ohio Manufacturers’ Association, Ohio Chamber of Commerce, Ohio Chapter of the National Federation of Independent Business, and Surety & Fidelity Association of America.
Harpst, Ross & Becker Co., L.L.C., Todd A. Harpst, and Joseph R. Spoonster, urging reversal for amicus curiae Subcontractors Association of Northeast Ohio.
McDonald Hopkins, L.L.C., Peter D. Welin, Jason R. Harley, and John A. Gambill, urging reversal for amici curiae Associated General Contractors of Ohio; Allied Construction Industries (Cincinnati AGC); Associated General Contractors
Koehler Fitzgerald, L.L.C., and Timothy J. Fitzgerald, urging reversal for amicus curiae Ohio Association of Civil Trial Attorneys.