SOUTHERN STATES CHEMICAL, INC. et al. v. TAMPA TANK & WELDING, INC. f/k/a TAMPA TANK INC. et al.
S23A0273
In the Supreme Court of Georgia
Decided: May 31, 2023
McMILLIAN, Justice.
McMILLIAN, Justice.
In 2012, Southern States Chemical, Inc. and Southern States Phosphate and Fertilizer Company (collectively, “Southern States“) sued Tampa Tank & Welding, Inc. (“Tampa Tank“) and Corrosion Control, Inc. (“CCI“), claiming damages from a faulty, leaky storage tank that Tampa Tank had installed in 2002. After a decade of litigation and multiple appeals, the trial court dismissed Southern States‘s claims with prejudice, concluding that the claims were barred by the applicable statute of repose. We affirm for the reasons that follow.
As previously set out by the Court of Appeals, the record shows that
The initial letter proposal between Tampa Tank and [Southern States] contained the following express one-year warranty provision: “All material and workmanship are guaranteed for a period of twelve (12) months from the date of completion of this work.”
The [Duval Tank] renovation was completed in January 2002. The renovation required Tampa Tank to install an impervious plastic (“HDPE“) liner directly on top of the [existing] steel floor of the tank. Tampa Tank then welded a new steel floor above the old floor of the tank, and a layer of sand filled the gap between the old floor and the new floor. In order to prevent corrosion of the new floor, Tampa Tank installed a cathodic corrosion control system (“cathodic system“) in the sand layer. Tampa Tank installed, but did not design, the cathodic system; it contracted with [CCI] to provide the design, materials, onsite technical assistance, and testing of the system.
During installation, Tampa Tank‘s foreman consulted
[Southern States contends] that CCI failed to properly test, design and commission the cathodic system. After the tank‘s renovation was substantially completed in January 2002, CCI performed a post-installation commissioning inspection of the cathodic system. The report resulting from that inspection indicated that the cathodic system was working and properly installed. However, the cathodic system and the sand layer it was installed upon had been covered up with steel plates by the time CCI arrived on[-]site to perform its inspection. CCI inspected the cathodic system when the tank was empty, and it was possible that a portion of the steel plates was not in contact with the sand layer during the testing because there was no liquid pressing the plates down into the sand. [Southern States contends] that CCI failed to properly test the cathodic system by neglecting to confirm that Tampa Tank kept the sand layer dry, by failing to verify that Tampa Tank had not driven a Bobcat over the floor, and by conducting an inspection when the tank was empty, which only put the cathodic system to limited use. [Southern States also faults] CCI for not having an engineer on-site to ensure that the corrosion
On July 3, 2011, it was discovered that sulfuric acid was leaking from the base of the Duval Tank.
Southern States Chemical, Inc. v. Tampa Tank & Welding, Inc., 331 Ga. App. XXVI (March 27, 2015) (unpublished) (”Southern States I“).
In 2012, Southern States sued Tampa Tank and CCI for breach of contract, negligence, negligent undertaking, negligent misrepresentation, fraud, punitive damages, and attorney fees. The trial court granted summary judgment in favor of Tampa Tank and CCI, in part, on the grounds that the claims were barred by the eight-year statute of repose under
On remand, in July 2015, the trial court again granted summary judgment in favor of Tampa Tank and CCI based on the running of the eight-year statute of repose and in an extensive order found that Southern States did not exercise due diligence to discover any fraud because it had never conducted any testing of the cathodic protection system within the statute of repose time period.4 Southern States appealed, and in July 2016, the Court of Appeals affirmed in another unpublished opinion. See Southern States Chemical, Inc. v. Tampa Tank & Welding, Inc. f/k/a Tampa Tank, Inc., 338 Ga. App. XXVIII (unpublished) (July 14, 2016) (”Southern States II“). However, the Court of Appeals also concluded that the trial court had ruled on the motions for summary judgment that were filed before the fourth amended complaint, such that the trial court did not expressly rule on whether the statute of repose barred the claim for breach of the express one-year warranty contract,
Southern States filed a fifth amended complaint, and in December 2017, the trial court found that Tampa Tank and CCI were entitled to judgment as a matter of law once again based on the statute of repose, but this time specifically addressing the breach of express warranty claim and other claims raised in the fifth amended complaint. The trial court also concluded that Southern States‘s contract claims were barred by the six-year statute of limitations for breach of contract under
Southern States filed a petition for writ of certiorari with this Court, but while the petition was pending, the Georgia General
In March 2021, the Court of Appeals issued an opinion affirming in part, reversing in part, and remanding the case to the trial court to reconsider in light of the 2020 amendment. See Southern States Chemical, Inc. v. Tampa Tank & Welding, Inc., 359 Ga. App. 731 (858 SE2d 72) (2021) (”Southern States IV“).
The trial court also considered CCI‘s renewed motion to dismiss, which was limited to whether any of Southern States‘s remaining claims were pending against CCI. The trial court granted CCI‘s motion to dismiss in April 2022. Applying the law of the case established by the Court of Appeals in Southern States III and IV, the trial court concluded that Southern States was not a third-party beneficiary of CCI‘s alleged express warranties because Southern States did not provide consideration directly to CCI. As such, the
1. Southern States first argues that the trial court erred in granting Tampa Tank‘s motion to dismiss because the statute of repose as amended in 2020, rather than the previous version of the statute, applies to its breach of express warranty claim and under the 2020 amendment, the statute of repose would not bar the claim. On the other hand, Tampa Tank asserts that it has a vested right in the pre-2020 version of the statute of repose and that applying the 2020 amendment retroactively to Southern States‘s pre-existing breach of express warranty claim would violate due process.
On appeal from a grant of a motion to dismiss, we review a trial court‘s decision de novo. See Norman v. Xytex Corp., 310 Ga. 127, 130 (2) (848 SE2d 835) (2020).
A motion to dismiss for failure to state a claim upon which relief may be granted should not be sustained unless (1) the allegations of the complaint disclose with certainty
that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought.
Id. at 130-31 (2). Upon review, “any doubts regarding the complaint must be construed in favor of the plaintiff.” Id. at 131 (2).
We start with first principles. The Due Process Clause of the Fourteenth Amendment to the U.S. Constitution,6 which has language similar to the Due Process Clause in Georgia‘s Constitution,7 “protects the interests in fair notice and repose that may be compromised by retroactive legislation.” Landgraf v. USI Film Products, 511 U.S. 244, 265 (IV) (A) (114 SCt 1483, 128 LE2d 229) (1994). “[T]he presumption against retroactive legislation is deeply rooted in our jurisprudence, and embodies a legal doctrine older than our Republic.”8 Id. at 265 (IV) (A). See Deal v. Coleman, 294 Ga. 170, 174 (1) (b) (751 SE2d 337) (2013) (“Generally speaking, the retroactive application of statutes has long been disfavored in the law, even if it is not always forbidden.” (citing Landgraf, 511 U.S. at 265 (IV) (A))). That is because “the principle that the legal effect of conduct should ordinarily be assessed under the law that existed when the conduct took place has timeless and universal appeal.” Landgraf, 511 U.S. at 265 (IV) (A) (cleaned up). The “largest category of cases” in which this presumption against retroactivity has been applied “has involved new provisions affecting
In determining whether legislation can be applied retroactively, we engage in a two-part analysis. Because of the presumption against retroactive legislation, this Court will initially “insist upon some clear indication in the statutory text that a statute is to be applied retroactively before so applying it.” Deal, 294 Ga. at 174-75 (1) (b). It is only when such a clear indication is present that we then consider whether retroactive application is unconstitutional, and in this context, an unconstitutional retroactive application of legislation would be one that would “injuriously affect the vested
(a) We thus start our analysis by first determining whether the legislature has clearly indicated that the 2020 amendment is to be applied retroactively. We easily conclude that it has because the 2020 amendment explicitly provides that it is to be applied to causes of action that have accrued on or after January 1, 1968. See Ga. L. 2020, p. 37, § 2/SB 451; Deal, 294 Ga. at 175 (1) (b) (holding that the explicit language in the statutory amendment at issue was sufficient to provide clear indication of the legislature‘s intent for retroactive application).
(b) We now turn to the question of whether Tampa Tank had a vested right in the pre-2020 version of the statute of repose such that retroactive application of the 2020 amendment would be unconstitutional.
Generally, a vested right is an interest “which it is proper for the state to recognize and protect and of which the individual cannot be deprived arbitrarily without injustice.” Deal, 294 Ga. at 177
In Deal, we attempted to provide some clarity on the analysis of whether a right is vested by exploring the nature of a vested right. One such characteristic of a vested right is that it is a private unalienable right of an individual as opposed to a public right. See Deal, 294 Ga. at 178-81 (2) (a). Unlike public rights, rights that belong to “the People in common,” private rights benefit “a particular individual.” Id. at 180 (2) (a). See also Bullard, 184 Ga. at 791 (2) (distinguishing public rights from those related to the rights of a specific litigant or for the benefit of a “particular individual or calling“). Compare Deal, 294 Ga. at 181 (2) (a) (citing Mikesell v. RP Motorsports, Inc., 283 Ga. 476, 476-77 (660 SE2d 534) (2008), which held that the “offer of settlement provisions of Tort Reform Act of 2005 could not be applied constitutionally in a lawsuit between
No action to recover damages: (1) For any deficiency in the survey or plat, planning, design, specifications, supervision or observation of construction, or construction of an improvement to real property . . . shall be brought against any person performing or furnishing the survey or plat, design, planning, supervision or observation of construction, or construction of such an improvement more than eight years after substantial completion of such an improvement.
It is clear that any right created by the statute of repose vests in a particular person, like Tampa Tank, who is relying on the statute to assert that a claim brought against it by another party has been extinguished. See Mikesell, 283 Ga. at 476-77 (offer of settlement
In addition to the public versus private right distinction, we have also traditionally considered whether a right is “substantive” or “procedural” in determining whether a right is vested as “there are no vested rights in any course of procedure.” Deal, 294 Ga. at 177 (2) (a) (citation and punctuation omitted). A statute “which affects substantive rights may operate prospectively only.” Browning v. Maytag Corp., 261 Ga. 20, 21 (401 SE2d 725) (1991) (citation and punctuation omitted). See also O‘Leary v. Whitehall Constr., 288 Ga. 790, 792 (2) (708 SE2d 353) (2011) (new legislation that does not impair a party‘s substantive rights may operate retrospectively). “Substantive law is that law which creates rights, duties and obligations. Procedural law is that law which prescribes the methods of enforcement of rights, duties, and obligations.” ECHA Cartersville, LLC v. Turner, 280 Ga. 333, 337 (3) (626 SE2d 482) (2006) (citation and punctuation omitted). See Deal, 294 Ga. at 175 (1) (b) n.12. Put another way, “where a statute governs only procedure of the courts . . . it is to be given retroactive effect absent an expressed contrary intention.” Polito v. Holland, 258 Ga. 54, 54-55 (2) (365 SE2d 273) (1988).
Although this Court has determined that a statute of limitation is procedural and creates no vested right, we have never expressly considered whether a statute of repose is substantive or procedural in nature. See Simmons v. Sonyika, 279 Ga. 378, 379 (614 SE2d 27) (2005) (“A statute of limitation is a procedural rule limiting the time in which a party may bring an action for a right which has already accrued.” (citation and punctuation omitted)); Vaughn v. Vulcan Materials Co., 266 Ga. 163, 164 (1) (465 SE2d 661) (1996) (“There is no vested right in a statute of limitation[.]“). However, we have considered the nature of statutes of repose and explained that, in contrast to a statute of limitation, “[a] statute of repose stands as an unyielding barrier to a plaintiff‘s right of action,” is “absolute,” and “destroys the previously existing rights so that, on the expiration of the statutory period, the cause of action no longer
Thus, these cases demonstrate that a statute of repose is
In considering whether a statute of repose is procedural or substantive in nature, we also find it instructive that the majority of other state courts that have considered the issue have concluded that repose statutes are substantive for retroactivity purposes. See, e.g., Davis v. Scottish Re Group Ltd., 88 NE3d 892, 897 (N.Y. 2017) (“[R]epose statutes exhibit a substantive texture, nature and consequence, different from regular statutes of limitation, and thus are substantive. In other words, unlike a statute of limitations, a statute of repose envelopes both the right and the remedy.“) (cleaned up); Nathan v. Whittington, 408 SW3d 870, 873 (Tex. 2013) (“While statutes of limitations operate procedurally to bar the enforcement of a right, a statute of repose takes away the right altogether, creating a substantive right to be free of liability after a specified
Based on the nature of a statute of repose, we conclude that a statute of repose creates a substantive right in being free from liability for a claim after a fixed period of time and join the majority of jurisdictions that have reached that conclusion. In so holding, we overrule any contrary decisions of the Court of Appeals, to the extent
Accordingly, we conclude that Tampa Tank had a substantive, vested right to be free from liability for Southern States‘s contract claims as set out in the pre-2020 version of
2.
Southern States next argues that even if the 2020 amendment does not apply retroactively, the trial court erred in applying the pre-2020 version of
In considering a statute‘s meaning, “courts must afford the words of the statute their ordinary meaning, see
The relevant part of the pre-2020 statute of repose provides:
No action to recover damages . . . [f]or any deficiency in the survey or plat, planning, design, specifications, supervision or observation of construction, or construction of an improvement to real property; . . . shall be brought against any person performing or furnishing the survey or plat, design, planning, supervision or observation of construction, or construction of such an improvement more than eight years after substantial completion of such an improvement.
Former
Southern States also asserts that the original 1968 statute of repose, which was in effect until the 2020 amendment, was never intended to apply to contract claims because the General Assembly did not adopt specific language from a model statute of repose that was developed in the 1960s by architectural, engineering, and contracting industry representatives.13 Southern States asserts that
Likewise, we reject the assertion that just because subsection (b) provides specific details about certain tort claims, it means that the entire statute is applicable only to tort claims. Instead, a natural and reasonable reading of the word “tort” in subsection (b) is that the subsection (b) sets out a separate rule for tort claims under certain circumstances.
Southern States does not seriously dispute that the storage tank was substantially completed in 2002, nor is it disputed that Southern States filed its initial complaint in 2012. Because the pre-2020 statute of repose required Southern States to file its action within eight years of substantial completion of the improvement, we
3.
Lastly, Southern States argues that the trial court erred in applying the “law of the case” from the Court of Appeals’ decisions in Southern States III and IV in granting CCI‘s motion to dismiss. In Southern States III and IV, the Court of Appeals held that “the only actionable warranty from which Southern could seek damages
Under the “law of the case” doctrine, “any ruling by the Supreme Court or the Court of Appeals in a case shall be binding in all subsequent proceedings in that case in the lower court and in the Supreme Court or the Court of Appeals as the case may be.”
Georgia courts have never held that an exception exists to the “law of the case” doctrine where a prior ruling was clearly erroneous or would otherwise create a manifest injustice. To the contrary, this Court has said that the law of the case applies despite contentions that a ruling below is erroneous. See Hollmon, 305 Ga. at 91 (1) (“[L]aw of the case” doctrine applies “despite all contentions that prior rulings in the matter are erroneous.“); Security Life Ins. Co. of America v. Clark, 273 Ga. 44, 46 (1) (535 SE2d 234) (2000) (“[A]ppellate rulings remain binding as between parties to a case, so long as the evidentiary posture of the case remains unchanged, despite all contentions that prior rulings in the matter are erroneous.“). Without addressing this precedent, Southern States asks us to adopt a “clearly erroneous” or “manifest injustice”
Judgment affirmed. Ellington, LaGrua and Colvin, JJ., and Judge LaTisha Dear Jackson concur. Boggs, C. J., and Peterson, P. J., disqualified. Warren, Bethel and Pinson, JJ., not participating.
Notes
(a) No action to recover damages:
- (1) For any deficiency in the survey or plat, planning, design, specifications, supervision or observation of construction, or construction of an improvement to real property;
- (2) For injury to property, real or personal, arising out of any such deficiency; or
- (3) For injury to the person or for wrongful death arising out of any such deficiency
shall be brought against any person performing or furnishing the survey or plat, design, planning, supervision or observation of construction, or construction of such an improvement more than eight years after substantial completion of such an improvement.
That language remains in the current version of the statute. SeeNotwithstanding subsection (a) of this Code section, in the case of such an injury to property or the person or such an injury causing wrongful death, which injury occurred during the seventh or eighth year after such substantial completion, an action in tort to recover damages for such an injury or wrongful death may be brought within two years . . . .
Benning, 240 Ga. at 427. Based on this language, Southern States argues that “[t]hese prospective ‘third-party’ plaintiffs would obviously not be suing for breach of warranty, because contractors sell warranties to second-party building owners, not to third parties.” According to Southern States, it follows that these claims by “third parties” could only sound in tort, and thus,Prior to the enactment of the [statute of repose], an architectural firm or construction company which designed or built a structure could be sued at any time by third-parties no matter how many years had passed since the architects’ or contractors’ work had been completed, so long as the third-party brought suit within the applicable statute of limitation, commencing to run from the date of injury caused by the alleged defect.
Southern States‘s argument is without merit. This Court concluded in Benning that the preexisting six-year statute of limitation applied to the contract claims in that case and that the Court of Appeals erred in applying the eight-year statute of repose as an extended statute of limitation for those claims, instead of considering the statute of repose as an “outside time limit” “within which preexisting statutes of limitation would continue to operate.” Benning, 240 Ga. at 428. Thus, Benning clarified that
Although Southern States has previously asserted that Tampa Tank is equitably estopped from raising the 2020 statute of repose as a defense, that argument was previously rejected by the Court of Appeals in Southern States II. There, the Court of Appeals affirmed the trial court‘s conclusion that equitable estoppel does not preclude Tampa Tank from asserting a statute of repose defense because Southern States failed to establish that a genuine issue of material fact existed as to whether Tampa Tank “concealed information with an intent to deceive and prevent Southern [States] from discovering wrongdoing and injury,” which is required for equitable estoppel to apply. Southern States II, 338 Ga. App. at XXVIII (emphasis in original). Because Southern States has already litigated this issue, the law of the case rule bars this Court from revisiting it. See
