REL: 03/26/2004 Chandiwala v. Pate
Notice: This
opinion is subject to formal revision before publication in the advance sheets
of Southern Reporter.
Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741
((334) 242-4621), of any typographical or other errors, in order that
corrections may be made before the opinion is printed in Southern
Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2003-2004
_________________________
_________________________
v.
Pate Construction Company and
Dillard Plastering Company
Appeal from Shelby Circuit Court
LYONS, Justice.
Farook Chandiwala appeals from a summary
judgment entered in favor of Pate Construction Company ("Pate") and
Dillard Plastering Company ("Dillard"). We affirm.
I.
Facts and Procedural History
On August 11, 1992, Chandiwala purchased a house constructed
by Pate. Dillard had applied an exterior
insulation and finishing system ("EIFS") on the house when it was
built. Dryvit Systems, Inc., manufactured the EIFS.
EIFS, or "Dryvit," is a multilayered exterior wall system
consisting of a finishing coat, a base coat, mesh, and insulation board, all of
which are secured to plywood or substrate mechanically or with an adhesive. On
April 20, 1998, Action Exterminators, Inc. ("Action Exterminators"),
the company that had issued a termite bond on the house, performed its annual
inspection. Chandiwala received a
report from the April 20 inspection that contained a notice stating:
"ALL CUSTOMERS: If there is any water rot or
earth/wood contact, it MUST be corrected or area IS EXCLUDED and possible
non-renewal next year." Chandiwala's inspection report revealed that there
was improper Dryvit-to-earth contact that needed correction. Upon receipt of
this inspection report, Chandiwala telephoned Action Exterminators on April 25,
1998, and his conversation with one of the representatives was documented as
follows:
"Mr. Chandiwala called about report on Dryvit
contact that must be corrected. I
explained in detail that he should have someone [check] his home for Dryvit to
see if it was sealed. Told him that we had started seeing problems around the
country and I wanted to try and avoid problems.
He asked if I would recheck for him and I said I would.
"Called Mr. [Chandiwala] back and told him that
he needed to have the Dryvit cutback [sic] and sealed as I did not believe that
it was."
While his
deposition testimony suggests that this telephone conversation took place in
May 1998, Chandiwala admits in his brief to this Court to having had the
foregoing conversation on April 25, 1998.
"Cut back" is a process by which a band or a section of EIFS
material around the base of the house is permanently removed. Based upon his
conversation with Action Exterminators, Chandiwala contacted numerous entities
to inquire as to the details and costs of repairing the EIFS. One such person
Chandiwala contacted was Ed Harris, who inspected the house on August 13, 1998,
and reported that there were some moisture problems.
On May 1, 2000, over two years after he had
received the termite-inspection report, Chandiwala sued Pate; Dryvit Systems,
Inc.; Apache Products, Inc., the distributor of the EIFS; and "Troy
Dillard d/b/a Dillard Plastering Company." Thereafter, on June 23,
2000, at Chandiwala's request, an EIFS inspection performed upon his house
revealed several areas with moisture readings from 40-100 percent. Dryvit
Systems, Inc., subsequently settled with Chandiwala, and
Apache Products, Inc., was voluntarily dismissed from the
action. Pate and Dillard each filed
motions for a summary judgment. Chandiwala
consented to the entry of a summary judgment in favor of Pate and Dillard as to
all claims except suppression, negligent installation, and negligent
supervision, and as a third-party beneficiary to a contract. The trial
court entered a summary judgment in favor of both defendants on all claims,
based upon the two-year statute of limitations. § 6-2-38(l), Ala. Code
1975. The trial court denied Chandiwala's motion to reconsider. Chandiwala appeals.
II.
Standard of Review
Our review of a summary judgment is de
novo. "A motion for summary judgment is granted only when the evidence
demonstrates that 'there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.' Rule 56(c), Ala. R. Civ. P." Reichert v. City of
Mobile, 776 So. 2d 761, 764 (Ala. 2000). We apply
"the same standard as that of the trial court in determining whether the
evidence before the court made out a genuine issue of material fact." Bussey
v. John Deere Co., 531 So. 2d 860, 862 (Ala. 1988); System
Dynamics Int'l, Inc. v. Boykin, 683 So. 2d 419,
420 (Ala. 1996). In order to defeat a properly supported motion for a
summary judgment, the nonmoving party must present substantial evidence that
creates a genuine issue of material fact. "[S]ubstantial evidence is
evidence of such weight and quality that fair-minded persons in the exercise of
impartial judgment can reasonably infer the existence of the fact sought to be
proved." West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989).
III.
Analysis
Pate and Dillard maintain that they are
entitled to a summary judgment based upon the two-year statute of limitations. §
6-2-38(l), Ala. Code 1975. Pate
and Dillard argue that the limitations period began to run on April 25, 1998,
when Chandiwala discovered that the EIFS on his house was not properly sealed
and needed to be cut back.
Chandiwala argues that the limitations
period did not begin to run until he discovered the actual damage, the moisture
in the walls of the house, made the basis of this suit. Chandiwala does not
assert in his initial brief to this Court a specific date when he learned of
the damage; he merely contends that Pate and Dillard, by offering only a
termite-inspection report and notes from a subsequent conversation between
Chandiwala and a representative of Action Exterminators, failed to prove that
the actual damage to his house was sustained more than two years before he
filed his action. Chandiwala argues that
his conversation with Action Exterminators on April 25, 1998, did not put him
on notice that there was any actual damage to his house, but only that
potential problems could result if he did not have the EIFS cut back. Chandiwala argues that even if the potential
problems he was notified of constituted actual damage, the potential problems
associated with the fact that the exterior walls of his house were below grade
were not causally related to the damage -- latent moisture damage -- made the
basis of this action. Chandiwala,
relying on Smith v. Medtronic, Inc., 607 So. 2d
156 (Ala. 1992), contends that because there is no evidence in the record of
any casual relationship or link between the potential problems and the moisture
damage, the two incidents are separate and distinct causes of action.
Pate and Dillard, basing their argument
upon Chandiwala's contention in the trial court that he did not learn of the
damage to his house until he received the June 23, 2000, inspection, maintain
that Chandiwala cannot claim that he did not know about the moisture damage
until after the June 23, 2000, EIFS inspection.
Such an assertion, Pate and Dillard contend, would mean that
Chandiwala's claims were not ripe for adjudication when he filed his complaint
on May 1, 2000, and that the complaint, therefore, was due to be
dismissed. Chandiwala contends, for the
first time in his reply brief in this Court, that he
first learned of the moisture damage when the August 13, 1998, inspection was
performed and that the June 23, 2000, inspection served only to solidify the
evidence obtained in August 1998.
Chandiwala's negligence, suppression, and
third-party- beneficiary1 claims are claims that must be brought within two years. §
6-2-38(l), Ala. Code 1975. The
statute of limitations on a claim begins to run when the cause of action
accrues. Home Ins. Co. v. Stuart McCorkle, Inc., 291 Ala. 601, 285 So. 2d 468 (1973). A
cause of action accrues as soon as the claimant is entitled to maintain an
action, regardless of whether the full amount of the damage is apparent at the
time of the first legal injury. Smith v. Medtronic, Inc.,
supra; Garrett v. Raytheon Co., 368 So. 2d 516,
518-19 (Ala. 1979). In Kelly v. Shropshire, 199 Ala. 602, 604-05, 75 So.
291, 292 (1917), the rule was stated as follows:
"'If the act of which the injury is the natural
sequence is of itself a legal injury to plaintiff, a completed wrong, the cause
of action accrues and the statute begins to run from the time the act is
committed, be the actual damage [then apparent] however slight, and the
statute will operate to bar a recovery not only for the present damages but for
damages developing subsequently and not actionable at the time of the wrong
done; for in such a case the subsequent increase in the damages resulting gives
no new cause of action. Nor does plaintiff's ignorance of the tort or
injury, at least if there is no fraudulent concealment by defendant, postpone
the running of the statute until the tort or injury is discovered.'"
(Emphasis
added.)
The undisputed evidence in the present case
establishes that the limitations period on Chandiwala's claims began to run on
April 25, 1998. Documentation by Action
Exterminators reveals that that was the day Chandiwala telephoned the termite
company and was notified that his house had "Dryvit contact that must be
corrected"; that the EIFS at the base of his house needed to be cut back
because it was below grade; and that his house was not properly sealed. In fact, Chandiwala testified that the person
he spoke with at Action Exterminators told him to look into the "Dryvit
problem." Furthermore, the fact that Chandiwala contacted numerous
entities to inquire as to details and costs of repairs to the EIFS soon after
his conversation with Action Exterminators substantiates that he was aware of a
problem with the exterior of his house and the need for repair. Because Chandiwala became aware of the damage
to his house when he had the telephone conversation with the representative of
Action Exterminators, Chandiwala's cause of action accrued on April 25, 1998,
for the expense required to take the corrected measures deemed necessary by
Action Exterminators. On that date, the
statutory period of limitations began to run for damage developing subsequent
to the initial legal injury, in this case for the moisture damage to the walls.
See Kelly, supra. Chandiwala's later damage related to moisture in the
walls did not give rise to a new cause of action where he was on notice more
than two years before the commencement of the action that the EIFS had been
improperly sealed. See B & B Props. v. Dryvit
Sys., Inc., 708 So. 2d 189 (Ala. Civ. App. 1997)(the increase in the amount
of damage from discoloration and blistering of paint to water and structural
damage to the exterior finishing system did not give rise to a new cause of
action).
Chandiwala's reliance on Smith v.
Medtronic, Inc., supra, is misplaced.
In Smith, a heart pacemaker was implanted in a patient's chest in
1981. Id. at 157. During an operation in 1984,
while replacing the pacemaker with a newer model, the doctors discovered defective
insulation around a lead wire that they could not safely remove, and they opted
to leave it inactive in the body. In
1990, the doctors discovered that the inactive lead was breaking apart and that
the breaking apart of the lead wire could be fatal to the patient.
Subsequently, all the existing leads, including the defective inactive lead,
were removed and the pacemaker replaced. Id. at 158. The patient sued the manufacturer, alleging
negligence. This Court held that the
1984 injury, which involved the insulation around the lead, and the 1990
injury, which involved the lead itself, "were separate and distinct
defects in the inactive lead for which the two separate and distinct causes of
action could have been maintained had injury occurred, with the limitations
period beginning to run for each cause of action accordingly." Id. at 160.
Smith is distinguishable from the
present case because in Smith the defective insulation around a lead wire did not cause any injury to the plaintiff at the time
it was initially discovered. The
plaintiff's doctor testified as follows:
"The presence of a[n] ... inactive lead (here,
the [6972] lead) is usually of no consequence to the patient, as the body
normally adapts to the presence of this inactive lead without difficulty. In
my opinion, it was not injurious to [Smith] for the [6972] lead [the inactive
defective lead] to be left inside his heart, and [it] had caused and was
causing no physical injury to [Smith] at that time. I was further of the
opinion that the [6972] lead could remain in the heart safely capped without
causing harm to [Smith]."
607 So. 2d at 158
(emphasis omitted; emphasis added). In
this context, where the evidence showed that the defective insulation did not
cause the subsequent defect in the wire itself, which resulted in the patient's
injury, the Court held as follows:
"Smith
presented substantial evidence that although the allegedly defective insulation
was discovered in December 1984, it produced no injury to him; that the
'injury-causing malfunction' of the product at issue occurred on March 14,
1990, when he underwent surgery as a direct result of an allegedly latent
defect in the inactive lead wire; that it was at that time that he could have
maintained this cause of action; that it was at that time that this cause of
action 'accrued'; and, therefore, that it was at that time that the statutory
period of limitations on this cause of action began to run."
607 So. 2d at 160
(emphasis added). Where the preceding
act was a benign condition in Smith causing no immediate injury, the
problem reported to Chandiwala giving rise to the necessity for cutting back
and sealing the exterior of Chandiwala's house cannot be described as a benign
condition. Because Chandiwala neglected to make repairs at that time, he cannot
now attempt to recover for the subsequent moisture damage to the walls of his
house.
Because Chandiwala's claims were properly
barred by the two-year statute of limitations, we pretermit discussion of
Pate's argument that it is not responsible for the actions of Dillard, an
independent contractor.
IV.
Conclusion
We affirm the trial court's summary judgment for Pate and Dillard.
AFFIRMED.
Houston, See, Brown, Harwood, Woodall, and
Stuart, JJ., concur.
Johnstone, J., dissents.