Opinion
No. 1 CA-CV 13-0739
04-14-2015
APRAJITA NAKRA, DPM, PC., an Arizona professional corporation; and SANDRA L. LEVITT, M.D., P.C., an Arizona professional corporation; DANA PV CONDO ASSOCIATION, an Arizona corporation, Plaintiffs/Appellants, v. PORTER BROS., INC., an Arizona corporation, Defendant/Appellee.
COUNSEL Dicks, Coglianese & Shuquem, LLP, Phoenix By Darrien O. Shuquem Counsel for Plaintiffs/Appellants Lorber Greenfield & Polito, LLP, Phoenix By Holly P. Davies and Louis W. Horowitz Counsel for Defendant/Appellee
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Maricopa County
Nos. CV2010-022260 CV2013-000381
The Honorable Douglas L. Rayes, Judge
AFFIRMED
COUNSEL Dicks, Coglianese & Shuquem, LLP, Phoenix
By Darrien O. Shuquem
Counsel for Plaintiffs/Appellants
Lorber Greenfield & Polito, LLP, Phoenix
By Holly P. Davies and Louis W. Horowitz
Counsel for Defendant/Appellee
MEMORANDUM DECISION
Judge Jon W. Thompson delivered the decision of the Court, in which Presiding Judge Andrew W. Gould and Judge Maurice Portley joined. THOMPSON, Judge:
¶1 Plaintiff-appellants Aprajita Nakra, DPM, PC, Sandra L. Levitt, M.D., P.C., and Dana PV Condo Association (collectively, plaintiffs) assert the trial court erred in granting Porter Bros., Inc., (Porter) summary judgment on the basis of the statute of limitations in this construction defect case. The trial court declined to adopt plaintiffs' assertions that their claim did not begin to accrue until a report was issued by their litigation experts or that Porter should be estopped from asserting the statute of limitations. Finding no error, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 Construction began in 2004 on the Dana Professional Village project with Porter as the general contractor. In 2004, Doctors Levitt and Nakra (doctors) each purchased two units. The doctors took possession in 2005, after those units were completed. The complex was managed by the Dana PV Condo Association and Levitt was continuously a member of the Association including, since 2006, president of the Association.
Dr. Levitt purchased units 101 and 102 which made up building one. Dr. Nakra purchased units 103 and 108, unit 103 is in building two which is next door to building one. Buildings one and two are separated by a small landscaped area; the two buildings share a common parking lot.
¶3 A letter from Doctor Levitt to Porter dated January 29, 2008, included as an exhibit to the motion for summary judgment, reads:
Dear Dennis [Porter],
I regret having to ask again that the necessary repairs to our building be done. We were to have met with one of your supervisors some weeks ago and we received a call that he could not be here for that appointment. We have heard nothing.
We have major settling problems on the North side of the building, cracks in the back and front sides of the building, our floor tile has still not been repaired. Grout is coming out of some tile. We have a major crack in the wall inside at the end of the East wall. All of these problems have been reported to you long before any deadline agreement. But nothing has been done and we have heard nothing.
Please call me at your earliest convenience.
¶4 Porter representative Glen Washburn responded to the doctors "repeated inquiries" in writing by advising them that "[t]he building is beyond any warranty period." But, as a gesture of goodwill, Porter offered to split the cost of the estimated drywall, ceiling and tile repairs or to repair the drywall alone at Porter's expense. In September 2009, doctors hired engineer Jesse Wyatt who examined the property and issued a report noting differential movement, evidence indicating heaving of the floor slab, vertical displacement of the floor tile of "about one foot from the south exterior wall," cracking of interior drywall partitions and binding of both interior and exterior doors. The Wyatt report states "information provided indicates distress had developed earlier and evidence of previous repairs was observed." The Association, according to the affidavit of its manager, was given periodic updates of the doctors' problems prior to July 2010.
¶5 In July 2010, doctors filed suit against the developers and Porter asserting various warranty claims, fraud claims and breach of contract and negligence related to "defects [with] the Project with respect to drainage, settlement/heaving, cracking, inadequate drainage and resultant damage as well as other deficiencies." Doctors asserted in that complaint that "[b]eginning in or around 2008, [doctors] began to notice serious problems with their respective offices, including significant cracking of the floors and exterior and interior walls as well as ceiling failures." The complaint asserts damages of nearly $1.8 million dollars based on an analysis undertaken by Praxis Construction Forensics and Analysis in March 2010 and culminating in a report in June 2010.
¶6 In January 2013, the Association also brought suit. The two matters were consolidated. Later, certain claims were dismissed by stipulation, leaving only the negligence claims against Porter.
¶7 Porter filed various motions for summary judgment including motions for summary judgment based on the statute of limitations as against doctors and the Association. The issues were briefed and argued before the trial court which ruled from the bench for Porter. Plaintiffs' motion for reconsideration was denied. The trial court entered judgment pursuant to Arizona Rule of Civil Procedure 54(b) for Porter and declined to award Porter any fees below. Plaintiffs appealed and we have jurisdiction over this matter.
The trial court additionally granted Porter summary judgment on the Association's claim for indemnity finding that, because the Association had not been sued, no indemnity followed.
ISSUES
¶8 Plaintiffs raise four issues on appeal:
a. Whether the trial court erred by granting summary judgment for Porter based on the two-year statute of limitations by adopting January 29, 2008, as the date of accrual for their claims "given the extensive evidence in the record from which the jury could conclude that Nakra and Levitt's claims did not accrue until September 2009 and the Association's claims did not accrue until November 2012";
b. Whether the trial courted erred by granting summary judgment for Porter by finding, as a matter of law, that Porter did not waive its limitations defense by failing to adequately plead same, or by fully participating in mediation and litigation for nearly three years before actively pursuing the limitations defense;
c. Whether the trial court erred in granting summary judgment for Porter where plaintiffs introduced evidence from which the jury could conclude that Porter should be equitably estopped from asserting a limitations defense or that the limitations period should be equitably tolled due to Porter's knowledge and concealment of latent defects; and
d. Whether the trial courted erred by granting summary judgment for Porter by finding, as a matter of law, that Levitt's knowledge was imputed to Nakra and the Association for purposes of determining the accrual date for their respective claims.
DISCUSSION
¶9 Plaintiffs assert the trial court erred by granting summary judgment for Porter based on the two-year statute of limitations by adopting January 29, 2008 as the date of accrual for their claims "given the extensive evidence in the record from which the jury could conclude that Nakra and Levitt's claims did not accrue until September 2009, and the Association's claims did not accrue until November 2012." We disagree.
¶10 A trial court properly grants summary judgment when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(c). On appeal, we determine de novo whether genuine issues of material fact exist and whether the trial court properly applied the law. Eller Media Co. v. City of Tucson, 198 Ariz. 127, 130, ¶ 4, 7 P.3d 136, 139 (App. 2000). We view the facts and any inferences from those facts in the light most favorable to the non-moving party, here plaintiffs. See Prince v. City of Apache Junction, 185 Ariz. 43, 45, 912 P.2d 47, 49 (App. 1996). We will affirm a grant of summary judgment if the trial court was correct for any reason. City of Tempe v. Outdoor Sys., Inc., 201 Ariz. 106, 111, ¶ 14, 32 P.3d 31, 36 (App. 2001).
¶11 The statute of limitations for negligence and negligent misrepresentation is two years. Ariz. Rev. Stat. (A.R.S.) § 12-542 (2003). Plaintiffs took possession of the property in 2005 and brought suit nearly five years later, in the case of the doctors, and over eight years later in the case of the Association. Doctors filed their complaint in July 2010 and the Association filed its complaint in January 2013.
Plaintiffs assert that Porter waived any ability to assert a statute of limitations defense by either failing to adequately plead the affirmative defense or, alternatively, by conduct during the course of limitation. We find that Porter did not waive the statute of limitations defense. Porter did make an assertion at paragraph 141 of its answer to the second amended complaint that the statute of limitations barred the negligence and fraud claims.
¶12 On the face of the complaint, plaintiffs' causes of action appear time-barred. When a complaint shows on its face that the cause of action is barred by the statute of limitations, the burden is on the plaintiffs to show the statute should be tolled. Cooney v. Phoenix Newspapers, Inc., 160 Ariz. 139, 141, 770 P.2d 1185, 1187 (App. 1989). Once the defendant has established a prima facie case entitling him to summary judgment, the plaintiff has the burden of showing available, competent evidence that would justify a trial. State v. Mecham, 173 Ariz. 474, 478, 44 P.2d 641, 645 (App. 1992). Whether a cause of action is time barred may properly be determined as a matter of law when no disputed issue of fact exists as to the plaintiff's knowledge regarding who caused the injury and when. See Thompson v. Pima County, 226 Ariz. 42, 46-47, ¶ 14, 243 P.3d 1024, 1028-29 (App. 2010).
¶13 In general, a cause of action accrues and the statute of limitations begins to run when one party is able to sue another. Sato v. Van Denburgh, 123 Ariz. 225, 227, 599 P.2d 181, 183 (1979); Norton v. Steinfeld, 36 Ariz. 536, 544, 288 P. 3, 5 (1930). Under the traditional, strict construction of that rule the period of limitations began to run when the act upon which legal action is based took place, even if the plaintiff was unaware of the facts underlying his or her claim. See Stockmen's State Bank v. Merchants' and Stockgrowers' Bank, 22 Ariz. 354, 363-64, 197 P. 888, 892 (1921). In an effort, to mitigate the harshness of the traditional rule, our court adopted the "discovery rule" finding a plaintiff's cause of action did not accrue until the plaintiff knew or, in the exercise of reasonable diligence, should have known the facts underlying the cause of action. Mayer v. Good Samaritan Hosp., 14 Ariz.App. 248, 251-52, 482 P.2d 497, 500-01 (1971); 2 Calvin W. Corman, Limitations of Actions § 11.1.1 (1991). Accrual is based on the plaintiff's knowledge of the facts underlying the cause of action. Doe v. Roe, 191 Ariz. 313, 322, ¶ 29, 955 P.2d 951, 960 (1998). To trigger accrual, the plaintiff need not know all the facts, only "a minimum requisite of knowledge sufficient to identify that a wrong occurred and caused injury." Id. at 323, ¶ 32, 955 P.2d at 961. Our supreme court in Gust, Rosenfeld v. Prudential Ins., said "In our view, the important inquiry in applying the discovery rule is whether the plaintiff's injury or the conduct causing the injury is difficult for plaintiff to detect." 182 Ariz. 586, 590, 898 P.2d 964, 970 (1995).
a. The Doctors' Claims
¶14 The evidence in the record shows both that the doctors knew early on that they were injured and that they believed Porter was at fault. From the complaint to plaintiffs' own Praxis report, the record demonstrates that the construction defects in those units were open and obvious and by 2008 the doctors, in fact, knew or should have known that they were sustaining damage to their units due to construction defects even if they did not know the exact cause of the defect or who all might be at fault.
¶15 For example, the doctors' complaint from July 2010 at paragraph 24 states: "[u]pon information and belief, prior to 2008, [defendants] were put on notice regarding defects at the Project with respect to drainage, settlement/heaving, cracking, inadequate drainage and resultant damage as well as other deficiencies." That complaint at paragraph 28 states "[b]eginning in or around 2008, [doctors] began to notice serious problems with their respective offices, including significant cracking of the floors and exterior and interior walls as well as ceiling failures. Accordingly, both [doctors] contacted [defendants] concerning these, and other, problems."
¶16 Doctor Levitt's letter of January 29, 2008, makes clear that she had made prior requests for repairs with no satisfaction and that such problems included "major settling problems [North wall] . . . cracks in the back and front sides of the building . . . a major crack in the wall inside at the end of the East wall." And she concluded "[a]ll of these problems have been reported to you long before any deadline agreement. But nothing has been done and we have heard nothing." By January 29, 2008, Dr. Levitt knew there were construction problems, blamed Porter, and knew Porter had stopped being responsive to her requests to fix them. This conclusion is reinforced by her affidavit which states that in February 2008, Doctor Levitt hired an outside contractor "for repairs."
¶17 The Wyatt report in 2009, generated on the request of the doctors, indicates cracking of walls, binding of interior and exterior doors and heaving of a floor slab and discusses "[i]nformation provided indicates distress had developed earlier" and that there was evidence of previous repairs. His report discusses exterior landscaping and inadequate drainage and states "[t]his indicates the builder understood that drainage was a problem. Evidence indicates water still ponds adjacent to the foundation on the east and south side of the building."
¶18 In October 2009, Dr. Nakra wrote to Porter to apprise it "of several ongoing serious structural issues" and that "Porter Brothers is aware of these issues since your support staff has been in our offices, on several occasions, to rectify some of these issues but have never provided an explanation regarding the recalcitrant nature of these structural problems." In November 2011, Dr. Nakra again wrote to Porter of "persistent, progressive and worsening structural concerns regarding our office suites" that they had been having "for several years." Dr. Nakra in her letter states that the doctors disagreed with Porter's assertion that the warranty period has run.
¶19 The investigative report, created for the doctors in 2010 stated Praxis was hired to "examine the dynamic, significant and distressing performance failures and deficiencies" at the units and noted "[d]ocumentation of the significant and readily visible failures and deficiencies occurring at each of the buildings." The Praxis report states that "[a] walk-thru of the three buildings indicated extensive movement of the slabs in conjunction with settling of the foundations" as demonstrated by "extensive cracking" of the slab, interior and exterior walls, shifting of window and door frames rendering them unable to be properly opened or closed, soffit cracking and ceiling tiles loose and falling. A "site visit indicated that extraordinarily poor drainage was, and is, a problem." It found problems with how the roofs and downspouts directed water and caused ponding between the buildings and the sidewalk. Of Suite 103, Dr. Nakra's suite, it stated: "[t]he entry walkway at Suite 103 was documented as having a negative slope back toward the structure. A negative slope toward the building is completely deficient and non-compliant in terms of the design of the civil drawings. . . This is obviously a common sense consideration. The deficient nature of this workmanship failure is self-evident."
¶20 Doctors Levitt and Nakra's affidavits in response to Porter's motion for summary judgment are of no assistance. Neither provides the necessary facts to create a genuine issue of material fact. Both doctors make similar vague statements in their affidavits as to when they started to notice problems in their units. Dr. Levitt said:
During the first few years of occupying the units, on several occasions I reported drywall cracking to Porter . . . Porter typically made repairs within a few weeks. During this period I also reported to Porter a damaged front door threshold and some doors that would not close, and cracked floor and later ceiling tile movement. These items were also fixed within weeks. In February 2008, and again in November 2008 I paid another contractor for repairs to some components.(Affidavit numbering omitted). Dr. Nakra stated "In the first few years of occupying my units, I reported some drywall cracking and other damage to Porter on several occasions. Porter typically made cosmetic repairs within a few weeks . . . I continued to have ongoing damage to my units in 2009."
¶21 On appeal doctors assert that a reasonable jury could find that the doctors did not have sufficient information and knowledge to discover their claims against Porter until the Wyatt Report in 2009. In the doctors' affidavits and at oral argument on summary judgment, doctors asserted that until the Praxis report in June 2010 the statute did not begin to run. We disagree. "[A]n opponent to a motion for summary judgment does not raise an issue of fact by merely stating in his affidavit that an issue of fact exists, but rather he must show that evidence is available which would justify a trial of that issue." Feuchter v. Bazurto, 22 Ariz. App. 427, 429, 528 P.2d 178, 180 (1974) (citing Schock v. Jacka, 105 Ariz. 131, 133, 460 P.2d 185, 187 (1969)). We do not find there is evidence in the record from which the jury could conclude that Nakra and Levitt's claims did not accrue until September 2009 the date of the Wyatt report. The record certainly does not support plaintiffs' assertions at oral argument before the trial court that the statute of limitations did not begin to run on their claims until the report by Praxis in June 2010. Both the Wyatt report and the Praxis report make clear that the defects doctors complained of were not latent defects but were extensive, visible, common-sense, and self-evident.
Doctors each stated "The Praxis Report was the first confirmation that I had that Porter in fact had been negligent in the construction of the Project, resulting in the ongoing damage to our units."
The trial court, of this claim, said "what I'm saying is I don't think I'm going to buy the idea that Plaintiffs' expert's report is the date the statute runs . . . I don't think the statute begins to run on the day the Plaintiffs decide to get around to hiring an expert."
¶22 The evidence does not demonstrate that doctors did not actually know or in the exercise of reasonable diligence should have known that they had been injured. Nor, based on the documentary evidence, is there a credible claim that they did not know Porter had a role in the injury as that is whom they continuously complained to regarding the problems. As a result, the trial court did not err by granting summary judgment against doctors on statute of limitations grounds.
b. The Association's Claims
¶23 We likewise find that the Association's claims filed in 2013 are time-barred. The patent defects complained of by the doctors included many common element defects which were under the authority of the community manager. Even if the defects had been latent, the Association, through Danny Green the community manager, admits actual knowledge because "the doctors provided periodic updates of their problems, and after filing a lawsuit, provided occasional updates as to the statutes of their case". The doctors' lawyer came to an Association meeting in 2010 to discuss the case. For these reasons, we affirm the trial courts grant of summary judgment against the Association.
By statute the common elements that the doctors asserted contained defects included, but were not limited to, the landscaping, sidewalks, exterior doors and windows, roofs, exterior walls. See A.R.S. § 33-1212 (2014) (defining interior finished surfaces as part of the unit and all other surfaces as common elements). The declarations page adopted the statutory language.
Dr. Levitt, at least, was a continuously sitting member of the board since at least 2006.
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c. Tolling and Equitable Estoppel
¶24 Plaintiffs next assert the trial court erred in granting summary judgment for Porter where plaintiffs introduced evidence from which the jury could conclude that Porter should be equitably estopped from asserting a limitations defense or that the limitations period should be equitably tolled due to Porter's knowledge and concealment of latent defects. Plaintiffs' claims in this arena focus on: (1) the fact that Porter kept making cosmetic repairs when asked, and (2) that Porter kept saying the damage was "normal."
¶25 Due to the open and obvious nature of the defects and the letters doctors sent to Porter, there is no evidence to support a claim that Porter concealed the existence of a cause of action. Nor do we find that Porter's actions induced plaintiffs to not file suit. Plaintiffs have not shown sufficiently specific threats, inducements or promises to satisfy the requirement that the plaintiffs actually and reasonably relied on that inducement in foregoing filing suit. As our supreme court in Nolde v. Frankie, 192 Ariz. 276, 280, ¶ 16, 964 P.2d 477, 481 (1998) stated "Vague statements or ambiguous behavior by the defendant will not suffice" to establish inducement.
d. Attorneys' Fees and Costs
¶26 On appeal, plaintiffs seek attorneys' fees and costs pursuant to A.R.S. §§ 12-341 and -341.01 (2003). Because plaintiffs were not successful on appeal, that request is denied. Porter is, however, awarded its costs on appeal upon compliance with ARCAP 21.
CONCLUSION
¶27 For the above stated reason, we affirm the trial court.