Opinion
No. C7-99-218.
Filed July 6, 1999.
Appeal from the District Court, Hennepin County, File No. 972349.
Kevin J. Kennedy, Kristin M. Nimsger, (for appellant)
Mark D. Covin, Stacy E. Cudd, (for respondent)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1998).
UNPUBLISHED OPINION
Appellant Cedar Woods Association challenges the district court's summary judgment dismissing the Association's negligence and breach of statutory warranty claims against respondent Francis DeRidder Construction Company. The Association argues the district court improperly applied the statute of limitations in determining the Association's claims were time-barred. We affirm.
FACTS
In 1983, Concord Realty Investment Development, Inc. was formed in order to build the Cedar Woods Court Townhomes, an 11-unit condominium. Steven Cox was a one-third owner and president of Concord, Andrea Edmonson was a one-third owner and secretary/treasurer, and Francis DeRidder was a one-third owner. Concord contracted with respondent Francis DeRidder Construction Company to be the general contractor for the construction of the townhomes.
The Association is a Minnesota nonprofit corporation organized to govern the Cedar Woods Court Townhomes and consists of the owners of the townhomes. When the bylaws of the Association were executed on July 9, 1984, Cox and Edmonson signed the documents as officers of the Association.
A memorandum sent by Concord in October 1984 informed DeRidder that some of the decks were leaking. Early in 1985, Charles Brink, the owner of unit 1629, informed either Cox or Edmonson that water was leaking from his deck into his garage. On numerous occasions in the spring of 1985, Cox and Edmonson informed DeRidder that the decks were leaking severely and requested that DeRidder address the problem immediately. According to DeRidder, the decks were caulked in the spring of 1985 and he thought that the problem was temporarily resolved.
Edmonson informed DeRidder on June 19, 1985, that the "attempt which was made to caulk these decks was not satisfactory." In a letter dated September 11, 1985, and signed by both Cox and Edmonson, Concord gave DeRidder notice that Concord would proceed with correcting the problems and would seek reimbursement from DeRidder. Among the items cited as major construction defects was "[l]eaking decks over the garages." In a responsive letter, DeRidder stated that the leaks were due to a need for periodic caulking and were not the responsibility of DeRidder, the general contractor. After that letter, nobody contacted DeRidder regarding the leaks until 1994.
The decks began to leak again in the early 1990s. According to Brink, his deck did not leak between 1985 and 1993, but started to do so in 1994. Brink believes that something was done to cure the leak problem in 1985, but he is not aware of what was done.
In September 1994, the Association commenced this action, alleging negligence and breach of warranty. Relying on the statute of limitations, the district court entered summary judgment against the Association regarding the water leakage problems on both its negligence and breach of warranty claims against DeRidder. The Association appeals.
DECISION
On an appeal from summary judgment, the reviewing court asks whether there are any genuine issues of material fact in dispute, and whether the trial court erred in its application of the law. State by Cooper v. French , 460 N.W.2d 2, 4 (Minn. 1990). We review the district court's interpretation of the law de novo. Sorenson v. St. Paul Ramsey Med. Ctr., 457 N.W.2d 188, 190 (Minn. 1990). We view the evidence in the light most favorable to the party against whom summary judgment was granted and accept as true the factual testimony produced by the nonmoving party. Fabio v. Bellomo , 504 N.W.2d 758, 761 (Minn. 1993).
Minn. Stat. § 541.051, subd. 1 (1984) states:
Except where fraud is involved, no action by any person in contract, tort, or otherwise to recover damages for any injury to property * * * arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained on account of the injury, shall be brought against any person performing or furnishing the design, planning, supervision, materials, or observation of construction or construction of the improvement to real property * * * more than two years after discovery thereof[.]
The two year statute of limitations applies to claims of defective workmanship and runs
when the plaintiff discovers, or in the exercise of reasonable diligence should have discovered, an injury sufficient to entitle him to maintain a cause of action.
Greenbrier Village Condominium Two Ass'n v. Keller Inv., Inc., 409 N.W.2d 519, 524 (Minn.App. 1987).
In this case, correspondence sent by Cox and Edmonson to DeRidder throughout 1984 and 1985 indicates that there was leakage into the garages. The Association concedes that Cox and Edmonson were aware of the concerns over the construction of the decks and the propensity for deck and garage leakage. We conclude these undisputed portions of the record indicate that the Association was aware of an injury sufficient to maintain a cause of action in 1984 or 1985 and that the two-year statute of limitations bars the action filed in 1994.
The Association argues that this analysis is complicated in two ways. First, the Association argues that it did not have actual knowledge of the problems with the decks. According to the Association, there is no evidence suggesting that Concord or DeRidder made this information or their concerns known to the Association. Without that knowledge in 1984 or 1985, the Association argues, the defects were not discovered by the Association until the 1990s.
This argument lacks support in the record. Either Cox or Edmonson signed each of the letters to DeRidder indicating that the decks were leaking. At the time that those letters were sent to DeRidder, Cox and Edmonson were the officers of the Association. These facts demonstrate that the Association had knowledge of the defective decks in 1984 and 1985. See Minnesota Valley Country Club, Inc. v. Gill, 356 N.W.2d 356, 361 (Minn.App. 1984) (stating that corporate officer's knowledge is imputable to corporation if officer was acting within scope of duties).
The Association also claims that the analysis is complicated by the fact that DeRidder attempted to repair the leaks in 1985 and that no leaks were discovered between 1985 and the 1990s. According to the Association, those facts implicated the "repair doctrine," an equitable estoppel doctrine, and tolled the running of the statute of limitations until the second set of leaks was discovered in 1992 or 1993. In support of its argument, the Association cites Cascade Gardens Homeowners Ass'n v. McKellar Assocs., 240 Cal.Rptr. 113 (Cal.Ct.App. 1987), review denied (Cal. Dec. 3, 1987). In Cascade Gardens, the California Court of Appeal noted that the statute of limitations tolls when the defendant attempts to repair a defect and assures the plaintiff that the repair will be made. Id. at 116. See also Sohns v. Pederson, 354 N.W.2d 852, 855 (Minn.App. 1984) (stating that estoppel claim requires assurances by defendant, reasonable reliance by plaintiff, and resulting harm).
In this case, the Association's reliance on the "repair doctrine" is misplaced. Conspicuously absent from the record is evidence that DeRidder assured Concord or the Association that the leaking decks would be or had been repaired. The numerous pieces of correspondence cited by the Association indicate that Cox and Edmonson knew of the leaks and wanted DeRidder to address the problem. The only correspondence from DeRidder to the Association, however, was a letter dated September 26, 1985 in which DeRidder informed Cox and Edmonson that the condominium design did not provide for waterproofing in the leaking areas, that periodic caulking would be needed to prevent further leakage, and that DeRidder took no further responsibility for the leaks. Because there is nothing in the record to suggest that DeRidder assured the Association that the leaking decks would be repaired, the "repair doctrine" set forth in Cascade Gardens is inapplicable.
A similar line of cases cited by the Association provides that the statute of limitations tolls if a plaintiff is unable to discover the defect due to repairs undertaken by the defendant. See Lake City Apartments v. Lund-Martin Co., 428 N.W.2d 110, 112 (Minn.App. 1988) (stating that reasonable minds may differ about date of discovery of injury if there is evidence that repairs prevented plaintiff from discovering injury), review denied (Minn. Oct. 26, 1988).
The Association claims that DeRidder's attempts to caulk the decks stopped all leaking problems from 1985 until the early 1990s and prevented the Association from fully discovering its injuries. Despite the Association's argument to the contrary, the record shows that the Association was well aware of the alleged defects in design and workmanship after DeRidder attempted to alleviate the problem by caulking. According to DeRidder, he last caulked the decks in the spring of 1985. As late as September 11, 1985, however, Cox and Edmonson believed that the leaking decks were a result of a "major construction defect" and believed DeRidder to be responsible for the defect. Nothing in the record indicates that DeRidder attempted to repair the decks after September 11, 1985.
Moreover, DeRidder's September 26, 1985, letter to Cox and Edmonson states in effect that it would do no additional work on the decks. That correspondence demonstrates that Cox and Edmonson believed the decks to be defective long after DeRidder completed its final attempt to alleviate the leaks. For this reason, the Association's contention that DeRidder's repair efforts prevented the Association from discovering its negligence claim is unsupported by the record and summary judgment was properly granted.
The Association also contends that the statute of limitations does not apply to its breach of statutory warranty claim. Minn. Stat. § 541.051, subd. 4 (1984), provides that breach of statutory warranty claims must be brought within two years of the discovery of the breach, not the discovery of the injury.
In this case, the Association argues that it did not discover the breach of the statutory warranties until January 1997, when it reviewed its expert's report detailing DeRidder's allegedly faulty workmanship. This argument is not persuasive. In September 1985, Cox and Edmonson informed DeRidder that the condominiums suffered from "major construction defects." That letter indicates that the Association had knowledge of the leaks and believed that the leaks were due to DeRidder's faulty workmanship nine years before this action was filed. For that reason, the breach of warranty claim is barred by the statute of limitations.
Because we find that the district court properly determined that the Association's claims are barred by the statute of limitations, we need not address whether the statute of repose bars the Association's claims.