Opinion
No. A05-1077.
Filed February 14, 2006.
Appeal from the District Court, Otter Tail County, File No. C0032400.
Katrina I. Wass, H. Morrison Kershner, Pemberton Sorlie, Rufer Kershner, P.L.L.P., (for appellant)
Elizabeth A. Moffitt, Michael G. Taylor, Leonard, Street and Deinard, (for respondent)
Considered and decided by Peterson, Presiding Judge; Randall, Judge; and Dietzen, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
In this appeal from a summary judgment, appellant City of Fergus Falls argues that because a genuine issue of material fact exists regarding whether respondent Sirny Architects, L.L.P., et al., was estopped from asserting a statute-of-limitations defense, the district court erred in determining that the city's action is time-barred. We affirm.
FACTS
In May 1996, the City of Fergus Falls contracted with Sirny Architects, L.L.P. for the design of the Prairie Wetlands Learning Center (PWLC). Under the contract, Sirny designed and provided architectural services for construction of the Day Building, which is part of the PWLC. The city contracted with Comstock Construction, Inc. for construction of the Day Building. Construction was completed in August 1998.
In late 1999, occupants of the Day Building began to notice problems with the building, including water leaks and uneven floors. Ken Garrahan, Executive Director of the PWLC, contacted Sirny about the problems. In early 2000, Sirny and the city frequently corresponded about possible causes of the problems with the building and how to correct the problems. In a March 22, 2000 letter, the city formally notified Sirny and Comstock about the defects in the Day Building.
On May 31, 2000, Sirny, Comstock, and the city met to determine the cause of the problems and the party responsible for making corrections. In a June 13, 2000 letter to the city, Sirny summarized the results of the meeting, identified the building's problem areas, and offered possible solutions. In closing, the letter stated, "I'm confident that we can resolve your issues and gain closure in a positive and timely manner."
In a June 14, 2000 letter to the city, which might not have been sent, Sirny stated "we are morally and ethically obligated to look out for your best interests." The letter concluded, "If we stay focused at our meeting and any required follow-through, I'm confident that we can resolve all the issues." Notations on the letter indicate that a Sirny representative discussed the contents of the letter with Dan Edwards, the city engineer, before a meeting. For more than a year, the city, Sirny, and other interested parties continued to correspond and meet in attempts to resolve the problems.
On September 5, 2001, Sirny, Comstock, and the city met and discussed building problems and possible solutions. Garrahan's notes from the meeting state:
The basic disagreement seems to center around possible movement of the building. Comstock asserts that all the problems are design related — that the building has moved and continues to move, thus causing misaligned doors, flooring separation and related issues. Partners and Sirny maintains that while all buildings move to some degree, that the problems observed are a result of the construction.
The parties continued to correspond regarding resolution of the building defects, and in an August 15, 2003 letter, Sirny asserted that it "did not contribute to the problems that the center has experienced" and that "the problems on this project are not design issues — they are construction issues." On December 2, 2003, the city initiated a lawsuit against Sirny and Comstock, alleging negligent design and construction of the Day Building. Sirny moved for summary judgment, asserting that the statute of limitations had expired. The district court granted Sirny's motion, and judgment was entered. This appeal followed.
DECISION
On an appeal from summary judgment, we ask whether there are any genuine issues of material fact and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).
A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law. On appeal, the reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.
Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (citations omitted); see Minn. R. Civ. P. 56.03.
No genuine issue for trial exists "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party." DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356 (1986)). "[T]he party resisting summary judgment must do more than rest on mere averments." Id. at 71. A genuine issue for trial must be established by "substantial evidence." Id. at 69-70 (citation omitted).
The applicability of a statute of limitations is a question of law, which we review de novo. Benigni v. County of St. Louis, 585 N.W.2d 51, 54 (Minn. 1998). Minn. Stat. § 541.051, subd. 1 (2004), states:
Except where fraud is involved, no action by any person in contract, tort, or otherwise to recover damages for any injury to property, real or personal . . . arising out of the defective and unsafe condition of an improvement to real property . . . 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 of the injury[.]
It is undisputed that the city was aware of the building's defects no later than March 22, 2000, and the city initiated its lawsuit more than two years later on December 2, 2003. But the city argues that Sirny should have been estopped from asserting the statute of limitations as a defense because Sirny made assurances upon which the city relied in delaying commencement of its lawsuit.
"When a party allegedly responsible for remedying a defect in real property makes assurances or representations that the defect will be repaired, that party may be estopped from asserting a statute-of-limitations defense if the injured party reasonably and detrimentally relied on the assurances or representations." Rhee v. Golden Home Builders, Inc., 617 N.W.2d 618, 622 (Minn.App. 2000).
Estoppel is an equitable doctrine addressed to the discretion of the court and is intended to prevent a party from taking unconscionable advantage of his own wrong by asserting his strict legal rights. To establish a claim of estoppel, plaintiff must prove that defendant made representations or inducements, upon which plaintiff reasonably relied, and that plaintiff will be harmed if the claim of estoppel is not allowed.
N. Petrochemical Co. v. U.S. Fire Ins. Co., 277 N.W.2d 408, 410 (Minn. 1979).
"Estoppel does not continue indefinitely if the circumstances relied on to justify estoppel cease to be operational. At that time plaintiff must proceed with due diligence to assert its claim against defendant." Id. at 411. "Estoppel depends on the facts of each case and is ordinarily a fact question for the jury to decide." Id. at 410. However, when only one inference can be drawn from the facts, it becomes a question of law. U.S. Leasing Corp. v. Biba Info. Processing Servs., Inc., 436 N.W.2d 823, 826 (Minn.App. 1989), review denied (Minn. May 24, 1989).
The city argues that Sirny's early promises to look out for the city's best interests and continue to work until these issues were resolved were assurances upon which it reasonably relied in delaying commencement of its lawsuit. But the city does not cite any evidence regarding continued assurances after September 2001, other than the August 2003 letter in which Sirny promised to "continue to work hard on this project for our client, and we will continue to give the City our best efforts." However, in that letter, Sirny also stated that it "did not contribute to the problems that the center has experienced" and that "the problems on this project are not design issues — they are construction issues." Therefore, even if Sirny's early assurances that it felt morally and ethically obligated to look out for the city's best interests could be interpreted as assurances or representations that the building defects would be repaired, it was unreasonable for the city to continue delaying a lawsuit based on Sirny's early assurances after Sirny asserted at the September 5, 2001 meeting with the city that the problems with the building were the result of the construction of the building. At that time, the circumstances initially relied on to justify estoppel ceased to be operational, and the city was required to proceed with due diligence to assert its claim. See N. Petrochemical, 277 N.W.2d at 411.
Because it is undisputed that Sirny never claimed responsibility for the building's defects or made any promises to take corrective action after the September 5, 2001 meeting, there is no genuine fact issue regarding whether Sirny is estopped from asserting a statute-of-limitations defense, and the district court did not err when it granted summary judgment based on its determination that the city's action is barred by the statute of limitations.