Opinion
C.A. No. 97C-08-018
Date Submitted: December 3, 1999
Date of Decision: February 25, 2000
Raymond E. Tornasetti, Jr., Esquire, attorney for plaintiff;
John A. Sergovic, Esquire, attorney for defendants.
MEMORANDUM OPINION
The above-referenced action is before the Court on a motion for summary judgment by the defendant based on a claim that the statute of limitations has expired. Defendant, Henlopen Junction's motion is hereby denied for the reasons set forth below.
NATURE AND STATUS OF THE PROCEEDINGS AND STATEMENT OF FACTS
Henlopen Station Condominium Council of Unit Owners ("Henlopen Station" or "Plaintiff') brought this action against Henlopen Junction Condominium Council of Unit Owners (" Henlopen Junction" or "Defendant") seeking repayment of expenses associated with clearing a drainage system, repairing damage to its parking lot that resulted from standing water, and constructing a stormwater management pond on its property. The suit arises out of the provisions of a drainage easement, benefiting Henlopen Junction, which was recorded in 1984. By agreement under that recorded easement, Henlopen Junction and Henlopen Station were to share maintenance responsibilities of the drainage easement.
No drainage system was ever built connecting Henlopen Junction with the easement area. However, it is alleged by Henlopen Station that surface drainage does enter the easement area and eventually pools on Plaintiffs parking lot along with its own runoff. The resulting damage was repaired by flushing the piping, resurfacing the parking lot, and creating a stormwater retention pond to accommodate the drainage. In completing this work, Henlopen Station alleges in its Complaint that it incurred costs in excess of 555,000. It now seeks to have Henlopen Junction contribute to the payment of these expenses as called for in the easement grant.
Henlopen Junction filed for summary judgment based solely on a theory that this claim has been brought outside the time period permitted by the statute of limitations applicable in this case. It requests dismissal on this basis. The parties have briefed the issue.
STANDARD OF REVIEW
Since the parties have relied on information drawn from outside the pleadings, what would otherwise be a motion to dismiss based on the pleadings calling into question the statute of limitations becomes a motion for summary judgment. Brown v. Colonial Chevrolet Co., Del. Super., 249 A.2d 439(1968). In acting on a motion for summary judgment, the Court may grant the motion only when no material issue of fact exists, and the moving party is entitled to judgment as a matter of law. Super. Ct. Civ. R. 56(c). The moving party bears the burden of establishing the lack of any issue of material fact. Moore v. Sizemore, Del. Supr., 405 A.2d 679 (1079). Summary judgment is appropriate where, after viewing the record in the light most favorable to the non-moving party, the Court finds there is no genuine issue of material fact. Camac v. Hall, Del. Super., 698 A.2d 394 (1996). A material factual dispute exists where the parties disagree about the factual predicates for the legal principles they advance. Merrill v. Crothall-American, Inc., Del. Supr., 606 A.2d 96 (1992).
ISSUE PRESENTED
Here, the legal theory advanced is based on the statute of limitations. No material issues of fact were raised by the parties with regard to that particular legal principle, though there was some discussion of issues of material fact relating to the underlying merits of the case. Those, however, would be moot were the Court to grant summary judgment based on the statute of limitations.
Hence, the only issue properly considered at this juncture of the case is a purely legal one. That is, whether the cause of action was brought too late, and is thus barred by the statute of limitations. The seminal inquiry in this issue is when the statute began to run. Henlopen Junction claims that the date that the easement was recorded is the date that the statute began to run. Henlopen Station claims that its suit is not barred by the statute of limitations since it seeks recovery of costs incurred in the three years prior to the suit being filed, and within the time period contemplated by 10 Del. C. § 8106.
Defendant claims that no matter whether 10 Del. C. § 8106 (three-year statute of limitations for property damage claims) or 10 Del. C. § 8127 (six-year statute of repose for suits arising from deficiencies in construction of improvements on real property) is utilized, the time period has passed when measured from the date the easement was filed. This memorandum will not address the provisions of § 8127 as they relate to this case, except to say that it is not applicable. Since the drainage system was never installed, no "improvement resulting from construction" has been placed on the property to call this statute into question. 10 Del. C. § 8127(2) (4). For discussion on a proper application of that provision, see City of Dover v. International Tel. And Tel. Corp., Del. Supr., 514 A.2d 1086 (1986).
DISCUSSION
The statute of limitations begins to run at the time a cause of action accrues. 10 Del. C. § 8106. Accrual of a cause of action occurs at the time of the wrongful act, absent fraud or deception. Isaacson, Stooler Co. v. Artisan's Sav. Bank, Del. Supr., 330 A.2d 130(1974); David B. Lilly Co. v. Fisher, 3d Cir., 18 F.3d 1112 (1994). In other words, a cause of action only accrues at the point when all the predicates are satisfied for a suit to be filed in regard to the wrongful act and resulting injury. Green v. Loper, Del. Supr., 67 A.2d 856 (1949). In a case based on contract theory, the cause of action accrues and the statutory period commences at the time of breach by one side or the other. Nardo v. Guido DeAscanis Sons, Del. Super., 254 A.2d 254 (1969).
Defendant, Henlopen Junction, cites United States Cellular Investment Co. of Allentown v. Bell Atlantic Mobile Systems, Inc., Del. Supr., 677 A.2d 497 (1996) for the proposition that the cause of action in this case accrued at the recording of the instrument including the language of the easement. In that case, under a partnership contract among several cellular phone service providers, there were a number of provisions limiting competition between the individual providers and the partnership. The Supreme Court ruled that the limitations period on a breach of contract claim was initiated when a general partner, in an individual capacity and in its own self-interest, filed with the FCC for approval to operate a cellular phone service in one of the areas the partnership was to engage in business. Id at 503. This filing, the Court reasoned, acted as sufficient notice to the limited partner that the general partner was breaching the contract provisions precluding competition.
Henlopen Junction would have the Court accept the idea that the filing in this case is commensurate with the FCC filing in U.S. Cellular. The defendant asks too much of the cited case and the statute of limitations. The filing of the easement in the Recorder of Deeds in the instant case provided no notice of breach. If the filing in this case is analogous to anything inU.S. Cellular, it would be the execution of the original contract among the cellular servers forming the partnership; both are the basis of the relationship between the parties and contain the covenants by which that relationship will exist.
The defendant further implies that Henlopen Station knew or should have known that Henlopen Junction was breaching the covenants in the easement when it did not install a drainage system in the easement area. The statute began to run, Henlopen Junction asserts, when it became clear that the system would not be installed. The Court finds this logic troubling for two reasons. First, the easement covenants provide for continuing obligations to maintain drainage, not to install a drainage system during construction. Second, there was no way for Henlopen Station to be on notice that the easement would never be used.
Henlopen Junction's failure to install the drainage system could not operate as notice of a breach, since the act omitted was not within the covenants originally made. Even if the Court were to accept a theory that Henlopen Junction repudiated the easement by not making use of it, there must have been some event by which Henlopen Station could have become aware of the rejection. An exception to the running of the statute of limitations "occurs when there are no observable or objective factors which put laymen on notice of a problem." Began v. Dixon, Del. Super., 547 A.2d 620 (1988). This exception is based on the theory that no cause of action accrues if the breach is inherently unknowable and the plaintiff was blamelessly ignorant that the cause of action existed. Fooks v. Delaware Health and Social Services, Del. Super., C.A. No. 98C-10-027, Graves, J. (September 14, 1999) (Mem. Op.), citing Iaasacson, supra.
Henlopen Station had no right to delve into the reason that Henlopen Junction did not install the drainage system in the drainage easement at the time of construction. Since the easement is perpetual and runs with the land, Henlopen Junction could, at some future point, decide to use the easement for part of its drainage system. For that reason, Henlopen Station could not be on notice that the easement would never be used and must assume that the easement continues to be reserved for the benefit of Henlopen Junction.
To otherwise allow this to be the basis for the initiation of the statutory time limit would permit Henlopen Junction to impermissible control when the statute began to run by picking a convenient date for when it made its decision to forego use of the easement. Unless Henlopen Junction took some action to clearly indicate abandonment of the easement, such as seeking to have that part of the recorded document removed, Henlopen Station could not have known that Henlopen Junction had foregone its right to use it. Thus, Henlopen Junction's supposed repudiation was inherently unknowable to Henlopen Station.
Since no cause of action accrued at the filing of the easement, and the terms of the document precluded the elements of a suit from arising from the failure to install a drainage system, the timing of the statute of limitations could not commence until an actual breach occurred. Here, Henlopen Junction's only possible breach was that of the covenant to share maintenance expenses. The duty could only arise after expenditure of some funds to maintain drainage in the easement. A cause of action could only accrue after Henlopen Junction repudiated that duty and Henlopen Station had notice of the breach. See U.S. Cellular, supra.
Henlopen Station contracted with Roto-Rooter Sewer Drain Services on August 20, 1994 to work on improving the drainage. Plaintiff allegedly further expended funds on drainage associated with this issue at least seven times after that. Sometime after services for these bills were rendered, Henlopen Station became aware that Henlopen Junction would not contribute to them. It is at that point that the statute began to run. Even if the Court were to give Henlopen Junction the benefit of the doubt and assume that it had repudiated its payment obligation the same day that the first bill was incurred, the statute would not preclude this action. This suit was filed on August 18, 1997, two days prior to this presumptive termination of the statutory period.
Whether these bills are actually subject to the terms of the easement covenant is a question of fact not at issue in this memorandum, as it goes to the merits of the case rather than whether the statute of limitations applies.
CONCLUSION
For the foregoing reasons, Defendant Henlopen Junction's Motion for Summary Judgment is denied.
IT IS SO ORDERED.
GRAVES, J.