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SMITH et al. v. KLS CONSTRUCTION COMPANY, INC.

Court of Appeals of Georgia2001-01-08No. A00A1794
247 Ga. App. 493544 S.E.2d 197

Summary

Holding. The court reversed the trial court's summary judgment dismissal, holding that a breach of contract claim against a professional builder-seller for construction defects is subject to a six-year statute of limitations for simple written contracts, not the four-year statute of limitations for damage to realty, and the Smiths' complaint was timely filed.

The Smiths purchased a home from KLS Construction Company in 1993, which was substantially completed in 1994. In 1999, they discovered damage from synthetic stucco deterioration and filed suit against the builder. The trial court dismissed their claims as time-barred, applying a four-year statute of limitations for damage to real property.

On appeal, the court reversed the dismissal of the breach of contract claim. The court determined that the six-year statute of limitations applicable to written contracts, rather than the four-year statute for property damage, governs builder-seller construction contracts. Because the Smiths filed suit within six years of substantial completion, their breach of contract claim was timely and should not have been dismissed.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Applicable statute of limitations for breach of contract claims in new home construction
  • When the limitation period begins for construction contracts
  • Whether builder-seller contracts are governed by property damage or contract statutes of limitations

Procedural posture

The trial court granted summary judgment in favor of KLS Construction Company based on the statute of limitations, and the Smiths appealed the dismissal of their breach of contract claim.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Phipps, Judge.

W. Hughes Smith III and Barbara Smith filed suit against the builder-seller of their home for damages allegedly caused by the use of synthetic stucco. The trial court ruled that their claims were barred by the statute of limitation, and they appeal. Because we find that the trial court applied the wrong statute of limitation to the Smiths’ breach of contract claim, we reverse that portion of the trial court’s summary judgment ruling.

In 1993, the Smiths contracted with KLS Construction Com pany, Inc. to construct their Savannah home. The house was substantially completed and a certificate of occupancy was issued in 1994. An inspection performed in 1999 revealed problems associated with the application of the exterior insulation and finishing system, or synthetic stucco, including termites and wood rot.

Decided January 8, 2001.

Eugene C. Brooks IV, for appellants.

Ellis, Painter, Ratterree & Bart, Tracy O’Connell, Rebecca C. Benton, for appellee.

On April 22, 1999, the Smiths filed suit against KLS and asserted claims for negligent construction, breach of warranty, breach of contract and bad faith. KLS moved for summary judgment on the basis that the Smiths’ claims were barred by the four-year statute of limitation set forth in OCGA § 9-3-30 for trespass or damage to realty and that no basis existed upon which to toll the running of the statute. The trial court granted the motion, finding that the four-year statute of limitation was applicable to all of the Smiths’ claims and that the record was devoid of evidence of fraud that would toll the limitation period. The Smiths appeal that decision, challenging only the dismissal of their breach of contract claim.

1. Recently we addressed the same issue in Mitchell v. Jones and determined that the six-year statute of limitation governing simple written contracts applies to a contract for the sale of new construction by a professional builder-seller. Applying that rule here, we hold that the Smiths’ breach of contract claim against KLS is subject to the six-year statute of limitation.

The limitation period on a construction contract commences ¡on the date the work was substantially complete. It is undisputed that the Smiths filed their complaint within six years of the date their home was substantially complete. Because the Smiths brought their action within the applicable six-year statute of limitation governing simple written contracts, summary judgment was not warranted on their breach of contract claim.

2. Because we find that the Smiths’ claim for breach of contract was brought within the applicable statute of limitation, we need not address whether fraud or fraudulent concealment tolled the running of the limitation period.

Judgment reversed.

Johnson, P. J., and Smith, P. J., concur.

Pursley, Howell, Lowery & Meeks, Paul A. Howell, Jr., John C. Amabile, Charles F. Peebles, Lane R. Frostbaum, amici curiae.

247 Ga. App. 113, 114 (1) (541 SE2d 103) (2000).

OCGA § 9-3-24.

Fort Oglethorpe Assoc. v. Hails Constr. Co., 196 Ga. App. 663 (1) (396 SE2d 585) (1990).

Mitchell, supra.