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Maroney v. Chip Buerger Custom Homes, Inc.

Court of Appeals of Texas, Third District, Austin

June 20, 2018

James Maroney and Maureen Maroney, Appellants
Chip Buerger Custom Homes, Inc. and Newton W. Buerger, Appellees


          Before Justices Puryear, Field, and Bourland.


          David Puryear, Justice.

         We withdraw our opinion and judgment dated March 22, 2018 and substitute the following opinion and judgment in their place, and we overrule Newton W. Buerger's motion for rehearing.

         Appellants James and Maureen Maroney, subsequent purchasers of a home built by Chip Buerger Custom Homes, Inc. (Buerger Homes), appeal the trial court's summary judgment in favor of the builder and its president and sole shareholder, Newton W. Buerger (collectively, appellees), dismissing their claims alleging defective and negligent construction of the home and breach of implied and express warranties. We reverse the portion of the trial court's summary judgment dismissing the Maroneys' implied-warranty claim against Buerger Homes with respect to the claimed damages to the two-story lakeside porch and remand that cause for further proceedings. We also reverse the portion of the judgment awarding appellees attorney's fees and render judgment that neither appellee is entitled to attorney's fees. We affirm the remainder of the trial court's judgment.


         The record shows that the Maroneys purchased the home at issue in January 2011 from a third-party relocation company, which had purchased the home from its original owners, for whom Buerger Homes built the home pursuant to a "Residential Construction Contract" (the Contract). Buerger Homes completed construction of the home in June 2009. Prior to the Maroneys' purchase, they received from the seller's realtor a copy of an engineering report on the property (the 2011 report) prepared for the seller by an independent engineering company.[1] The Maroneys did not move fully into the home until mid-2012 but outfitted it with basic furniture and stayed overnight there at least once a month after purchasing it in early 2011.

         In February 2016, the Maroneys filed this lawsuit against appellees to recover the costs of various repairs they made to the home that were allegedly necessitated by defective construction. Their pleadings alleged that in March 2015 they discovered water damage and waterproofing issues with the home, causing structural damage and necessitating repairs. They asserted claims in negligence and breach of express and implied warranties as well as pleading that their claims were not barred by the respective two- and four-year statutes of limitations due to the discovery rule. See Tex. Civ. Prac. & Rem. Code § 16.003(a) (stating limitations periods); Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 518 (Tex. 1988) ("A party seeking to avail itself of the discovery rule must therefore plead the rule, either in its original petition or in an amended or supplemental petition in response to defendant's assertion of the defense as a matter in avoidance."). Through the course of discovery, the Maroneys identified four defects for which they sought damages: (1) inadequate waterproofing and resulting structural damage of the home's two-story "lakeside porch"; (2) defective installation of two columns outside the living-room window, resulting in wood rot of the columns; (3) improper sealing of the home's "envelope, " causing or contributing to water damage and bug infestation; and (4) improper grading and drainage around the home's exterior, causing water penetration into the home.

         In their answer, appellees raised several affirmative defenses, including statutes of limitations and the Maroneys' lack of capacity to sue due to non-privity, and filed a counterclaim for attorney's fees under a prevailing-party clause in the Contract. After sufficient time for discovery had elapsed, appellees filed a motion for partial summary judgment on all of the Maroneys' claims, raising the following grounds in support: limitations, lack of the Maroneys' capacity to sue, the "economic loss rule, " and lack of a material fact issue with respect to the Maroneys' landscaping and grading claims. Appellees supported their motion with, among other evidence, excerpts from the deposition of James Maroney and the 2011 report.

         The trial court granted the motion, leaving only appellees' counterclaim for attorney's fees pending. Both parties then filed partial summary-judgment motions with respect to appellees' counterclaim. The trial court granted appellees' motion and denied appellants' and later conducted an evidentiary hearing on the amount of attorney's fees to be awarded. After that hearing, the trial court rendered a final judgment incorporating the two interlocutory partial-summary judgments and awarding appellees $54, 000 in attorney's fees plus further contingent amounts in the event of unsuccessful appeals by the Maroneys.


         The Maroneys contend on appeal that the trial court erred in (1) granting summary judgment dismissing all of their claims because the evidence they presented raised genuine issues of material fact on appellees' limitations affirmative defense and because appellees were not entitled to summary judgment as a matter of law on their negligence and warranty claims, and (2) awarding appellees attorney's fees because the Maroneys were not signatories to the Contract. We review a trial court's grant of summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When, as here, a trial court grants summary judgment but does not specify the grounds for granting the motion, we must uphold the judgment if any of the grounds asserted in the motion and preserved for appellate review are meritorious. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003). In reviewing a trial court's ruling on summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve all doubts in the nonmovant's favor. Id. Generally, we review the decision by a trial court to either grant or deny attorney's fees for abuse of discretion. See EMC Mortg. Corp. v. Davis, 167 S.W.3d 406, 418 (Tex. App.-Austin 2005, pet. denied).

         Limitations and discovery rule

         A defendant moving for summary judgment on the affirmative defense of limitations has the burden to conclusively establish that defense. KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). Thus, the defendant must (1) conclusively prove when the cause of action accrued, and (2) negate the discovery rule, if it applies and has been pleaded or otherwise raised, by proving as a matter of law that there is no genuine issue of material fact about when the plaintiff discovered, or in the exercise of reasonable diligence should have discovered, the nature of its injury. Id. If the movant establishes that the statute of limitations bars the action, the nonmovant must then adduce summary-judgment proof raising a fact issue in avoidance of the statute of limitations. Id.

         The discovery rule is a limited exception to the statute of limitations. Computer Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996). The rule is applied when the nature of the injury is inherently undiscoverable, that is, when it is "difficult for the injured party to learn of the negligent act or omission." Id. at 456 (quoting Willis v. Maverick, 760 S.W.2d 642, 645 (Tex. 1988)). "Inherently undiscoverable encompasses the requirement that the existence of the injury is not ordinarily discoverable, even though due diligence has been used." Id. Whether an injury is inherently undiscoverable is a legal question "decided on a categorical rather than case-specific basis; the focus is on whether a type of injury rather than a particular injury was discoverable." Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006). The discovery rule operates to defer the accrual of a cause of action until the date the plaintiff knew or, exercising reasonable diligence, should have known of the facts giving rise to the cause of action. Computer Assocs., 918 S.W.2d at 455; see J.M. Krupar Constr. Co. v. Rosenberg, 95 S.W.3d 322, 329 (Tex. App.-Houston [1st Dist.] 2002, no pet.). A plaintiff need not know the full extent of the injury before limitations begin to run. See Town of Dish v. Atmos Energy Corp., 519 S.W.3d 605, 613 (Tex. 2017) (holding that evidence showed plaintiffs were concerned about air contamination and were at least put on "inquiry notice" of claims well before date of report on which they relied as accrual date); Gonzales v. Southwest Olshan Found. Repair Co., 400 S.W.3d 52, 58 (Tex. 2013) (recognizing that "once a claimant learns of a wrongful injury, the statute of limitations begins to run even if the claimant does not yet know the specific cause of the injury; the party responsible for it; the full extent of it; or the chances of avoiding it"); see also Murphy v. Campbell, 964 S.W.2d 265, 273 (Tex. 1997).

         Generally, in construction-defect cases, limitations begin to run when an owner becomes aware of property damage. J.M. Krupar Constr., 95 S.W.3d at 329. However, the question of when a plaintiff knew or should have known of an injury generally is a question of fact. Houston Livestock Show & Rodeo, Inc. v. Hamrick, 125 S.W.3d 555, 570 (Tex. App.-Austin 2003, no pet.). "Discovery" occurs when a plaintiff has knowledge of such facts, conditions, or circumstances as would cause a reasonably prudent person to make an inquiry that would lead to discovery of the cause of action or injury. Trousdale v. Henry, 261 S.W.3d 221, 234 (Tex. App.-Houston [14th Dist.] 2008, pet. denied). The discovery rule requires reasonable diligence by the plaintiff to make inquiry about his or her legal rights upon discovery of such facts, conditions, or circumstances. See Bell v. Showa Denko K.K., 899 S.W.2d 749, 754 (Tex. App.-Amarillo 1995, writ denied).

         The parties agree that the Maroneys' negligence and warranty claims are governed by two- and four-year limitations periods, respectively. See Tex. Civ. Prac. & Rem. Code § 16.003(a) (stating limitations periods). Because the Maroneys filed this suit on February 11, 2016, any negligence and warranty claims that accrued prior to February 11, 2014 and 2012, respectively, are time-barred. Appellees asserted in their summary-judgment motion that the Maroneys discovered, or should have discovered, their claimed property damage in January 2011 when they bought the home and reviewed the 2011 report. See J.M. Krupar Constr., 95 S.W.3d at 329-330; Bayou Bend Towers Council of Co-Owners v. Manhattan Constr. Co., 866 S.W.2d 740, 742-43 (Tex. App.-Houston [14th Dist.] 1993, writ denied) (noting that discovery rule tolls accrual until plaintiff discovers, or should have discovered through exercise of reasonable diligence and care, nature of injury).

         We separately consider each of the Maroneys' claimed home defects and whether appellees were entitled to summary judgment by proving that there is no genuine issue of material fact about when the Maroneys discovered, or in the exercise of reasonable ...

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