Kingwood Commercial Properties, LLC v. Nova Consulting Group, Inc.

• Court: Court of Appeals of Texas
• Decided: April 30, 2020
• Docket: 09-18-00321-CV
• Status: Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

__________________

NO. 09-18-00321-CV __________________

KINGWOOD COMMERCIAL PROPERTIES, LLC, Appellant

V.

NOVA CONSULTING GROUP, INC., Appellee

__________________________________________________________________

On Appeal from the 410th District Court Montgomery County, Texas Trial Cause No. 18-02-01397-CV __________________________________________________________________

MEMORANDUM OPINION

In this appeal, Kingwood Commercial Properties, LLC argues the trial court

erred when it granted Nova Consulting Group, Inc.’s motion for summary judgment,

which hinged on Nova’s claim that Kingwood’s claims were barred by the statute of

limitations. We hold the trial court did not err by granting the motion, so we affirm.

1 Background

We limit our background discussion to the facts relevant to the dispositive

issue in Kingwood’s appeal. Here, the parties do not dispute that Kingwood bought

two buildings from Colonnade Royal Forest Group, L.P. in September 2015. To

finance the purchase, Kingwood’s lender obtained an environmental, property

condition, and engineering assessment from Nova regarding the property Kingwood

wanted to purchase.

In July 2015, Nova provided Kingwood’s lender with its report. Nova’s report

represents the building’s roofs are in “Good” condition. The report also states that

“Nova does not anticipate the need for significant roof replacement during the [next

twelve years].” When the transaction to purchase the property closed, Kingwood

reimbursed its lender for the expense Kingwood’s lender incurred from hiring Nova

to issue the report. Also, Kingwood alleged in its petition that it was an intended

third-party beneficiary of Nova’s report.1

On January 30, 2018, Kingwood sued Nova, alleging Kingwood relied on

Nova’s findings when purchasing the property at issue. Less than three months after

1Nova’s motion for summary judgment disputes Kingwood’s claim that it was an intended beneficiary of its report. And Nova’s motion argued that Kingwood could not sue it for negligence on a breach of contract claim. We need not address these questions given our resolution of the statute of limitations defense, as Kingwood filed only a negligence claim. 2 the purchase, according to Nova’s petition, the property “sustained substantial water

damage from water penetrating the roof.” Kingwood’s petition also alleges Nova

acted negligently by failing to properly assess the condition of the roofs at the facility

that it purchased, and Nova’s acts and omissions in reporting the condition of the

property caused the damages Kingwood was seeking to recover in its suit.

In response to the suit, Nova moved for summary judgment. In part, Nova’s

motion argues the statute of limitations barred Kingwood’s negligence claim.2

Kingwood responded, and it supported the response it filed with three exhibits: (1)

an affidavit by Greg Huff, its managing member; (2) a loan closure statement on the

property, dated September 16, 2015; and (3) a letter Kingwood’s attorney sent to

Nova to inform it that Kingwood had relied on Nova’s report about the condition of

the roofs when it purchased the property. According to the affidavit Huff filed, in

late January 2016, he reviewed Nova’s inspection report but had not done so earlier

because he “had been so consumed with learning the realities of owning and

operating commercial real estate property (for the first time) and fixing the water

damage, that [he] did not think about referring back to the initial . . . report.” Huff

2Nova’s motion also argues it owes no legal duty to Kingwood based on Nova’s common law negligence claim. It also argues that Kingwood is not a third- party beneficiary of the contract Nova signed with Kingwood’s lender.

3 then states that in February 2017, he contacted an attorney, who sent Nova a

“demand letter” and after that, Kingwood filed suit.

In July 2018, the trial court granted Nova’s motion for summary judgment.

The trial court did not provide the parties with any written findings to explain its

ruling. 3 The order the trial court signed states “the Defendant’s Motion for Summary

Judgment is GRANTED as to the negligence claim asserted by Plaintiff which [is]

the sole cause of action asserted by Plaintiff such that this Order disposes of all

claims herein asserted.” After the trial court signed the final judgment, Kingwood

moved for a new trial. But the trial court denied that motion.

Kingwood pursed an appeal from the trial court’s ruling. According to

Kingwood’s brief, the trial court erred in granting Nova’s motion because

Kingwood’s cause of action did not accrue until February 2016, the date Huff first

realized Kingwood had a “potential cause of action against [Nova].” 4

3 Kingwood has not complained about the trial court’s inaction on its request for findings in its brief. That said, “a request for findings and conclusions following summary judgment can have no purpose, should not be filed, and if filed, should be ignored by the trial court[.]” IKB Indus. (Nigeria) Ltd. v. Pro-Line Corp., 938 S.W.2d 440, 441-42 (Tex. 1997). 4 Kingwood does not argue that the four-year statute of limitations, which

applies to contract actions, applies to its claim. 4 Standard of Review

Appellate courts review rulings granting summary judgments under a de novo

standard. To apply that standard, we review the appellate record “in the light most

favorable to the nonmovant, indulging every reasonable inference and resolving any

doubts against the motion.”5 When a trial court does not specify the grounds it relied

on to grant the motion, we will affirm the ruling if any of the grounds asserted in the

motion have merit.6

To prevail on a motion for summary judgment, Nova had the burden to either

conclusively negate at least one element of Kingwood’s negligence claim or to

establish it had a right to prevail on an affirmative defense as a matter of law. 7 Once

Nova did so, the trial court was required to grant the motion unless Kingwood

produced enough evidence to defeat the grounds for summary judgment that Nova

raised in its motion, including its claim that the statute of limitations barred

Kingwood’s claims. 8

5 City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005). 6 See Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520 S.W.3d 39, 45 (Tex. 2017). 7 Tex. R. Civ. P. 166a(c); KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70, 79

(Tex. 2015); Provident Life and Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215-16 (Tex. 2003). 8 See Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018).

5 Analysis

Nova’s motion raises two grounds for summary judgment. One asserts the

two-year statute of limitations bars Kingwood’s claim alleging Nova committed acts

or omissions that raise a fact issue showing it was negligent. The second asserts

Nova owed Kingwood no legal duties because Nova is not a third-party beneficiary

of the contract between Nova and Kingwood’s lender. We need to address the issue

challenging the trial court’s ruling that limitation bars Kingwood’s claims first

because it is dispositive of Kingwood’s appeal. 9

Based on the arguments in the motions, we imply the trial court applied the

two-year statute of limitations to bar Kingwood’s claims.10 Here, Kingwood has not

argued that some other limitations period applies to its claims. Thus, to show it was

entitled to summary judgment based on the two-year limitations period argued in the

motion for summary judgment and response, Nova had to conclusively prove

Kingwood’s claims arose more than two years before Kingwood filed suit. 11 Also,

9 See Tex. R. App. P. 47.1; Lightning Oil Co., 520 S.W.3d at 45. 10 See Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a) (providing the statute

of limitations for negligence is two years). 11 Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830, 833-34 (Tex. 2018)

(“A defendant moving for summary judgment on the affirmative defense of limitations bears the burden of conclusively establishing the elements of that defense. This includes conclusively establishing when the cause of action accrued.”) (cleaned up). 6 since Kingwood alleged the discovery rule applied to its claims, Nova had to

establish either that (1) the discovery rule did not apply, or that if it applied, (2) the

summary judgment evidence established Kingwood should have, acting reasonably,

discovered or actually discovered the roof was in a condition that required repairs

more than two years before Kingwood sued.12

We will assume (without deciding) the discovery rule applies to Kingwood’s

claim. In its brief, Nova argues Kingwood’s claim accrued no later than December

2015. Kingwood’s evidence shows that by November 2015, the roofing company it

hired told Kingwood the roof needed repairs and by December 2015, Kingwood

began repairing the roof. The record shows Kingwood waited for more than two

years after commencing the repairs to the damage caused by water penetrating its

building’s roof to file suit. In its brief, Kingwood does not dispute that in December

2015, it knew the roof needed repairs; instead, Kingwood suggests it did not discover

it could sue Nova until February 2016, the date Kingwood’s attorney informed

Kingwood, through Huff, that Kingwood had a claim.

First, we must decide when Kingwood’s claim accrued. Ordinarily, causes of

action accrue when someone suffers a legal injury. 13 Thus, a cause of action accrues

12 See id. at 834. 13 Id. 7 when “a wrongful act causes a legal injury, even if the fact of injury is not discovered

until later, and even if all resulting damages have not yet occurred.”14 Even so, there

are exceptions to the legal injury rule. The discovery rule is the exception Kingwood

relies on; but it delays the accrual date on a claim only until the injured party knew

or in the exercise of reasonable diligence should have known that a wrongful act

injuring it had occurred.

Even more, the discovery rule is a “very limited exception to statutes of

limitations[.]”15 It is available only “when the nature of the plaintiff’s injury is both

inherently undiscoverable and objectively verifiable.” 16 And even when the

discovery rule applies, the date a claim accrues “does not linger until a claimant

learns of actual causes and possible cures.” 17 Instead, “[o]nce 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.” 18

14Id. (cleaned up). 15 Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734 (Tex. 2001)

(cleaned up). 16 Id. 17 PPG Indus., Inc. v. JMB/Houston Ctrs. Partners Ltd. P’ship, 146 S.W.3d

79, 93 (Tex. 2004). 18 Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 207 (Tex.

2011) (cleaned up). 8 The summary judgment evidence shows Kingwood’s claim for negligence

accrued more than two years from the date it sued. For instance, Kingwood attached

a certificate of merit to the original petition it used to launch the suit. The certificate

of merit, signed by Javier Godoy (an engineer) states water entered Kingwood’s

building on October 30, 2015, which required Kingwood to repair severe damage to

sections of the roof. Huff’s affidavit reflects Kingwood obtained a quote to repair

the property in November 2015 and the repairs began that December. Thus, the

evidence shows Kingwood learned more than two years before it sued that water had

penetrated its building’s roof and the roof needed repairs.

Kingwood argues Huff’s affidavit raises a fact issue about the date it first

learned it had a legal claim. But in cases to which the discovery rule applies, a cause

of action accrues, under Texas law, when the fact of the injury is known, not when

the plaintiff first learns who is responsible for causing the injury. After all, the statute

of limitations on negligence claims allows the injured party two years from the date

it learns of the injury to figure out who to sue. 19

We express no opinion about whether the discovery rule applies to this case.

But even if and assuming that it does, Kingwood’s pleadings and the summary

judgment evidence shows Kingwood was aware the roof to its building had been

19 See Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a). 9 damaged more than two years before it sued. 20 Here, the evidence shows Kingwood

knew Nova provided a report about the property’s condition and knew of its injury

more than two years before it sued Nova. We hold the trial court had no choice but

to grant Nova’s motion based on Nova’s statute of limitations defense. 21

Conclusion

Because Nova established that Kingwood’s claims accrued more than two

years before Kingwood sued, we hold the statute of limitations bars Kingwood’s

claim for negligence. Given that conclusion, we need not address Kingwood’s other

argument, which suggests it is a third-party beneficiary of the contract between Nova

and Kingwood’s lender since Kingwood did not file any claims alleging Nova was

liable to it based on any claims sounding in contract.22 For these reasons, the trial

court’s judgment is

AFFIRMED.

20 See Emerald Oil, 348 S.W.3d at 207 (“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.”) (cleaned up); id. at 209 (“Knowledge of injury initiates the accrual of the cause of action and triggers the putative claimant’s duty to exercise reasonable diligence to investigate the problem, even if the claimant does not know the specific cause of the injury or the full extent of it.”) (cleaned up). 21 See id. 22 See Tex. R. App. P. 47.1.

10 _________________________ HOLLIS HORTON Justice

Submitted on January 28, 2020 Opinion Delivered April 30, 2020

Before McKeithen, C.J., Kreger and Horton, JJ.