New Bern Riverfront Development, LLC v. Weaver Cooke Construction, LLC (In re New Bern Riverfront Development, LLC)

515 B.R. 256, 2014 Bankr. LEXIS 3616
Procedural entryThis page is a short order in New Bern Riverfront Development, LLC v. Weaver Cooke Construction, LLC (In re New Bern Riverfront Development, LLC). Read the opinion of the Court — 521 B.R. 718
United States Bankruptcy Court, E.D. North Carolina·Decided August 27, 2014·No. CASE NO. 09-10340-8-SWH; ADVERSARY PROCEEDING NO. 10-00023-SWH-AP·Published

Opinion

ORDER ON SUMMARY JUDGMENT REGARDING, INTER ALIA, STATUTE OF LIMITATIONS DEFENSE ASSERTED BY WATERPROOFING SPECIALTIES, INC.

Stephani W. Humrickhouse, United States Bankruptcy Judge

This matter came on to be heard upon the motion for summary judgment filed by Waterproofing Specialties, Inc. (“WSI”) regarding the third party complaint of Weaver Cooke Construction, LLC (“Weaver Cooke”), in Raleigh, North Carolina, on March 5, 2014. Although summary judgment is sought on several bases, this order will deal with the issue of whether the statute of limitations bars the negligence and breach of express warranty claims Weaver Cooke asserts against WSI. Additionally, the court will consider whether summary judgment is appropriate on the basis that no genuine issue of material fact exists regarding the lack of defects in WSI’s work on the parking and pool decks.

BACKGROUND

New Bern Riverfront Development, LLC (“New Bern”) is the owner and developer of the SkySail Luxury Condominiums located in New Bern, North Carolina (the “SkySail Project” or the “Project”). On March 30, 2009, New Bern initiated an action in Wake County Superior Court against nine individual defendants related to the alleged defective construction of the SkySail Condos (the “State Action”). The named defendants in the State Action included: New Bern’s general contractor, Weaver Cooke; Travelers Casualty and Surety Company of America (“Travelers”); National Erectors Rebar, Inc. f/k/a National Reinforcing Systems, Inc. (“NER”) and certain subcontractors of the general contractor.

On November 30, 2009, New Bern filed a petition for relief under chapter 11 of the Bankruptcy Code. The State Action was removed to the United States District Court for the Eastern District of North Carolina on December 16, 2009, and subsequently transferred to this court on February 3, 2010. After voluntarily dismissing its causes of action as to the subcontractors named as defendants in the State Action, New Bern filed its first amended complaint on May 6, 2010, asserting claims against Weaver Cooke; Travelers; NER; and the additional parties of J. Davis Architects, PLLC, and Fluhrer Reed, PA.

On May 27, 2010, Weaver Cooke filed an answer to New Bern’s first amended complaint and a third-party complaint against Wachovia Bank, National Association and Wells Fargo & Company f/d/b/a Wachovia Corporation. Absent as third-party defendants in Weaver Cooke’s original third-party complaint were any of the subcontractors hired by Weaver Cooke during the construction of the SkySail Project.

On June 14, 2012, Weaver Cooke filed its second, third-party complaint asserting claims of negligence, contractual indemnity and breach of express warranty against many of the subcontractors hired during the construction of the SkySail Project, including WSI. WSI filed an answer to Weaver Cooke’s second, third-party complaint on August 28, 2012, asserting numerous defenses, including the statute of limitations and contributory negligence.

On December 20, 2013, WSI filed a motion for summary judgment regarding all three causes of action alleged by Weaver Cooke. As grounds for summary judgment, WSI argued: (1) the applicable statute of limitations bars Weaver Cooke’s claims of negligence and breach of express [261]*261warranty to the extent the claims relate to balcony “sequencing defects;” (2) the economic loss rule bars Weaver Cooke’s negligence claim; (3) Weaver Cooke’s contractual indemnity claim is barred by N.C. GemStat. § 22B-1; (4) all of Weaver Cooke’s claims are barred by the doctrine of contributory negligence; and, (5) no genuine issue of material fact exists as to whether work performed by WSI on the Project’s parking and pool decks was defective. The court will deal only with the first and fifth bases for summary judgment in this opinion.

WSI was responsible for, among other things, installing and applying concealed waterproofing, expansion joints and traffic coating to the horizontal concrete surfaces of the SkySail project, which included the Project’s concrete balcony slabs and the parking and pool decks. Weaver Cooke alleges that certain failures in the sequence in which traffic coating was applied to the concrete balconies, in relation to the installation of other building materials, contributed to water intrusion problems and caused damage to the interior of certain condo units. WSI argues that Weaver Cooke was aware of these sequencing defects more than three years prior to Weaver Cooke’s filing of its second, third-party complaint. Accordingly, WSI asserts that Weaver Cooke’s negligence and breach of warranty claims, regarding the balconies, are barred by the three-year statute of limitations found in N.C. GemStat. § 1-52. In response, Weaver Cooke contends that genuine issues of material fact exist as to whether the sequencing defects were reasonably apparent more than three years prior to the filing of its second, third party complaint.

The debtor, New Bern, has also identified cracks in the Project’s parking and pool decks, and the resulting water intrusion, as a defect for which it seeks to recover damages from Weaver Cooke. In turn, Weaver Cooke has alleged in its third-party complaint that WSI defectively applied traffic coating and waterproofing to the parking and pool decks, which contributed to cracks, and thus water intrusion. However, WSI argues that there is no credible evidence that its work on the parking and pool decks contributed to the water intrusion problems and that New Bern and Weaver Cooke have not only failed to forecast any such evidence, but have, in fact, affirmatively agreed with WSI’s position. But, Weaver Cooke, in its response to the summary judgment motion, maintains that a factual issue still exists regarding the defective nature of the work performed by WSI on the parking and pool decks.

DISCUSSION

“[S]ummary judgment is proper ‘if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ ” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56(c)). In making this determination, conflicts are resolved by viewing all facts and inferences to be drawn from the facts in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962) (per curiam). Summary judgment is not a “disfavored procedural shortcut,” but an important mechanism for filtering out “claims and defenses [that] have no factual basis.” Celotex, 477 U.S. at 327, 106 S.Ct. at 2555.

I. Statute of Limitations and the Balcony Sequencing Defects

In this proceeding, the court turns to North Carolina state law, and as is [262]*262typical in this context, the determination of “whether a cause of action is barred by the statute of limitations is a mixed question of law and fact. However, when the bar is properly pleaded and the facts are admitted or are not in conflict, the question of whether the action is barred becomes one of law.” Pembee Mfg. Corp. v. Cape Fear Constr. Co., 313 N.C. 488, 491, 329 S.E.2d 350

Free access — add to your briefcase to read the full text and ask questions with AI

New Bern Riverfront Development, LLC v. Weaver Cooke Construction, LLC (In re New Bern Riverfront Development, LLC), 515 B.R. 256, 2014 Bankr. LEXIS 3616 (N.C. 2014).

515 B.R. 256 (New Bern Riverfront Development, LLC v. Weaver Cooke Construction, LLC (In re New Bern Riverfront Development, LLC)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

United States v. Diebold, Inc.
369 U.S. 654 (Supreme Court, 1962)
Pembee Mfg. Corp. v. Cape Fear Const. Co., Inc.
329 S.E.2d 350 (Supreme Court of North Carolina, 1985)
DeWitt v. Eveready Battery Co., Inc.
565 S.E.2d 140 (Supreme Court of North Carolina, 2002)
Maharias v. WEATHERS BROTHERS MOVING & STORAGE COMPANY
127 S.E.2d 548 (Supreme Court of North Carolina, 1962)
Young v. Hickory Business Furniture
538 S.E.2d 912 (Supreme Court of North Carolina, 2000)
Liberty Mutual Insurance v. Pennington
573 S.E.2d 118 (Supreme Court of North Carolina, 2002)
Collingwood v. General Electric Real Estate Equities, Inc.
376 S.E.2d 425 (Supreme Court of North Carolina, 1989)