Santee Portland Cement Co. v. Daniel International Corp.

384 S.E.2d 693, 299 S.C. 269, 1989 S.C. LEXIS 184
CourtSupreme Court of South Carolina
DecidedJune 5, 1989
Docket23028
StatusPublished
Cited by58 cases

This text of 384 S.E.2d 693 (Santee Portland Cement Co. v. Daniel International Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Santee Portland Cement Co. v. Daniel International Corp., 384 S.E.2d 693, 299 S.C. 269, 1989 S.C. LEXIS 184 (S.C. 1989).

Opinions

Harwell, Justice:

This appeal involves the application of the “discovery rule” to contract actions. We affirm in part, reverse in part, and remand.

I. PACTS

On May 18, 1965, Santee Portland Cement Company (Santee) entered into a contract with Daniel International Corporation (Daniel) for the construction of a cement plant at Santee’s place of business in Orangeburg, South Carolina. The plant was to be constructed in accordance with plans and specifications prepared by Daniel. As part of the contract, Daniel and its sub-contractors constructed a cement storage silo complex consisting of twelve circular concrete silos, six interstices, and three pocket bins.

In 1969, a small crack was found in one of the pocket bins, known as Bin #12. This crack was repaired by Marbury-Pittillo, Daniel’s sub-contractor on the project, for $2000.00.

In 1975, another crack appeared in Bin #12. Santee contacted the W & P Construction Company (W & P), consisting of Mr. Frank Wall and Mr. Pittillo (both previously of Mar-bury-Pittillo). W & P repaired the crack. Santee introduced testimony that W & P characterized this as “permanent repair” of Bin #12, and that W & P inspected the remaining silos and advised that they were in good condition. Santee’s witnesses characterized the repairs as relatively minor in nature compared to the annual maintenance costs on the $2,000,000 project.

On September 12, 1980, another of the pocket bins, Bin #13, ruptured causing extensive damage. Cement from the silo covered the weigh station, burying an “eighteen-wheeler” which was parked nearby. Two people were killed in the collapse. Bin #13 and the remaining silos were then examined by experts. Investigation revealed that #13, as well as the remaining silos were all structurally unsound [271]*271and in need of repair. Experts testified that steel reinforcement rods were improperly spaced and tied together, weakening the walls and resulting in collapse.

Santee commenced an action in April 1986 alleging causes of action in tort and contract and pleading for a total of $750,000 for damages due to the collapse of Bin #13 and $2,120,000.00 for loss of capacity and the cost of construction to correct the remaining silos.

The trial court granted summary judgment on the tort cause of action, ruling that appellant’s exclusive remedy was in contract. The trial court also granted Daniel’s motion for a directed verdict as to the contract cause of action, holding it barred by the statute of limitations. This appeal follows.

II. DISCUSSION

A. “DISCOVERY RULE”

The trial court held that Santee’s cause of action for breach of contract was barred by the statute of limitations. See S. C. Code Ann. § 15-3-530(1) (1976) (six year period in which to bring a contract cause of action). Santee urged the court to apply the “discovery rule,” under which the statute would begin to run when Santee either knew or should have known the contract had been breached. The trial court rejected the applicability of the “discovery rule.” We disagree and hold that the “discovery rule” is applicable to contract actions governed by § 15-3-530(1).

One policy behind the statute of limitations is the protection of a defendant from false or fraudulent claims that might be difficult to disprove if not brought until after relevant evidence has been lost or destroyed and witnesses have become unavailable. Gates Rubber Company v. USM Corporation, 508 F. (2d) 603 (7th Cir. 1975). It affords defendants an opportunity to gather evidence while facts are still fresh. April Enterprises, Inc. v. KTTV, 147 Cal. App. (3d) 805, 195 Cal. Rptr. 421 (2d Dist. 1983) citing Davies v. Krasna, 14 Cal. (3d) 502, 121 Cal. Rptr. 705, 535 P. (2d) 1161 (1975). This concern must be balanced against a plaintiff’s interest in prosecuting an action and pursuing his rights. Plaintiffs should not suffer where circumstances prevent them from knowing they have been harmed. April Enter[272]*272prises, Inc., supra. “[Statutes of limitation which are susceptible to judicial construction should not be applied mechanically but rather construed in the manner most consistent with both their underlying purposes and the requirements of substantial justice for all parties involved.” Gattis v. Chavez, 413 F. Supp. 33, 39 (D.S.C. 1976).

The “discovery rule” has previously been applied, either judicially or legislatively, to other causes of action under § 15-3-530. In 1976, a South Carolina District Court held the “discovery rule” applicable in medical malpractice cases. Gattis v. Chavez, supra. Prior to Gattis, the statute of limitations had remained substantially untouched by the legislature since 1870. Only two sub-sections of the statute originally contained “built-in” discovery provisions.1 The Gattis court refused to interpret the existence of “built-in” provisions for these two causes of action, but not for any others, to mean that the legislature intended to reject the discovery rule in cases of medical malpractice. Shortly after the Gattis decision, the South Carolina legislature enacted S. C. Code Ann. §§ 15-3-535 and 15-3-545 (Supp. 1987). Section 15-3-535 extended the “discovery rule” to actions governed by § 15-3-530(5) (actions for criminal conversation or for any other injury to the person or rights of another, not arising on contract .. .).2 Section 15-3-545 created a special “discovery rule” for medical malpractice actions.

In 1979, this Court addressed the applicability of the “discovery rule” to actions for professional negligence and recognized that “... the accrual upon discovery rule represents the more equitable and rational view.” Mills v. Killian, 273 S. C. 66, 70, 254 S. E. (2d) 556, 558 (1979). In the same year, a South Carolina District Court held the discovery rule applicable to actions brought under 15-3-530(3) (action for trespass upon or damage to real property) and § 15-3-530(4) (action for taking, detaining or injuring any goods or chattels including an action for the specific recovery of personal property). Campus Sweater & Sportswear v. M. B. Kahn Construction, 515 F. Supp. 64 (D.S.C. 1979).

[273]*273The question now before us is whether the “discovery rule” should be further extended to apply to actions governed by § 15-3-530(1) (action upon a contract, obligation or liability, express or implied... ). Daniel contends that the doctrine of “inclusio unius est exclusio alterious”— the inclusion of one is the exclusion of the other — must be adhered to in this case. Daniel argues that because the legislature enacted special discovery provisions .in §§ 15-3-535 and 15-3-545 and did not act with reference to any of the other sections of § 15-3-530, we must assume that the legislature decided against application of the discovery rule to these actions. We disagree.

“When legislative history is inadequate or unavailable, the inclusion of certain provisions in a statute may be some evidence that the exclusion of others was purposeful, but the weight accorded this evidence may vary.” Gattis, supra at 37. Considering these two provisions in light of the fact that they were enacted just after Gattis, it appears that the legislature addressed issues raised by the Gattis decision.

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Bluebook (online)
384 S.E.2d 693, 299 S.C. 269, 1989 S.C. LEXIS 184, Counsel Stack Legal Research, https://law.counselstack.com/opinion/santee-portland-cement-co-v-daniel-international-corp-sc-1989.