News

Divided Court Upholds Application of Ten-Year Limitations Period

21 Nov 2013 10:00 AM | Lynette Pitt (Administrator)

Two plaintiffs from St. Louis sued a company in Moore County for failure to complete improvements to a development that would allow the plaintiffs to construct their dream home. The defendant in Davis v. Woodlake Partners raised several defenses, all of which were rejected by the trial court sitting without a jury - resulting in a $191,000 judgment for breach of contract. Two arguments were presented on appeal, one of which was fact-specific and thus of limited interest beyond the parties. The second argument focused on the statutes of repose and limitation, and the date upon which each of those two clocks would begin to run. After finding that the claim was brought within six years of the date the construction was to have been completed, and thus that the filing complied with the statute of repose, the court then considered the competing arguments for when a three-year statute of limitations would begin to run.

And here's where it gets interesting - the court said that both sides had missed the boat. Instead of worrying about when the three years would begin to run, the court said the issue was irrelevant because the ten-year statute for actions on sealed contracts applied instead. There were three separate documents that were signed, on different dates, but the Purchase Contract included the word "seal" on the signature lines - thus meaning that it, at least, was a sealed instrument. Because the court could not find any scenario under which the three documents were not intended to constitute one integrated agreement between the parties, it determined as a matter of law that the "seal" on one means a "seal" for all. A ten-year statute of limitations means no defense to the claim. Judge McGee dissented, arguing that there should be a fact issue for determination about whether the parties intended for all three documents to be under "seal". The practice point here is to pay close attention to the documents in any case which includes a contract claim - the "seal" language may not be very prominent or conspicuous, but it can loom large.   Even when neither party argues that point on appeal.


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