The North Carolina Court of Appeals issued an opinion affirming the six-year statute of repose codified at North Carolina General Statutes ยง 1-50(a)(5) as a valid defense for both contractors and manufacturers of products incorporated into a new building.
In 2004, the Plaintiffs (a professor at Duke Law School and his wife, a former in-house attorney for a tobacco company) contracted with a builder to construct a new residence. The certificate of occupancy for the house was issued on March 22, 2005. In late 2010, the homeowners noticed problems with moisture intrusion through the exterior finish on the house, which was a product known as "Grailcoat," which is similar to synthetic stucco. A lawsuit alleging negligence in the construction of the house and in the manufacturing of the exterior finish was filed on October 31, 2011. In an effort to avoid the statute of repose, the Plaintiffs alleged the acts of defendants constituted "willful and wanton negligence," although the only allegation was that the builder and manufacturer intentionally violated the North Carolina Building Code.
The defendants moved for summary judgment based upon the statute of repose, as suit was filed more than six years after substantial completion and the Plaintiffs did not show any evidence of willful or wanton acts of the defendants other than alleged violations of the Building Code.
The Court of Appeals summarily affirmed the trial court's order granting summary judgment, and did not entertain any of Plaintiffs' arguments on why the statute of repose should not apply. Further, with respect to the claims against the product manufacturer, since the product was incorporated into a residence, the Court held that all claims against the manufacturer for money damages were barred by the statute of repose, notwithstanding the fact that the manufacturer issued a 20 year express warranty for its product. The Court held that the only claim that could extend beyond the statute of repose was for specific performance of the warranty, and not for money damages.
NCADA member (and former director) Bill Pollock of Ragsdale Liggett PLLC in Raleigh represented the builder in this matter.
