Henderson v. Park Homes Inc.

THOMAS, Judge. This case concerns alleged defects in synthetic stucco applied to the home of plaintiffs, Ramon Kent Henderson and wife, Kymberley Anne Henderson. The trial court granted summary judgment for defendant, Dryvit Systems, Inc., based on the products liability statute of repose and the statute of limitations. Plaintiffs appeal, arguing four assignments of error. For the reasoning herein, we affirm the decision of the trial court. Plaintiffs entered into a purchase agreement with defendant, Park Homes Incorporated (Park Homes), on or about 23 June 1992 for construction of a house. Park Homes, in turn, subcontracted with defendant, Southern Synthetic & Plastic, Inc. (Southern), for the task *502 of cladding the exterior of the house with a manufactured exterior insulation finish system (EIFS), commonly known as synthetic stucco. Southern purchased the EIFS from defendant, Dryvit Systems, Inc., (Dryvit), a manufacturer and distributor of the EIFS. In the fall of 1992, workers for Southern applied the EIFS manufactured by Dryvit to the house plaintiffs agreed to purchase. The certificate of occupancy was issued on 5 April 1993. Shortly thereafter, plaintiffs closed on the purchase and moved into their home. Through media reports, plaintiffs learned in the spring of 1996 that there may be defects associated with the EIFS. A moisture intrusion inspection report, dated 31 May 1996, confirmed that plaintiffs’ home did indeed have moisture intrusion problems due to defective EIFS cladding. Plaintiffs filed suit against defendants on 5 March 1999. On 16 July 1999, plaintiffs opted out of Ruff v. Parex, 96-CVS-0059, a class action lawsuit against Dryvit and other EIFS manufacturers asserting claims essentially identical to those alleged by plaintiffs. The trial court granted Dryvit’s motion for summary judgment on two grounds. First, the trial court found that the appropriate statute of repose was N.C. Gen. Stat. § l-50(a)(6), the products liability statute of repose, and that it barred plaintiffs’ claims against defendant. Second, the trial court found that the applicable statute of limitations had run because more than three years had passed since plaintiffs first noticed bulging and wrinkling on the surface of the EIFS. Plaintiffs advance four arguments in maintaining that the trial court erred. Initially, we note that the summary judgment order from which defendant appeals is not interlocutory. Rather, it is a final judgment that is immediately appealable because Park Homes settled with plaintiffs and Southern made no appearance. See Jenkins v. Wheeler, 69 N.C. App. 140, 142, 316 S.E.2d 354, 356, disc. review denied, 311 N.C. 758, 321 S.E.2d 136 (1984) (order dismissing claims against one defendant is interlocutory where other defendants remain in the suit). Summary judgment is appropriate when “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 any party is entitled to a judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2000). Plaintiffs first argue that their action is governed by the real property statute of repose, and that their claims were filed within six years of “the later of the specific last act or omission of the defend *503 ant... or substantial completion of the improvement.” N.C. Gen. Stat. § l-50(a)(5) (1999). Second, plaintiffs maintain that if the products liability statute of repose applies, their claims against Dryvit were filed within six years of the “initial purchase for use or consumption” of the residence, and thus complied with the statute. N.C. Gen. Stat. § l-50(a)(6) (1999). Third, plaintiffs contend that the statute of repose was tolled with respect to their claims against Dryvit by the filing of Ruff v. Parex in 1996. Finally, plaintiffs argue that this action is not barred by the applicable three-year statute of limitations, N.C. Gen. Stat. § l-50(a)(5)(f), which provides that the cause of action “shall not accrue until the injury, loss, defect or damage becomes apparent or ought reasonably to have become apparent to the claimant.” N.C. Gen. Stat. § l-50(a)(5)(f) (1999). We consider plaintiffs’ arguments in the above order. Dryvit, which uses a wholesale distribution network, is a remote manufacturer. The EIFS made its way to plaintiffs’ home through the commerce stream, thus implicating the products liability statute of repose, N.C. Gen. Stat. § l-50(a)(6). See Forsyth Memorial Hospital v. Armstrong World Industries, 336 N.C. 438, 445, 444 S.E.2d 423, 427 (1994) (products liability statute of repose, as opposed to real property statute of repose, N.C. Gen. Stat. § l-50(a)(5)(b)(9), applies to remote manufacturer whose materials find their way to a job site indirectly through the commerce stream; such manufacturer would not be a materialman who furnished materials to the job site under N.C. Gen. Stat. § l-50(a)(5)(b)(9)). We therefore apply the products liability statute of repose, section l-50(a)(6), which provides: No action for recovery of damages . . . based upon or arising out of any alleged defect or any failure in relation to a product shall be brought more than six years after the date of initial purchase for use or consumption. N.C. Gen. Stat. § l-50(a)(6). Plaintiffs claim the running of the time period did not begin until the date of the purchase of their home in April of 1993. This Court, however, recently held that the statute of repose was triggered upon the purchase by the subcontractor of the EIFS for installation on the plaintiffs’ house. See Cacha v. Montaco, 147 N.C. App. 21, 554 S.E.2d 388 (2001). The holding in Cacha turned on the interpretation of *504 “initial purchase for use or consumption.” After the “initial purchase for use or consumption,” the plaintiffs had six years to file suit against the EIFS manufacturer before their claims would be barred; the statute, however, does not define the phrase, nor does it have a clear, independent meaning of its own. See N.C. Gen. Stat. § l-50(a)(6). This Court, therefore, examined the definitions of “use” and “consume.” Gacha at 23-4, 554 S.E.2d at 390. In addition, the Court relied on the holding in Chicopee, Inc. v. Sims Metal Works, that the date of initial purchase for use under section 1-50(a)(6) is the date of purchase for the “ultimate and intended use of the product.” Chicopee, 98 N.C. App. 423, 428, 391 S.E.2d 211, 214, disc. review denied 327 N.C. 426, 395 S.E.2d 674 (1990) (purchase for assembly is not purchase for use). See also Tetterton v. Long Manufacturing Co., 314 N.C. 44, 332 S.E.2d 67 (1985) (purchase for resale is not purchase for use). The ultimate and intended use of the EIFS is to provide a weather-resistant barrier to protect the house interior from exposure to the weather. See Cacha at 30, 554 S.E.2d at 393-4. The EIFS begins to perform this function at the moment of application. Id. The EIFS, therefore, was first “purchased for use or consumption,” by the subcontractor who applied the EIFS to the plaintiffs’ residence. Id. Once the applicator applied the EIFS, it was “consumed,” that is, “utilized in the construction process,” which use resulted in its transformation . . . and the destruction of its original form .... Id. Accordingly, the EIFS was first purchased for use or consumption by Southern for installation on plaintiffs’ residence. Southern installed the EIFS on plaintiffs’ home in late fall of 1992. The statute of repose, therefore, began to run before 5 March 1993, and plaintiffs’ suit, filed more than six years after Southern’s purchase of the EIFS, is barred. See N.C. Gen. Stat. § l-50(a)(6). By their third assignment of error, plaintiffs argue that even if the products liability statute of repose is the appropriate one to apply, and even if it began running prior to 5 March 1999, the statute of repose regarding their claims against defendant was equitably tolled by the filing of Ruff v. Parex in 1996. This same contention was rejected in Gacha, which held that a statute of repose creates substantive rights that may not be tolled by equitable considerations. See Cacha at 27-9, 554 S.E.2d at 392-3. *505 Based on the foregoing, we need not address plaintiffs’ final assignment of error regarding the statute of limitations, N.C. Gen. Stat. § l-50(a)(5)(f). Accordingly, we affirm the order of the trial court granting the summary judgment motion of defendant. AFFIRMED. Chief Judge EAGLES and Judge TIMMONS-GOODSON concur.