Carlson v. Kelso Drafting & Design, Inc.

JOHN MAUZY PITTMAN, Judge. 11 This is an appeal from an order of dismissal based on the trial court’s conclusion that appellants’ action was time-barred by Ark.Cdde Ann. section 16-56-112(a) (Repl.2005). Appellants argue that the trial court erred in dismissing their action because there was a genuine issue of material fact. In addition, they ask us to judicially modify the statute to create an exception in cases such as theirs. We affirm. In reviewing a trial court’s decision on a motion to dismiss under Ark. R. Civ. P. 12(b)(6), we treat the facts alleged in the complaint as true and view them in the light most favorable to the party who filed the complaint. Martin v. Equitable Life Assurance Society, 344 Ark. 177, 40 S.W.3d 733 (2001). In testing the sufficiency of a complaint on a motion to dismiss, all reasonable inferences must be resolved in favor of the complaint, and the pleadings |2are to be liberally construed. Id. However, our rules require fact pleading, and a complaint must state facts, not mere conclusions, in order to entitle the pleader to relief. Id. The essential facts are not in dispute. Appellants had a custom home built. The general contractor and designer of the home was Wayne Kelso. Pursuant to appellants’ request, a concrete-tile roof was installed. The various appellee Kelso firms were engaged in the construction of the home. Kelso hired Travis Pendarvis, d/b/a Best Roofing Company, to install the roof. Construction was completed in 2002. Leaking was noticed by appellants after the first rain following occupancy. The Kelso firms told appellants that the defects could be repaired, and they, together with Pendarvis, made repeated attempts to repair the roof from the time of occupancy in 2002 until March 2006, when broken roof tiles were replaced. At that time, appellants believed that the roof had been successfully repaired but, upon discovering further leakage in November 2007, they again contacted Wayne Kelso and demanded that the roof be fixed. On January 18, 2007, the Kelsos said that the leaks were caused by product defects rather than faulty design or installation. In August 2007, appellants contracted with another firm to replace the roof; it was then, they later alleged, that they learned of the construction and installation defects for which they brought suit on February 29, 2008. Appellees moved to dismiss based on Ark. R. Civ. P. 12(b)(6). After a hearing on August 4, 2008, the trial court held that the cause was time-barred by Ark.Code Ann. section 16-56-112(a), and granted the motion to dismiss. Section 16-56-112(a) provides that: |sNo action in contract, whether oral or written, sealed or unsealed, to recover damages caused by any deficiency in the design, planning, supervision, or observation of construction or the construction and repair of any improvement to real property or for injury to real or personal property caused by such deficiency, shall be brought against any person performing or furnishing the design, planning, supervision, or observation of construction or the construction or repair of the improvement more than five (5) years after substantial completion of the improvement. Except for cases involving personal injury, the only exception to the application of this statute is found in subsection (d), which states that the limitation prescribed by section 16-56-112 shall not apply in the event of fraudulent concealment of the deficiency. The defense of fraudulent concealment requires a fact question related to some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiffs cause of action concealed, or perpetrated in a way that it conceals itself. Curry v. Thornsberry, 354 Ark. 631, 128 S.W.3d 438 (2003). Appellants argue that the trial court erred in dismissing their complaint because they pled facts sufficient to create a fact question as to fraudulent concealment. We disagree. Here, appellants were, by their own admission, aware that there was a construction or installation defect in 2002, yet they did not file their lawsuit until 2008. There is nothing alleged that would constitute a furtive, secret, positive act of fraud. In fact, appellants candidly state in their complaint that one of the Kelso appellees actually suggested as early as March 2006 that appellants would need to file suit against the Kelso firms to resolve the problem but that appellants did not wish to do so. Although appellants were told by the builders that they should not walk on the concrete roof tiles because they would break, appellants do not allege |4that the tiles could in fact be walked on without breakage and, in any event, nothing prevented them from using ladders or other means to inspect the work. In fact, that is what they ultimately did. The dissenting judge’s position is that representations that repair is possible, combined with continued attempts to repair, are sufficient facts to support allegations of fraudulent concealment, even when the builder suggests that it may be necessary for the homeowner to sue them to resolve the problem. We think it preposterous to assert that these allegations are sufficient to support a finding of a secretly executed and furtive plan to defraud. To hold that this is all that was required would be to adopt the repair doctrine discussed and rejected infra, We think such an invitation to sue is incompatible with a secretly executed and furtive plan to defraud, and we hold that appellants failed to present a material allegation of fact regarding the defense of fraudulent concealment. Appellants also urge us to adopt a “repair doctrine” that would have the effect of tolling the statute during the period that appellees attempted repairs and representations were made that the repairs would cure the defects. With respect to a statute of limitation, Arkansas has long recognized that: [Wjhile the statute of limitations ordinarily begins to run against an action for breach of warranty upon the sale and delivery of a chattel which does not comply with the warranty, yet the statute is tolled so long as the vendor insists that the defect can be repaired and is attempting to do so. Louisville Silo & Tank Co. v. Thweatt, 174 Ark. 437, 442, 295 S.W. 710, 712 (1927). A similar “repair doctrine” is recognized in several foreign jurisdictions. See, e.g., Gustine Uniontown Associates, Ltd. v. Anthony Crane Rental, Inc., L.P., 577 Pa. 14, 842 A.2d 334 (2004). 1 ¿Therefore, the question is not whether such a doctrine should be adopted in Arkansas, but is instead whether it should apply to the time-bar established by Ark.Code Ann. section 16-56-112(a) (Repl.2005). In Curry v. Thornsberry, supra, our supreme court noted that section 16-56-112 is not a mere statute of limitation but instead a statute of repose, the effect of which is to entirely cut off a cause of action after the statutory period elapses. The Curry court further declared that the legislature intended, in enacting this statute, to create a comprehensive statute protecting persons engaged in the construction industry from being subject to litigation arising from work performed many years prior to the initiation of the lawsuit. Therefore, if the breach or injury occurs immediately after the completion of the improvement, representations and attempts to repair may toll the three-year statute of limitations set out in Ark.Code Ann. section 16-56-105(3), but for no longer than the five-year period provided in section 16-56-112(a). See East Poinsett County School v. Union Standard, 304 Ark. 32, 800 S.W.2d 415 (1990). Given the legislative intent and the supreme court’s consistent refusal to graft judicially created exceptions onto the statute of repose, we decline appellants’ invitation to amend the statute by judicial fiat. Affirmed. GLADWIN, KINARD, and GLOVER, JJ., agree. BAKER and BROWN, JJ., dissent.