Title: Ex Parte Stonebrook Development, LLC

State: alabama

Issuer: Alabama Supreme Court

Document:

854 So. 2d 584 (2003)
Ex parte STONEBROOK DEVELOPMENT, L.L.C., et al.
(In re Matthews Brothers Construction Company, Inc. v. Stonebrook Development, L.L.C., et al.).
1010722.

Supreme Court of Alabama.
February 21, 2003.
*585 Thomas R. Edwards and Clyde T. Bailey III of Edwards & Edwards, P.C., Wetumpka, for petitioner.
*586 Jacqueline E. Austin, Wetumpka, for respondent.
BROWN, Justice.
Stonebrook Development, L.L.C., Bill N. Sanford, and Sanford, Bell & Associates, Inc. ("SBA"), petitioned this Court for a writ of certiorari to review the Court of Civil Appeals' decision in this case. They allege that the Court of Civil Appeals' decision, which reversed the trial court's judgment in a breach-of-warranty and negligence action brought by Matthews Brothers Construction, conflicted with prior decisions of this Court and of the Court of Civil Appeals. We granted the petition, and we affirm the Court of Civil Appeals' judgment.
The pertinent facts are set forth in the Court of Civil Appeals' opinion:
Matthews Bros. Constr. Co. v. Stonebrook Dev., L.L.C., 854 So. 2d 573, 575-76 (Ala. Civ.App.2001). The Court of Civil Appeals summarized the trial court proceedings as follows:
Matthews Bros. Constr. Co., 854 So. 2d  at 575.
On December 21, 2001, the Court of Civil Appeals, in a per curiam opinion, reversed the dismissal of Matthews Brothers' indemnity claim against Sanford and SBA, the partial summary judgment in favor of Stonebrook on its breach-of-contract (liquidated-damages) claim, and the trial court's judgment in favor of Stonebrook on its breach-of-warranty claim. Stonebrook did not seek certiorari review of the Court of Civil Appeals' holding as to the breach-of-contract claim.
Sanford and SBA allege that the Court of Civil Appeals wrongly reversed the trial court's dismissal of Matthews Brothers' third-party indemnity claim against them. Specifically, Sanford and SBA contend that the Court of Civil Appeals erred in finding that the statute of limitations for actions against professional architects, contained in Ala.Code 1975, § 6-5-221, did not bar Matthews Brothers' third-party indemnity claim against Sanford and SBA. Sanford and SBA contend that this is a matter of first impression before this Court. The Court of Civil Appeals, in an extensive, scholarly analysis of when Matthews Brothers' indemnification claim accrued, stated:
"We turn first to the issue of the statute of limitations. [Sanford and SBA] submitted evidence in support of their `motion to dismiss'1 including the deposition testimony of the principal of Matthews Brothers, Jimmy Matthews. Matthews testified that almost immediately after his company began its performance under its June 1, 1994, contract, it experienced problems with the subdivision design plans as they related to the subdivision's soil type and the company's ability to properly construct the roadways. Matthews testified that *588 a large part of the construction problems and the delay were caused by what he characterized as a faulty design of the roadways, given the condition of the soil in the construction area. Matthews testified that the condition of the soil made it difficult to lay a stable roadway because the soil tended to shift under the asphalt; he also testified that Stonebrook refused to pay for additional materials to place on the roadways to facilitate stabilizing the soil in order to provide a good base for the roads. Matthews Brothers continued to experience such difficulties after the expiration of the August 11, 1994, date on which the contract specified its performance was to be completed. Bill N. Sanford sent a letter dated November 30, 1994, to Jimmy Matthews, expressing concern about the delays and the quality of Matthews Brothers' work. Jimmy Matthews testified that he `knew we had problems' in November 1994.
"413 So. 2d  at 1072 (emphasis added). Accord Smith v. Medtronic, Inc., 607 So. 2d 156, 159 (Ala.1992) (`A party has a cause of action, and the statute of limitations begins to run, on the date the first legal injury occurs, but not necessarily from the date of the act causing the injury.').
"The general principle at issue was well stated by Dean Prosser in explaining that the fourth element of a cause of action for negligence, `actual loss or damage,' requires more than nominal damages. `[P]roof of damage [is] an essential part of the plaintiff's case. Nominal damages, to vindicate a technical right, cannot be recovered in a negligence action, where no actual loss has occurred. The threat of future harm, not yet realized, is not enough.' William C. Prosser, Handbook of the Law of Torts, § 30 (4th ed.1971) (emphasis added).
"Applying this general principle, our courts have long recognized that noncontract causes of action accrue only when the plaintiff actually suffers injury or loss. Thus, in Alabama Power Co. v. Cummings, 466 So. 2d 99, 102 (Ala.1985), our Supreme Court held that a homeowner's cause of action accrued only when the defects (cracks and other injuries) in her home actually manifested themselves, not when the defendant's complained-of-acts occurred decades earlier. `Generally, a cause of action for injury or damage to property accrues, so as to start the running of limitations, on the date of the injury or damage, and not upon the occurrence of the negligence itself, or the last known negligent act.' 54 C.J.S. Limitations of Actions § 176 (1987) (citing Cummings, 466 So. 2d  at 102; Rumford v. Valley Pest Control, Inc., 629 So. 2d 623, 627 (Ala. 1993); and Dorsey v. Bowers, 709 So. 2d 51, 56 (Ala.Civ.App.1998)).
"In West Pratt Coal Co. v. Dorman, 161 Ala. 389, 49 So. 849 (1909), the defendant's mining operations removed the subjacent support from the plaintiff's land. Since a landowner has a legal right to subjacent support, the court could have held that a `legal injury' first occurred when the mining operations commenced. Instead, the Court deemed the cause of action to have accrued only when the soil on the plaintiff's property settled and the enjoyment of the plaintiff's land was actually lost. Id. at 393, 49 So.  at 851.
"[Sanford and SBA] rely on the fact that, if any negligence on their part caused Matthews Brothers' late performance of its construction work, that late performance was nonetheless completed in December 1994. In essence, [Sanford and SBA] contend that, because Matthews Brothers at that time faced the possibility of paying damages pursuant to the liquidated-damages provision of its contract with Stonebrook, its cause of action alleging negligence against [Sanford and SBA] accrued at that time. We disagree. Although Stonebrook might have suffered actual injury or loss at that point because of the delay in the completion of its roadways, Matthews Brothers had not yet suffered any injury or loss. Facing the possibility of paying monetary damages to another party, and actually paying such damages, are not the same. The possibility, or even the probability, of an action by Stonebrook to enforce its liquidated-damages provision, in the words of Prosser, was at that point a `threat of future harm, not yet realized, [and] is not enough.'3
Matthews Bros. Constr. Co., 854 So. 2d  at 576-79.
This Court addressed the issue of when a cause of action for indemnification occurs so as to trigger the running of the statutory limitations period in American Commercial Barge Line Co. v. Roush, 793 So. 2d 726, 729-30 (Ala.2000) (noting that in an action seeking indemnification the limitations period does not begin to run until liability has become fixed); see also Alabama Kraft Co. v. Southeast Alabama Gas Dist., 569 So. 2d 697, 700 (Ala.1990) ("a right to indemnity does not arise ... until one acting as surety satisfies his principal's obligation, or until a master or principal pays damages arising from his servant's or agent's negligent or fraudulent acts"). See also Bellevue South Assocs. v. HRH Constr. Corp., 78 N.Y.2d 282, 579 N.E.2d 195, 574 N.Y.S.2d 165 (1991); Hillcrest Country Club v. N.D. Judds Co., 236 Neb. 233, 461 N.W.2d 55 (1990); Kala Invs., Inc. v. Sklar, 538 So. 2d 909 (Fla.Dist.Ct. App.1989).
The Court of Civil Appeals continued:
Matthews Bros. Constr. Co., 854 So. 2d  at 580-81. We agree with the sound reasoning of the Court of Civil Appeals that Matthews Brothers' third-party indemnity claim was not time-barred.[1]
Nevertheless, Sanford and SBA argue that the Court of Civil Appeals should have applied the "occurrence rule" adopted by this Court in Ex parte Panell, 756 So. 2d 862 (Ala.1999), and that by not doing so, it has incorrectly decided this issue. We disagree. In Panell, the plaintiff sought damages for legal malpractice; the case has nothing to do with the law of indemnity. On that ground alone, Panell is distinguishable. Moreover, Panell was a plurality opinion; its rationale was approved *592 by only three of the nine members of this Court.
Stonebrook argues that the Court of Civil Appeals erred in reversing the trial court's judgment in favor of Stonebrook on its breach-of-warranty claim. Specifically, Stonebrook claims that the Court of Civil Appeals failed to follow the ore tenus rule.
Alabama law is well settled, "[w]here evidence is presented to the trial court ore tenus, we presume that the court's conclusions on issues of fact are correct, and we will not disturb them unless they are clearly erroneous, without supporting evidence, manifestly unjust, or against the great weight of the evidence." Ex parte Lamar Adver. Co., 849 So. 2d 928, 929-30 (Ala.2002); American Petroleum Equip. & Constr. Inc. v. Fancher, 708 So. 2d 129, 132 (Ala.1997).
The Court of Civil Appeals' opinion in this case states:
Matthews Bros. Constr. Co., 854 So. 2d  at 582-83 (footnote omitted; emphasis, other than last two emphases, added).
The Court of Civil Appeals found that the trial court's factual findings were against the great weight of the evidence presented at trial. We agree. The great weight of the evidence at trial demonstrated that the deficiencies in Matthews Brothers' work were the result of defects in the design specifications provided by Sanford and SBA.
Stonebrook also alleges that the Court of Civil Appeals misstated the law governing breach-of-warranty claims. Specifically, Stonebrook claims that "by requiring Stonebrook to prove that all of the damage[ ] to the roadway [was] proximately caused by Matthews Brothers' failure to comply with contract specifications without consideration of the manner in which the work was performed, the Court of Civil Appeals is restricting Stonebrook's claim and not allowing Stonebrook to pursue damages, which are the natural and proximate consequence of a breach of warranty." (Petitioner's brief at 21.) As stated above, the Court of Civil Appeals found that "there [was] no direct testimony that any deficiency in Matthews Brothers' work caused any of the roadway failures." Matthews Bros. Constr. Co., 854 So. 2d  at 583. To the contrary, "the evidence supports the conclusion that some, if not all, of the failures in the roadway were a result of [Sanford and SBA's] design defects." Matthews Bros. Constr. Co., 854 So. 2d  at 582. Because Stonebrook failed to prove that the warranty was breached, we need not determine whether the Court of Civil Appeals misstated the law regarding causation.
We affirm the Court of Civil Appeals' judgment that Matthews Brothers' thirdparty indemnity claim against Sanford and SBA was not time-barred. We also affirm the Court of Civil Appeals' judgment insofar *594 as it pertains to Stonebrook's breach-of-warranty claim.
AFFIRMED.
HOUSTON, LYONS, JOHNSTONE, HARWOOD, WOODALL, and STUART, JJ., concur.
SEE, J., concurs in the result.
MOORE, C.J., dissents.
[1]  Section § 6-5-221(d), Ala.Code 1975, states: "This section shall not apply to ... any architect, engineer, or builder who, at the time the cause of action accrues or arises, is the owner or is in actual possession or control as owner, tenant, or otherwise of the improvement." Matthews Brothers argues that this section applies because Sanford is the managing partner of Stonebrook and a "principal" in SBA. While this may indicate that Sanford and SBA could have been "in actual possession or control as owner, tenant, or otherwise of [Stonebrook]," the record is unclear as to the extent of the control each had over Stonebrook. Moreover, even if § 6-5-221 does not apply to either party, and the limitations period is instead controlled by Ala.Code 1975, § 6-2-38, "[t]he operative principles for accrual of causes of action are the same under [both statutes]...." Matthews Bros. Constr. Co., 854 So. 2d  at 577 n. 2.