Title: Goodrich v. Seamands

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Goodrich v. Seamands1994 WY 32870 P.2d 1061Case Number: 93-36Decided: 03/17/1994Supreme Court of Wyoming
Charlotte 
E. GOODRICH, a/k/a Charlotte E. Tyndall,

 Appellant 
(Plaintiff),

v.

Albert 
L. SEAMANDS and Janet M. Seamands, 

Appellees 
(Third Party Defendants).

 

Appeal 
from the District Court, Fremont County, D. Terry Rogers, 
J.

Representing 
Appellant:

Robert 
N. Williams, Meyer and Williams, Jackson and Donna Sears, Sears Law Office, 
Lander.

Representing 
Appellee:

R.A. 
Nicholas, Hettinger & Leedy, Riverton.

 

Before 
MACY, C.J., and THOMAS, CARDINE, GOLDEN and TAYLOR, 
JJ.

CARDINE, 
Justice.

[¶1]      Appellant 
Charlotte E. Goodrich (Goodrich) sued appellees Albert L. and Janet M. Seamands 
(the Seamandses) for injuries Goodrich suffered when a ceiling tile and ceiling 
fan fell on her in a building previously owned by the Seamandses. Goodrich 
alleged that the Seamandses were negligent in failing to discover, disclose and 
warn of a latent defect in the construction of the ceiling and the fan. The 
trial court granted summary judgment to the Seamandses based on Wyoming's 
statute of repose, W.S. 1977, 1-3-111, and Goodrich 
appeals.

[¶2]      We 
affirm.

[¶3]      Goodrich presents 
two issues:

1. 
Is the 10 year statute of repose found in § 1-3-111 W.S. 1977 applicable to the 
facts of this case?

2. 
Does the statute of repose provide immunity to an owner of real property for 
negligently failing to disclose injury causing defects to a subsequent purchaser 
when such owner would otherwise be liable under § 353 Restatement of Torts, 
2d?

FACTS

[¶4]      In 1977, the 
Seamandses erected a small commercial building in Lander, Wyoming to provide 
space for their daughter's health food store and their son-in-law's hair salon. 
The building's shell, i.e., foundation, exterior walls, roof and insulation, was 
constructed by an independent contractor. The Seamandses, however, hired their 
son-in-law, Ron Teague (Teague), to oversee the completion of the interior of 
the building. Teague built the interior walls and put in the hanging tile 
ceiling, but he hired sub-contractors to install electricity, plumbing, and 
heating. The ceiling fan in the women's bathroom was installed by the electrical 
subcontractor.

[¶5]      After completion, 
the Seamandses leased the various spaces in the new building to different 
parties for a period of ten years. During that ten-year period the structure of 
the building, both the interior and the exterior, remained substantially and 
materially unaltered. The sole complaints about the building involved tenant 
disputes over the temperature in the building and a door which apparently would 
stick. Ceiling tiles, in rooms other than the women's bathroom, would 
occasionally have to be slightly maneuvered after being popped from their frames 
due to air being forced into a room from a shutting door.

[¶6]      From the spring 
of 1987 until December of 1989, the Seamandses leased most of the building to 
the local branch of the Veterans of Foreign Wars (VFW). In December 1989, the 
Seamandses sold the building to the VFW.

[¶7]      On a Saturday 
afternoon in late September of 1990, Goodrich, while a patron at the VFW club, 
was struck by a falling ceiling tile and ceiling fan as she entered the women's 
bathroom in the building. Following the accident, a mechanical engineer, 
employed by the VFW to determine the cause of the accident, 
reported:

The 
ceiling failure and resultant potential for physical harm involves a combination 
of substandard installation of the exhaust fan, the [fibrous ductboard] ducting, 
and the lay-in ceiling grid support.

* 
* * * * *

If 
all of these three different items had been installed in accordance with 
governing Code requirements and recognized industry/construction standard 
practices, and had been properly and securely supported independently of each 
other from the building structure above, neither the duct joints or ceiling 
would have failed, nor could the exhaust fan have fallen.

All 
the parties agree that the defects in the ceiling, the fan, and the ducting were 
hidden above the ceiling tiles and thus not readily 
apparent.

[¶8]      As a result of 
the accident and due to her injuries, Goodrich filed this suit against VFW and 
the Seamandses. VFW and Goodrich settled, and VFW was dismissed from the case 
October 21, 1992. Meanwhile, the Seamandses moved for summary judgment on 
September 1, 1992, asserting the statute of repose and claiming no negligence. 
After a hearing, the trial court granted summary judgment to the Seamandses 
based upon the statute of repose.

DISCUSSION

[¶9]      When reviewing 
the trial court's grant of summary judgment, we examine the case in the same 
manner as the trial court. Our task requires that we make a dual finding that no 
genuine issue of material fact exists, and that the prevailing party was 
entitled to judgment as a matter of law. When considering questions of law, we 
accord no special deference to the [trial] court's determination. [citations 
omitted]

First 
Wyoming Bank, N.A., Jackson Hole v. Continental Ins. Co., 
860 P.2d 1094, 1097 (Wyo. 1993) (quoting Davidson v. Sherman, 848 P.2d 1341, 1343 (Wyo. 1993)). Additionally, we may sustain summary judgment on any 
legal ground appearing in the record. Id. (citing Deisch v. Jay, 
790 P.2d 1273, 1278 (Wyo. 1990)).

[¶10]   The statute of repose 
provides:

(a) 
Unless the parties to the contract agree otherwise, no action to recover 
damages, whether in tort, contract, indemnity or otherwise, shall be brought 
more than ten (10) years after substantial completion of an improvement to real 
property, against any person constructing, altering or repairing the 
improvement, manufacturing or furnishing materials incorporated in the 
improvement, or performing or furnishing services in the design, planning, 
surveying, supervision, observation or management of construction, or 
administration of construction contracts for:

(i) 
Any deficiency in the design, planning, supervision, construction, surveying, 
manufacturing or supplying of materials or observation or management of 
construction;

(ii) 
Injury to any property arising out of any deficiency listed in paragraph (i) of 
this subsection; or

(iii) 
Injury to the person or wrongful death arising out of any deficiency listed in 
paragraph (i) of this subsection.

W.S. 
1-3-111 (1988). Goodrich alleges that the statute does not apply to her cause of 
action against the Seamandses, and therefore cannot bar the action because the 
Seamandses do not fall into the class of persons protected by the statute and 
because the basis for her cause of action is not barred by the 
statute.

[¶11]   Based upon the plain language of 
the statute, one of the requirements necessary for it to apply is that the 
action sought to be barred be one "for: [a]ny deficiency in the design, 
planning, supervision, construction, surveying, manufacturing or supplying of 
materials or observation or management of construction." Goodrich's cause of 
action against the Seamandses is based upon the Seamandses' alleged failure to 
discover, disclose and warn of a dangerous condition of which they knew or 
should have known. It is not, and could not be, based upon a claim that the 
Seamandses negligently constructed the building.

[¶12]   The alleged negligent action of the 
Seamandses (failure to discover, disclose and warn) occurred after construction 
was completed and is not a "deficiency in the design, planning, supervision, 
construction, surveying, manufacturing or supplying of materials or observation 
or management of construction." Therefore, the statute of repose is not 
applicable to Goodrich's cause of action for negligent failure to maintain and 
inspect the property and discover and disclose a dangerous condition which was 
known or should have been known.

[¶13]   This construction of the statute of 
repose is supported by legislative history. In 1981, when the statute of repose 
was amended, the legislature included the following 
language:

(a) 
The purpose of this law is to recognize that:

* 
* * * * * 

(ii) 
It is in the public interest to set a period of time following the substantial 
completion of the project after which no action may be brought for errors 
and omissions in the design, planning, supervision, construction, surveying, 
manufacturing or supplying of materials or observations or management of 
improvements to real estate, whether or not these errors and omissions 
have resulted or may result in injury[.]

1981 
Wyo. Sess. Laws ch. 166 § 2 (emphasis added). The emphasized language 
demonstrates that the legislature intended that the statute of repose apply as a 
bar to actions alleging "errors and omissions" occurring during the process of 
completing the improvement and not to actions which allege "errors and 
omissions" which occur in the maintenance of the improvement after it is 
completed. Goodrich's action alleges that the Seamandses made "errors and 
omissions" in maintaining the improvement - the building - after it was 
completed.

[¶14]   Since we have determined that the 
statute of repose does not bar Goodrich's action against the Seamandses, then 
basing a grant of summary judgment on the statute of repose was incorrect as a 
matter of law; however, the record reflects that summary judgment for the 
Seamandses is sustainable because, as a matter of law and based on the 
undisputed material facts, the Seamandses owed no duty to 
Goodrich.

[¶15]   Essential to any negligence cause 
of action is proof of facts which impose a duty upon defendant. See, ABC 
Builders, Inc. v. Phillips, 632 P.2d 925, 931 (Wyo. 1981). The question of 
the existence of a duty is a matter of law for the court to decide. Id., 
at 932. A duty exists where, "upon the facts in evidence, such a relation exists 
between the parties that the community will impose a legal obligation upon one 
for the benefit of the other - or, more simply, whether the interest of the 
plaintiff which has suffered invasion was entitled to legal protection at the 
hands of the defendant." Prosser and Keeton on Torts § 37 at 236 (5th ed. 
1984).

[¶16]   The rule of caveat emptor (let the 
buyer beware) has never been strictly applied by this court when dealing with 
vendor liability. ABC Builders, Inc., 632 P.2d  at 932; see § 352 
Restatement, Second, Torts for rule of caveat emptor. In ABC Builders, 
Inc., we adopted § 353 of the Restatement, Second, Torts to define the duty 
of a vendor or grantor of real estate. ABC Builders, Inc., 632 P.2d  at 
932.

[¶17]   Section 353 of the Restatement, 
Second, Torts provides:

(1) 
A vendor of land who conceals or fails to disclose to his vendee any condition, 
whether natural or artificial, which involves unreasonable risk to persons on 
the land, is subject to liability to the vendee and others upon the land with 
the consent of the vendee or his subvendee for physical harm caused by the 
condition after the vendee has taken possession, if

(a) 
the vendee does not know or have reason to know of the condition or the risk 
involved, and

(b) 
the vendor knows or has reason to know of the condition, and realizes or should 
realize the risk involved, and has reason to believe that the vendee will not 
discover the condition or realize the risk.

(2) 
If the vendor actively conceals the condition, the liability stated in 
Subsection (1) continues until the vendee discovers it and has reasonable 
opportunity to take effective precautions against it. Otherwise the liability 
continues only until the vendee has had reasonable opportunity to discover the 
condition and to take such precautions.

Thus, 
a vendor has a duty to disclose the condition described in subsection (1) if 
"the vendee does not know or have reason to know of the condition or the risk," 
"the vendor knows or has reason to know of the condition," the vendor "realizes 
or should realize the risk involved," and the vendor "has reason to believe that 
the vendee will not discover the condition or realize the risk." See 
Comments, § 353 Restatement, Second, Torts and Prosser and Keeton § 64 at 
447-48. Concerning the requirement of actual or constructive knowledge by the 
vendor, the comments to § 353 state:

c. 
It is not, however, necessary that the vendor have actual knowledge of the 
condition, or that he be in fact aware that it involves an unreasonable risk of 
physical harm to persons on the land. It is enough that he has reason to know 
that the condition exists and is dangerous, as "reason to know" is defined in § 
12(1) - that is to say, that he has information from which a person of 
reasonable intelligence, or his own superior intelligence, would infer that the 
condition exists, or would govern his conduct on the assumption that it does 
exist, and would realize that its existence will involve an unreasonable 
risk of physical harm to persons on the land.

§ 
353 Restatement, Second, Torts (emphasis added).

[¶18]   Goodrich admits that the Seamandses 
were not actually aware of the defective ceiling, fan or ducting. Goodrich 
asserts, however, that several facts support an inference that the Seamandses 
had reason to know of the defects and, therefore, that a genuine issue exists 
concerning whether the Seamandses had "reason to know" of those 
defects.

[¶19]   First, Goodrich argues that Mr. 
Seamands' testimony that occasionally the ceiling tiles would pop out of their 
frames because of forced air from doors shutting is sufficient to demonstrate 
that the Seamandses had "reason to know" of the defects. Knowledge of the 
occasional movement of ceiling tiles from forced air in rooms other than the 
women's restroom is not sufficient for a person of reasonable intelligence 
to infer that the ceiling tile, fan, and duct in the women's bathroom were 
improperly installed and created an unreasonable risk of harm to others. See 
Heinsohn v. Motley, 13 Kan. App. 2d 66, 761 P.2d 796 (1988) (affirming 
summary judgment in favor of vendor of cabin and against vendee, who had sued 
for injuries from defective propane stove in cabin, because vendee failed to 
establish that vendor had reason to know of the defects or the risk involved); 
see also Emile F. Short, Annotation, Liability of Vendor or Grantor of Real 
Estate for Personal Injury to Purchaser or Third Person Due to Defective 
Condition of Premises, 48 A.L.R.3d 1027 (1973).

[¶20]   Second, Goodrich asserts that the 
Seamandses are charged with the same knowledge as Teague, who was hired by the 
Seamandses to complete the interior of the building, and since he installed the 
ceiling then the Seamandses had "reason to know" of the defects. Because he has 
been deceased for several years, the evidence does not reflect what Teague knew 
or should have known concerning the ceiling, the fan or the ducting. Simply 
because Teague installed the ceiling tile does not demonstrate that a person of 
reasonable intelligence in the Seamandses' position had information from which 
they could infer the existence of these defects.

[¶21]   Lastly, Goodrich asserts that the 
fact the Seamandses' lease to the VFW required the Seamandses to maintain the 
common areas of the building, and the fact that the Seamandses owned the 
building for twelve years shows that the Seamandses had "reason to know" of the 
defects. The evidence demonstrated that there were never any material complaints 
or problems with the ducting, the fan, or the ceiling tiles during those twelve 
years. Since there were no material complaints or problems, the Seamandses never 
had reason to look above the tiles and discover any defect. Neither of these 
facts shows that the Seamandses had information from which they could infer the 
existence of the defects.

CONCLUSION

[¶22]   Necessary to every negligence 
action is proof that the defendant owed the plaintiff a duty. In this case the 
Seamandses had a duty to disclose only if they knew or had reason to know of the 
defects. Goodrich failed, however, to establish that the Seamandses had either 
actual or constructive knowledge of the defects and, therefore, failed to 
establish a duty to disclose the defective ceiling, fan and ducting. The failure 
to prove duty, which is a question of law, makes summary judgment in favor of 
the defendants, the Seamandses, proper.

[¶23]   We affirm.