Title: Loftus v. Romsa Const., Inc.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Loftus v. Romsa Const., Inc.1996 WY 46913 P.2d 856Case Number: 95-111Decided: 03/25/1996Supreme Court of Wyoming

 

JOHN R. LOFTUS, Jr., and GWENDOLYN B. 
LOFTUS, 

Appellants (Plaintiffs), 

 

v. 

 

ROMSA CONSTRUCTION, INC., a Wyoming 
corporation,  

Appellee (Defendant).

 

Appeal 
from the District Court of Laramie County: Nicholas G. Kalokathis, 
Judge.

 

Representing 
Appellant: 

Bert T. Ahlstrom, Jr. and Jennifer A. Cudworth, 
Cheyenne.

Representing 
Appellee: 

James N. Wolfe and David D. Uchner, 
Cheyenne.

 

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

THOMAS, Justice. 

[¶1]      In this case, 
John R. Loftus, Jr. and his wife, Gwendolyn B. Loftus (collectively Loftus), 
question whether an affirmative defense, specifically the statute of repose 
found in WYO. STAT. § 1-3-111 (1988), must be deemed waived by the failure to 
plead it or by admitting an inconsistent factual allegation. Romsa Construction, 
Inc. (Romsa), not only failed to plead the statute of repose in its answer, but 
it admitted a factual allegation that the home, which allegedly was the product 
of defective construction, was completed within the ten-year period specified in 
the statute. In a motion for summary judgment, however, Romsa contended the 
action was foreclosed by substantial completion of the home more than ten years 
before the action was filed. The trial court granted that motion after ruling 
there was no genuine issue of material fact as to when the home was 
substantially completed. We are in accord with the conclusion of the trial court 
that there is no genuine issue of fact as to when the home was substantially 
completed, and we hold the defense of the statute was not waived by either the 
admission of fact in the answer or the failure to plead the defense. The Order 
Granting Summary Judgment entered in the trial court is 
affirmed.

 

[¶2]      In the Brief of 
the Appellants filed on behalf of Loftus, the issues are stated to 
be:

 

I.          
At what point in time was the house "substantially completed" so as to 
call into play the statute of repose, known as W.S. § 1-3-111; and, can 
Appellants be held to any such determination in any event?

 

II. If W.S. § 1-3-111 is applicable to Appellants, at 
what point in time can they be held to said statute?

 

III. Whether the very nature of the statute of repose 
mitigates against summary judgment in this case?

 

IV. Has the Appellee waived the right to interpose 
the defense of limitation; and otherwise as set forth 
hereinafter?

 

V. Whether summary judgment is proper herein pursuant 
to Rule 56, Wyoming Rules of Civil Procedure, and pursuant to the doctrine of 
equitable estoppel?

 

[¶3]      In the Brief of 
Appellee, this statement appears under the subtitle "Statement of the 
Issues":

 

For purposes of this Brief, the Appellee will accept 
the issues as presented by the Appellants and address each of them in the order 
presented.

 

[¶4]      On January 6, 
1984, an agreement to purchase a home in Cheyenne was entered into between 
Loftus and Romsa. Romsa had constructed the home, and Loftus moved in sometime 
in February of 1984. Some eight years later, Loftus decided to sell the home, 
and it was listed with a local realtor in April of 1992. Some potential 
purchasers had the home inspected and, at that time, a problem with the brick 
veneer was identified. The inspector concluded the veneer was separating from 
the walls of the house and, in order to consummate a sale of the home, Loftus 
paid $7,980 to another contractor to correct the defect. Loftus then agreed to 
the sale of the home on August 31, 1992.

 

[¶5]      On December 22, 
1993, Loftus filed a Complaint for Monetary Damages, seeking to recover from 
Romsa the $7,980 expended to have the veneer repaired, pre-judgment and 
post-judgment interest, and attorney fees and expenses. The allegation material 
to the resolution of this case is found in paragraph four of the Complaint for 
Monetary Damages, which reads:

 

The home was constructed by Defendant upon the 
described premises, and was completed the first part of 1984; and Defendant 
provided Plaintiffs with a "Warranty" on or about February 2, 1994 [sic], 
relating to the subject house and premises.

 

In its Answer, Romsa stated 
in paragraph one:

 

Plaintiff admits paragraphs 1, 2, 3, 4, except that 
the warranty provided was dated February 2, 1984, not 1994, paragraphs 6, 16, 
and 22.

 

Romsa did not specifically 
plead the statute of repose as an affirmative defense, but asserted in its fifth 
affirmative defense:

 

That Plaintiff is barred from recovery by virtue of 
the doctrine of laches and estoppel.

 

[¶6]      Subsequently, 
Romsa filed a Motion for Summary Judgment with supporting exhibits, which 
stated:

 

COMES NOW, the undersigned attorneys for the 
Defendant in the above-entitled matter and hereby moves the Complaint of the 
Defendant be dismissed on the grounds and for the reasons the Court lacks 
jurisdiction inasmuch as the claims of 
the Plaintiff are barred by W.S. § 1-3-111, 1977 [Wyoming's ten-year statute of 
repose] as amended. (Emphasis added.)

 

Loftus then filed a 
response, which denied "that this lawsuit is barred by the provisions of W.S. § 
1-3-111, 1977, as amended" and requested the district court to "deny and dismiss 
the [Romsa's] Motion for Summary Judgment."

 

[¶7]      The district 
court granted Romsa's motion in an Order Granting Summary Judgment entered on 
February 23, 1995. The court considered the supporting materials furnished by 
the parties and concluded the Loftus home was "substantially completed" more 
than ten years prior to the filing of the action against Romsa. WYO. STAT. § 
1-3-110 (1988) provides:

 

As used in this act [§§ 1-3-110 through 1-3-113] 
"substantial completion" means the degree of completion at which the owner can 
utilize the improvement for the purpose for which it was 
intended.

 

WYO. STAT. § 1-3-111 (1988) 
provides (emphasis added):

 

(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.

 

(b) Notwithstanding the provisions of subsection (a) 
of this section, if an injury to property or person or an injury causing 
wrongful death occurs during the ninth year after substantial completion of the 
improvement to real property, an action to recover damages for the injury or 
wrongful death may be brought within one (1) year after the date on which the 
injury occurs.

 

(c) This section shall not be construed to extend the 
period for bringing an action allowed by the laws of this 
state.

 

[¶8]      In the materials 
produced to support its Motion for Summary Judgment, Romsa furnished an 
affidavit by its president in which it is stated:

 

2. That Romsa Construction, Inc., built the home 
which is the subject matter of the lawsuit of Loftus v. Romsa. That construction 
of the home was completed sometime prior to December 20, 
1983.

 

3. That a review of the records of Romsa Construction 
by your undersigned Affiant, revealed that all of the bills of the construction 
of the home were paid in full prior to December 20, 1993. Those bills included 
the installation and completion of the water well and hook up to the house as 
well as the carpet costs including installation. Both of these matters are 
amongst the last items to be completed in home construction. The bills are not 
paid until the work has been completed. The bill for the installation and hook 
up of the water well was paid on November 8, 1983, and the bill for the 
carpeting was paid December 7, 1983.

 

4. The review by your Affiant also revealed that a 
compliance inspection report revealed that the property was inspected by the VA 
on or before December 20, 1983. Such inspection is not done until after the home 
construction is completed.

 

Copies of the paid bills and 
the inspection report were attached to the affidavit. It is clear Romsa 
supported its Motion for Summary Judgment by asserting facts demonstrating the 
home was "substantially completed" more than ten years prior to the filing of 
the Complaint for Monetary Damages. In response, the only facts furnished by 
Loftus were an admission by Mrs. Loftus in her deposition that she did not know 
when the house was completed. Loftus relied solely upon the transaction dates 
involved in the sale from Romsa to Loftus. We have no difficulty concluding, as 
the trial court did, that there was no genuine issue of material fact as to when 
the home was "substantially completed."

 

[¶9]      We turn to the 
substantive legal issues. Loftus contends Romsa waived the affirmative defense 
of the statute of repose in two ways. The first contention is that Romsa 
admitted the home was completed the first part of 1984. The second assertion of 
waiver arises out of the asserted failure to plead the affirmative defense. The 
first argument seems somewhat amorphous because, indeed, the home may have been 
completed by January of 1984. Therefore, it was appropriate for Romsa to admit 
the truth of that allegation. This admission does not foreclose Romsa from 
pointing out the home actually was completed at some earlier date, nor is it 
foreclosed from asserting it was "substantially completed" at some earlier date. 
The admission of a truthful allegation does not manifest any intention by Romsa 
to accomplish an "intentional relinquishment of a known right * * * in some 
unequivocal manner." See Ranger Ins. Co. 
v. Cates, 501 P.2d 1255, 1259 (Wyo. 1972). When we couple this proposition 
with the affirmative assertion of the defense of "laches and estoppel," we are 
satisfied that, under appropriate rule of law, Romsa did not waive the statute 
of repose by its admission in the answer, or by any failure to plead 
it.

 

[¶10]   Our conclusion with respect to 
waiver is supported by the policy favoring amendments found in WYO.R.CIV.P. 15, 
which provides, in pertinent part:

 

(a) Amendments. - A party may amend the 
party's pleading once as a matter of course at any time before a responsive 
pleading is served, or if the pleading is one to which no responsive pleading is 
permitted and the action has not been placed upon the trial calendar, the party 
may so amend it at any time within 20 days after it is served. Otherwise a party 
may amend the party's pleading only by leave of court or by written consent of 
the adverse party; and leave shall be freely given when justice so 
requires.

 

(b) Amendments 
to conform to the evidence. - When issues not raised by the pleadings are 
tried by express or implied consent of the parties, they shall be treated in all 
respects as if they had been raised in the pleadings. Such amendment of the 
pleadings as may be necessary to cause them to conform to the evidence and to 
raise these issues may be made upon motion of any party at any time, even after 
judgment; but failure so to amend does not affect the result of the trial of 
these issues.

 

[¶11]   We have no question that the 
district could have, and probably should have, permitted an amendment of Romsa's 
answer if amendment had been sought. E.g., Apodaca v. Ommen, 807 P.2d 939 
(Wyo. 1991); Harris v. Grizzle, 599 P.2d 580 (Wyo. 1979). After the initial pleadings, discovery often produces new 
claims that may be asserted as well as the factual basis for additional 
defenses. Romsa assuredly would have been entitled to amend its answer prior to 
any trial on this issue.

 

[¶12]   We have applied this rule when 
issues not raised in the pleadings are nonetheless adjudicated at trial either 
by the express or implied consent of the parties. The issues tried by the court 
are treated as if raised in the parties' pleadings. Jankovsky v. Halladay Motors, 482 P.2d 129 (Wyo. 1971); Title Guar. Co. of Wyo., 
Inc. v. Midland Mortgage Co., 451 P.2d 798 (Wyo. 1969); Lore v. Town of Douglas, 355 P.2d 367 
(Wyo. 1960). In fact, amendment of the pleadings under WYO. R.CIV.P. 15(b) is 
mandatory if the court finds a specific issue was tried, either expressly or 
impliedly, by the parties. Bragg v. 
Marion, 663 P.2d 505 (Wyo. 1983).

 

[¶13]   Other jurisdictions have addressed 
the rule's significance in the context of pretrial motions. For example, in County of Rutherford ex rel. Hedrick v. 
Whitener, 100 N.C. App. 70, 394 S.E.2d 263 (1990), the North Carolina court 
deemed the parties' pleadings amended, where neither the answer nor the motion 
to dismiss referenced the affirmative defense of res judicata. In that case, the 
court held a summary judgment hearing and considered evidence of the affirmative 
defense with consent of both parties. The court significantly stated in its 
decision:

 

[A]n affirmative defense sought to be raised for the 
first time in a motion for summary judgment "must ordinarily refer expressly to 
the affirmative defense relied upon." 302 N.C. at 443, 276 S.E.2d  at 329. In the 
absence of an expressed reference in the motion for summary judgment, if the 
"affirmative defense was clearly before the trial court," the failure to 
expressly mention the defense in the motion will not bar the trial court from 
granting the motion on that ground. Id., at 443, 276 S.E.2d  at 330. Furthermore, where a motion for summary 
judgment is supported by matters outside the pleadings, the pleadings are deemed 
amended if in fact the issue not raised by the pleadings or by the motion for 
summary judgment is tried by the express or implied consent of both 
parties.

 

Whitener, 
394 S.E.2d  at 265 (emphasis added, citations omitted).

 

Because both parties 
addressed the issue, no prejudice was sustained by either, and the pleadings 
were deemed amended by the North Carolina court to reflect consideration of the 
affirmative defense. Whitener. See also Peeples v. City of Atlanta, 189 
Ga. App. 888, 377 S.E.2d 889 (1989).

 

[¶14]   These cases are persuasive, and 
these courts appropriately elevated substance over form in allowing 
consideration of affirmative defenses outside the four corners of the original 
answer to a complaint. Since Wyoming courts can amend the parties' pleadings 
based on the issues and evidence presented at trial, there is no reason 
pleadings cannot be deemed amended to reflect the issues and evidence adduced 
through a motion for summary judgment. When there is no issue of material fact 
and the affirmative defense disposes of the entire case because the moving party 
is entitled to judgment as a matter of law, the outcome is identical to a trial. 
Amendment of the pleadings to conform to the evidence presented should be 
allowed in either situation.

 

[¶15]   As in Whitener, the district court considered 
Romsa's motion for summary judgment based upon the affirmative defense of the 
statute of repose. Not only was the issue presented to the trial court, but the 
defense was asserted in Romsa's motion for summary judgment. No prejudice has 
resulted to Loftus as the non-moving party because the issue of the statute of 
repose was considered and briefed by Loftus, and it was adequately considered by 
the district court before granting summary judgment to 
Romsa.

 

[¶16]   We turn then to whether the statute 
of repose appropriately was asserted by virtue of the Motion for Summary 
Judgment. In Pickle v. Bd. of County 
Comm'rs of the County of Platte, 764 P.2d 262, 264 (Wyo. 1988), we held that 
allowing an affirmative defense to be asserted by an amendment to the answer, 
but disallowing that defense if presented by a motion for summary judgment is a 
"mechanistic application of the waiver rule." Both the amendment of the 
pleadings and the motion for summary judgment are procedural devices available 
prior to trial. In Pickle, 764 P.2d  
at 264, we quoted from 2A MOORE'S FEDERAL PRACTICE ¶ 8.28 (1987) language 
applicable to this case:

 

[T]here is a split in authority as to whether a 
defendant may, subsequent to filing an answer, move for summary judgment on the 
basis of an affirmative defense omitted from the answer. While some cases hold 
that an affirmative defense not raised in the answer is waived and, therefore, 
not available as a basis for a summary judgment motion, other holdings provide 
that, absent prejudice to plaintiff, an affirmative defense may be raised by a 
motion for summary judgment regardless of whether it was pleaded in the answer 
or not. The latter position is more in keeping with the general purpose of the 
Federal Rules to avoid decisions based on pleading technicalities rather than 
the merits of the case.

 

[¶17]   Another leading treatise on the 
federal rules of civil procedure, after which we have patterned our WYOMING 
RULES OF CIVIL PROCEDURE, has this to say:

 

Numerous cases state that the affirmative defenses 
listed in Rule 8(c), and any other defense that is not specified in Rule 12(b), 
must be asserted in defendant's answer and cannot be the basis for a motion to 
dismiss the complaint, to vacate an attachment, or to strike. The Third Circuit 
and several other courts, however, seem to follow the rule that all affirmative 
defenses may be presented by these motions. The rule against raising defenses by 
motion is based on the view that motions to dismiss or to strike cannot be used 
to resolve disputed fact questions, and that courts should avoid "little trials" 
on the pleadings because under federal practice the pleadings are designed 
merely to provide notice of the respective claims and defenses of the 
adversaries. Since the facts necessary to establish an affirmative defense 
generally must be shown by matter outside the complaint, the defense technically 
cannot be adjudicated on a motion under Rule 12. According to this conception, 
motions to dismiss or to strike only can attack matters appearing on the face of 
the complaint; new defensive material therefore must be raised by 
answer.

 

In practice, even courts purporting to follow the 
rule against raising defenses by motion often tend to reach the same result as 
does the Third Circuit. Many courts permit affirmative defenses to be asserted 
by motion, even when the defenses are not available on the face of the 
complaint. This is especially true as to those defenses that seem likely to 
dispose of the entire case or a significant portion of the case and defenses 
that require factual inquiry for their adjudication. In situations such as 
these, the courts appear to be wise in overlooking the formal distinctions 
between affirmative defenses and motions, which have their primary justification 
in history rather than logic. 

 

Obviously, 
courts may consider evidence beyond the pleadings bearing on a challenge that 
falls within the scope of the Rule 8(c) affirmative defenses on a motion for 
summary judgment. In addition, both 
Rule 12(b) and Rule 12(c) provide that when affidavits or other matter outside 
the pleadings is presented to the court on a motion to dismiss or for judgment 
on the pleadings and this matter is not excluded, the motion "shall be treated" 
as one for summary judgment. Thus, in 
practice, courts that allow the adjudication of affirmative defenses on a motion 
to dismiss or for judgment on the pleadings are converting these motions 
into summary judgment motions and normally will give all parties the opportunity 
provided by Rule 56 to present pertinent evidentiary material to the 
court.

 

5 CHARLES A. WRIGHT & 
ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1277, at 461-66 (2d ed. 1990) 
(footnotes omitted, emphasis added).

 

[¶18]   Affirmative defenses can be 
asserted by motion when a set of undisputed facts disclosed by affidavits and 
depositions demonstrates the movant is entitled to judgment as a matter of law. 
See Suckow Borax Mines Consol., Inc. v. 
Borax Consol., Ltd., 185 F.2d 196 (9th Cir. 1950), cert. denied, 340 U.S. 943, 71 S. Ct. 506, 95 L. Ed. 680 (1951); reh'g 
denied, 341 U.S. 912, 71 S. Ct. 620, 95 L. Ed. 1349 (1951); Pantzer v. Shields Dev. Co., 660 F. Supp. 56 (D.Del. 1986); City of Yonkers 
v. Otis Elevator Co., 649 F. Supp. 716 (S.D.N.Y. 1986), aff'd, 844 F.2d 42 (1988). The cases 
also indicate that defenses should be allowed in a motion for summary judgment 
or a motion to dismiss if these defenses are likely to dispose of the entire 
case. The presentation of affirmative defenses by motion will depend upon a 
conclusion that there is no prejudice to the opposing 
party.

 

[¶19]   While a split of authority can be 
identified in the trial courts, after the amendment to the federal rules of 
civil procedure in 1966, most allow an affirmative defense to be raised either 
in a motion to dismiss or in a motion for summary judgment. An example can be 
found in a case in which a defendant failed to raise the statute of limitations 
in the answer, but the court allowed the defense to be raised in a memorandum in 
support of a motion for summary judgment. Quigley v. Hawthorne Lumber Co., 264 F. Supp. 214 (S.D.N.Y. 1967). See also Wade 
v. Lynn, 181 F. Supp. 361 (N.D.Ohio 1960) (holding defense of statute of 
limitations not waived when asserted in a motion for summary judgment, rather 
than in the answer).

 

[¶20]   Other state jurisdictions permit 
affirmative defenses to be asserted either in the answer, by a motion to 
dismiss, by a motion for summary judgment, or by a motion for judgment on the 
pleadings. In Missouri, the statute of limitations can be raised in a motion to 
dismiss. Gramlich v. Travelers Ins. 
Co., 640 S.W.2d 180 (Mo. Ct. App. 1982); Follmer's Market, Inc. v. Comprehensive 
Accounting Serv. Co., 608 S.W.2d 457 (Mo. Ct. App. 1980). See Uber v. Missouri Pacific R.R. Co., 
441 S.W.2d 682 (Mo. 1969). In Florida, Georgia, North Carolina, and Tennessee, 
affirmative defenses may be raised by motion, although not asserted in a 
responsive answer to the complaint. Fletcher v. Williams, 153 So. 2d 759 
(Fla.Ct.App. 1963); Phillips v. State 
Farm Mut. Auto. Ins. Co., 121 Ga. App. 342, 173 S.E.2d 723 (1970); Whitener; Usrey v. Lewis, 553 S.W.2d 612 (Tenn. 
Ct. App. 1977). The rationale of these courts is their perception that the 
merits of the affirmative defense should be the basis of decision rather than 
pleading technicalities. In this regard, Bredthauer v. TSP, 864 P.2d 442 (Wyo. 
1993), clearly is analogous. We there permitted the statute of repose to be 
substituted for the statute of limitations after remand of the case for further 
proceedings.

 

[¶21]   We are satisfied that, given the 
policy of liberality expressed in our rules of civil procedure and the specific 
resolutions of amendments to those pleadings, even to the point of amending the 
pleadings to conform to evidence, the assertion of an affirmative defense in a 
motion for summary judgment is not only appropriate, but is just. A party should 
not be deprived of his right to prevail on the merits by some technical failure 
in the pleadings. In this instance, like in Whitener, the trial court considered 
the motion for summary judgment which encompassed the affirmative defense of the 
statute of repose after looking at supporting evidence on both sides. The 
parties debated that issue, and we can perceive no specific prejudice in 
reliance upon the statute of repose by the trial court. Loftus was unable to 
present any evidence to counter the showing by Romsa that "substantial 
completion" occurred more than ten years prior to the filing of the 
action.

 

[¶22]   The Order Granting Summary Judgment 
in this case is affirmed.