# FILED

February 27, 1998

Cecil W. Crowson Appellate Cou rt Clerk JOHN MOLIN and wife, FREDERICKA ) LITTLEFAI

R-MOLIN, ) ) Plaintiffs/Appella

nts, ) Appeal No.

) 01-A-01-9705-CV-00232 v. ) ) Davidson Circuit PERRYMAN CONSTRUCTION CO., ) No. 95C-3506 ) Defendant/Appellee. )

COURT OF APPEALS OF TENNESSEE

APPEAL FROM THE CIRCUIT COURT FOR DAVI DSON COUNTY AT NASHVILLE, TENNESSEE

THE HONORABLE BARBARA N. HAYNES, JUDGE

MICHAEL A. MEYER Sidwell & Barre

tt, P.C. 121 First Avenue South, Suite 200 Franklin, Tennessee 37064 ATTORNEY FOR PLAINTIF FS/APPELLANTS

LEE ANNE MURRAY Feeney & Lawren ce, PLLC 2040 First American Center P. O. Box 198685 Nashville, Tennessee 37219-8685 ATTORNEY FOR DEFENDANT/APPELLEE

REVERSED AND REMANDED

WALTER W. BUSSART, JUDGE2 

### O P I N IO N

The plaintiff/appell

ant homeowners br

ought suit a

gainst the defendant/appellee construction company alleging breach

of contract. The trial court granted the appellee summary judgment finding that the appellants'

claim f ell outside of the three-year statute of limitations found in section 28-3-105 of the Tennessee code. In addition, the court denied a motion by the appellants to amend the original complaint. The case is here on appeal to determine whether the trial court erred.

I. Procedural and F

actual Background
The facts givingrise to this law suit began when John Molin and Frede

ricka Littlef

air-Molin (the “Molins”) entered a contract with Perryman Construction Co. (“Perry man”) for co nst ruction work to be done on the Molins' home. The agreement, which was executed on March 1 , 1991, providedthat the appellee Perryman would renovate part of the interior of the existing structure as wellas build an addition to that structure. The Molins planned to live in the house w

hilethe work
was being done. However, after a fire damage

d their home

they moved into a rental home during the construction.

The contract between the Molins and Perryman provided that Appellee " [a]t the time as the entirety of the work

. . . has been perf

ormed . . . shall

file a Notice of Co

mpletion." Perry

man did filea notice of completion on Septem ber 2 4, 1991 which stated that the work was completed on September

20, 1991. However, Appellants, who claimed to ha ve been unaware of the notice of completion, moved back into the ir home in October of 1991 after exhausting their rental insurance proceeds. When they move d back home , there was no lock on the front do or which was held together by

a piece of wood. Appellee’s workers continued to work on the house for two or three
more months. In her deposition, Ms. Molin stated that the bulk of t he work was done b y late September

or early October of 1991. However, the house did not pass the final codes inspection until June 19, 1992, and a certificate of occupancy was not issued by the city until June 24, 1992.

Ms. Molin also

stated in her deposition that, within a year after the completion of the work, the roo f began to leak, doors and windows started to buckle, and portions of the wall an d floo r developed

cracks. Though the M ol ins began to notice some of the defects in late 1991, it was February or March of 1992 when the family first noticed the roof leaking. E

ach time that Appellants noticedsomething wrong , they would n

otify Appell

ee who would se

nd a n employee to make the necessary repairs. However, the repairs were insufficient and the problems continued. In late 1992
or early 1993 , Dr. Molin wrote a letter containing a comprehensive list of everything that the Molins thought to be wrong with the house at that time. Appellee respon ded by infor

ming Appellants

that he did not do maintenance work.3

On October 19, 1995, Appellants filed a complaint for breach of contract whi ch made the following alleg

ations: Under the terms of

the contract, [Appellee] was under an obligation to utilize good workmanship

at all times during the construction process. This

obligation extended to work done on the roof. . . . [Appellee] breache

d its contr

act with [A

ppellants ] b y faili ng to exercise good workmanship

in the construction of [Appellants'] residence. There are a number of leaks in the roof w

hich [Appellee] has

failed to corre

ct. Appellee answered the complaint and alleged the statute of limitations barred the claim. Appellee later amended its answer to includethe statute of repose as a defense. On October 7, 1996, Appellee fileda motion for summar y judgment i

n which it argued that both the statute of limitations and the statute of repose barred Appellants’ claim. Appellants moved to ame nd their com plaint on November

7, 1996. The amendment which was submitted added allegations against Perryman as follows: [Appellant] also failed to exercise good workmanship in the constru ction of the foundation, floors an

d walls of

[A ppellant s'] residence. Floor joints have been crushed and twisted. Outside walls are bowing and sag ging. All of these failures also constitute

a breach of [Appellee's] agreement to exercise good workmanship.

.

. . In the alternative, the defects described in [the above paragraph] are the result of the neglige nce of [Ap

pellee]. The proposed amende

d complaint conclu

ded by asse

rting that the Moli

ns had "been inju

red as a result of [Appellee's] breach and/or negligence."

The tr ial court granted Appell ee’s motion for su

mmary judg

ment based upon its determination that the three-y ear statute of lim

itations set forth

in section 28-3-105 of

the Tennessee code barred Ap

pellants’ claims.

In addition, the court overruled Appellants’ motion to amend the complaint without giving a

reason and mere

ly stating that the motion was not "not well-taken." To reiterate the issues before

this court, we must determine whether the trial court erred in dismissing Appellants'

original pleadings and wh ether it erred in not allowing Appellants to amen

d their complaint.

II. Standard of Review
Rule56.03 of the Tennessee Rules of Civil Procedure provides that summar y jud gment is appropriate

when two pre requisite s are met. Fi rst, there m ust be no ge nu ine issue as to any fact necessary to resolve the substantive claim or defense embodied in the summary judgment motion, Byrd v. Hall , 847 S.W.2d 208, 210 (Tenn. 1993), and second, the moving party must be entitled to
a judgment as a matter of law. Mansfield v. Colonial F reight Sys. , 862 S.W.2d 527, 530 (T enn. Ct. App. 1993). In reviewing the record to determine whether the requirements of Rule 56 have bee n met, this court should view all evidencein the light most fa vorable to the opponent of the motion, allow all reasonable inferences in favor of that par ty, and discard any countervailing evidence.4

Carvell v. Bott oms , 900 S.W. 2d 23, 26 (T enn. 1995) ( citing Byrd , 847 S.W.2d at 210-11). Summary judgment should only be granted

if the facts and conclusions permit a reasonable person to reach only one decision. McCall v. Wilder , 913 S.W.2d 150, 152 (Tenn. 1995). Summary jud gm ent is ordinarily not appropriate i

n negligence c

ases. Roe v. Catholic Dioc ese of Memphis , 950 S.W.2d 27, 31 (Tenn. Ct. App. 1996).

III. Appropriate Statut

e of Limitations
Init ial ly, we must determine which statute of li

mitations is applica

ble to thiscause of action. As stated, the trial court found that Appellants' claim was bar red by sec

tio n 28-3-105 of the Tennessee code

which provides in p

ertinent part: The following action

s shall be commenced within three (3) years from the acc ruing of the cause of action: (1) Act ion s fo r injur ies to p ers ona l or real pro pert y. Tenn. Code A n n. § 28-3-105 (Supp . 1997). On appea l, Appellants insist t

hat the court err

ed in applying this secti on and urge the application of the six-year statute found in section 28-3-109 which provides that

"[a]ctions on contracts not otherwise expressly provided for . . . shall be commenced within six (6) years after the cause of action accrued." Tenn. Code Ann. § 28-3-109 (1980).

"It is well settled in this state that the gravam e n of an action, rather than its designation as
an action for

tortor contract, determines t he applicable statute o f limitations." Pera v. Kroger Co. , 674 S.W.2d 715, 719 (Tenn. 1984); Keller v. Colgems-EMI Music, Inc. , 924 S.W.2d 357, 359 (Tenn. Ct. App. 1996). In other words, the "statute of limitations is determined by the subject matter of the controversy rather than the remedial procedure emp loyed." Taylor v. Trans Aero Corp. , 924 S.W.2d 109, 113 (Tenn. Ct. A pp. 1995) (while

plaintiff's claim for recovery of property da

mage to
an airplane was barred under section 28-3-105 because the gravamen of th is claim was prope

rty damage, the same plaintiff was allowed a trial on its claim for damag es based on the de

fendants' breach of the contractu

al promise to insure

the aircraft be

cause the gravamen

of that claim is breach of contract which has a longer statutory period under sec tion 28-3-109). As even Appe llant s concede, the pertinent ca

se law supports

a conclusion that the gravamen of the complaint in this

case i s for inj ury to real property. See Williams v. Thompson , 443 S.W.2d 447 (Tenn. 1969); Kirby Farms Homeowners Ass'n v. Citic orp, Citibank, N.A. , 773 S.W.2d 249 (Tenn. Ct. App. 1989).

Under sim

ilar facts, the court in Kirby Farms held that "[w]hen the damages for wh ic h recovery is sought represent the cost of repair or the replacement cost of property and such accrued damages are the result of

negligent ac

ts, the action is

for damage to property and covered by T.C.A. § 28-3-105." Kirby F

arms , 773 S.W.2d at 251. There, the plaintiff homeowners association was made up of in dividual homeowners who purchased condominiums and subsequently "notice[d] various defects in the pr

oject; including

but not limited to the f

oundations, roofs , drainage sy stems,5

sanitarysewers, a sphalt, stone work , brick work, slidin

g glass doors, c

arports, storag

e buildings, plumbing, wiring, heating and air conditio ning, and recreational facil ities." Id. at 250. Five years subsequent

to the homeowners' demand for correction of the defects, they filed a complaint "alleg[ing] defendants were guilty of breach of express warranties, breach of implied warranties of workmanship

and habitability

, breach of oral warranties, breach of fiduciary duty, negligence, negligent misrepresentati on, strict liabili ty and fraudulent concealment." Id.

The Kirby Farms court found that "the d eterminat ive issue before [them] is whether the three-year statute of limitatio

ns for injury

to real property . . . or the six-year statute of limitations for contracts not otherwis e covered . . . applies to t he facts of this case." I d. While the plaintiffs conceded that the three-year statute barre d the claims for negligence, negligent misrepresentation, strict liability and

fraudulent conc

ealm ent, they co ntended that the longer period applied to the claims of breach of express warranty, breach of implied wa rranty and

brea ch o f fi duc iar y dut y. Id. The court disagreed stating that "[t]he word 'actions' in T.C.A. § 28-3-105 refers to the subject matterof t he controversy and not to the remedial procedure." The court then found that the gravamen of the complaint wa

s for injury

to real property

refusing to

distinguish

the case on the ground that the plaintiffs were alleging breach of contract a nd not tort. Id. at 251.

In reaching its co

nclusion, th

e Kirby Farms court cited the earlier supreme court case of William s v. Thompson , 443 S.W.2d 447 (Tenn. 1969). William s was a factually similar case which involved a suit

against a construction company over a home it built, spec

ifically ove

r defects in this homesuch as cracks in the walls, alignment problems with window and door frames, an d general foundation problems. Id. at 448. Alleging breach of an implied warranty in the sales contract, the plaintiffs sought to recover damages for injury to their prope rty arising out of the contract ual relationship

with the defenda

nts. However, as in Kirby F arms , the court found that it was not the six-year statute of limitations forcontracts, but rather the three-year statute that applied to this action. The court noted that "[w]heth

er an action for

the recovery

of damages for

injury to personal or real property results from a breach

of contract or from a tort, independent of contract, is immate rial." Id. at 449. The court

concluded that "although complainants' bill sounds in contract, . . . the only injury alleged in the bill is ph ysi cal injury to the residence w

hich allegedly

occurred and w

as known to complainants more th an three years prior to commencing th e action." Id. at 449.

Both Kirby F

arms and William

s support our conclusion that section 28-3-105 contains the appropriate

statute of limitatio

ns for the action i

n this case. In the instant case, the gravamen of the Molins' complaint

is for injury to real property. As in William s , the complaint in this case sounds in contract

denoting as the "cause of action" a "breach of contract." H

owever, the injur

y alleged is the damage to the Molins' home. The complaint alleges that "[t]here are a number of leaks in the roof which [Perryman] has failed to correct. . . . [The Molins] have been injured as a result of [Perryman's] breach

of contract. [They] have or will incur substantial expenses to repair the leaks1 We similarly reject Appellants' argument that the decision in William s , which rested on the premise that the doctrine of caveat emptor governed the transaction, was substantially undermined when the supreme court moved away from that doctrine in Dixon v. Mountain City Constr. Co. , 632 S.W.2d 538 (Tenn. 1982). Dixon's hol din g tha t in iti al p urch aser s of new ly c ons tructed homes should receive certa

in implied warran

ties has no effec

t on the statue of lim

itatio ns determ ination which focusses on "the subject matter of the controversy and not . . . the remedial procedure." William s , 443 S.W.2d at 449. 6 andother damages caused by the water." In the proposed amendment, Appellants alleged that "[t]he floors are buckling, sagging and cracking. F loor joints have been crushed and twisted. Outside walls
are bowing and sagging. . . . [The Molins] will have to incur substantial expens e to corr ect these p rob lems." Thus, even a consideration of the allegations in the proposed amendment reveals that t here are no damages other than this injury to the real property which have been claimed by Appellants. See Pre

scott v . Adams , 627 S.W .2d 134, 13 7 (Tenn. Ct. App. 1981) ("The major criterion in

ascertaining the gravamen of an ac tio n is the kin d of dam age a lle ged. "). A ccor din gly, we are of the opinion that section 28-3-105 applies to the facts in this case.
Appellants

attempt to distinguish William s on the grounds that it involved a breach of implied warranty. Where a plaintiff is suing to enforce an express provision of the contract, Appellants

argue that the s

ix year conta

ct statute of limitations should

apply. Appellants' argument is untenable. The cas es are clear that an inquiry as to which statute is applicable focusses on the subject matter of the c ontro versy and not the remedial means employ ed. 1 Hence, whether or not Appellants

have sued under a theory of implied contract or one of express

contract is immate

rial to
our determination of which statute applies. Indeed, the decision in Kirby supports this conclusion. The plaintiff in Kirby sued for breac h of express warr

anty as wel

l as breach of implied warranty, and the court made no distinction in holding that the gravamen of the complaint was for injur y to real property and hence, the three y ear statute barred all claims. Kirby F arms , 773 S.W.2d at 250.

IV. Application of Section 28-3-105
Section 28-3-105 gives a plaintiff three years from the ac crual of his action to brin g his complaint for injuries to real property. The words "from the acc ruing of the cause of action" found in section 28-3-105

have been defin

ed to mean "from the time when the plaintiff knew or

reasonably should have known that a cause of action existed." Presco

tt v. Ad ams , 627 S.W.2d 134, 138 (Tenn. Ct. App. 1981) (cit ing Stone v. Hinds , 541 S.W.2d 598, 599 (Tenn. Ct. App.1976)). In addition, th is courthas he ld that "[a] cause of action for breach of contract arises when the acts of one of th e contracting parties demonstrate a clear, total repudiation of the cont ract. . . . Thus, the statute of limitations begins to run whe n a contracting

party first

knows or should

know that the contr

act will notbe performed." Wilkins v. Third Nat'l Bank , 884 S.W.2d 758, 761-62 (Tenn. Ct. App. 1994). Thus, the question in this cas e is when should Appellants have reasonably known that the contract was not going to be performed such that a cause of action arose.2 Whilethe court has referred to section 28-3-202 as a “statute

of limitations” on numerous occasions, see e.g., Briggs v. Riversound Ltd. Partnership, 942 S.W.2d 529, 532 (Tenn. Ct. App. 1996); Brookridge Apartments, Ltd. v. Universal Constructors, Inc. , 844 S.W.2d 637, 638 (Tenn. Ct. App. 1992), recent cases have termed t his section a “statute of repose.” See Bowers v. Hammond , 954 S.W.2d 752, 758 (T enn. Ct. App. 1997); Chrisman v. Hill Home Dev., Inc. , No. 03A01-9607-CV-00218, 1997 WL 36833, at *3 (Tenn. Ct. App. 1997). Despite this ambivalence, the supreme court le

ft no doubt that the l

imitations articula

ted in this section was to fun ction as a statute of repose. Watts v. Putnam County , 525 S.W.2d 488, 491 (Tenn. 1975). 7 The complaint in this case was filed on October 19, 1995. The deposition testimony of Ms. Molinwas that Appellants began to notice defects late i n the year of 1991. However, employ ees from Appellee' s bu sin ess were sen t as need ed t o rem edy t he d efec ts u nti l la te i n 19 92 o r ear ly i n 1993 when Appellee r

efused to fix the de

fects any longer. Were we to find that the action accrue d at Appellants'

initial discovery of the defects, the October 19, 1995 complaint would be barred by the three-ye

ar statute of limita

tions as this initial di

sc overy occurred more than three years before the complaint was filed. Ho wever, if we find that the action did not accrue until that time when Appellee first refused to f ix the defects in lat

e 1992 or early

1993, Appellants

would still have the

ir
cause of action so lon g as this refusal took place subsequent to October 19, 1992. We interpret "accrual," in this case, to mea n that time

when Appellants learn

ed Appellee woul

d no longer repa

ir the defects. Other

wise, Appellants w

ould be penalized for attempting to obtain compliance with the contract without litigation.

In light of our holdin

g regarding

accrual, we fi

nd that the alleg

atio ns of the var ious complaints

and the deposition of Ms. Molin do not offer sufficient dates from which this court can determine that no genuine i ssue existsas to the accrua l of the cause of a

ction. This

court has stated that "[t]he time of the accrual of the cause of action, as affectinglimitations, is frequently a question of fact to be deter

min ed by the jury or trier of fa ct, as where the evidence is conflicting or subject to different inferences." Prescott v. Adams , 627 S.W.2d 134, 139 (Tenn. Ct. App. 1981) (quoting 54 C.J.S. Limitations of Actions § 399(b) (1948)). Finding this to be true in the case at bar, we remandthis case to the jury for a determination of the time that Appellants reasonably knew the contract would not performed and thus had a cause of action. V. Statute of Repose If the statute of limitations does not barr Appellants' action, the action must be considered under the statute of rep

ose found in Tenne

ss ee Code A nnotated section 28-3-202. 2 That section provides as follow

s: A ll actions to recover damages for any def iciency in the design, planning , supervision, observation of construction, or construction of an improvement to real pro pert y, for inj ury t o pr ope rty, real or p ers ona l, a ris ing o ut o f any s uch defi cie ncy, or for injury to the person or for wro ngfu l de ath ari sin g out of an y suc h de fic ien cy, shallbe brought

against a ny person perfo rming or furn ishing the d esign, plan ning, supervision, observation of construction, construction of, or land sur veying in c onnection with, such an improvement within four (4) years after substan tia l3 The statute does extend the four year period when an injury occurs during the fourth year after such substantial completion by giving plaintiffs another y ear from the date of

injury. Tenn. Code Ann. § 28-3-203 (a) (1991). The court has sum marize d this statute's effect: "if the injury occurred or was disco vered on the last day of the four yea r period, the plaintiffs would receive an additional year to bring suit. " Presco tt v. Ad ams , 627 S.W.2d 134, 138 (Tenn. Ct. App. 1981). 8 completion of such

an improvement. 3
Courts in Tennessee have stated that statutes of limitations affect only a party's r emedy for a cause of action, while the running of a statute of repose abolishes both the remedy and the right. Wyatt v. A-Best Prods. Co

. , 924 S.W.2d 98, 102 (Tenn. Ct. App. 1995) (citing Bruce v . Hami lton, 894 S.W.2d 274, 276 (Tenn. Ct. App.199 3)). Our s upreme court has held that section 28-3-202 was enacted "to provide outer limi ts of liability." Watts v. Putnam County , 525 S.W.2d 488, 491 (Tenn. 1975). It is "entirely unrelated to the accrual of any cause of action, since [it] begin[s] to run on the date of substantial co mpletion as opposed t o the date of injury or damage." Id.

TennesseeCode Annotated section 28-3-201 defines substantial completion as: “that degree of completion of a project, improvement, or a specified area

or portion thereo

f (in accordanc

e with the contract documents, as modified by any c hange order agreed to by the parties)upon attainment of which the owner can use the same for the purpose for which it was intended.” The statute further provides that "the date of substantial completion may be established by written agreement between the contractor and the owner." Tenn. Code Ann. § 28-3-201(1980). Pursuant to this latter portion of the statute, the parties' inclusion of a "date of substantial completion" in the record would have rendered unnecessary a factual determination o f when the Molins' h

ouse was substanti

ally completed. With regard to completion, the contract only includes the following language under the heading "notice of completion": "At such time as the entirety of the work hereinabove described has been performed, CONTRACTOR shall file a Notice of Complet ion." We do not find t hat this contract language represents the parties' agree ment on a date of s ubstantial completion. See Brookridge Apartments, Ltd. v. Universal Constructors, Inc. , 844 S.W.2d 637 , 638 ( Tenn. Ct. App. 1992) (finding that the

parties had esta

blished a date

of substanti al complet ion where th e contract's language mirrored that of section 28-3-201 "provid[ing] that the 'date of substantial completion shall be the date'" that a certain report was signed by one person and endorsed by another).

As stated, the complaint in this case was filed on October 19, 1995. Thus, in order to avoid the statutory bar, the Molins' home can not have bee n substantially complete before October 19, 1991. From the record before us, we do know that a notice of completion was filed duringthe month of September preceding October of 1991 but that a

certificate of occupancy was not issued until June 24, 1992. This court stated that "it is probably an erroneous conclusion that issuance of a ce

rtificate of occupancy by a g

overnmental agency establishes substantial completion of

a construction project
a s a matter of law." Meyer v. Bryson , 891 S.W.2d 223, 225 (Tenn. Ct. App. 1994). R ather , "[s]ubstantial completion occurs when the owner

can use the building for its intended use. If the
owner can use the building for its intendeduse, then any defects in the co

nstruction are us

ually held9

notto be material." Id. (quoting Howard G. Lewis Constr. Co. v. Lee , 830 S.W.2d 60 (Tenn. Ct. App. 1991) (quo ting Construction and Design Law (199 1))). From Ms. Molin's testimony, we know that the Molins moved back into the house

in October of 1991 but it

does not follow that they
were immediately

using the portions of

the home which were affected by the construction contra ct betweenthe parties. Indeed, the record is silent as to Appellants' use of the spe cific areas of the h ome . Because a determination of when an improvement is substantially complete is a fa ct-intensive
one and because the

record below is f

actually sp

arse , we reman d this issue to the low er court to resolve the issue through evidence. VI. Amendment of Co

mplaint As stated above, Appellants moved to amend their complaint on November 7, 1996. Whereas, the allegations in the original complaint, filed October 19,1995, related only to the roof, the amendment added

charges aga

inst Appe llee involving the foundation, floors and walls of Appellants'

residence. While the trial court gave no reason for its r

efusal to allow amendment, i

t did state that "[a]fter considering the written memoranda submitted by counsel for the parties, the oral argument presented by counsel for

the parties, and p

leadings filed i

n this lawsuit," it

concluded that the motion was not "not w ell-tak en." The only written memoranda in the record reg arding the motion to amend was Appe llee's "Respon

se to Plaintif f's Motion to Amend." The gi st of Appel lee's argument was that the amendment was futile in light of the fact that it was barred by the statute of repose.

Once a responsive pleading has been filed, Rule 15 of the Rules of Civil Procedure gives the court leave to freely

permit amendments to comp

laints "when justice so requires." This court has held that "where a motion

to amend pleadings is submitted after responsive pleadings have been filed in a case, the grant or denial of the motion is within the sound discretion of the trial judge. Once decided, such matters are seldom adversely reviewed on appeal unless abuse of discre tion has been shown." Wilson v. R icciardi , 778 S.W.2 d 450, 453 ( Tenn. Ct. A pp. 1989). While the court's discretion can encompass many factors, Merriman v. Smith , 599 S.W.2d 548, 559 (Tenn. Ct. App. 1979), the court can not base a d ecision to deny a motion to amend pleadings on an erroneous interpretation of the law. Since it is possible that the court's denial rested on an assumption that the relation back provi sions of Rule 15.03 do not app ly after the

statute of repose

has run, we must determine this legal issue to know if the court abused its discretion.

Thus, the questi on for this court, whi ch is one of f irst impre ssion, is whether ple adings initially filed within the statute of repose can be amended after the statute of repose has run . Ini tia lly,
we notethat the court has addressed the related issue regarding amendment of pleadings subsequent to the running of the statute of limitations. In Floyd v. Rentrop , 675 S.W.2d 165, 168 (Tenn. 1984), the supreme court made clear that "[n]otice is the critical element involved in determining whether amendments

to pleadings rel

ate back." When

the conditions of Ru

le 15.03 are me

t, such that the10

opposing party

has notice of

the claim against him within the original statutory period, "the effec t of the Rule [is] to avoid

the impact of the statute of limitations by letting the amendment relate back to the original filing." Id. at 168.
Appellee attempts to d ist inguish Floyd by arguing that since the running of the statute of repose nullifies a plaintiff's right and remedy, the court does not possess subject

matter jurisdiction
over c laims rai sed outside of the statute of repose. However, in the recent cases of Sharp v. Richardson , 937 S.W.2d 846 (Tenn. 1996), and Cronin v. Howe , 906 S.W.2d 910 (Tenn. 1995), our supreme court did not permi

tthe substantive nature of the statute of repose to prohibit actions from being brought bey

ond the statute's

running. Both Sharp and Cronin involved the application of the savi ngs statu te to save actions initially filed in a timely fashion but refiled bey ond the statutes of repose, and in both cases, the court found that the actions c

ould be refiled outside of the statute. See Tenn. Code Ann. § 28-1-105(a) (1980 & Supp.1995) (savings statute).

In Cronin , the specific issu e was the constru

ction of the medic

al m alpra ctice statute of r

epose
as it interacted with the savings statute. With the goal to give effect to the legislative intent and to provide harmonious operation of the two laws, the court emphasized the spirit of the saving

s statute wh ich "is remedial and

should be liberall

y construed

in furtherance

of its purpose and i

n order t o bring cases within its spi rit and fair intention ." Cronin , 906 S.W.2d at 913 (c iting Kee v. Shelter Ins. , 852 S.W.2d 226, 228 (Tenn.1993)). After acknowledging the substantive nature of the sta

tute of repose, the cour

t found that "[b]ecause t he plaintiff initially brought her medical malpractice action within the one-y

ear statute of lim

itations, and within

th e three-year statute of repose, she compli edwith the letter of the statute of repose, avoided the substantive bar of the statut e, an d fulfilled its legislative pu rpose--to limit the

time period durin

g w hich a physician is subject to a claim of potential liabil ity." Cronin , 906 S.W.2d at 914. Fu rthermore, the o

riginal acti

on' s "conclusionon a ground othe r than the merits

brought its refiling within the long-standing purpose, spirit, andexpress terms of the savings statute--to provide a dilig ent plaintiff with

an opportunity

to
renew a suit that is dismissed by any judgment or

decree that does not conclude the right of action." Id

.

The issue in Sharp was "whether th e savings statute

applies to save anaction that is timely filedwithin

both the products liability statute of limitations and statute of repose, but refiled beyond the six-year statute of repose." Sharp , 937 S.W.2d at 848. As in Cronin , the court focussed on the long history and remedial spirit of the savings statute. It conclude d that the plaintiffs had, by filing their action with

in the statute of repose, "complied with the letter of the products liability statute of repose and fulfilled its

legislative purpose--to limit the time period during which a manufacturer is subj ect to a claim of potential liability." Id. at 850. Moreover, "[s]ince the plaintiff' s suit wa s 'commenced

wit hin the tim e li mit ed b y a rule or statute of limitation,' and was concluded by an order of voluntarily dismissal without prejudice, its refiling was within the express terms and longstanding11

purpose and spirit of the savings statute--to provide a diligent plaintiff with an opportunity to renew
a suit that is dismissed b

y any judgment or dec

ree that does not c

onclu de the righ t of action." Id. The court concluded

that "applicatio

n of the savings s

tatute in this case

does not conflict n

or frustrate either the letter or purp ose of the products liab ility statute of repose." Id.

As in Sharp and Cronin , in the case at bar we must determine the legislative intent for which
we look first to "the natural and ordinary me aning of the lan

guage used, w

ithout forced or s

ubtle construction that would limit or extend the meaning of the language." Cronin , 906 S.W.2d at 912 (citing Carso n Creek Vacat ion Resorts, Inc. v. Sta te, Dept. of Reve

nue , 865 S.W.2d 1, 2 (Tenn.1993)). Where, as here, amending the complaint does not change the party or naming of that party, the f

ollowing portion o

f Rule 15.03 gove

rns the timeliness o

f the amendment: Whenever

the claim or defense asserted in amended pleadi ngs arose out of the conduct, trans action, or occurrence set forth or attempted to be set forth in the original pl eading, the a mendment r elates back to the date of the origi nal pleadi ng. Tenn. R. Civ. P. 15.03. From the lan guage of Rule 15.03, relation back is qualified only upon the amendment havin g arisen "out o f the conduct, tra

nsaction, or occ

urrence set for

th or attempted to be set forth in

the original pleading." Significantly, our courts have long stressed the importance of
a liberal interpretation of Rule 15. Floyd v. Rentrop , 675 S .W.2d 165 , 168 (Tenn. 1984); Huntington Nat. Bank v. Hooker , 840 S.W.2d 916, 923 (Tenn. Ct. App. 1991). The supreme court has stated that Rule 15 w

as intended "to in

sure that cases a

nd controversies

be determined upo

n their merits and not upon legal technicalities or proceduralniceties." Karash v. Pigott , 530 S.W.2d 775, 777 (Tenn.1975).

If a plaintiff initially brings his suit within the statute of repose, he has com plied with t he letter of that statute by

fulfilling the sta

tute's purpose w

hich is to "provide outer limits of liability." Watts v. Putnam County , 525 S.W.2d 488, 491 (Tenn. 1975). Furthermore , the purpose and s

pirit of Rule 15 is furthered by permitting an amendment which meets the Rule's cri te ria. Under these
c ircumstances,

a diligent plaintiff is given the opportunity to amend his complaint such that the controversy

may be fully determined

on it merits. Howev

er, compliance w

ith Rule 15 ensures that the non-amending party will not be surprised by the amended pleading which must "[arise] out of the conduct, transaction, or occurrence" of the original pleading. We therefore hold that Rule 15.03 permit s amendmentof pleadings beyond the statute of repose. Our holding today is a logical extension of the decision in Floyd v. Rentrop . Weorder that the co urt below recons

ider Appellants' motion to amend after it makes its conclusions regar ding the timeliness of Appellants' original complaint , in light o f this hol ding.12 VII. Conclusion
In conclusion, we hold that since the gravamen of the Moli ns' complaint is injury to real pro pert y, section 28-3-105 contains the applicable statute of limitations. However, because there is a genuineissue as to when the action accrued, we remand the case to the trial court on the issue of accrual. In a

ddition, we rem and on the issue of whether the Molins ' home was substa ntially complete prior to October 19, 1991 such the their action is barred by the statute of repose. Fin all y,
we hold that under Rule 15.03 of the Tennessee Rules of Civil Procedure, pleadings may be amended after the statute of rep

ose has run. I

f the trial court d

etermines that Ap

pellants' Octob er 19, 1995 complaint was filed within the statute of limitations as well as within the statute of repose, it must reconsider

Appellants' motion to amend in light of our h olding wit h regard to Rule 15.03. The judgment of the trial court is reversed and the cause remanded for further proceedings consistent with this opinion. The cost of appeal shall be taxed to Appellee.

_______________________________________ WALTER W. BUSSART, JUDGE CONCUR:

_______________________________________ HENRY F

. TODD, P.J.

_______________________________________ BEN H. CANTRELL, J.