Court Opinion

ID: 2733056
Source: CourtListenerOpinion
Date Created: 2014-09-16 12:03:41.236535+00
Date Added: 2024-06-11T12:39:54.699149
License: Public Domain

NO. COA14-183
                    NORTH CAROLINA COURT OF APPEALS
                      Filed:   16 September 2014

TRILLIUM RIDGE CONDOMINIUM
ASSOCIATION, INC.,
     Plaintiff

                                         Jackson County
    v.
                                         No. 11 CVS 462

TRILLIUM LINKS & VILLAGE, LLC;
TRILLIUM CONSTRUCTION COMPANY LLC;
SHAMBURGER DESIGN STUDIO, P.C.,
SHAMBURGER DESIGN, INC. (fka
SHAMBURGER DESIGN STUDIO, INC.), S.C.
CULBRETH JR., GREGORY A. WARD,
     Defendants

    Appeal by plaintiff from orders entered 20 August 2013 and

amended orders entered 12 September 2013       by Judge Marvin P.

Pope, Jr., in Jackson County Superior Court.       Heard in the Court

of Appeals 5 June 2014.

    Kilpatrick Townsend & Stockton LLP, by Dustin T. Greene,
    David C. Smith, and Richard D. Dietz, for Plaintiff.

    Hedrick Gardner Kincheloe & Garofalo, LLP, by Luke Sbarra,
    for Defendant Trillium Links & Village, LLC.

    Marc J. Meister, PLLC, by Marc J. Meister, for Defendant
    Trillium Construction Company, LLC.

    Northup, McConnell & Sizemore, P.L.L.C.,           by   Robert   E.
    Allen, for Defendants Ward and Culbreth.

    ERVIN, Judge.
                                                -2-
      Plaintiff         Trillium     Ridge       Condominium             Association,         Inc.,

appeals from orders and amended orders granting summary judgment

in   favor    of     Defendants          Trillium       Construction           Company,        LLC;

Trillium     Links      &   Village,       LLC;       and        S.C.   Culbreth,      Jr.,     and

Gregory A. Ward.            On appeal, Plaintiff argues that Defendants’

motions for summary judgment should have been denied for the

following     reasons:             (1)    Trillium          Construction’s        motion        for

summary      judgment        was     filed       in         an     untimely      manner;        (2)

Plaintiff’s claims are not time-barred; (3) Mr. Culbreth and Mr.

Ward breached the fiduciary duty that they owed to Plaintiff;

(4) Trillium Links breached the fiduciary duties that it owed to

Plaintiff;        (5)       Trillium       Construction                and    Trillium        Links

constructed the condominiums in a negligent manner; (6) Trillium

Links is liable for breach of warranty; (7) claims based on

defects      in    buildings        100    and        200        are    not   barred     by     the

applicable        statute     of    repose;       (8)       summary      judgment      based     on

contributory         negligence           was     improper;             and    (9)     Trillium

Construction’s failure to mitigate its damages does not support

an award of summary judgment.1                    After careful consideration of

      1
      Trillium Construction has not defended any rulings that the
trial court may have made in its favor based on contributory
negligence and failure to mitigate damages for purposes of this
appeal.    As a result of the fact that the record does not
support a determination that Plaintiff was contributorily
negligent as a matter of law and the fact that a failure to
mitigate damages is a defense to the size of a damage award
                                    -3-
Plaintiff’s challenges to the trial court’s orders in light of

the record and the applicable law, we conclude that the trial

court’s orders and amended orders should be affirmed in part and

reversed in part and that this case should be remanded to the

Jackson   County    Superior   Court      for   further     proceedings    not

inconsistent with this opinion.

                         I. Factual Background

                         A. Substantive Facts

      The Trillium Development is a private residential, lake,

and   golf   community    located      in   Cashiers.          The   Trillium

Development was founded in 1996 and consists of approximately

270   private   residences,     including        homes,     townhouses,   and

condominiums.      Trillium Ridge Condominiums, the subject of this

appeal, is one of several condominium complexes located in the

Trillium Development.      The Trillium Ridge Condominiums consist

of 22 individual units contained in six buildings identified as

Building Nos. 100, 200, 300, 400, 500, and 600 and multiple

common    elements.      The   Trillium         Ridge     Condominiums    were

constructed in two phases, with Building Nos. 100 and 200 having

rather than a bar to liability, the trial court’s decision to
grant summary judgment in favor of Trillium Construction cannot
be affirmed on the basis of either contributory negligence or
any failure on Plaintiff’s part to take appropriate steps to
mitigate its damages.
                                       -4-
been constructed during the first phase and Buildings Nos. 300

through 600 having been constructed during the second phase.

    Trillium Links, the developer of Trillium Ridge, filed a

Declaration for the Trillium Ridge Condominiums on 12 February

2004.    Trillium Links was owned and controlled by Mr. Culbreth

and Mr. Ward along with two other individuals, Dan Rice and

Morris     Hatalsky.2     During    the      period     of    construction,      Mr.

Culbreth and Mr. Ward held the principal ownership interests in

Trillium    Links.      The    Declaration        allowed    Trillium   Links,    as

developer-declarant,          the   right         to   appoint     officers       to

Plaintiff’s     executive     board.         As    a   result,   Trillium     Links

appointed Mr. Culbreth and Mr. Ward to serve as Plaintiff’s sole

initial officers and directors, and they continued to act in

that capacity until Trillium Links turned control of Plaintiff

over to the unit owners on 24 February 2007.

    Trillium Construction was solely owned by Mr. Rice, who

also owned a minority interest in Trillium Links.3                       Trillium

Links and Trillium Construction operated out of the same offices

and used the same mailing address, phone number, and website.

    2
      Mr. Rice was a building contractor who served as the sole
member and manager of Trillium Construction. Mr. Hatalsky is a
golf course designer.
    3
      Mr. Rice died in May 2008, leaving Trillium Construction
without a member or manager.     As of April 2013, Trillium
Construction had been dissolved.
                                            -5-
In 2003, Trillium Links hired Trillium Construction to serve as

the   general      contractor       for    the    construction          of   the     Trillium

Ridge      Condominiums.           Although       Trillium      Links        and     Trillium

Construction executed a contract providing for the construction

of each building, the contract documents have not been located

and are presumed to have been destroyed as a result of water

damage.

      In     October       2004,    a     report     from     Structural           Integrity

Engineering, P.A., was delivered to Trillium Construction and to

Mr.   Culbreth       and    Mr.    Ward    individually.            According         to    the

Structural Integrity report, a failure to install two foundation

piers   in    Building       No.   100     had    resulted    in     a   sagging       floor.

Although Structural Integrity confirmed that these piers were

replaced     in    2005,     it    noted    that    its     report       “should      not    be

construed as an implication that there are no deficiencies or

defects at other locations in this structure.”

      On 24 February 2007, Trillium Links turned over control of

Plaintiff to the unit owners.                      No information regarding the

foundation        problems    in    Building       No.    100      or    the       Structural

Integrity report was disclosed to the new board.                             After control

had been transferred to the unit owners, Plaintiff decided to

study       future     maintenance           requirements          and         commissioned

Miller+Dodson to perform a reserve study for the condominiums.
                                         -6-
According to the Miller+Dodson report, the condominiums’ wooden

siding had a shorter remaining economic life than Plaintiff had

anticipated given the type of siding that had been installed.

      After receiving the Miller+Dodson report, Plaintiff asked

Freddie Boan, the Association’s secretary and a Trillium Links

employee, to retain an expert for the purpose of providing a

second opinion concerning the expected useful life of the wooden

siding.       As a result, Mr. Boan hired Andy Lee, a professor of

forest products at Clemson University, to inspect the siding.

On    5   November     2007,      Professor     Lee    delivered         a   report    to

Plaintiff in which he discussed certain siding-related issues,

including the fact that “some metal flashings are either too

narrow or missing, which require immediate corrections.”                               In

addition,      Professor     Lee    noted     that,    at    many       locations,    the

bottoms of the siding pieces either touched or were too close to

the   ground    and    recommended      that    this    problem         be   corrected.

Finally,      Professor     Lee    concluded    that,       if    the    problems     were

corrected, the wood sidings should last “thirty (30) years or

longer.”

      According to Mr. Boan, all of the members of Plaintiff’s

board     received    the    Lee    Report     and    were       made    aware   of   the

flashing defects.         Upon receiving the Lee Report, James Tenney,

who     had   been    elected      to   the    board    after       control      of   the
                                          -7-
development had been transferred to Plaintiff, talked about the

situation with Mr. Boan.           After discussing the available options

with Professor Lee, Mr. Boan decided that the existing problems

could be remedied by continuously caulking over the problematic

flashings.        In addition, Mr. Boan reached the conclusion that

Plaintiff did not need to procure additional inspections of the

buildings.     As a result, Plaintiff had the problematic flashings

caulked over “either prior to or at the time we did the painting

in March of 2008.”

       In   approximately      October     2010,       leaks   were    discovered     in

Building     Nos.      100   and   300.          Upon     further      investigation,

extensive     water     damage     and     rotting       was    discovered.          The

similarity between the leaks in the two buildings led Mr. Boan

to advise Mr. Tenney that the problem might not be a localized

one.    As a result, Mr. Tenney hired an engineer to inspect the

property.         On   19    October     2010,        Sydney    E.    Chipman,     P.E.,

submitted     a     report     detailing        his    findings       concerning     the

condition    of     Building    No.    100.       In    his    report,     Mr.   Chipman

indicated     that     “[i]mproper       flashing       details       at   the    doors,

windows, and horizontal transitions” had caused serious water

damage and that these defects were “probably endemic throughout

the community.”         Subsequent inspections disclosed the existence
                                           -8-
of   numerous      defects     in    the     original      construction        of    the

condominium buildings.

                             B. Procedural History

     On    3    August     2011,    Plaintiff      filed    a     complaint    against

Trillium Links; Trillium Construction; Mr. Culbreth; Mr. Ward;

Shamburger Design Studio, P.C.; and Shamburger Design, Inc.4                           In

its complaint, Plaintiff asserted claims for breach of warranty

against Trillium Links; negligent construction against Trillium

Links,    Trillium    Construction,         and    the    Shamburger    Defendants;

gross negligence against Trillium Links; and breach of fiduciary

duty against Mr. Culbreth, Mr. Ward, and Trillium Links.                            On 6

October    2011,      10     October       2011,    and      12     December        2011,

respectively, Mr. Culbreth and Mr. Ward, Trillium Links, and

Trillium Construction filed answers in which they denied the

material       allegations    of     Plaintiff’s         complaint    and     asserted

various affirmative defenses.

     On 9 October 2012, Trillium Construction filed a motion

seeking partial summary judgment in its favor with respect to

all negligent construction claims relating to Building Nos. 100

and 200.       On 18 January 2013, Trillium Construction withdrew its

partial summary judgment motion based upon the expectation that
     4
      The Shamburger defendants were involved in designing the
condominium buildings.    Shamburger Design Studio was never
served and an entry of default was made against Shamburger
Design on 9 January 2012.
                                         -9-
the    Chief   Justice    would      designate     this     case    as     exceptional

pursuant to Rule 2.1 of the General Rules of Practice.                                 On 8

March     2013,   the     Chief       Justice     designated        this        case     as

exceptional and transferred responsibility for it to the trial

court.

       On 1 July 2013, Mr. Culbreth and Mr. Ward filed motions for

summary     judgment,     or    in     the     alternative,        partial       summary

judgment.      On 22 July 2013, Trillium Links filed a motion for

summary judgment.        On 9 August 2013, Trillium Construction filed

a    revised   motion    for   summary       judgment.      On     14    August    2013,

Plaintiff      filed    materials      in      opposition     to        these    summary

judgment motions.        On 16 August 2013, Plaintiff filed a response

to Trillium Construction’s summary judgment motion.

       The pending summary judgment motions came on for hearing

before the trial court at the 19 August 2013 civil session of

the Jackson County Superior Court.               On 20 August 2013, the trial

court entered orders granting summary judgment in favor of Mr.

Culbreath, Mr. Ward, Trillium Construction, and Trillium Links

with respect to all of Plaintiff’s claims and granting partial

summary judgment in favor of Trillium Construction with respect

to Plaintiff’s claims relating to Building Nos. 100 and 200.                             On

12    September   2013,    the       trial    court   entered       amended       orders

granting summary judgment in favor of Mr. Culbreath, Mr. Ward,
                                            -10-
Trillium      Construction,         and     Trillium       Links,     granting    partial

summary    judgment         in     favor     of     Trillium        Construction,     and

certifying its order for immediate review pursuant to N.C. Gen.

Stat. § 1A-1, Rule 54(b).             On 18 September 2013, Plaintiff noted

an   appeal     to   this    Court        from    the     trial    court’s   orders    and

amended orders.5

                       II. Substantive Legal Analysis

      On appeal, Plaintiff argues that the trial court erred by

granting        Defendants’         summary         judgment        motions.          More

specifically,        Plaintiff       argues        that     Trillium     Construction’s

motion    for    summary         judgment    was        untimely;     that   Plaintiff’s

claims are not barred by the applicable statute of limitations

or   statute      of   repose;        and        that    the      evidentiary    forecast

presented for the trial court’s consideration established that

Mr. Culbreth and Mr. Ward had breached a fiduciary duty owed to

Plaintiff, that Trillium Links had breached a fiduciary duty

owed to Plaintiff, and that Trillium Construction and Trillium

Links had negligently constructed the condominium buildings.                           We

will address each of Plaintiff’s arguments in turn.

                                 A. Standard of Review

      5
      As a result of the fact the trial court properly certified
its orders for immediate appellate review pursuant to N.C. Gen.
Stat. § 1A-1, Rule 54(b), the fact that Plaintiff’s appeal has
been taken from an interlocutory order is no bar to our
consideration of this case on the merits.
                                           -11-
      “A trial court appropriately grants a motion for summary

judgment    when      the     information        contained       in     any    depositions,

answers to interrogatories, admissions, and affidavits presented

for the trial court’s consideration, viewed in the light most

favorable       to    the     non-movant,      demonstrates           that     there   is    no

genuine issue of material fact and that the movant is entitled

to   judgment        as   a    matter    of    law.”         Williams         v.   Houses    of

Distinction,         Inc.,    213   N.C.      App.    1,   3,    714 S.E.2d 438,    440

(2011).     As a result, in order to properly resolve the issues

that have been presented for our review in this case, we are

required to “determine, on the basis of the materials presented

to the trial court, whether there is a genuine issue as to any

material    fact       and     whether     the    moving        party    is    entitled     to

judgment as a matter of law.”                    Coastal Plains Utils., Inc. v.

New Hanover Cty., 166 N.C. App. 333, 340, 601 S.E.2d 915, 920

(2004).         “Both     before    the    trial      court      and     on    appeal,      the

evidence must be viewed in the light most favorable to the non-

moving party and all inferences from that evidence must be drawn

against the moving party and in favor of the non-moving party.”

White v. Consol. Planning, Inc., 166 N.C. App. 283, 296, 603
S.E.2d 147, 157 (2004), disc. review denied, 359 N.C. 286, 610
S.E.2d 717    (2005).         “‘When       there    are      factual       issues   to    be

determined that relate to the defendant’s duty, or when there
                                     -12-
are   issues    relating   to   whether     a   party    exercised   reasonable

care, summary judgment is inappropriate.’”               Holshouser v. Shaner

Hotel Grp. Properties One Ltd. P’ship, 134 N.C. App. 391, 394,

518 S.E.2d 17, 21 (1999) (quoting Ingle v. Allen, 71 N.C. App.
20, 26, 321 S.E.2d 588, 594 (1984), disc. review denied, 313
N.C. 508, 329 S.E.2d 391 (1985), overruled in part on other

grounds in N.C. Dept. of Transp. v. Rowe, 351 N.C. 172, 177, 521
S.E.2d 707, 710 (1999)), aff’d, 351 N.C. 330, 524 S.E.2d 568

(2000).    We review orders granting or denying summary judgment

using a de novo standard of review, In re Will of Jones, 362
N.C. 569, 573, 669 S.E.2d 572, 576 (2008), under which “this

Court ‘considers the matter anew and freely substitutes its own

judgment for that of the [trial court].’”                 Burgess v. Burgess,

205 N.C. App. 325, 327, 698 S.E.2d 666, 668 (2010) (quoting In

re Appeal of the Greens of Pine Glen Ltd. P’ship, 356 N.C. 642,

647, 576 S.E.2d 316, 319 (2003)).

                                B. Timeliness

      As   an   initial    matter,   Plaintiff     contends    that       Trillium

Construction’s summary judgment motion was untimely.                      Although

Trillium    Construction     acknowledges       having    failed     to   provide

notice of its effort to obtain summary judgment in its favor in

a timely manner, it contends that Plaintiff has waived the right
                               -13-
to object to the lack of timely notice.     Trillium Construction’s

argument is persuasive.

    Pursuant to N.C. Gen. Stat. § 1A-1, Rule 56(c), a motion

for summary judgment must be served at least ten days before the

time fixed for hearing.   N.C. Gen. Stat. § 1A-1, Rule 56(c).    In

the event that service is effectuated by mail, three days must

be added to the prescribed notice period.    N.C. Gen. Stat. § 1A-

1, Rule 6(e).    However, “[t]he notice required by [N.C. Gen.

Stat. § 1A-1,] Rule 56(c) of the North Carolina Rules of Civil

Procedure may be waived ‘by participation in the hearing and by

a failure to object to the lack of notice or failure to request

additional time by the non-moving party.’”       Patrick v. Ronald

Williams, Prof’l Ass’n, 102 N.C. App. 355, 367, 402 S.E.2d 452,

459 (1991) (quoting Westover Products v. Gateway Roofing, 94
N.C. App. 163, 166, 380 S.E.2d 375, 377 (1989)).

    As a result of the fact that Trillium Construction mailed

its summary judgment motion on 9 August 2013 and the fact that

the hearing on that motion was scheduled for 19 August 2013,

Trillium Construction concedes, as it must, that it failed to

serve its summary judgment motion in a timely manner.       At the

beginning of the summary judgment hearing, Plaintiff informed

the trial court that Trillium Construction had failed to serve

its summary judgment motion in accordance with the statutorily
                                            -14-
prescribed deadline.            However, Plaintiff did not object to the

adequacy      of     the     notice    that      it    had       received    or     request

additional          time     within      which        to     respond        to     Trillium

Construction’s            motion,     participated          in     the     hearing,        and

addressed the issues raised by Trillium Construction’s motion on

the merits.6        As a result of Plaintiff’s failure to object to the

lack of notice or to request additional time and its decision to

participate in the hearing, Patrick, 102 N.C. App. at 367, 402

S.E.2d at 459, Plaintiff waived the right to object to Trillium

Construction’s            summary     judgment        motion       on      notice-related

grounds.       As     a    result,    the   trial      court’s      decision      to     grant

summary judgment in Trillium Construction’s favor should not be

disturbed on timeliness grounds.

                          C. Negligent Construction Claims

      Next,     Plaintiff       argues      that      the    trial       court    erred    by

granting      summary       judgment     in   favor         of    Trillium       Links    and

Trillium Construction on the grounds that Trillium Links and

Trillium Construction were negligent, and that Trillium Links

was       grossly     negligent,       during         the    construction          of      the

condominiums.         Although Plaintiff’s gross negligence claim lacks

merit, the trial court erred by granting summary judgment in

      6
      Although Plaintiff mentioned the timeliness issue in its
rebuttal argument before the trial court, it conceded that
“we’ve addressed the issues.”
                                            -15-
favor of Trillium Links and Trillium Construction with respect

to Plaintiff’s negligent construction claims.

                               1. Finding of Liability

                                     a. Negligence

       “To state a claim for common law negligence, a plaintiff

must allege:           (1) a legal duty; (2) a breach thereof; and (3)

injury proximately caused by the breach.”                      Stein v. Asheville

City    Bd.    Of     Educ.,   360 N.C. 321,   328,    626 S.E.2d 263,    267

(2006).       “‘In the absence of a legal duty owed to the plaintiff

by     [the    defendant],       [the      defendant]      cannot     be   liable     for

negligence.’”           Id. (quoting Cassell v. Collins, 344 N.C. 160,

163, 472 S.E.2d 770, 772 (1996), overruled on other grounds by

Nelson v. Freeland, 349 N.C. 615, 631-32, 507 S.E.2d 882, 892

(1998)).

       According to Trillium Links, a developer does not owe a

legal duty to a condominium unit purchaser and cannot, for that

reason,       be    held   liable    for    negligence.       In     support    of    this

assertion, Trillium Links notes that Plaintiff has not cited any

support for its contention that such a duty exists.                              On the

other     hand,       Plaintiff      points    out    that     the     Building       Code

“‘imposes          liability   on    any   person    who    constructs,       supervises

construction, or designs a building or alteration thereto, and

violates the Code such that the violation proximately causes
                                             -16-
injury or damage,’” Lassiter v. Cecil, 145 N.C. App. 679, 684,

551 S.E.2d 220,    223   (quoting     Olympic          Products    Co.   v.   Roof

Systems, Inc., 88 N.C. App. 315, 329, 363 S.E.2d 367, 375, disc.

review       denied,   321 N.C. 744,    366 S.E.2d 863    (1988)),     disc.

review denied, 354 N.C. 363, 556 S.E.2d 302 (2001), and that a

violation of the Building Code constitutes negligence per se.

Oates v. Jag, Inc., 314 N.C. 276, 280, 333 S.E.2d 222, 225

(1985).       As a result, any person responsible for supervising a

construction         project      is   subject       to    being    held    liable     on   a

negligent construction theory.

       According       to     Plaintiff,       the        record    contains      evidence

tending to show that Trillium Links supervised the construction

of     the     Trillium       Ridge     condominiums.              More     specifically,

Plaintiff notes that Trillium Links hired Neill Dalrymple to

work    on    the    Trillium      Ridge     condominium        construction      project;

that Mr. Dalrymple’s              “Construction duties & responsibilities”

made him “[r]esponsible & accountable” for the Trillium Ridge

project,       among       others;     and    that        Mr.   Dalrymple    “ha[d]     the

authority to stop any construction activity at any time to clear

up any misunderstandings or expectations or under other terms

when he acts on behalf of [Trillium Links].”                          According to Mr.

Culbreth, if Mr. Dalyrmple “knowingly saw something that was

wrong[,] he could stop it just like a QA, QC officer.”                                      In
                                     -17-
addition, Trillium Links charged Trillium Construction more than

$80,000.00 for acting as an “Asst Project Manager” during the

construction of Buildings 100 and 200.                     As Plaintiff suggests,

this   evidence,    when   viewed    in   the      light      most    favorable   to

Plaintiff, is sufficient to establish the existence of a genuine

issue of material fact concerning the extent to which Trillium

Links supervised the construction project and whether Trillium

Links could lawfully be held liable for negligent construction

based upon alleged Building Code violations.

       In seeking to persuade us to reach a different result,

Trillium Links argues, in reliance upon Lassiter, that, even if

it were required to adhere to the Building Code, the fact that a

Code violation occurred did not establish the existence of a

legally effective duty of care.              Lassiter does not, however,

control the present issue given that the plaintiffs in that case

never came under the protection of the Building Code because

their house was never completed.                 Lassiter, 145 N.C. App. at

684,   551   S.E.2d   at   223-24.          As    a    result,       since   persons

responsible for supervising construction are obligated to comply

with the Building Code and since the necessity for compliance

with the Building Code clearly creates a compliance obligation

applicable   to    supervisory   personnel,           we    hold   that   the   trial
                                       -18-
court   erred   by   granting       summary   judgment     in   Trillium        Links’

favor with respect to the negligent construction issue.

                              b. Gross Negligence

      In addition, Plaintiff argues that Trillium Links is liable

for gross negligence, which consists of “wanton conduct done

with conscious or reckless disregard for the rights and safety

of others.”     Parish v. Hill, 350 N.C. 231, 239, 513 S.E.2d 547,

551   (1999).    “An    act    is    wanton   when    it   is   done       of   wicked

purpose,   or    when   done        needlessly,      manifesting       a    reckless

indifference to the rights of others.”               Yancey v. Lea, 354 N.C.
48, 52, 550 S.E.2d 155, 157 (2001) (citations omitted).                          Aside

from simply asserting that Trillium Links acted in a grossly

negligent fashion, however, Plaintiff has not pointed to any

specific act or omission on the part of Trillium Links which it

contends to have been grossly negligent.                   As a result, given

Plaintiff’s failure to identify any act or omission on the part

of Trillium Links that was             “done with conscious or reckless

disregard for the rights and safety of others,” Parish, 350 N.C.

at 239, 513 S.E.2d at 551, we conclude that the trial court did

not err by granting summary judgment in favor of Trillium Links

with respect to Plaintiff’s gross negligence claim.

                 2. Statute of Limitations and Repose

                        a. Statute of Limitations
                                                 -19-
       Next, Trillium Links and Trillium Construction argue that,

even   if    they      owed      a    legally         recognized       duty    to    Plaintiff,

Plaintiff’s        negligent         construction          claim       was    barred       by    the

applicable        statute      of     limitations.              Plaintiff,      on   the        other

hand, contends that the record reflects the existence of genuine

issues    of      material     fact     concerning             the    date    upon   which       its

negligent         construction         claims           against       Trillium       Links       and

Trillium Construction accrued for purposes of the statute of

limitations.          We believe that Plaintiff has the better of this

disagreement.

       “The statute of limitations having been pled, the burden is

on the plaintiff to show that his cause of action accrued within

the limitations period.”                Crawford v. Boyette, 121 N.C. App. 67,

70, 464 S.E.2d 301, 303 (1995), cert. denied, 342 N.C. 894, 467
S.E.2d 902      (1996).          “As        a    general     proposition,        an        order

[granting summary judgment] based on the statute of limitations

is   proper       when,    and       only    when,       all    the    facts     necessary         to

establish the limitation are alleged or admitted, construing the

non-movant’s pleadings liberally in his favor and giving him the

benefit      of      all   relevant          inferences          of    fact     to    be     drawn

therefrom.”          Williams, 213 N.C. App. at 4, 714 S.E.2d at 440

(internal quotations omitted).                          On the other hand, when the

evidence       “is     sufficient           to       support    an     inference      that       the
                                            -20-
limitations      period      has      not    expired,       the     issue        should     be

submitted to the jury.”            Hatem v. Bryan, 117 N.C. App. 722, 724,

453 S.E.2d 199, 201 (1995).

      Negligent       construction          claims     resulting          from     physical

damage to the plaintiff’s property are subject to the three year

statute of limitations set out in N.C. Gen. Stat. § 1-52(16),

with such claims accruing when “bodily harm to the claimant or

physical    damage     to    his      property       becomes      apparent        or    ought

reasonably to have become apparent to the claimant, whichever

event first occurs.”             Lord v. Customized Consulting Specialty,

Inc., 182 N.C. App. 635, 643, 643 S.E.2d 28, 33 (quoting N.C.

Gen. Stat. § 1-52(16)), disc. review denied, 361 N.C. 694, 652
S.E.2d 647   (2007).         In     support      of     their    contention           that

Plaintiff’s      negligent         construction        claims       are     time-barred,

Trillium Links and Trillium Construction argue that Plaintiff

had   actual     notice     of   the    existence      of    construction          defects,

consisting       of    missing         or    inadequate        flashings,          in      the

condominium buildings as of 5 November 2007, when the Lee Report

was delivered.

      As we have already noted, the Lee Report pointed out that

“[s]ome metal flashings are either too narrow or missing, which

require immediate corrections” and that “some bottom pieces of

wood sidings in many locations either touched the ground or are
                                       -21-
too close to the ground.”           On the other hand, Dr. Lee expressed

the “opinion that these wood sidings are in good to excellent

condition, with the exceptions of the problems outlined in the

above observations,” and stated that, in the event that the

problems delineated in the report were to be corrected, the

sidings should last “thirty (30) years or longer.”                     According to

Trillium    Links    and    Trillium     Construction,          this    information

provided     Plaintiff      with     notice      that     the     Trillium        Ridge

condominiums suffered from construction defects sufficient to

put Plaintiff on notice of the negligent construction claims

that have been asserted in this case and triggering the running

of the applicable statute of limitations with respect to those

claims.

    On     the   other    hand,    Plaintiff     argues        that    the   problems

outlined in the Lee Report were corrected and that it did not

have notice of the problems that prompted the assertion of the

present claims until 2010, at which point Plaintiff hired an

engineer and discovered the existence of extensive problems in

other     condominium      buildings.         According    to    the    evidentiary

forecast     upon   which       Plaintiff      relies     in    support      of    this

contention, Mr. Tenney, acting in his capacity as President of

Plaintiff’s      board,     reviewed     the     Lee    Report,       informed     his

colleagues       about    the     flashing     problems        outlined      in   that
                                             -22-
document,    and       obtained        their    agreement         that     the      continuous

caulking     approach         recommended           by    Professor        Lee      should     be

adopted.     In addition, the record reflects that Mr. Boan did

not believe, after learning of the flashing-related defects,

that any additional investigation was necessary.                                   Mr. Tenney

testified    that       neither        Mr.    Boan       nor   Mr.     Lee    ever     advised

Plaintiff that there was any reason to conduct a more extensive

investigation       concerning           the    possibility            that        there     were

defects     in   the     other        buildings          at    that    time.          Finally,

Plaintiff notes that multiple construction defects outlined in

its    complaint       bore      no     relation         to    the    flashing        problems

discussed in the Lee Report.                   We believe that this evidence,

when    viewed     in      the        light    most       favorable          to     Plaintiff,

demonstrates the existence of a genuine issue of material fact

concerning       the     extent,        if     any,       to    which        the     negligent

construction       claim      that      Plaintiff         seeks       to   assert      against

Trillium    Links       and    Trillium        Construction           accrued       more     than

three years before the date upon which the complaint was filed.

As a result, the trial court erred by granting summary judgment

with respect to Plaintiff’s negligent construction claims in

favor of Trillium Links and Trillium Construction on statute of

limitations grounds.

                               b. Statute of Repose
                                             -23-
     Next, Plaintiff argues that the statute of repose set out

in N.C. Gen. Stat.          §   1-50(a)(5)(a)           does not bar Plaintiff’s

negligent construction claims relating to Building Nos. 100 and

200 against Trillium Construction and Trillium Links.7                        N.C. Gen.

Stat.    §   1-50(a)(5)(a)      provides        that    “[n]o    action      to   recover

damages based upon or arising out of the defective or unsafe

condition of an improvement to real property shall be brought

more than six years from the later of the specific last act or

omission of the defendant giving rise to the cause of action or

substantial completion of the improvement,” N.C. Gen. Stat. § 1-

50(a)(5)(a), with an action based upon or arising out of the

defective or unsafe condition of an improvement to real property

“[f]or    purposes     of   this    subdivision”         having      been    defined   to

include      an   “[a]ction[]           to    recover    damages       for    negligent

construction      or   repair      of    an    improvement      to   real    property.”

N.C. Gen. Stat. § 1-50(a)(5)(b)(2).                     “‘[N.C. Gen. Stat. § 1-

50(a)(5)(a)] is a statute of repose and provides an outside

limit of six years for bringing an action coming within its

terms.’”     Roemer v. Preferred Roofing, Inc., 190 N.C. App. 813,

815, 660 S.E.2d 920, 923 (2008) (quoting Whittaker v. Todd, 176
N.C. App. 185, 187, 625 S.E.2d 860, 861, disc. rev. denied, 360
     7
      As a result of the fact that the claims that Plaintiff has
asserted against them sound in breach of fiduciary duty rather
than defective construction, Mr. Culbreth and Mr. Ward have not
asserted a statute of repose defense in their brief.
                                       -24-
N.C. 545, 635 S.E.2d 62 (2006)).               A statute of repose “is a

substantive limitation that establishes a time frame in which an

action    must   be   brought    to    be   recognized.”      Bryant      v.   Don

Galloway Homes, Inc., 147 N.C. App. 655, 657, 556 S.E.2d 597,

600 (2001).      As a result, given that the negligent construction

claims that Plaintiff has asserted against Trillium Links and

Trillium Construction seek recovery arising from an allegedly

defective or unsafe improvement to real property, those claims

come within the ambit of N.C. Gen. Stat. § 1-50(a)(5)(a).

    “Unlike      an   ordinary   statute      of   limitations    which    begins

running upon accrual of the claim, the period contained in the

statute    of    repose   begins       when   a    specific      event    occurs,

regardless of whether a cause of action has accrued or whether

any injury has resulted.”             Black v. Littlejohn, 312 N.C. 626,

633, 325 S.E.2d 469, 474-75 (1985) (internal citations omitted).

“Under the statute, a plaintiff has the burden of showing that

he or she brought the action within six years of either (1) the

substantial completion of the house or (2) the specific last act

or omission of defendant giving rise to the cause of action.”

Boor v. Spectrum Homes, Inc., 196 N.C. App. 699, 705, 675 S.E.2d
712, 716 (2009).      In the event that Plaintiff fails to establish

that it had asserted its claim before the expiration of the

statute of repose, its claim is “insufficient as a matter of
                                         -25-
law.”       Chicopee, Inc. v. Sims Metal Works, Inc., 98 N.C. App.
423, 426, 391 S.E.2d 211, 213, disc. review denied, 327 N.C.
426, 395 S.E.2d 674 (1990).

                              i. Substantial Completion

       As    an     initial      matter,     Trillium     Links     and    Trillium

Construction       contend      that   Plaintiff   has    failed    to    bring   its

claim related to Building Nos. 100 and 200 within six years of

the     date      upon    which     those     buildings     were    substantially

completed.        N.C. Gen. Stat. § 1–50(a)(5(c) defines “substantial

completion” as being “that degree of completion of a project,

improvement or specified area or portion thereof . . . upon

attainment of which the owner can use the same for the purpose

for which it was intended.”                 N.C. Gen. Stat. § 1-50(a)(5)(c).

As this Court had previously held, a building is “substantially

complete” on the date upon which a certificate of occupancy has

been issued.         Boor, 196 N.C. App. at 705, 675 S.E.2d at 716

(finding that the date of substantial completion for purposes of

N.C.    Gen.      Stat.   §    1–50(a)(5)    was   the    date    upon    which   the

certificate of occupancy was issued); Nolan v. Paramount Homes,

Inc., 135 N.C. App. 73, 76, 518 S.E.2d 789, 791 (1999) (holding

that a house was substantially completed for purposes of N.C.

Gen. Stat. § 1–50(a)(5) upon the issuance of a certificate of

compliance), disc. review denied, 351 N.C. 359, 542 S.E.2d 214
                                       -26-
(2000).     According to the record developed before the trial

court, certificates of occupancy were issued for Building No.

100 between 17 August and 23 August 2004 and for Building No.

200 between 11 February and 30 March 2004.                As a result of the

fact that Building Nos. 100 and 200 were substantially completed

nearly seven years before Plaintiff commenced this action on 3

August    2011,     Plaintiff       failed    to     assert    its    negligent

construction      claim    within   six   years    of   the   date   upon   which

Building Nos. 100 and 200 were substantially completed.

                           ii. Last Act or Omission

    According to          Plaintiff,   Trillium Construction’s last act

with respect to Building No. 200 occurred when it repaired Mr.

Tenney’s deck in 2006.            Although the expression “last act or

omission”   has    not     been   statutorily      defined,   this   Court   has

stated that, “[i]n order to constitute a last act or omission,

that act or omission must give rise to the cause of action.”

Nolan, 135 N.C. App. at 79, 518 S.E.2d at 793.                   As a result,

although an act sufficient to affect the running of the statute

of repose may occur after the date of substantial completion, “a

‘repair’ does not qualify as a ‘last act’ under N.C. Gen. Stat.

§ 1-50(5) unless it is required under the improvement contract

by agreement of the parties” given that “allow[ing] the statute

of repose to toll or start running anew each time a repair is
                                    -27-
made would subject a defendant to potential open-ended liability

for an indefinite period of time, defeating the very purpose of

statutes of repose such as N.C. Gen. Stat. § 1-50(5).”               Monson

v. Paramount Homes, Inc., 133 N.C. App. 235, 240-41, 515 S.E.2d
445, 449-50 (1999).      Even so, Plaintiff argues that, since the

original construction contract was never produced, the repairs

to Mr. Tenney’s deck might have been required as part of the

original contract and, therefore, could qualify as a “last act”

for statute of repose purposes.            However, given that Plaintiff

“has the burden of showing that he or she brought the action

within six years of . . . the specific last act or omission of

defendant giving rise to the cause of action,” Boor, 196 N.C.

App. at 705, 675 S.E.2d at 716, we are unable to accept this

contention.    As a result, we have no basis for determining that

the   “last   act”   underlying    Plaintiff’s     negligent   construction

claims occurred later than the date of substantial completion.

                      iii. Possession or Control

      Finally, Plaintiff argues that Trillium Links and Trillium

Construction are not entitled to rely upon N.C. Gen. Stat. § 1-

50(a)(5)(a) on the grounds that they retained “possession or

control” over the condominium buildings.           According to N.C. Gen.

Stat.   §   1-50(a)(5)(d),   the   statute    of   repose   “shall   not   be

asserted as a defense by any person in actual possession or
                                            -28-
control, as owner, tenant or otherwise, of the improvement at

the   time    the    defective         or   unsafe    condition      constitutes   the

proximate cause of the injury or death for which it is proposed

to    bring   an     action,      in    the    event      such     person   in   actual

possession or control either knew, or ought reasonably to have

known, of the defective or unsafe condition.”                      N.C. Gen. Stat. §

1-50(a)(5)(d).        As the Supreme Court has stated, “the purpose of

the exclusion” is to impose a continuing duty “to inspect and

maintain”     on      persons      who,       after       having     constructed     an

improvement,        remain   in    possession        of   and    control    over   that

improvement.        Cage v. Colonial Bldg. Co., Inc. of Raleigh, 337
N.C. 682, 685, 448 S.E.2d 115, 117 (1994).                       In support of this

assertion, Plaintiff argues that Trillium Construction remained

in “possession or control” of the condominiums by virtue of its

“intermingled existence” with Trillium Links and that Trillium

Links, as the declarant, had actual control over Plaintiff based

upon its board appointment authority until the Association came

under the control of the unit owners on 24 February 2007.                            On

the one hand, we are unable to see how the fact that Trillium

Construction had an “intermingled existence” has any tendency to

show that it had possession of or control over the condominium

buildings after the completion of the construction process given

the absence of any attempt on Plaintiff’s part to pierce the
                                           -29-
corporate veil.              On the other hand, while Trillium Links did,

arguably, have possession of or control over the condominium

buildings, the record discloses the existence of a genuine issue

of   material        fact     concerning     the       extent,    if    any,        to    which

Trillium Links knew or should have known of the existence of the

defects       upon    which     Plaintiff’s       claim     rests.          As     a    result,

although we conclude that Trillium Construction is entitled to

rely   on     the    statute     of     repose    as    a   defense     to        Plaintiff’s

negligent construction claims relating to Building Nos. 100 and

200,     we    further        conclude     that     the     extent      to        which       the

“possession         or   control”       exception      to   the   statute          of    repose

defense applies to Trillium Links is a question for the jury.

As a result, although Trillium Construction is entitled to rely

on the statute of repose to the extent that it is not equitably

estopped from doing so, there is a jury question concerning the

extent    to    which        Trillium    Links    is    entitled       to    rely        on   the

statute of repose.

                                c. Equitable Estoppel

       Next,     Plaintiff        argues     that       Defendants          are     equitably

estopped from asserting either the statute of limitations or the

statute of repose.             Equitable estoppel may be invoked, in proper

cases,    to    bar      a   defendant    from     relying    upon     the        statute     of

limitations or statute of repose.                   Duke Univ. v. Stainback, 320
                                         -30-
N.C. 337, 341, 357 S.E.2d 690, 692 (1987); see also Robinson v.

Bridgestone/Firestone N. Am. Tire, L.L.C., 209 N.C. App. 310,

319, 703 S.E.2d 883, 889, disc. review denied, 365 N.C. 202, 710
S.E.2d 21 (2011).         “North Carolina courts ‘have recognized and

applied the principle that a defendant may properly rely upon a

statute of limitations as a defensive shield against “stale”

claims, but may be equitably estopped from using a statute of

limitations as a sword, so as to unjustly benefit from his own

conduct    which    induced      a    plaintiff       to    delay    filing    suit.’”

White,    166    N.C.    App.    at    305, 603 S.E.2d       at   162   (quoting

Friedland v. Gales, 131 N.C. App. 802, 806, 509 S.E.2d 793, 796

(1998)).

      “The essential elements of equitable estoppel are:                           ‘(1)

conduct on the part of the party sought to be estopped which

amounts to a false representation or concealment of material

facts; (2) the intention that such conduct will be acted on by

the other party; and (3) knowledge, actual or constructive, of

the real facts.’”        Id. (quoting Friedland, 131 N.C. App. at 807,
509 S.E.2d at 796-97).           “‘The party asserting the defense must

have (1) a lack of knowledge and the means of knowledge as to

the real facts in question; and (2) relied upon the conduct of

the   party     sought   to     be    estopped    to       his   prejudice.’”       Id.

(quoting Friedland, 131 N.C. App. at 807, 509 S.E.2d at 796-97).
                                           -31-
“In   order    for    equitable      estoppel      to    bar    application    of   the

statute of limitations, a plaintiff must have been induced to

delay filing of the action by the misrepresentations of the

defendant.”     Jordan v. Crew, 125 N.C. App. 712, 720, 482 S.E.2d
735, 739, disc. review denied, 346 N.C. 279, 487 S.E.2d 548

(1997).

      In its brief, Plaintiff argues that Trillium Links should

be estopped from asserting a statute of limitations or repose

defense because its property manager, Mr. Boan, reviewed the Lee

Report and advised the Association that he believed that further

investigation        would   not     be    necessary.          However,   given     that

Plaintiff’s entire board received the Lee Report and, for that

reason, had the same information that was available to Trillium

Links, we are unable to see how Trillium Links concealed any

information that should have been made available to Plaintiff

with respect to the Lee Report.                    In addition, the record is

totally devoid of any information tending to show that Plaintiff

was    “induced       to     delay        filing   of      the     action     by    the

misrepresentations of” Trillium Links.                   Jordan, 125 N.C. App. at

720, 482 S.E.2d at 739.               As a result, Trillium Links is not

equitably estopped from asserting the statute of limitations or

statute   of     repose      in    opposition       to     Plaintiff’s      negligent

construction claims.
                                               -32-
      Similarly,          Plaintiff         argues         that     Trillium       Construction

should be estopped from asserting the statute of limitations or

the statute of repose against Plaintiff on the grounds that

Trillium Construction actively concealed its defective work from

Plaintiff.          In support of this assertion, Plaintiff points to

evidence tending to show that Trillium Construction placed other

building materials over subsurface construction defects before

these defects could be observed.                      In addition, Plaintiff asserts

that, on occasion, Trillium Construction learned that various

defects      needed       to     be   repaired            without    either       passing   this

information along to Plaintiff or ensuring that the defects in

question         were    fixed.        According           to   Plaintiff,        this   conduct

deprived it of the opportunity to discover the defects in a more

timely      manner       and,     thus,     delayed         the     filing    of    Plaintiff’s

action.      Trillium Construction, on the other hand, argues that

the   Lee    Report        put    Plaintiff          on    notice     of    the    construction

defects      in     2007       and    is,      for    that        reason,    precluded      from

asserting         that    it     is   equitably           estopped    from     asserting     the

statute of limitations or statute of repose.

      Given       our    determination          that       genuine     issues      of    material

fact exist as to whether or not the Lee Report put Plaintiff on

notice      of    the    existence        of    the        construction-related          defects

described in its complaint, it follows that issues of fact exist
                                        -33-
as   to   whether    Plaintiff      lacked     “knowledge    and    the   means    of

knowledge      as   to   the   real    facts    in   question”      sufficient     to

establish that Trillium Construction is equitably estopped from

asserting the statute of limitations or statute of repose in

opposition     to   the    negligent     construction       claim    that   it    has

asserted against Trillium Construction.               White, 166 N.C. App. at

305, 603 S.E.2d at 162.               As a result, given that the record

discloses the existence of a genuine issue of material fact

concerning the extent to which Trillium Construction is estopped

from asserting the statute of limitations or the statute of

repose    in    opposition     to     Defendant’s     negligent      construction

claim, the trial court erred by granting summary judgment in

favor of Trillium Construction with respect to this issue.

                          D. Breach of Fiduciary Duty

                           1. Individual Directors

      The only claim asserted against Mr. Culbreth and Mr. Ward

in Plaintiff’s complaint rests upon an alleged breach of the

fiduciary duty that they owed to Plaintiff during their service

as members of Plaintiff’s board.               “A fiduciary duty arises when

there has been a special confidence reposed in one who in equity

and good conscience is bound to act in good faith and with due

regard to the interests of the one reposing confidence.”                    Branch

Banking & Trust Co. v. Thompson, 107 N.C. App. 53, 60, 418
                                          -34-
S.E.2d       694,   699     (internal     quotation     omitted),     disc.     review

denied, 332 N.C. 482, 421 S.E.2d 350 (1992).                     According to N.C.

Gen.       Stat.    §    47C-3-103(a),     “[i]n      the    performance   of      their

duties, the officers and members of the executive board shall be

deemed to stand in a fiduciary relationship to the association

and the unit owners and shall discharge their duties in good

faith, and with that diligence and care which ordinarily prudent

men    would        exercise      under    similar      circumstances      in       like

positions[,]” N.C. Gen. Stat. § 47C-3-103(a), with the duties

imposed upon members of Plaintiff’s board by the Declaration

having       included      the    “management,        replacement,    maintenance,

repair, alteration, and improvement of the Common Elements.”

       Trillium Links, acting as declarant, appointed Mr. Culbreth

and Mr. Ward to Plaintiff’s board.8                   Mr. Culbreth and Mr. Ward

argue that, given that Plaintiff had no role in the construction

of the condominium buildings, they had no responsibility for the

construction        of    those    buildings     or    any    obligation      to    hire

inspectors or to otherwise oversee the construction process.                          In

support of this position, Mr. Culbreth and Mr. Ward point to the

testimony of Mr. Gentry, who indicated that, in his experience,
       8
      Although Plaintiff argues that, since Mr. Culbreth and Mr.
Ward were also members of Trillium Links, this arrangement was
“presumptively fraudulent,” Plaintiff’s expert, Marvin Gentry,
testified that it is not improper for a developer or declarant
to appoint its principals to serve on the board of a condominium
association during the period of declarant control.
                                                  -35-
condominium       associations             do    not     typically      participate            in    the

original    construction            of      the    condominium          buildings,            and    the

absence    of     any    evidence          tending        to   show     that        Plaintiff        had

anything to do with the construction of the buildings during the

period when the declarant retained control over Plaintiff.

    In spite of the fact that Mr. Culbreth and Mr. Ward had no

direct     involvement         in      the        construction          of        the    condominium

buildings,       they    did,         as        directors,       have        an     obligation       to

disclose     material          facts            regarding        the     existence            of     any

construction       defects       of      which      they       were    aware        to   Plaintiff.

King v. Bryant, __ N.C. App. __, __, 737 S.E.2d 802, 809 (2013)

(stating     that       an     affirmative             duty    “to      disclose         all       facts

material     to     a    transaction”              is     inherent       in        any       fiduciary

relationship); Searcy v. Searcy, 215 N.C. App. 568, 572, 715
S.E.2d 853,    857        (2011)      (stating         that    “[a]       duty       to    disclose

arises where a fiduciary relationship exists between the parties

to [a] transaction”).               Although Mr. Culbreth and Mr. Ward do not

dispute the existence of such a duty to disclose, they do argue

that the record does not contain any evidence tending to show

that they possessed any information concerning the existence of

construction-related defects in the condominium buildings of the

type alleged in the complaint.                           On the other hand, Plaintiff

argues that Mr. Culbreth and Mr. Ward actually knew of material
                                                   -36-
defects in the foundation of Building No. 100 and failed to

disclose the existence of these                           problems to Plaintiff.                  For

example, Mr. Culbreth and Mr. Ward acknowledge that they had

received the Structural Integrity report, which noted that two

foundation piers had not been installed in Building No. 100 and

that       a   sagging     floor       had    resulted       from         this    omission.        In

addition, Mr. Tenney stated that the unit owner-controlled board

was    never        informed      by    either        of    the       prior      directors        that

foundation          problems      had    been       discovered            beneath    one     of   the

buildings.           As a result of the fact that this evidence, when

viewed         in   the   light    most       favorable         to    Plaintiff,         creates    a

genuine issue of material fact concerning the extent, if any, to

which Mr. Culbreth and Mr. Ward breached a fiduciary duty that

they       owed      to   Plaintiff           by     failing         to     disclose        relevant

information          in   their     possession,9           the       trial       court   erred     by

granting summary judgment in their favor with respect to this

claim.

                                       2. Trillium Links

       Next,        Plaintiff      argues         that    the    trial       court    erroneously

granted         summary    judgment          in    favor    of       Trillium       Links    on    the
       9
      Although Mr. Culbreth and Mr. Ward stated that the
foundation pier problem was corrected and that no one had ever
described the sagging floor as a construction defect, these
facts go to the weight and credibility of the evidence rather
than its sufficiency to support a breach of fiduciary duty
claim.
                                        -37-
grounds that the same facts that support a determination that

Mr. Culbreth and Mr. Ward violated a fiduciary duty establish a

breach of fiduciary duty by Trillium Links as well.                             Trillium

Links, on the other hand, argues that a condominium developer

does not, as a matter of North Carolina law, owe a fiduciary

duty to the property owner’s association during the period of

declarant      control.      Although        N.C.   Gen.    Stat.    §    47C-3-103(a)

expressly provides that the members of a condominium association

board owe a fiduciary duty to the association, N.C. Gen. Stat. §

47C-3-103(a), the Condominium Act is silent with respect to the

issue    of    whether     such   a   duty     is    owed    to     the    condominium

association by a developer or declarant.                      However, N.C. Gen.

Stat. §       47C-1-108 states that,           “[t]he principles of law and

equity supplement the provisions of this chapter, except to the

extent inconsistent with this chapter.”                    N.C. Gen. Stat. § 47C-

1-108.        Thus,   the    extent     to    which    Trillium       Links      owed   a

fiduciary      duty   to    Plaintiff    during       the   period        of   declarant

control must necessarily be governed by common law principles.

    “‘Generally, in North Carolina . . . there are two types of

fiduciary      relationships:         (1)     those    that       arise    from    legal

relations such as attorney and client, broker and client . . .

partners, principal and agent, trustee and cestui que trust, and

(2) those that exist as a fact, in which there is confidence
                                        -38-
reposed on one side, and the resulting superiority and influence

on the other.’”        S.N.R. Mgmt. Corp. v. Danube Partners 141, LLC,

189 N.C. App. 601, 613, 659 S.E.2d 442, 451 (2008) (quoting

Rhone-Poulenc Agro S.A. v. Monsanto Co., 73 F. Supp. 2d 540, 546

(M.D.N.C.1999) (internal quotations omitted)).                 As a result of

the fact that Plaintiff has not asserted that any fiduciary duty

arose from a “legal” relationship between Plaintiff and Trillium

Links,    we    must    determine     whether     a    fiduciary     relationship

existed between Plaintiff and Trillium Links                   as a matter of

fact.

    The     undisputed       record   evidence        establishes,   during     the

period of declarant control, “the Declarant [Trillium Links had]

control of the Association through its power to appoint and

remove Board Members.”          Trillium Links remained in control of

Plaintiff      until   24    February    2007,    when     authority    over    the

Association was transferred to the unit owners.                 As a result of

the fact that Trillium Links had a position of dominance over

Plaintiff      and     the   fact     that     individual    unit      owners   or

prospective unit owners had little choice except to rely upon

Trillium Links to protect their interests during the period of

developer control, we hold that the record contains sufficient

evidence from which the existence of a fiduciary duty between

the two entities could be established.                   In addition, for the
                                            -39-
reasons set forth above in connection with our discussion of the

breach of fiduciary duty claim that Plaintiff asserted against

Mr. Culbreth and Mr. Ward, we further conclude that the record

evidence,       when    considered        in     the      light       most   favorable       to

Plaintiff,       evidences     the        existence       of      a    genuine     issue     of

material fact concerning the extent, if any, to which Trillium

Links breached a fiduciary duty that it owed to Plaintiff.                                 As a

result, the trial court erred by granting summary judgment in

favor of Trillium Links with respect to this issue.

                          3. Statute of Limitations

    Mr.     Culbreth,        Mr.    Ward,      and     Trillium        Links     argue     that

Plaintiff’s fiduciary duty claims are barred by the statute of

limitations on the grounds that the Lee Report sufficed to put

Plaintiff on notice of the facts upon which their breach of

fiduciary duty claims rely.                    Breach of fiduciary duty claims

accrue    upon    the   date       when    the   breach        is     discovered    and     are

subject    to    a   three    year    statute        of    limitations.           Toomer     v.

Branch Banking & Trust Co., 171 N.C. App. 58, 66, 614 S.E.2d
328, 335 (stating that “[a]llegations of breach of fiduciary

duty that do not rise to the level of constructive fraud are

governed by the three-year statute of limitations applicable to

contract actions contained in N.C. Gen. Stat. § 1-52(1)”), disc.

review denied, 360 N.C. 78, 623 S.E.2d 263 (2005).                             As a result
                                            -40-
of our determination that the trial court erred by granting

summary       judgment       with       respect     to     the   issue     of    whether

Plaintiff’s negligent construction claims were time-barred given

the existence of genuine issues of material fact concerning the

date upon which Plaintiff knew or had reason to believe that

extensive defects existed in the condominium buildings and the

fact that the same principles are applicable to the present

issue,      we    conclude    that       the    trial    court   erred     by   granting

summary       judgment   in    favor       of     Mr.    Culbreth,   Mr.    Ward,    and

Trillium Links with respect to Plaintiff’s breach of fiduciary

duty claims on statute of limitations grounds.

                               E. Constructive Fraud

       Next, Plaintiff contends that the record evidence tends to

show    the      existence    of    a    valid     claim   for   constructive      fraud

against Mr. Culbreth, Mr. Ward, and Trillium Links.                             For that

reason, Plaintiff further contends that the trial court erred by

granting summary judgment in favor of Mr. Culbreth, Mr. Ward,

and Trillium Links on the grounds that a ten-year statute of

limitations applies to this claim.10                     Plaintiff’s argument lacks

merit.

       10
      “A claim of constructive fraud based upon a breach of
fiduciary   duty   falls    under   the ten-year   statute  of
limitations[.]”   NationsBank of N.C. v. Parker, 140 N.C. App.
106, 113, 535 S.E.2d 597, 602 (2000).
                                           -41-
       Although the showing necessary to establish the existence

of a breach of fiduciary duty and constructive fraud involves

overlapping elements, the two claims are separate under North

Carolina law.        White, 166 N.C. App. at 293, 603 S.E.2d at 155.

In order to recover for constructive fraud, a plaintiff must

establish the existence of circumstances “(1) which created the

relation of trust and confidence, and (2) [which] led up to and

surrounded     the     consummation         of     the     transaction      in     which

defendant is alleged to have taken advantage of his position of

trust[.]”     State ex rel. Long v. Petree Stockton, L.L.P., 129

N.C.   App.   432,    445,    499 S.E.2d 790,   798     (quoting   Rhodes    v.

Jones, 232 N.C. 547, 549, 61 S.E.2d 725, 726 (1950)), disc.

review    dismissed,     349 N.C. 240,     558 S.E.2d 190     (1998).

“Further, an essential element of constructive fraud is that

defendants    sought    to    benefit       themselves      in     the   transaction.”

Piles v. Allstate Ins. Co., 187 N.C. App. 399, 406, 653 S.E.2d
181, 186 (2007) (quotation omitted), disc. review denied, 362
N.C. 361,   663 S.E.2d 316     (2008).           “The    primary    difference

between pleading a claim for constructive fraud and one for

breach of fiduciary duty is the constructive fraud requirement

that the defendant benefit himself.”                     White, 166 N.C. App. at

294, 603 S.E.2d at 156.             In order to satisfy this requirement,

“Plaintiff’s evidence must prove defendants sought to benefit
                                  -42-
themselves     or    to   take   advantage      of    the    confidential

relationship.”      Wilkins v. Safran, 185 N.C. App. 668, 675, 649
S.E.2d 658, 663 (2007) (citing Barger v. McCoy Hillard & Parks,

346 N.C. 650, 666, 488 S.E.2d 215, 224 (1997)).

    In   its   complaint,   Plaintiff      alleged   in   support   of   its

constructive fraud claim that:

               70. By virtue of their positions as
          officers and directors of the Association
          and their control over the Association,
          Defendants Trillium Links, Culbreth and Ward
          stood in a relationship of special faith,
          confidence and trust with respect to the
          Plaintiff Association.      These Defendants
          therefore owed fiduciary duties to the
          Association under North Carolina law.

                                 . . . .

                72. These Defendants breached their
          fiduciary duties and acted in their own
          interests    instead     of   those    of  the
          Association by hiring Trillium Construction,
          which shared common ownership and control
          with Trillium Links, to build the Trillium
          Ridge Condos.    Upon information and belief,
          these    Defendants    benefited    from  this
          transaction    at    the    expense    of  the
          Association.

                                 . . . .

                74. These Defendants also breached
          their    fiduciary   duties    by   failing  to
          disclose    material    facts    regarding  the
          defects    and   their   own    negligence  and
          conflict of interest actions to the unit
          owners    and   the    new    members   of  the
          Association’s Executive Board when control
          of   the   Association    was   transferred  in
          February, 2007.
                                        -43-

Although    Plaintiff      alleged     that    Mr.     Culbreth,   Mr.    Ward,    and

Trillium Links “benefitted from this transaction at the expense

of the Association,” Plaintiff has not directed our attention to

any evidence tending to show that Defendants sought or gained

any   personal    benefit       by   taking      unfair      advantage    of     their

relationship with Plaintiff.                Simply put, given that Plaintiff

has   failed     to    adduce    any        evidence    tending    to    show     that

“defendants sought to benefit themselves in the transaction,”

Piles, 187 N.C. App. at 406, 653 S.E.2d at 186, it has failed to

forecast sufficient evidence to establish a constructive fraud

claim governed by a ten year statute of limitations rather than

a breach of fiduciary duty governed by a three year statute of

limitations.11

                            F. Breach of Warranty

      Finally, Plaintiff argues that the trial court erred by

granting    summary     judgment       in    favor     of    Trillium    Links    with

respect to its breach of warranty claim.                       More specifically,

Plaintiff     argues    that     Trillium       Links       breached    the    implied

warranty applicable to condominium units to the effect that “the

premises are free from defective materials, constructed in a

workmanlike      manner,     [and]      constructed          according    to     sound
      11
      However, for the reasons set forth above, Plaintiff’s
breach of fiduciary duty claims survive the summary judgment
stage of this case.
                                        -44-
engineering and construction standards[.]”                   N.C. Gen. Stat. §

47C-4-114.     However, “a declarant and any person in the business

of   selling      real   estate   for     his    own   account   may   disclaim

liability    in    an    instrument     signed    by   the    purchaser   for   a

specified defect or specified failure to comply with applicable

law, if the defect or failure entered into and became a part of

the basis of the bargain.”               N.C. Gen. Stat. § 47C-4-115(b).

Although Trillium Links does not contest the existence of the

warranty upon which Plaintiff’s claim relies or argue that the

record does not contain any evidence tending to show that a

breach of this warranty occurred, it does argue that Plaintiff’s

breach of warranty claim is barred by the applicable statute of

limitations or statute of repose.

     Plaintiff’s claim for breach of warranty is subject to a

three year statute of limitations, with this claim accruing upon

discovery of the breach.          Kaleel Builders, Inc. v. Ashby, 161
N.C. App. 34, 44, 587 S.E.2d 470, 477 (2003) (the statute of

limitations for breach of warranty is three years from the date

of the breach), disc. review denied, 358 N.C. 235, 595 S.E.2d
152 (2004).       As a result of our earlier determination that the

record reflects the existence of a genuine issue of material

fact concerning the date upon which Plaintiff knew or reasonably

should have known of the existence of the construction defects
                                       -45-
upon which its claim relies, we hold that Trillium Links was not

entitled to the entry of summary judgment in its favor with

respect to Plaintiff’s breach of warranty claims on statute of

limitations     grounds.       Similarly,       given    the     existence    of      a

genuine issue of material fact concerning the extent, if any, to

which Trillium Links knew, or had reasonable grounds to know, of

the existence of the defects in the construction of the Trillium

Ridge condominiums, Trillium Links was not entitled to summary

judgment   in   its    favor   on     statute    of   repose     grounds.        As   a

result, to the extent to that the trial court granted summary

judgment in favor of Trillium Links with respect to Plaintiff’s

breach of warranty on the basis of the applicable statute of

limitations or the statute of repose, the trial court erred.

                               III. Conclusion

    Thus, for the reasons set forth above, we conclude that the

trial court correctly granted summary judgment with respect to

some issues and erred by granting summary judgment with respect

to other issues.         As a result, the trial court’s orders and

amended orders should be, and hereby are, affirmed in part and

reversed   in   part    and    this    case     should     be,   and    hereby     is,

remanded   to   the    Jackson      County      Superior    Court      for   further

proceedings not inconsistent with this opinion.

    AFFIRMED IN PART; REVERSED AND REMANDED IN PART.
                              -46-
    Judge STROUD concurs.

    Judge ROBERT N. HUNTER, JR. concurred in part and concurred

in result only in part in separate opinion prior to 6 September

2014.
                                NO. COA14-183

                     NORTH CAROLINA COURT OF APPEALS

                          Filed: 16 September 2014

TRILLIUM RIDGE CONDOMINIUM
ASSOCIATION, INC.,
     Plaintiff,

      v.                                    Jackson County
                                            No. 11 CVS 462
TRILLIUM LINKS & VILLIAGE, LLC;
TRILLIUM CONSTRUCTION COMPANY,
LLC; SHAMBURGER DESIGN STUDIO,
P.C., SHAMBURGER DESIGN, INC.
(f/k/a SHAMBURGER DESIGN STUDIO,
INC.), S.C. CULBRETH, JR., AND
GREGORY A. WARD,
     Defendants.

      HUNTER, JR., Robert N., Judge, concurring.

      I concur in the opinion of the majority in all respects

except for the analysis of the constructive fraud claim.                 For

the reasons discussed in Orr v. Calvert, 212 N.C. App. 254, 270,

713 S.E.2d 39,   50   (Hunter,   Jr.,   J.,   dissenting),   rev’d   for

reasons stated in dissenting opinion, 365 N.C. 320, 720 S.E.2d
387 (2011), I only concur in the results as to this issue.