Court Opinion

ID: 6105309
Source: CourtListenerOpinion
Date Created: 2022-01-20 18:04:05.369386+00
Date Added: 2024-06-11T08:53:47.838165
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF DELAWARE

 RYAN AND MARISA                           §
 ALTENBAUGH,                               §   No. 120, 2021
                                           §
       Plaintiffs Below,                   §   Court Below—Superior Court
       Appellants,                         §   of the State of Delaware
                                           §
       v.                                  §
                                           §   C.A. No. N19C-11-046
 BENCHMARK BUILDERS INC.                   §
 and DELAWARE ROOFING &                    §
 SIDING COMPANY L.L.C.,                    §
                                           §
       Defendants Below,                   §
       Appellees.                          §

                           Submitted: November 10, 2021
                             Decided: January 20, 2022

Before VALIHURA, VAUGHN, and TRAYNOR, Justices.

                                      ORDER

      This 20th day of January 2022, upon consideration of the parties’ briefs and

the record of the case, it appears that:

      (1)    The Plaintiffs-Appellants, Ryan and Marisa Altenbaugh (the

“Altenbaughs”), appeal from the Superior Court’s grant of summary judgment in

favor of the Defendants-Appellees, Benchmark Builders Inc. (“Benchmark”) and

Delaware Roofing & Siding Company L.L.C (“DRSC”). The Altenbaughs brought

this action against Benchmark and DRSC alleging that the Appellees were liable for

damages caused by negligence in the construction of the Altenbaughs’ home in
Newark, Delaware. Benchmark and DRSC moved for summary judgment, arguing

that the Altenbaughs’ claim was barred by the applicable three year statute of

limitations because Ryan Altenbaugh was on notice of the alleged negligence since

at least 2011. The Altenbaughs argued that while Ryan was aware of limited water

leaks in the home well before bringing this suit, he was not aware of the alleged

significant construction defects until 2019.     They argued that the statute of

limitations was tolled by the time-of-discovery rule until 2019. The Superior Court

rejected the Altenbaughs’ time-of-discovery argument and found that the cause of

action was time barred because there were undisputed facts showing as a matter of

law that Ryan was on notice of alleged defects since at least 2011.

      (2)    On appeal, the Altenbaughs argue that there are material issues of fact

regarding their level of knowledge of construction defects prior to 2019, and it

should be up to a jury to determine when they were put on notice of the Appellees’

negligence. We find no merit to the Altenbaughs’ claims and affirm the judgment

of the Superior Court.

      (3)    On or about March 31, 2008, Ryan Altenbaugh and his then-wife,

Amee Altenbaugh, purchased a home in the Academy Hills development of Newark

Delaware from Benchmark. On March 2, 2011, Ryan became the sole owner of the

Property. On June 14, 2017, the Property was retitled to include Marisa Altenbaugh,

Ryan’s current wife, as an owner along with Ryan.

                                         2
         (4)     The first mention of a leak appears to be in a letter that Ryan sent to

Benchmark in January of 2009, in which he reported that “[t]he set of 3 windows in

the kitchen are not properly sealed from wind/rain causing at least 2 places where

water has leaked from the top of the window into the kitchen.” 1 In March of that

year, Ryan and Amee prepared a one-year list of warranty items in which they

reported that “the middle of the kitchen windows leaks when it rains.” 2 More

significantly, in January 2011, Ryan sent a letter (the “2011 Letter”) to Benchmark

notifying it of an issue in the property’s basement. In the letter, Ryan described the

scope of the damage:

                 Just recently, I discovered what appears to be a
                 construction defect in my house . . . In the basement, on
                 the wall facing east, near the walk outdoor, there is
                 significant water on the inside of the walls. This includes
                 the plywood boards and the supporting wall frame. The
                 area is about 15 feet horizontal, and 4 feet vertical along
                 this entire section of wall. It appears the walls are soaked,
                 and there are stains along the supporting 2 x 4 wall
                 supports from continued exposure to water. I just noticed
                 this, as the fiber glass insulation was covering most of the
                 issue. This insulation is also partially “sticking” to the
                 wall due to the water.

                 The problem will need to be corrected as soon as possible,
                 as further water damage would eventually compromise the
                 structure of this portion of the wall. I am requesting that
                 Benchmark Builders take a look at the issue and determine

1
    App. to Appellant’s Opening Br. at A112 [hereinafter “A_”].
2
    A171.

                                                 3
               if some correction might be covered under an existing
               warranty.3

After receiving this letter, Benchmark sent a representative to the property who

identified one section of the weep screed4 as the source of the leak. Benchmark’s

representative told Ryan that the issue was limited to one small area of the basement

wall and that he had repaired the problem. The Altenbaughs did not report any

further damage until 2019.

       (5)     In August 2019, a contractor repairing interior drywall in the

Altenbaughs’ bathroom alerted the couple to rotting wood behind the drywall. Soon

after this discovery, the Altenbaughs contracted with Green Valley Group to conduct

a Building Moisture Survey, which uncovered alleged systemic and catastrophic

water intrusion. The bulk of the defects related to a failure to install adequate

flashing around penetrations through the stucco exterior.

       (6)     The Altenbaughs filed their complaint against Benchmark and DRSC

on November 6, 2019, seeking recovery for the alleged damage to their property.5

Benchmark filed a Motion to Dismiss or in the Alternative for Summary Judgment,

contending that the action was time barred under 10 Del. C. § 8106. The Superior

Court denied the Motion to Dismiss and allowed the parties to proceed with

3
  A022.
4
  A weep screed is a special piece of metal flashing that serves as a vent so that moisture can
escape a stucco wall finish just above the foundation.
5
  DRSC was apparently a subcontractor in the construction of the house.

                                                 4
discovery. On March 26, 2021, after discovery, the Superior Court granted the

Appellees’ Motion for Summary Judgment, finding that there were undisputed facts,

in particular the 2011 Letter, that established that Ryan possessed knowledge of

injury to the home since at least 2011.6

       (7)    This Court reviews a grant of summary judgment de novo “to determine

whether, viewing the facts in the light most favorable to the nonmoving party, the

moving party has demonstrated that there are no material issues of fact in dispute

and that the moving party is entitled to judgment as a matter of law.”7

       (8)    Pursuant to 10 Del. C. § 8106(a), “no action to recover damages by an

injury unaccompanied with force or resulting indirectly from the act of the defendant

shall be brought after the expiration of 3 years from the accruing of the cause of such

action.”8 Such statutes are commonly known as “accrual” statutes, and causes of

action under these statutes are deemed to have accrued, and time begins to run, at

the time the tort is committed.9 Consequently, under the general rule in Delaware,

a plaintiff’s cause of action for a negligent construction claim accrues at the time of

construction.10

       (9)    However, in Layton v. Allen,11 this Court explained that the “time-of-

6
  DRSC joined in Benchmark’s Motion for Summary Judgment.
7
  Homeland Ins. Co. of N.Y. v. CorVel Corp., 197 A.3d 1042, 1046 (Del. 2018) (en banc).
8
  10 Del. C. § 8106(a).
9
  Isaacson, Stolper & Co. v. Artisans’ Sav. Bank, 330 A.2d 130, 132 (1974).
10
   Id.
11
   246 A.2d 794 (Del. 1968).

                                              5
discovery” rule could toll the running of such statutes. The time-of-discovery rule

was traditionally applied in medical malpractice cases but has since been expanded

to other actions, including causes of action based on alleged negligent construction

such as the one involved here. Under the time-of-discovery rule, a statute may be

tolled if the injury is inherently unknowable and the plaintiff is blamelessly ignorant

of the cause of action, or if the defendant fraudulently conceals the cause of action.12

If the injury is inherently unknowable, the statutory period will be suspended until

the plaintiff possesses what is referred to as “inquiry notice” of the claim.13 A party

is deemed to have inquiry notice “upon the discovery of facts constituting a basis for

the cause of action, or [where the party] knows facts sufficient to put a person of

ordinary intelligence and prudence on inquiry, which, if pursued, would lead to the

discovery of such facts.”14 The court should consider whether there were red flags

that would have left a prudent person of ordinary intelligence to inquire further.15

       (10) The Appellees do not take issue with the contention that the alleged

construction defects were inherently unknowable at the time Ryan and Amee bought

the house. The dispute concerns when Ryan was put on inquiry notice of the alleged

defects. Accordingly, the issue on appeal is whether there are undisputed facts that

support a finding that Ryan was put on inquiry notice of the alleged negligence more

12
   Id. at 797.
13
   Wal-Mart Stores, Inc. v. AIF Life Ins. Co., 860 A.2d 312, 319 (Del. 2004).
14
   Id.
15
   Coleman v. Pricewaterhousecoopers, LLC, 854 A.2d 838, 842 (Del. 2004).

                                               6
than three years prior to bringing this lawsuit.

       (11) The Altenbaughs argue that the facts are insufficient to show as a matter

of law that Ryan was put on inquiry notice of the construction defects in the home

prior to the Building Moisture Survey in 2019. The Appellees argue, and the

Superior Court agreed, that the 2011 Letter shows that Ryan was on inquiry notice

of a construction defect causing significant water on the inside of the walls in the

home at that time. This fact, the Appellees argue, is undisputed. The Altenbaughs

contend that there is a difference between knowledge of “limited” leaks in their home

and knowledge of a construction defect. The Altenbaughs further argue that because

they do not have specialized knowledge regarding home construction, they

reasonably relied on Benchmark’s evaluation of the basement leak in 2011 and,

therefore, Ryan was not put on notice at that time.

       (12) To support their argument, the Altenbaughs point to several Superior

Court cases where the court refused to decide a time-of-discovery rule issue at the

summary judgment stage because the plaintiffs’ knowledge of construction defects

was disputed.16       However, we find the cases cited by the plaintiff to be

16
   See, e.g., Washington House Condo. Ass’n of Unit Owners v. Daystar Sills, Inc., 2017 WL
3412079 (Del. Super. Aug. 8, 2017); Guerrieri v. Cajun Cove Condo. Counsel, 2007 WL 1520039
(Del. Super. Apr. 25, 2007); S&R Assocs., L.P. v. Shell Oil Co., 725 A.2d 431 (Del. Super. 1998);
Affordable Homes Enters., Inc. v. Nelson, 1994 WL 315227 (Del. Super. May 25, 1994); Council
of Unit Owners of Sea Colony E., Phase III Condo., on behalf of Ass’n of Owners v. Carl M.
Freeman Assocs., Inc., 1988 WL 90569 (Del. Super. Aug. 16, 1988); Queen Anne Pier Condo.
Council v. Raley, 1988 WL 7618 (Del. Super. Jan. 26, 1988).

                                               7
distinguishable and, therefore, unpersuasive. None of the cases discussed in the

Appellants’ brief include communications from the homeowner explicitly stating

that issues with the home were likely caused by a “construction defect.”

      (13) We agree with the Appellees that Ryan was on inquiry notice of water

on the inside of the walls of his home in 2011, when he discovered what he described

as an apparent construction defect, covering a fifteen by four-foot area of the wall in

the basement. At that point, the existence of a water seepage problem was no longer

inherently unknowable. The discovery of soaked walls at that time was sufficient to

put Ryan on notice of a significant water problem, which could have been pursued

at that time and that would have led to the discovery of the construction defects.

Representations made by an agent of the party responsible for the defects do not

render the defects inherently unknowable and cannot simply be accepted at face

value as a reasonable basis for not further investigating and discovering the defects

in 2011.

      NOW, THEREFORE, IT IS THE ORDER of the Court that the judgment of

the Superior Court is AFFIRMED.

                                        BY THE COURT:

                                        /s/ James T. Vaughn, Jr.
                                        Justice

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