Lawrence v. General Panel Corp

Filing 29

ORDER AND OPINION This matter is before the Court on Defendant's motion for summary judgment. For the reasons set forth in this order and opinion, the Court certifies the following question to the South Carolina Supreme C ourt: 1. Did 2005 South Carolina Laws Act 27 (H.B. 3008) amend South Carolina Code § 15-3-640 so that, in an action for damages based upon a defective improvement to new construction real property, the date of "substantial completion of th e improvement" is measured from the date of the certificate of occupancy (unless the parties establish a different date by written agreement), superseding the South Carolina Supreme Court's decision in Ocean Winds Corp. of Johns Island v. Lane, 556 S.E.2d 377 (2001)? The Court CERTIFIES the foregoing question to the South Carolina Supreme Court. AND IT IS SO ORDERED. Signed by Honorable Richard M Gergel on 11/14/2017. (sshe, )

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION

Civil Action No. 2: 17-600-RMG

Mark Lawrence, individually and on behalf )
of others similarly situated,
)
)

Plaintiff,

)
)

V.

ORDER AND OPINION

)

)

General Panel Corp., a division of Perma
"R " Products, Inc.,

)
)
)

Defendant.

)

This matter is before the Court on Defendant's motion for summary judgment. For the
reasons set forth below, the Court certifies the following question to the South Carolina Supreme
Court:
1.

Did 2005 South Carolina Laws Act 27 (H.B. 3008) amend South Carolina Code

§ 15-3-640 so that, in an action for damages based upon a defective improvement to newconstruction real property, the date of "substantial completion of the improvement" is measured
from the date of the certificate of occupancy (unless the parties establish a different date by written
agreement), superseding the South Carolina Supreme Court's decision in Ocean Winds Corp. of
Johns Island v. Lane, 556 S.E.2d 377 (2001)?
I.

Background

This is a products liability action.

Defendant General Panel manufactures Structural

Insulated Panels ("SIPs"), which are made using two sheets of oriented strand board with
insulating foam inserted between the sheets. SIPs are an alternative to traditional framing.
Plaintiff's home, located at 675 Faulkner Drive in Mount Pleasant, South Carolina, was built using

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SIPs manufactured by Defendant. Plaintiff alleges the SIPs have failed due to moisture intrusion
because Defendant provided defective installation instructions.
It is undisputed that the SIPs were installed by March 2007. It is also undisputed that the

certificate of occupancy was issued on December 10, 2008. Plaintiff filed the present action on
December 8, 2016, more than eight years after the SIPs were installed, but less than eight years
after the certificate of occupancy was issued.

II.

Legal Standard
South Carolina Appellate Court Rule 244 provides that the South Carolina Supreme Court
in its discretion may answer questions of law certified to it by any federal court of
the United States . .. when requested by the certifying court ifthere are involved in
any proceeding before that court questions of law of this state which may be
determinative of the cause then pending in the certifying court when it appears to
the certifying court there is no controlling precedent in the decisions of the Supreme
Court.

SCA CR 244( a). The certification order must set forth: ( 1) "the questions of law to be answered";
(2) "all findings of fact relevant to the questions certified"; and (3) "a statement showing fully the
nature of the controversy in which the questions arose. " SCA CR 244(b).

III.

Discussion
Defendant has moved for summary judgment, argumg this action is barred by the

applicable statute of repose. South Carolina Code § 15-3-640 provides that damages actions
against manufacturers of components used in the construction of real property must be filed within
eight years of the "substantial completion of the improvement."

Section 15-3-630 defines

"substantial completion" as "that degree of completion of a project, improvement, or a specified
area or portion thereof (in accordance with the contract documents, as modified by any change
orders agreed to by the parties) upon attainment of which the owner can use the same for the

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purpose for which it was intended; the date of substantial completion may be established by written
agreement between the contractor and owner."
Defendant argues that under the statutory definition, the date of "substantial completion"
is the date of the product installation, relying on the South Carolina Supreme Court's decision in

Ocean Winds Corp. ofJohns Island v. Lane, 556 S.E.2d 377(2001 ). In Ocean Winds, the plaintiffs
sued Andersen Windows, among other defendants, for damage resulting from defective windows
that Anderson manufactured and installed during construction of a condominium project. Id. at
378 . The issue before the South Carolina Supreme Court was whether the statute of repose
codified at South Carolina Code § 15-3-640 began to run when the windows were installed or
when the building as a whole was substantially completed. The court held that the statute of repose
began to run when the windows were installed, not when the building was substantially completed
as a whole or when certificates of occupancy were issued. Id. at 380.

Ocean Winds was decided in 2001.

In 2005, the South Carolina General Assembly

amended South Carolina Code§ 15-3-640, reducing the limitations period from thirteen years to
eight years and adding the following language:
For any improvement to real property, a certificate of occupancy issued by a county
or municipality, in the case of new construction or completion of a final inspection
by the responsible building official in the case of improvements to existing
improvements, shall constitute proof of substantial completion of the improvement
under the provisions of Section 15-3-630, unless the contractor and owner, by
written agreement, establish a different date of substantial completion.
2005 S.C. Laws Act 27 (H.B. 3008) § 2.

The amended statute "applies to any applies to

improvements to real property for which certificates of occupancy are issued by a county or
municipality or completion of a final inspection by the responsible local building official after the
effective date" of July 1, 2005. Id. § 16(2). Plaintiff argues that the plain language of South

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Carolina Code § 15-3-640, as amended, provides that the certificate of occupancy provides the
date of substantial completion, unless the parties agree to a different date of substantial completion.
The viability of Plaintiffs claims for simple negligence, strict liability, and breach of
implied warranty of fitness turns on whether Ocean Winds remains the controlling interpretation
of South Carolina Code§ 15-3-640. If Ocean Winds is still good law, Plaintiffs claims are barred
unless he can prove gross negligence or recklessness. 1 If Ocean Winds has been superseded by
statute, the statute ofrepose does not bar any of Plaintiffs claims. Whether a decision of the South
Carolina Supreme Court has been abrogated by an enactment of the South Carolina General
Assembly is a question best addressed to the South Carolina Supreme Court. The Court therefore
certifies to the South Carolina Supreme Court the question, "Did 2005 South Carolina Laws Act
27 (H.B. 3008) amend South Carolina Code § 15-3-640 so that, in an action for damages based
upon a defective improvement to new-construction real property, the date of 'substantial
completion of the improvement' is measured from the date of the certificate of occupancy (unless
the parties establish a different date by written agreement), superseding the South Carolina
Supreme Court's decision in Ocean Winds Corp. ofJohns Island v. Lane, 556 S.E.2d 377 (2001)."
IV.

Conclusion

For the foregoing reasons, the Court CERTIFIES the foregoing question to the South
Carolina Supreme Court.

1

Plaintiff additionally argues Defendant provides an express warranty for the panels that extends

the statute of repose. That argument is without merit. The warranty Plaintiff cites only guarantees

that the panels will "not delaminate or fail structurally during the customer' s lifetime." (Dkt. No.
25-7.) Plaintiffs argue the panels were defective because their instructions were defective, not
because they structurally failed or delaminated. Moreover, Plaintiff does not plead a breach of
express warranty claim.

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AND IT IS SO ORDERED.

November /l(, 2017
Charleston, South Carolina

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