Park Place Corporation v. Seaman Corporation
Filing
42
ORDER granting 31 Motion for Summary Judgment as to Defendant Seaman Corporation. Signed by Honorable Bruce Howe Hendricks on 3/14/16.(alew, )
GUNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
GREENVILLE DIVISION
PARK PLACE CORPORATION,
) Civil Action No.: 6:14-CV-2614-BHH
)
Plaintiff, )
vs.
)
)
Opinion and Order
SEAMAN CORPORATION,
)
)
Defendant. )
_________________________________ )
This matter is before the Court on Defendant Seaman Corporation’s (“Seaman”)
Motion for Summary Judgment (ECF No. 31). For the reasons set forth in this Order,
Defendant’s motion is granted.
BACKGROUND
This matter involves a dispute over the application of a warranty regarding a
Seaman roofing membrane product installed at Plaintiff Park Place Corporation’s (“Park
Place”) commercial location, 6801 Augusta Road, Greenville, South Carolina (the
“Property”). Defendant moves for summary judgment on the bases that: (1) there were
no leaks in the roofing membrane during the warranty period that were not repaired by
Seaman pursuant to the warranty, and (2) the hail damage relied upon by Plaintiff is
excluded from warranty coverage.
The loss giving rise to the warranty question occurred as a result of a hail event
or events at the Property. The Property is a large commercial building with a flat roof
that was constructed in 1997. The roofing system installed on the Property at that time
was a Seaman product that came with a warranty, which was issued on or about May
1
19, 1997, and contemplated a 15-year period of protection for repair to leaks in the
roofing system. (Ex. A, Def. Mot. Summ. J., ECF No. 31-1.) Park Place alleges, and the
parties’ independent inspections and evaluations have established, that the roof was
impacted by hail on or about March 31, 2012 and/or on or about April 3, 2012,
approximately six weeks before the warranty’s expiration on May 19, 2012. (Compl.,
ECF No. 1 at ¶ 6; Ex. D, ECF No. 31-4 at 5; Exs. E, F, Pl. Resp. Mot. Summ. J., ECF
Nos. 37-5 at 2, 37-6 at 3.)
Pursuant to the terms of the warranty, Seaman was to repair any leaks in the
roofing system during the applicable period. (Ex. A, ECF No. 31-1.) Specifically, the
warranty states:
SEAMAN CORPORATION warrants to the owner named above (“Owner”)
of the building described herein that, subject to the Terms, Conditions, and
Limitations set forth below, for a period of Fifteen (15) years commencing
with the date of final inspection and acceptance, Seaman Corporation will
repair any leaks in the FiberTite Roofing Systems1 furnished to said
commercial building attributable to Roofing Membrane provided by
Seaman Corporation and/or defective workmanship provided by Seaman
Corporation or its authorized FiberTite Single Ply Roof Applicator.
(Id. at 2 (emphasis in original).) Under “Terms, Conditions & Limitations,” the warranty
states in relevant part: “5. Owner shall give Seaman Corporation written notice at its
address set forth herein not more than thirty (30) days after discovery of any leaks in the
Roofing System.” (Id.) Further, the warranty includes the following limitation: “9. This
warranty shall not be applicable to nor shall Seaman Corporation be responsible for
damage or loss caused in whole or in part by: natural disasters including, but not limited
to lightning, hurricanes, tornadoes or earthquakes . . . .” (Id.)
Over the life of the warranty, Plaintiff contacted Defendant to report numerous
1
FiberTite Roofing Systems appears to be either a product line or an entity within Seaman Corporation,
and is the trade name under which the roof in question was sold. (See Ex. A, ECF No. 37-1.)
2
potential warranty claims. These warranty claims were memorialized by Defendant in a
document called “FiberTite Job Tracker.” (Ex. B, ECF No. 37-2 at 2.) Approximately
thirty-two (32) warranty claims were made by Park Place, resulting in approximately
twenty-eight (28) incidents of repair at Seaman’s expense. (Id.; Ralph Raulie Dep. 37,
Ex. C, ECF No. 37-3.) On or about March 22, 2012, Russell Dickard, a maintenance
employee of Park Place, called Seaman and reported two leaks in the showroom area
of the Property; this call was documented as Service Request 12-0395 in the FiberTite
Job Tracker. (Ex. D, ECF No. 37-4 at 2.) The Seaman service representative made the
following notation, dated April 4, 2012, in the service request history: “per Tom Cuddy at
Wilson roofing have 6 drains that the non-reinforced is cracked, will send me a quote
and pictures. Russell called thinks they have hail damage, Tom check it out Thurs or
Fri, his guys have been up to do temp repairs.” (Id.)
In a report dated April 25, 2012, an insurance adjuster for Capstone ISG, Inc.,
documented an inspection of the roof (“Capstone Report”) performed on April 24, 2012
on behalf of Plaintiff’s insurance company, Westfield Insurance. (Ex. B, ECF No. 31-2.)
The report indicates that the inspection was performed in the presence of the insured
(Park Place) and the insured’s roofer, Chris Cannon of Cannon Roofing. (Id. at 2.) The
report further states:
Our inspection of the single-ply membrane roofing noted no significant
bruising and/or fracturing that would be consistent with hail impacts. We
noted signs of normal wear and tear to the dwellings [sic] roof where water
sits in lower areas and some minor cracking and splitting around the
fasteners and seams. No storm related damage to the membrane roofing.
The insured's roofer agreed with this assessment. The insured noted that
the roof storm drains were replaced right after this storm from damage in
order to prevent further damages.
(Id.) In his deposition, David Orders, Executive Vice President of Administration for Park
3
Place, indicates that he was present for at least part of the inspection on April 24, 2012
and that Mr. Cannon reported back to him after being on the roof with the insurance
adjuster. (Orders Dep. 17-18, Ex. F, ECF No. 31-6.) The warranty expired on May 19,
2012, approximately three and one half weeks after this inspection was conducted.
In a report dated December 14, 2012, an insurance adjuster for Barker Claim
Service, Inc. documented an inspection of the roof (“Barker Report”) performed on
December 10, 2012 on behalf of Westfield Insurance. (Ex. C, ECF No. 31-3.) The report
indicates that the inspection was performed in the presence of Mr. Orders and an
engineer, Craig Williams of Rimkus North Carolina, PLLC (“Rimkus”). (Id. at 2-3.) In his
deposition, Mr. Orders appears to be discussing this December 2012 inspection when
he states:
And I do remember an event which I think was month or two later where I
was on the roof, and it was such a bright day, I didn’t have sunglasses,
and I couldn’t even look at the membrane because it was white, and it was
so bright. Everybody else had sunglasses on, so I couldn’t even stay up
there very long because of the intensity of the light. That’s all I recall.
(Orders Dep. 19, Ex. F, ECF No. 31-6.) The Barker Report states in pertinent part:
During our inspection, we found visible hail damage to the coil fins on 8 air
handlers that are located on the roof. There is [sic] also some visible hail
impacts on several soft metal roof vents spread out across the roof. Many
of these impacts are minor and there are several roof vents with no signs
of hail damage. At the time of our inspection, Mr. Orders walked a small
section of the roof with us and pointed out what he felt was hail damage.
We found and chalked these spiral type marks on the north, south and
middle sections of the building. These areas do appear to have been
caused by an impact of some type however the membranes [sic] surface
does not appear to have been cracked or split as a result of the impact.
Please be advised that there are countless marks like the ones in our
photographs across the entire roof.
(Ex. C, ECF No. 31-3 at 3.)
Mr. Williams of Rimkus prepared an engineer’s report (“Rimkus Report”), dated
4
January 14, 2013, for Westfield Insurance, based on his inspection of the roof on
December 10, 2012. (Ex. D, ECF No. 31-4.) The report stated that Rimkus was
“retained to perform a roof evaluation and determine the cause of the reported [hail]
damage.” (Id. at 4.) Section II of the Rimkus Report, entitled Conclusions, states:
1. The roof was struck by hail as evidenced by the dents in the light gage
metal vent caps, the dents in the fins of the HVAC equipment and the
circular marks on the roofing membrane. 2. The fractures in the roofing
membrane resulted in a reduction of the expected long-term service life of
the roof. 3. The roofing membrane was damaged by wind.
(Id. at 5.) Mr. Orders, described as present on-site during Rimkus’ inspection, was
reported as providing the following information: “The Building was constructed in 1997
and the existing roof covering was part of the original construction of the building.
During the reported storm large hail stones fell on the roof for a period of approximately
30 minutes. Leaks were noted around the roof drains during the storm. These leaks
were repaired.” (Id. at 6.) Notably, there is nothing in the Rimkus Report about any leaks
resultant from the hail storm(s) that were not repaired. In the Analysis section, Mr.
Williams defines hail damage to roofing as “‘a diminution of water shedding capability or
a reduction in the expected long-term service life of the roofing material.’” (Id. at 8
(quoting unknown source).) The report further states:
The individual ring [marks from hail strikes] at the impact locations were
fractures in the [thermoplastic polyolefin] membrane surface. These
fractures made the membrane more susceptible to degradation from UV
light and created locations for potential leaks in the roof. . . . The number
of hail fractures in the TPO roof membrane indicated that individual repairs
to the damage locations would not be practical or cost effective.
(Id. (emphasis added).)
In March 2015, Mr. Williams generated a second report (“Rimkus Supplemental
Report”) upon request of counsel for Westfield Insurance. (Ex. E, ECF No. 31-5.) Mr.
5
Williams was provided with various deposition transcripts and other discovery materials
from this case and was tasked with determining, to the extent possible, the chronology
of events related to the reported hail damage and commenting on the roofing
membrane material that was damaged by the hail storm(s). (Id. at 2, 4.) The
Supplemental Report noted that the roofing membrane was made of a Ketone Ethylene
Ester material, rather than a thermoplastic polyolefin material as originally believed, and
further concluded, inter alia:
6. A report dated December 15, 2014 prepared for Seaman Corporation
by Jim D. Koontz and Associates, Inc. indicated that the Fibertite product
was susceptible to fracturing with hail stones as small as 3/4 inch when
the roofing material was aged. 7. After examining samples of the roof
membrane, Mr. Jonathan Pierson of FTR Technical Services concluded
“The impact which has been reported as stemming from hail has
compromised the overall integrity of the membrane . . . This roof
membrane should be replaced.” 8. According to Mr. Russel Dickard of
Park Place Corporated [sic], there were internal moisture intrusions at
various locations under the roof in the summer of 2012. According to the
report by Mr. Jonathan Pierson of FTR Technical Services, there was
moisture under the roofing membrane on February 1, 2013. The inception
date of the moisture intrusion could not be determined. 9. Impacts that
resulted in cracks or fractures in the top surface of the membrane material
shortened the expected service life of the membrane material and made
the material susceptible to the formation of leaks.
(Id. at 3 (emphasis added).) Notably absent from the Supplemental Report was any
determination or conclusion that unrepaired leaks occurred during the warranty
coverage period. In the Analysis section, Mr. Williams states:
According to Mr. Russell Dickard of Park Place Corporated [sic] there
were internal moisture intrusions at various locations under the roof in the
summer of 2012. He stated that he made attempts to locate the source of
the moisture intrusions through the roofing membrane but these attempts
were not successful. He also stated that he did not consider himself to be
[sic] roofing expert. Based on the lack of written or recorded testimony or
observations, the inception date of the moisture intrusion could not be
determined.
6
There was no reported active leaking on the interior of the building
immediately after the reported storm event on March 31, 2012. The
internal moisture intrusions were not reported until the summer of 2012, in
the range of three to six months after the reported hail impacts. In his
discussion of the damaged roofing samples, Mr. Jonathan Pierson stated
that approximately 30 percent of the impact marks on the top side of the
membrane material have or would compromise the integrity of the
membrane. This statement implied that even if leaking of the membrane
did not occur immediately after the impacts, the damage to membrane
material would result in leaks at a later time. These later leaks would result
from cracking of the bottom side of the membrane material due to
accelerated degradation of the fiber substrate and stress concentration in
to [sic] bottom side where the top side had been compromised. Based on
this information it was concluded that impacts that resulted in cracks or
fractures in the top surface of the membrane material shortened the
expected service life of the membrane material and made the material
susceptible to the formation of leaks.
(Id. at 6.)
In February 2013, Jonathan Pierson of FTR Technical Services prepared a report
(“FTR Report”) on behalf of Seaman, based on his inspection of the roof on February 1,
2013 and evaluation of samples removed at that time. (Ex. F, ECF No. 37-6.) Mr.
Pierson writes, “Based upon a previous telephone discussion of 1-29-13, with Mr.
Orders, there was no current leakage into the structure and my limited internal
observations confirmed this.” (Id. at 2.) He goes on to document his identification of six
(6) sample locations; the reason each sample area was tagged; cleaning, “hands and
knees assessment,” photographing, and patching of each sample area; and any further
analysis specific to each sample area. (Id. at 2-3.) With regard to Sample 3, which was
tagged because there was caulking on the roof surface, the report states: “Please note
that there was evidence of a small amount of moisture on the insulation facer under this
area as illustrated in picture 35.” (Id. at 2.) This is the only sample area in which
moisture was noted. Later in the report, Mr. Pierson describes the results of his analysis
7
of the samples using a hand held magnifying glass:
Top Side Analysis: Very few additional impact fractures were noted via the
magnification. The roof top assessment as to the extent of the damages is
consistent with those illustrated in the sample photographs #2.
Back Side Analysis: While not all the impact fracture, which was noted on
the top side, was "hard" enough to compromise the back side, I estimated
that 30% of the impacts have or will compromise the integrity of the
membrane.
Conclusion: The impact which has been reported as stemming from hail
has compromised the overall integrity of the membrane. It is my opinion
that while there is no immediate danger of catastrophic failure this roof
membrane should be replaced.
(Id. at 3.) Defendant states, and Plaintiff has not contested, that Westfield Insurance
ultimately paid for the roofing system to be replaced and Plaintiff chose another
Seaman membrane roof. (ECF No. 31 at 3.) Further, Defendant asserts that Westfield
Insurance, on behalf of and in the name of Park Place, filed the instant action against
Seaman. (Id.)
In his deposition, Mr. Orders was asked whether he was aware of any active leak
in the roofing system when the April 24, 2012 inspection was conducted, to which he
responded: “I do not remember.” (Orders Dep. 20, Ex. F, ECF No. 31-6.) When asked a
series of questions regarding the existence of any evidence of leaks in the roofing
system between May 2012 and December 2012, Mr. Orders indicated that he knew of
no such evidence. (Id. 30-32.) Moreover, Mr. Orders stated that he was not aware of
any instance where Seaman refused to repair a leak in the roofing system during the
fifteen year warranty period. (Id. 46.)
On June 26, 2014, Plaintiff filed suit in this Court asserting causes of action for
negligence, breach of contract, and breach of warranties. (ECF No. 1 at 2-5.) Defendant
8
filed its Motion for Summary Judgment (ECF No. 31) on May 6, 2015. Plaintiff filed its
Response in Opposition on June 19, 2015 (ECF No. 37), and Defendant filed its Reply
on June 24, 2015 (ECF No. 38). The Court has thoroughly reviewed these filings and
now issues the following ruling.
STANDARD OF REVIEW
The court shall grant summary judgment “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to a judgment as a
matter of law.” Fed. R. Civ. P. 56(a). The movant bears the initial burden of
demonstrating that summary judgment is appropriate; if the movant carries its burden,
then the burden shifts to the non-movant to set forth specific facts showing that there is
a genuine issue for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). If a
movant asserts that a fact cannot be disputed, it must support that assertion either by
“citing to particular parts of materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations, stipulations (including those
made for purposes of the motion only), admissions, interrogatory answers, or other
materials;” or “showing . . . that an adverse party cannot produce admissible evidence
to support the fact.” Fed. R. Civ. P. 56(c)(1).
Accordingly, to prevail on a motion for summary judgment, the movant must
demonstrate that: (1) there is no genuine issue as to any material fact; and (2) that he is
entitled to judgment as a matter of law. As to the first of these determinations, a fact is
deemed “material” if proof of its existence or non-existence would affect disposition of
the case under applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). An issue of material fact is “genuine” if the evidence offered is such that a
9
reasonable jury might return a verdict for the non-movant. Id. at 257. In determining
whether a genuine issue has been raised, the court must construe all inferences and
ambiguities against the movant and in favor of the non-moving party. United States v.
Diebold, Inc., 369 U.S. 654, 655 (1962).
Under this standard, the existence of a mere scintilla of evidence in support of
the non-moving party’s position is insufficient to withstand a summary judgment motion.
Anderson, 477 U.S. at 252. Conclusory allegations or denials, without more, are
likewise insufficient. Ross v. Communications Satellite Corp., 759 F.2d 355, 365 (4th
Cir. 1985). “Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary judgment. Factual disputes
that are irrelevant or unnecessary will not be counted.” Anderson, 477 U.S. at 248.
DISCUSSION
Seaman makes the following arguments in support of its Motion for Summary
Judgment. First, it claims that as a matter of straightforward factual analysis, it did not
breach the warranty. Seaman emphasizes that the warranty covers leaks, and states
that Seaman will repair any such leaks during the warranty period. Seaman asserts that
there is simply no evidence of any unrepaired leaks during the term of the warranty.
Rather, leaks were reported on March 22, 2012, an inspection revealed problems with
six drains, and it is undisputed that the leaks coming from the drains were repaired by
the end of April 2012.
Second, Seaman argues that hail damage was excluded by the warranty. Here,
Seaman asserts that hail, although not specifically itemized in the limitations portion of
the warranty, should be included within the definition of “natural disaster.” In support of
10
this proposition, Seaman draws on two Court of Appeals decisions that include hail in
the category of “natural disaster” in the Disaster Assistance Act of 1988 and the Federal
Crop Insurance Act respectively. (See ECF No. 31 at 6 (citing Greenhorn Farms v.
Espy, 39 F.3d 963, 963 (9th Cir. 1994); Meyer v. Conlon, 162 F.3d 1264, 1266 (10th
Cir. 1998).)
Alternatively, if the Court were to determine the term “natural disaster” as
included in the warranty to be ambiguous, Seaman argues that the Court must give
legal effect to the parties’ intentions as determined by the contractual language. See
Beaufort Cnty. Sch. Dist. v. United Nat. Ins. Co., 709 S.E.2d 85, 90 (S.C. Ct. App.
2011). When a contract is ambiguous, the Court may consider extrinsic evidence to aid
interpretation of the relevant language. Rhame v. Nat'l Grange Mut. Ins. Co., 121 S.E.2d
94, 97 (S.C. 1961). Seaman asserts that in the event of such ambiguity, the Court
should look to the parties’ expectations and trade usage to define “natural disaster.”
Seaman contends that it expected hail to be included within “natural disaster” and that
at the time the warranty was issued the commercial roofing industry simply did not
warrant against hail damage (see ECF No. 31 at 7; Raulie Dep. 72-73, Ex. G, ECF No.
31-7; Raulie Affidavit 2-3, Ex. H, ECF No. 31-8); meanwhile, argues Seaman, Park
Place did not, indeed could not, have had any expectation about how “natural disaster”
would be defined, because Park Place’s corporate representative, Mr. Orders, testified
that he never even read the warranty until sometime after the hail storm at issue and
was ambivalent on the parameters of the term (see Orders Dep. 42-44, 48, Ex. F, ECF
No. 31-6).
Third, Seaman argues that Plaintiff did not notify Seaman of any alleged leak
11
resulting from the hail storm(s), and that written notice was a prerequisite to any duty to
repair under the warranty. (See ECF No. 31 at 8-10.) Here, Seaman cites paragraph 5
of the Terms, Conditions, & Limitations section, which states: “Owner shall give Seaman
Corporation written notice at its address set forth herein not more than thirty (30) days
after discovery of any leaks in the Roofing System.” (Ex. A, ECF No. 31-1 at 2.)
Seaman avers that notice of the existence of a leak in the roof is a condition precedent
to Seaman’s performance under the warranty. (ECF No. 31 at 8 (citing Byrd v.
Livingston, 727 S.E.2d 620, 623 (S.C. Ct. App. 2012) (“A condition precedent to a
contract is any fact other than the lapse of time, which, unless excused, must exist or
occur before a duty of immediate performance arises.” (internal quotation marks and
citation omitted))).) Seaman further argues that such a reading is the only reasonable
construction of the warranty language, and that the notice requirement is specifically
designed to mitigate damage through early detection and prevent difficulty in
determining the actual source of a leak, especially where some causes of leaks (e.g.
natural disasters) are excluded from coverage. (Id. at 9.)
Fourth, Seaman argues that to the extent Plaintiff’s claims are based on alleged
breach of implied warranties of merchantability, fitness for a particular purpose, and
quality workmanship, such claims are inapposite because Seaman properly disclaimed
any implied warranties on the face of the contract. The warranty specifically states:
SEAMAN CORPORATION MAKES NO WARRANTY THAT THE
ROOFING SYSTEM IS MERCHANTABLE OR FIT FOR ANY
PARTICULAR PURPOSE, THERE BEING NO WARRANTIES, EXPRESS
OR IMPLIED, WHICH EXTEND BEYOND THE FACE HEREOF.
(Ex. A, ECF No. 31-1 at 2.) Seaman asserts that this clause constitutes an effective
disclaimer of implied warranties pursuant to S.C. Code § 36-2-316. Plaintiff does not
12
contest Defendant’s motion in this regard. (ECF No. 37 at 8.) There being no
disagreement between the parties on this point, the Court finds that Defendant
effectively disclaimed any implied warranties and Plaintiff’s allegations based on that
theory are without merit.
Finally, Seaman argues that the Court should limit damages to $226,500 as a
matter of law, because that was the cost of the original roof. The warranty specifically
states: “Seaman Corporation will repair any leaks in the Roofing System at its expense,
but in no event shall Seaman Corporation’s obligation over the lifetime of the warranty
exceed the Owner’s original cost of the installed roof.” (Ex. A, ECF No. 31-1 at 2.)
Plaintiff has stipulated to this limit on the total recoverable damages. (ECF No. 37 at 8.)
Again, due to an absence of disagreement between the parties, the Court finds that the
total amount of recoverable damages is so limited. But this limitation is moot because,
as further elucidated below, by way of this Order the Court grants Defendant’s Motion
for Summary Judgment.
The Court finds that Seaman has born its initial burden of demonstrating that
summary judgment is appropriate and shifted the burden to Park Place to set forth
specific facts showing there is a genuine issue for trial. See Celotex, 477 U.S. at 322.
Park Place responds that Seaman breached the warranty because it failed to
investigate reports of potential hail damage that occurred on March 31 and/or April 3,
2012. Plaintiff argues that shortly after it complained about potential damage to the roof
from hail, a contractor was sent by Seaman to investigate, and through that
investigation discovered that there was cracking in and around six drains. Plaintiff
further asserts that although these drains were repaired under the terms of the
13
warranty, no investigation was conducted with respect to other portions of the roof. Had
Seaman conducted an appropriate investigation, avers Plaintiff, it would have learned
that the hail storm(s) had damaged the roof to a degree requiring total replacement.
(See ECF No. 37 at 3.)
In furtherance of this argument, Plaintiff asserts that nothing in the warranty
excludes damage resulting from hail. Discussing the “natural disasters” exclusion
clause, Plaintiff states, “By specifically identifying various natural disasters, but by
excluding hail from the definition, there is a clear fact question about the scope of the
warranty, and what is to be included and/or excluded.” (Id. at 3-4.) Plaintiff points to
marketing materials from Seaman’s website predating the loss at issue, that purportedly
infer that hail damage is warrantied. (See Ex. G, ECF No. 37-7 at 2 (discussing in
general the value of a roofing membrane warranty and stating, “Is the warranty prorated and does it include exclusions such as ponding water, hail, oil and grease?
If so, be sure to factor the potential future expenditures to repair or replace a failed roof
into your buying decision.” (emphasis in original)).)
Plaintiff is correct that whether or not hail should be included within the scope of
the term “natural disasters” in the warranty is a question of fact, but wrong about the
notion that dispute over this question prevents the entry of summary judgment in this
case. “If the contract’s language is clear and unambiguous, the language alone,
understood in its plain, ordinary, and popular sense, determines the contract’s force and
effect.” Beaufort Cty. Sch. Dist. v. United Nat. Ins. Co., 709 S.E.2d 85, 90 (S.C. Ct. App.
2011). “‘A contract is ambiguous only when it may fairly and reasonably be understood
in more ways than one.’” Padgett v. S.C. Ins. Reserve Fund, 531 S.E.2d 305, 307 (S.C.
14
Ct. App. 2000). “It is a question of law for the court whether the language of a contract is
ambiguous. Once the court decides the language is ambiguous, evidence may be
admitted to show the intent of the parties. The determination of the parties’ intent is then
a question of fact.” S.C. Dep’t of Nat. Res. v. Town of McClellanville, 550 S.E.2d 299,
302-03 (S.C. 2001) (internal citations omitted). The Court finds that the term “natural
disaster” in the warranty may fairly and reasonably be understood in more ways than
one, namely, as including or excluding hail storms. But this ambiguity is immaterial and
does not prevent the entry of summary judgment, because, as more fully explicated
below, even accepting the non-movant’s assertion that leaks ensuing from hail damage
are warrantied would not affect the disposition of the case. See Anderson, 477 U.S. at
248. Again, “Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary judgment.” Id.
Summary judgment is appropriate in this case for the simple reason that Plaintiff
has not presented any evidence of a leak in the roofing membrane during the term of
the warranty about which it notified Seaman, and that Seaman failed to repair. Neither
can Plaintiff uncover any such evidence through further discovery or at trial as: (1) the
relevant witnesses have been deposed and have not been able to provide testimony to
aid Plaintiff in overcoming this hurdle, and (2) the roofing membrane has long been
replaced and discarded, thereby foreclosing any opportunity for further testing in an
attempt to date leaks within the term of the warranty. Plaintiff has shown, and Seaman
admits, that the roof sustained damage from hail. However, as Seaman has argued and
the Court agrees, the warranty provides no coverage for damage alone; rather,
remedies are provided for leaks reported during the warranty period. (Def. Reply Mot.
15
Summ. J., ECF No. 38 at 1.)
Plaintiff cites the FTR Report prepared by Mr. Pierson for the notion that “as a
result of hail damage, approximately 30% of the roof had been compromised,” and “hail
in March and April, 2012, well within the warranty period, compromised the roof and
resulted in the need for repair.” (ECF No. 37 at 4.) Of the six roofing membrane samples
taken by Mr. Pierson, he noted a small amount of moisture on the insulation facer under
one sample. (Ex. F, ECF No. 37-6 at 2.) However, it is undisputed that Mr. Pierson’s
discovery of this moisture occurred in February 2013, more than eight months after the
warranty expired. Despite Plaintiff’s valiant efforts, there is simply no evidence of any
leak that went unrepaired by Seaman during the warranty coverage period.
At the same time Plaintiff points to Mr. Pierson’s conclusion that the roofing
membrane should be replaced as evidence of warrantable damage, Plaintiff overlooks
the Capstone Report, which documents an April 24, 2012 inspection that revealed no
leaks in the roof. Rather, the Capstone Report, prepared at the behest of Plaintiff’s
insurer, notes “no significant bruising and/or fracturing that would be consistent with hail
impacts,” “no storm related damage to the membrane roofing,” and “the insured noted
that the roof storm drains were replaced right after this storm from damage in order to
prevent further damages.” (Ex. B, ECF No. 31-2 at 2.) Regardless of the fact that this
assessment about the lack of hail damage later proved to be inaccurate, the fact
remains that the inspection closest in time to the hail storm(s) revealed no existing leaks
attributable to the hail.
The next inspection in succession, conducted on December 10, 2012 at Plaintiff’s
insurer’s behest, also revealed no leaks in the roof. The Barker Report generated by the
16
claims adjuster on site at the time states:
. . . Mr. Orders walked a small section of the roof with us and pointed out
what he felt was hail damage. We found and chalked these spiral type
marks on the north, south and middle sections of the building. These
areas do appear to have been caused by an impact of some type however
the membranes [sic] surface does not appear to have been cracked or
split as a result of the impact.
(Ex. C, ECF No. 31-3 at 3 (emphasis added).) Furthermore, the Rimkus Report,
generated by Mr. Williams who was present for the same inspection, similarly notes no
leaks. Thus, Plaintiff’s own expert concludes that the hail damage “resulted in a
reduction of the expected long-term service life of the roof,” but did not actually produce
any leaks. (Ex. D, ECF No. 31-3 at 5.) Moreover, the Rimkus Report reiterates that any
leaks actually identified were repaired when it documents Mr. Orders’ statements at the
time of the December 10, 2012 inspection: “Leaks were noted around the roof drains
during the storm. These leaks were repaired.” (Id. at 6.) The Rimkus Report further
explains that damage to the roofing membrane is defined as “punctures, fractures, tears
or bruises in the membrane to the extent that the substrate becomes exposed.
Exposure of the substrate leads to premature degradation of the substrate due to
increased exposure to ultra-violet (UV) light.” (Id. at 8) And such degradation “will result
in a reduction of the expected long-term service life of the roof.” (Id.) But the closest the
Rimkus Report comes to documenting actual leaks from the hail is when it says, “The
individual rings at the impact locations were fractures in the TPO membrane surface.
These fractures made the membrane more susceptible to degradation from UV light and
created locations for potential leaks in the roof.” (Id. (emphasis added).) Putting aside
the fact that the underlying inspection was conducted six months after the warranty
expired, “potential leaks” are not the same as actual leaks.
17
Mr. Williams’ second report, the Rimkus Supplemental Report, is similarly
unavailing to Plaintiff as a source of evidence of unrepaired leaks during the warrantied
period. In March 2015, at Plaintiff’s counsel’s direction, Mr. Williams was tasked with
reviewing the pleadings, deposition transcripts, and discovery materials in this case in
order to develop a chronology of events related to the hail damage and comment on the
roofing membrane material damaged by the storm(s). (Ex. E, ECF No. 31-5 at 2, 4.) The
relevant language from the Rimkus Supplemental Report states:
According to Mr. Russell Dickard of Park Place Corporated [sic] there
were internal moisture intrusions at various locations under the roof in the
summer of 2012. He stated that he made attempts to locate the source of
the moisture intrusions through the roofing membrane but these attempts
were not successful. He also stated that he did not consider himself to be
[sic] roofing expert. Based on the lack of written or recorded testimony or
observations, the inception date of the moisture intrusion could not be
determined.
There was no reported active leaking on the interior of the building
immediately after the reported storm event on March 31, 2012. The
internal moisture intrusions were not reported until the summer of 2012, in
the range of three to six months after the reported hail impacts.
(Id. at 6.) It is notable that Plaintiff does not contest that the moisture intrusions Mr.
Dickard apparently described in his deposition were not discovered until the warranty
had already expired, nor that the inception date of such intrusions could not be
discovered. Plaintiff’s own expert has concluded as much. The Court accepts
Defendant’s invitation to take judicial notice that summer 2012 began on June 20,
approximately one month after the warranty period ended. It is further notable that
Plaintiff does not use Mr. Dickard’s deposition testimony in support of its Response in
Opposition to the Motion for Summary Judgment. (See ECF No. 37.) The Court can
only conclude that there is no further specificity therein which would date the moisture
18
intrusions within the warrantied period. Plaintiff asserts that, “At the very least, there is a
question of fact as to whether and to what extent leaks existed as a result of the hail
damage which occurred in March/April, 2012.” (Id. at 5.) But the Court disagrees.
Defendant has made its initial showing that summary judgment is appropriate and
shifted the burden to Plaintiff to show some evidence of leaks that went unrepaired
during the term of the warranty. Plaintiff has failed to do so, and the Court enters
summary judgment accordingly.
Mr. Orders deposition testimony is further support for the absence of any leaks
that went unrepaired during the warrantied period. When asked whether he was aware
of any active leak in the roof at the time of the April 24, 2012 inspection, he stated “I do
not remember” before going on to discuss the drain leaks that were appropriately
repaired. (Orders Dep. 20, Ex. F, ECF No. 31-6.) When asked if he was aware of any
evidence that there was an existing leak between May 2012 and December 2012, he
stated “I am not.” (Id. 30-32.) When asked whether he, as the management
representative for Park Place, contended that Seaman failed to repair any leaks during
the warranty period, he stated “I’m not aware of any refusals to repair leaks by
Seamans [sic].” (Id. 46.)
The parties are at odds about whether Plaintiff notified Defendant of leaks during
the warrantied period, thus triggering Defendant’s duty to make repairs. Seaman argues
that notification of a specific leak is a condition precedent to its duty to make repairs
under the warranty, citing paragraph 5 of the Terms, Conditions & Limitations section.
(See Ex. A, ECF No. 31-1 at 2 (“Owner shall give Seaman Corporation written notice at
its address set forth herein not more than thirty (30) days after discovery of any leaks in
19
the Roofing System.”)); see also Byrd v. Livingston, 727 S.E.2d 620, 623 (S.C. Ct. App.
2012).2 Meanwhile, Plaintiff cites an April 4, 2012 service note associated with the
March 22, 2012 service call (Ex. D, ECF No. 37-4 at 2) as evidence that Park Place met
its burden of notifying Seaman, thus triggering a duty on Seaman’s part to investigate
potential hail damage and make any necessary repairs. The undisputed evidence
reflects that the two roof leaks reported on March 22, 2012 were inspected, determined
to be resultant from problems with six drains, and repaired by approximately April 18,
2012, when the repair ticket was closed out. (See id. at 2-3; Ex. B, ECF No. 37-2 at 2.)
Putting aside any technicalities about the required notice being in writing, the Court
agrees with Seaman that notice of an actual leak is a condition precedent to Seaman’s
duty to repair. This is the only reasonable construction of the warranty language as a
whole. Such a notice requirement is, of course, designed to put the onus of discovering
any leaks on the building owner, as Seaman cannot possibly be responsible for ongoing
monitoring of all the roofing membranes it installs. The only actual leaks of which
Seaman was notified in the time period relevant to this case were those indicated by Mr.
Dickard on March 22, 2012. Those leaks were properly repaired, and an inspection
conducted at the direction of Plaintiff’s insurer one week later (Capstone Report)
revealed no ongoing leaks. Again, Seaman has shown that summary judgment is
appropriate and Plaintiff has not produced evidence of any leak it reported during the
term of the warranty and which Seaman failed to repair.
Finally, to the extent that Plaintiff advances negligence as a theory of liability in
2
“The question of whether a provision in a contract constitutes a condition precedent is a question of
construction dependent on the intent of the parties to be gathered from the language they employ.” Byrd,
727 S.E.2d at 623 (quoting Brewer v. Stokes Kia, Isuzu, Subaru, Inc., 613 S.E.2d 802, 805 (S.C. Ct. App.
2005).
20
this case, the Court grants summary judgment with respect to that claim as well. In its
Complaint, Plaintiff advances, inter alia, a litany of alleged failures by Seaman to
exercise due care in designing, manufacturing, selling, testing, and distributing its
roofing products, as well as alleged failures to instruct, supervise, monitor, and retain
competent employees and agents. (See ECF No. 1 at 2-4.) However, it is entirely
unclear what the source of duty is in all of these putative negligence claims. In the
briefing on the Motion for Summary Judgment, Plaintiff appears to have narrowed its
negligence theory down to the notion that because Mr. Dickard mentioned potential hail
damage in a service call to Seaman, this invoked a general duty on Seaman’s part to
conduct an in-depth inspection of the roofing membrane. On this point the Court would
say very little. Seaman had no affirmative duty to discover leaks based on a report of
potential hail damage. Plaintiff’s Response in Opposition to the Motion for Summary
Judgment is devoid of citation to any authority to support the assertion that such a duty
exists at common law. The Court finds that no such duty is imposed by the language of
the warranty. As noted above, the warranty places the onus of discovery and notification
of leaks on the building owner. And even if Seaman had investigated, Plaintiff has
submitted no evidence that Seaman would have found any leaks. Indeed, the available
evidence suggests the contrary. The inspection occurring closest in time to the hail
storm(s) was documented in the Capstone Report, which notes “no significant bruising
and/or fracturing that would be consistent with hail impacts,” “signs of normal wear and
tear,” and “no storm related damage to the membrane roofing.” (Ex. B, ECF No. 31-2 at
2.) Moreover, Park Place’s roofer, Mr. Cannon, who was present for the inspection,
agreed with that assessment. (Id.)
21
The warranty at issue was to repair leaks, not to replace the roof if damage led to
fractures and fissures that would reduce its lifespan. As such, Defendant’s Motion for
Summary Judgment is granted.
CONCLUSION
After careful consideration of the parties’ briefs and the associated record, the
Court GRANTS Defendant’s Motion for Summary Judgment.
IT IS SO ORDERED.
/s/ Bruce Howe Hendricks
United States District Judge
March 14, 2016
Greenville, South Carolina
22
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?