Willow Greene Homeowners Association v. Gerard Roofing Technologies et al

Filing 49

MEMORANDUM OPINION re Granting in Part and Denying in Part 31 MOTION for Summary Judgment filed by Gerard Roofing Technologies, Metals USA, Inc., Denying 41 MOTION to Strike 37 Additional Attachments to Main Document, Denying 35 MOTION to Strike Defendants' Summary Judgment Evidence filed by Willow Greene Homeowners Association. Signed by Magistrate Judge Amos L. Mazzant on 10/9/14. (cm, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

WILLOW GREENE HOMEOWNERS,
ASSOCIATION

§
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§
§
V.
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GERARD ROOFING TECHNOLOGIES, A §
DIVISION OF METALS USA BUILDING §
PRODUCTS, L.P. AND METALS USA, §
INC.
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CASE NO. 4:13-CV-176
Judge Mazzant

MEMORANDUM OPINION
Pending before the Court is Defendants’ Motion for Summary Judgment on Their
Affirmative Defense of Statutes of Limitations (Dkt. #31). The Court, having considered the
relevant pleadings, finds that Defendants’ Motion for Summary Judgment should be granted in part
and denied in part.
BACKGROUND1
Plaintiff Willow Greene Homeowners Association (“Willow Greene”) is a homeowners
association comprised of a twenty-five (25) building, 174-unit complex of one and two-story
multi-family condominiums that is more than thirty (30) years old and has suffered from numerous
structural problems dating back to the late 1980’s, including, but not limited to, deteriorated siding,
cracks and holes in the stucco, window sealant problems and roof leaks. In 2003 and 2004, the
concrete tile roofs at Willow Greene severely leaked, forcing Willow Greene to replace the roofs.

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Each side has filed a motion to strike summary judgment evidence (Dkt. #35, #41). In
reviewing Defendants’ motion for summary judgment, the Court only considered proper
summary judgment evidence as provided by the parties. Accordingly, the motions to strike are
denied, and the objections are overruled.

Willow Greene hired a professional roofing consultant and considered multiple products for the
replacement roofs. Willow Greene ultimately chose to follow the advice of its roofing consultant,
Mr. Emmett Marshall (“Marshall”), and contracted with installer Horn Brothers Roofing to purchase
and install the Gerard Granite Ridge roofing system. Defendant Gerard Roofing Technologies, a
Division of Metals USA Building Products, L.P. (“Gerard”) provided a fifty-year limited product
warranty on the replacement roofing products sold to Willow Greene. Horn Brothers Roofing
provided a ten-year workmanship warranty on its work replacing the defective and leaking roofs at
Willow Greene.
In 2012, Willow Greene made an initial warranty claim with Gerard, and filed this lawsuit
against Defendants on February 14, 2013. Willow Greene asserts the following claims against
Defendants: strict product liability; breach of express warranty; breach of implied warranty of
merchantability; violations of the deceptive trade practices act; negligence; negligent
misrepresentation; and fraud. Defendants denied all allegations in Willow Greene’s lawsuit and
have asserted several affirmative defenses including, but not limited to, improper installation and
the applicable statutes of limitations.
On July 21, 2014, Defendants filed a motion for summary judgment on the affirmative
defense of statute of limitations (Dkt. #31). On August 7, 2014, Plaintiff filed a response (Dkt. #37).
On August 18, 2014, Defendants filed a reply (Dkt. #42). On August 22, 2014, Plaintiff filed a surreply (Dkt. #43).
LEGAL STANDARD
The purpose of summary judgment is to isolate and dispose of factually unsupported claims
or defenses. See Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). Summary judgment is proper
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if the pleadings, the discovery and disclosure materials on file, and any affidavits “[show] that there
is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). A dispute about a material fact is genuine “if the evidence is such that
a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). The trial court must resolve all reasonable doubts in favor of the party
opposing the motion for summary judgment. Casey Enterprises, Inc. v. American Hardware Mut.
Ins. Co., 655 F.2d 598, 602 (5th Cir. 1981) (citations omitted). The substantive law identifies which
facts are material. Anderson, 477 U.S. at 248.
The party moving for summary judgment has the burden to show that there is no genuine
issue of material fact and that it is entitled to judgment as a matter of law. Id. at 247. If the movant
bears the burden of proof on a claim or defense on which it is moving for summary judgment, it must
come forward with evidence that establishes “beyond peradventure all of the essential elements of
the claim or defense.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). But if the
nonmovant bears the burden of proof, the movant may discharge its burden by showing that there
is an absence of evidence to support the nonmovant’s case. Celotex, 477 U.S. at 325; Byers v. Dallas
Morning News, Inc., 209 F.3d 419, 424 (5th Cir. 2000). Once the movant has carried its burden, the
nonmovant must “respond to the motion for summary judgment by setting forth particular facts
indicating there is a genuine issue for trial.” Byers, 209 F.3d at 424 (citing Anderson, 477 U.S. at
248-49). The nonmovant must adduce affirmative evidence. Anderson, 477 U.S. at 257.
DISCUSSION AND ANALYSIS
The only issue raised in Defendants’ motion is whether, as a matter of law, Willow Creek’s
asserted claims are barred by the applicable statutes of limitations. Defendants assert that Willow
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Greene’s causes of action have a limitations period of two or four years that began to accrue in 2005,
after the roofs were installed and allegedly leaked. As such, according to Defendants, any claim by
Willow Greene with a two-year limitations period needed to be filed by 2007, and any Willow
Greene claim with a four-year limitations period needed to be filed no later than 2009. Defendants
assert that instead, Willow Greene waited until approximately eight years after the defective
installation, and Willow Greene’s discovery of the resulting alleged leaks, to bring this lawsuit.
Therefore, Defendants argue that given that all of Willow Greene’s claims in this lawsuit are subject
to a two-year or four-year statute of limitations, all of Willow Greene’s claims are barred by the
applicable statutes of limitations.
Although Texas law must be consulted to determine the applicable limitations periods,
federal law determines when a cause of action accrues. Williams v. Upjohn Co., 153 F.R.D. 110, 113
(S.D. Tex. 1994) (citing Slack v. Carpenter, 7 F.3d 418, 419 (5th Cir. 1993); Gartrell v. Gaylor, 981
F.2d 254, 257 (5th Cir. 1993)). “In most cases, a cause of action accrues when a wrongful act causes
a legal injury, regardless of when the plaintiff learns of that injury or if all resulting damages have
yet to occur.” Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex. 2003); TIG Ins.
Co. v. Aon Re, Inc., 521 F.3d 351, 355 (5th Cir. 2008).
In this case, Willow Greene filed suit almost eight years after the new roof was installed, and
its claims are barred unless the discovery rule2 applies. “The discovery rule ‘defers accrual of a
cause of action until the plaintiff knew or, exercising reasonable diligence, should have known of
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Although Plaintiff did not plead the discovery rule and Defendants object to the
assertion of this theory, the Court overrules the objection, and finds that Plaintiff’s state court
petition asserts facts that raise the question of the discovery rule. Moreover, since the petition
alleges facts that raise the issue of the discovery rule, Plaintiff did not have to plead it. See TJG
Ins. Co. v. Aon Re, Inc., 521 F.3d 351, 357 (5th Cir. 2008).
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the facts giving rise to the cause of action.’” Milton v. Stryker Corp., 551 F. App’x 125, 127 (5th Cir.
2014) (quoting Computer Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex. 1996)).
“Whether the discovery rule applies in a particular case is determined categorically; not on a
case-by-case basis.” Id. (citing Computer Assocs., 918 S.W.2d at 457). “The discovery rule is ‘a very
limited exception to statutes of limitations’ and only applies when the nature of the injury is both
‘inherently undiscoverable’ and ‘objectively verifiable.’” Id. at 127-28 (quoting Wagner & Brown,
Ltd. v. Horwood, 58 S.W.3d 732, 734 (Tex. 2001)). To be “inherently undiscoverable,” an injury
need not be absolutely impossible to discover, nor does “inherently undiscoverable” mean merely
that a particular plaintiff did not discover his injury within the prescribed period of limitations. S.V
v. R.V, 933 S.W.2d 1, 7 (Tex. 1996). The requirement of inherent undiscoverability recognizes that
the discovery rule exception should be permitted only in circumstances where “it is difficult for the
injured party to learn of the negligent act or omission.” Computer Associates, 918 S.W.2d at 456
(quoting Willis v. Maverick, 760 S.W.2d 642, 645 (Tex. 1988)). The “objectively verifiable” second
element of applying the discovery rule can be proven by showing that the facts upon which liability
was asserted can be demonstrated by direct, physical evidence. S.V., 933 S.W.2d at 7.
Defendants assert that the discovery rule does not linger until a claimant learns of actual
causes and possible cures, but instead, it tolls limitations only until a claimant learns of a wrongful
injury, citing PPG Indus., Inc. v. JMB/Houston Ctrs. Partners Ltd., 146 S.W.3d 79, 93 (Tex. 2004),
in support of this proposition. Defendants argue that in the context of leaks from windows, roofs,
and sewers, the application of the discovery rule ends when an owner “knows of enough leaks to
indicate [that] the problem is not isolated.” Id . and 94 n.78. Defendants argue that the application
of the discovery rule ended in 2007 at the very latest, by which time Willow Greene had: (1)
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experienced leaks in at least twenty-four percent (24%) of the units at Willow Greene; (2) made at
least 200 service calls to its installer; (3) contacted Gerard and asked it to perform an inspection of
the Granite Ridge roofing system due to leaks; (4) retained ECI; and (5) was advised by its roofing
consultant, Marshall, to file a warranty claim with Gerard.
Plaintiff asserts that the condominiums were subject to numerous water intrusion issues such
as leaking chimney caps and skylights and that it acted diligently from the beginning of the water
intrusion by hiring Marshall and ECI to inspect and report problems, calling Horn Brothers to fix
known points of water intrusion, and requesting an inspection from Gerard. Plaintiff asserts that none
of the work performed over the seven years indicated an issue with the Granite Ridge roofing system.
Plaintiff argues that it took extreme measures in order to discover the true cause of the water
intrusion. Plaintiff asserts that it knew of water intrusion, but not from the roof itself.
Defendants bear the burden of proving all the elements of the affirmative defense of
limitations, but Plaintiff bears the burden of producing summary judgment evidence capable of
raising a genuine issue of material fact as to whether the discovery rule applies to defer the running
of limitations.
Defendants respond that Plaintiff concedes that it was long aware of a water intrusion
problem and that Plaintiff attempts to expand the discovery rule to include “who has inflicted the
injury” which is not part of the discovery rule test. Defendants assert that the discovery rule cannot
toll limitations beyond 2007, at which time Plaintiff experience a roof leak “epidemic” which
required it to investigate all potential sources of the leaks, including, but not limited to, the Granite
Ridge roof that was installed in 2005.
The Court agrees that the discovery rule does not toll the statute of limitations until the
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injured party discovers the identity of the party who caused the alleged injury. However, Plaintiff
counters by arguing that it exercised incredible diligence and was never on notice that the Granite
Ridge panels themselves were leaking until 2012. Willow Greene asserts that it first discovered that
the Granite Ridge panels were leaking in February 2012. After a diligent search for the cause of the
leaks and extensive testing, Plaintiff argues that it had notice of water intrusion into the units, not
that the roof leaked. After considering the arguments of the parties and the summary judgment
evidence, the Court finds that there is a material fact issue on when Plaintiff's claim accrued and
whether Plaintiff exercised diligence in its efforts to discover the injury, and this factual dispute
should be decided by a jury. Summary judgment should be denied.
Plaintiff agrees that its claim for implied warranty of merchantability is barred by the
four-year statute of limitations in Texas. Therefore, Plaintiff’s implied warranty limitation period
expired in 2009 and should be dismissed.
It is therefore ORDERED that Defendants’ Motion for Summary Judgment on Their
Affirmative Defense of Statutes of Limitations (Dkt. #31) is hereby GRANTED in part and
Plaintiff’s claim for implied warranty of merchantability is DISMISSED. The remainder of the
motion is DENIED.
It is further ORDERED that Plaintiff’s Motion to Strike Defendants’ Summary Judgment
Evidence (Dkt. #35) is hereby DENIED.
It is further ORDERED that Defendants’ Motion to Strike Plaintiff’s Summary Judgment
Evidence (Dkt. #41) is hereby DENIED.

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SIGNED this 9th day of October, 2014.

___________________________________
AMOS L. MAZZANT
UNITED STATES MAGISTRATE JUDGE

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