Todd Hoffman, Appellant, vs. Daniel J. Van Hook, d/b/a Van Hook Homes, Respondent, Palmer-Soderberg, Inc., Respondent, Andersen Corporation, Respondent, Simon Hershberger, Respondent.

Todd Hoffman, Appellant, vs. Daniel J. Van Hook, d/b/a Van Hook Homes, Respondent, Palmer-Soderberg, Inc., Respondent, Andersen Corporation, Respondent, Simon Hershberger, Respondent. A06-1213, Court of Appeals Unpublished, April 10, 2007.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2006).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-1213

 

Todd Hoffman,

Appellant,

 

vs.

 

Daniel J. Van Hook, d/b/a Van Hook Homes,

Respondent,

 

Palmer-Soderberg, Inc.,

Respondent,

 

Andersen Corporation,

Respondent,

 

Simon Hershberger,

Respondent.

 

Filed ­­­April 10, 2007

Affirmed

Dietzen, Judge

 

Olmsted County District Court

File No. C2-04-4375

 

Jaren L. Johnson, Kimberly A. Chapman, BenePartum Law Group, P.A., 860 Blue Gentian Road, Suite 295, Eagan, MN 55121 (for appellant)

 

Steven J. Sheridan, Molly C. Kramer, Foley & Mansfield, 250 Marquette Avenue, Suite 1200, Minneapolis, MN 55402 (for respondent Daniel J. Van Hook)

 

Timothy W. Waldeck, Waldeck & Lind, P.A., 1400 TCF Tower, 121 South Eighth Street, Minneapolis, MN 55402 (for respondent Palmer-Soderberg, Inc.)

 

Neal J. Robinson, Law Offices of Bakken & Robinson, 2550 University Avenue West, Suite 220-South Court International, St. Paul, MN 55114 (for respondent Andersen Corporation)

 

Peter C. Sandberg, Douglas A. Boese, Dunlap & Seeger, P.A., 206 South Broadway, Suite 505, P.O. Box 549, Rochester, MN 55903-0549 (for respondent Simon Hershberger)

 

            Considered and decided by Minge, Presiding Judge; Stoneburner, Judge; and Dietzen, Judge.

U N P U B L I S H E D   O P I N I O N

 

DIETZEN, Judge

 

            Appellant challenges the district court's orders and resulting judgments dismissing his claims against respondents arising out of the construction of a new home, arguing that genuine issues of material fact preclude summary judgment, and that the district court erred in concluding that (1) the claims were barred by the statute of limitations as set forth in Minn. Stat. § 541.051, and (2) that respondent Van Hook's bankruptcy precluded appellant's claims.  We affirm.

FACTS

Appellant Todd Hoffman owns a lot located in rural Olmstead County.  In July 1997, Hoffman accepted a written proposal from respondent general contractor Daniel J. Van Hook, doing business as Van Hook Homes, to build a new home on a residential lot.  The written agreement contained a provision in which Van Hook expressly warranted that the new home "shall be free from ‘MAJOR STRUCTURAL DEFECTS,'" in accordance with state law.  As the general contractor, Van Hook supervised the construction of the new home.  Respondent Simon Hershberger, a roofing subcontractor for Van Hook, completed the roofing.  Thereafter, some of the shingles were damaged during a storm.  In January or February 1998, Van Hook abandoned the job and later filed for Chapter 7 bankruptcy.  Hoffman repeatedly attempted to contact Van Hook and received no response.  At that time the home was about 80% completed; the roof and windows were installed, the furnace was operational, most of the plumbing was completed, but the structure had only a Tyvek weather barrier on its exterior.

Because of the stage of the project and the economies of the situation, Hoffman decided to act as his own general contractor for the completion of the project.  Hoffman solicited bids for exterior stucco application, and respondent Palmer-Soderberg submitted a bid in February 1998, but Hoffman did not accept it until June 1998.  The bid provided for installation of the stucco but excluded caulking and flashings.  Palmer-Soderberg applied the stucco in June-July 1998.  Hoffman moved into the home sometime before the installation of the stucco after receiving a temporary certificate of occupancy.  Hoffman did not obtain a final certificate of occupancy or have the work inspected to determine if the work met the requirements of the building code.  

            In the fall of 1998, Hoffman noticed small cracks in the stucco and moisture buildup on the windows, particularly during cold weather, and in the fall of 1999 observed "severe" stucco cracking.  Following a complaint from Hoffman, Palmer-Soderberg inspected the building and concluded that the cracks were due to structural movement of the home and not the stucco application.  Palmer-Soderberg applied cosmetic repairs to the cracks and contacted Resource Supply and the Minnesota Lath and Plaster Bureau (Minnesota Lath) for additional opinions.  Following its inspection, Minnesota Lath reported in a letter dated November 7, 2000, that "the Bureau's opinion does not appear to be substantially different from Palmer-Soderberg's or Resource Supply's.  It seems apparent that the cracking is the result of a structural issue not connected to the stucco installation."  The letter offered several suggestions for methods of repairing the cracked stucco. 

            In November 2002, Hoffman found a mushroom growing in the house and contacted Private Eye, Inc. to conduct a moisture analysis.  In June 2003, Private Eye submitted its report to Hoffman, which concluded that Hoffman's home had "one or more areas showing signs of excessive moisture intrusion and soft or damaged sheathing."  The report noted that caulking was not satisfactory on door joints and that the window head, door head, and kickout flashings were not present. 

In September 2003, Hoffman filed a complaint against respondents Van Hook, Palmer-Soderberg, Andersen Corporation, and Hershberger.  The complaint alleged (1) breach of contract; (2) breach of statutory warranty; (3) breach of warranty; (4) strict liability; (5) negligent design and construction; (6) fraud, misrepresentation and fraudulent concealment; (7) false promises, misleading statements, and deceptive practices in violation of Minn. Stat. § 325 F. 69 (2006); and (8) promissory estoppel.  Palmer-Soderberg filed a counter-claim against Hoffman.  Palmer-Soderberg, Van Hook, and Hershberger also filed cross claims, seeking indemnity from the other defendants. 

Van Hook and Palmer-Soderberg brought a motion for summary judgment.  Following a hearing, the district court granted the motions for summary judgment, finding that the claims were time barred under the two-year limitation of Minn. Stat. § 541.051, subd. 1; and that Van Hook's discharge in bankruptcy enjoined Hoffman from recovering against Van Hook.  Hoffman moved for reconsideration, which the court denied. 

            Respondents Andersen Corporation and Simon Hershberger then filed motions for summary judgment.  Following a hearing, the district court granted the motions for summary judgment concluding that "the reasoning as set forth in the previous order granting summary judgment equally applies to the remaining two defendants."  This appeal follows.

D E C I S I O N

I.

Hoffman contends that the district court erred by concluding that his claims were barred by the statute of limitations.  "A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law."  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).  On appeal from summary judgment, we review de novo whether there are any genuine issues of material fact and whether the district court erred in applying the law.  STAR Ctrs., Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72, 76 (Minn. 2002).  In doing so, we view the evidence in the light most favorable to the party against whom summary judgment was granted.  Hickman v. SAFECO Ins. Co. of Am., 695 N.W.2d 365, 369 (Minn. 2005).

To survive summary judgment, a party need not show substantial evidence; it needs only to produce sufficient evidence to permit reasonable persons to draw different conclusions.  Schroeder v. St. Louis County, 708 N.W.2d 497, 507 (Minn. 2006).  And "[w]hen reasonable minds can differ about when the injury was discovered, summary judgment is inappropriate because the issue should be left to the trier of fact."  Lake Superior Ctr. Auth. v. Hammel, Green & Abrahamson, Inc., 715 N.W.2d 458, 472-73 (Minn. App. 2006).  But "[t]he party opposing summary judgment may not establish genuine issues of material fact by relying upon unverified and conclusory allegations, or postulated evidence that might be developed at trial, or metaphysical doubt about the facts."  Dyrdal v. Golden Nuggets, Inc., 689 N.W.2d 779, 783 (Minn. 2004).

Here, the district court concluded that Hoffman's claims were barred by Minn. Stat. § 541.051, subd. 1 (2002).  When Hoffman brought the claim in 2003, Minn. Stat. § 541.051 provided:

Subdivision 1. (a) Except where fraud is involved, no action by any person in contract, tort, or otherwise to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property . . . shall be brought against any person performing or furnishing the design, planning, supervision, materials, or observation of construction or construction of the improvement to real property . . . more than two years after discovery of the injury . . . .

 

Subd. 4. This section shall not apply to actions based on breach of the statutory warranties set forth in section 327 A. 02, or to actions based on breach of an express written warranty, provided such actions shall be brought within two years of the discovery of the breach.

 

Minn. Stat. § 541.051 (2002).[1]  The construction and applicability of a statute of limitations is a question of law, which we review de novo.  Benigni v. County of St. Louis, 585 N.W.2d 51, 54 (Minn. 1998).

                        A.        Subdivision 4

            Hoffman argues that the district court erred in concluding that his warranty claims were governed by Minn. Stat. § 541.051, subd. 1 rather than Minn. Stat. § 541.051, subd. 4.  Essentially, subdivision 4 provides that claims for "statutory warranties set forth in section 327 A. 02," or "actions based on breach of an express written warranty" are not governed by subdivision 1, which has a two-year limitation "after discovery of the injury," but rather have a two-year limit from "discovery of the breach."  Minn. Stat. § 541.051, subd. 4. 

In his complaint, Hoffman alleges breach of statutory warranty against Van Hook.  Hoffman also alleges breach of express and implied warranty claims against subcontractors Palmer-Soderberg and Hershberger, and material supplier Andersen Corporation, but was unable to identify any statutory or express written warranty that applied to them.  Appellant asserts that such warranty was implied.  Here, the statute does not cover an "implied warranty."  Thus, Hoffman's claims against Palmer-Soderberg, Hershberger, and Andersen Corporation do not have either an express written warranty or the statutory warranty under Minn. Stat. § 327 A. 02, and, therefore, we conclude that those claims are not covered by Minn. Stat. § 541.051, subd. 4.   We turn then to Hoffman's subdivision 4 warranty claim against Van Hook.     

            The accrual period under subdivision 4 begins to run at "discovery of the breach," or "when the homeowner discovers, or should have discovered, the builder's refusal or inability to ensure the home is free from major construction defects."  Vlahos v. R & I Constr. of Bloomington, Inc., 676 N.W.2d 672, 678 (Minn. 2004).  Hoffman argues that he did not discover that Van Hook would not honor the statutory warranty until he served Van Hook with a summons and complaint in September 2003, and Hoffman filed an answer denying liability.  Van Hook counters that Hoffman discovered the breach in 1998 when Van Hook abandoned the project and failed to respond to any of Hoffman's attempts to contact him. 

Hoffman relies on Vlahos to argue that notice of a vendor's breach of warranty is always a question of fact that precludes summary judgment.  But this argument misconstrues Vlahos, which held that "[b]ased on the information presented to the district court, the question of when either the Rovicks or the Vlahoses discovered or should have discovered R&I's refusal or inability to ensure the home was free from major construction defects was a factual question, inappropriate for resolution on summary judgment." Vlahos, 676 N.W.2d at 679.  We do not read Vlahos to preclude summary judgment when the material facts are not in dispute.

Here, it is not disputed that Van Hook abandoned the project and refused to respond to Hoffman's requests to complete the project in 1998.  As of that date, Van Hook refused to do anything, which would reasonably include refusing to ensure that the home was free from any major construction defects.  Thus, we see no genuine issue of material fact, and conclude as a matter of law that the discovery of the breach for purposes of Hoffman's subdivision 4 claims accrued in 1998.  Consequently, Hoffman's statutory warranty claim against Van Hook is barred as a matter of law by the two-year statute of limitation in Minn. Stat. § 541.051, subd. 4, and Van Hook is entitled to summary judgment.  Therefore, we affirm on grounds other than those offered by the district court.  See Northway v. Whiting, 436 N.W.2d 796, 798 (Minn. App. 1989) ("we may affirm a summary judgment if there are no genuine issues of material fact and if the decision is correct on other grounds.")

            Additionally, Van Hook argues that Hoffman failed to comply with the notice requirements of Minn. Stat. § 327 A. 02 and, therefore, is barred from asserting a warranty claim.  Minn. Stat. § 327 A. 02 excludes "[l]oss or damage not reported by the vendee or the owner to the vendor or the home improvement contractor in writing within six months after the vendee or the owner discovers or should have discovered the loss or damage."  Minn. Stat. § 327A.03(a) (2006).  A homeowner cannot recover if he fails to comply with this notice requirement.  Vlahos, 676 N.W.2d at 681.  It is undisputed that Hoffman failed to provide timely written notice to Van Hook prior to filing the complaint.  Accordingly, Hoffman's claim against Van Hook is barred as a matter of law for failing to satisfy the written notice requirement of the statute within six months of discovery of the damage, providing an alternate basis for summary judgment. 

            B.        Subdivision 1

            Subdivision 1 of Minn. Stat. § 541.051 governs all actions based on "contract, tort, or otherwise" arising from the "defective and unsafe condition of an improvement to real property," excluding the specific warranty claims covered by subdivision 4.  Hoffman concedes that his non-warranty causes of action[2] are subject to the statute of limitations in subdivision 1.  Because Hoffman's implied warranty claims against Palmer-Soderberg, Andersen Corporation, and Hershberger are not governed by subdivision 4, the district court properly considered those claims under Minn. Stat. § 541.051, subd. 1. 

Hoffman argues that he did not have notice of the injury until he received a report from Private Eye, Inc. Moisture Testing Services and that he commenced the lawsuit within two years of that notice.  Under subdivision 1, a cause of action accrues "upon discovery of the injury."  Minn. Stat. § 541.051, subd. 1(b).  The statute begins to run "when an actionable injury is discovered or, with due diligence, should have been discovered, regardless of whether the precise nature of the defect causing the injury is known."  Dakota v. BWBR Architects, 645 N.W.2d 487, 492 (Minn. App. 2002).  Separate injuries are to be "aggregated under the mantel of defective construction," and the statute begins to run upon discovery of the first actionable injury.  Id. at 493.

It is undisputed that Hoffman first noticed cracking in the stucco in the fall of 1998, noticed severe cracking in the fall of 1999, and learned through a letter from Minnesota Lath that the cause of the cracking was the "result of a structural issue not connected to the stucco installation" in November 2000.  Although the time of Hoffman's earliest discovery of the injury may be disputed, it cannot be reasonably disputed that Hoffman had discovered the injury at the latest by November 2000.  On this record, Hoffman has failed to present genuine issues of material fact regarding the discovery of the injury and the start of the accrual period.             

C.        Estoppel

            Hoffman argues that respondents are estopped from asserting the statute of limitations as a bar to his underlying negligence action against Palmer-Soderberg.  Specifically, Hoffman argues that Palmer-Soderberg made assurances that minor stucco cracking was repairable and that those assurances induced him to not commence legal action.  Palmer-Soderberg admits that it informed Hoffman that minor stucco cracking could be repaired but made no assurances as to the structural integrity of the home or its ability to repair any structural issues.  Further, it asserts that after Hoffman noticed "severe" stucco cracking and received a copy of the November 2000 letters from Resource Supply and Minnesota Lath, that he was on notice that the stucco cracking was a structural problem, and that minor stucco repairs would not resolve the problem.

Estoppel is an equitable doctrine that prevents a party from "taking unconscionable advantage of his own wrong by asserting his strict legal rights." Mut. Serv. Life Ins. Co. v. Galaxy Builders, Inc., 435 N.W.2d 136, 140 (Minn. App. 1989) (quotation omitted), review denied (Minn. Apr. 19, 1989). "To raise estoppel, one must show representations made by one party that the other has reasonably relied on to his detriment."  BWBR Architects, 645 N.W.2d at 493.  In the context of Minn. Stat. § 541.051, estoppel is pleaded where "after discovery of a cause of action, the injured party has been induced to forego suit in reliance on the other party's assurances that corrective action would be taken."  Id. 

            The district court found that (1) although Palmer-Soderberg attempted to repair the  minor cracks in the stucco, there was no representation that those repairs would resolve any structural problems with the house; (2) "there [was] clearly no evidence that Palmer-Soderberg induced [Hoffman] to delay the filing of [his] complaint.  In fact, quite the opposite is true.  [Hoffman] unilaterally severed his contact with Palmer-Soderberg after a dispute over the terms of an agreement regarding re-meshing of the home;" and (3) that Hoffman's "claim of equitable estoppel is without merit and does not toll the statute of limitations."

Hoffman argues that under Brenner v. Nordby, 306 N.W.2d 126, 127 (Minn. 1981), estoppel is a question for the jury and that material facts are in dispute, precluding summary judgment.  He compares the situation to Galaxy Builders,435 N.W.2d at 141, which held that genuine issues of material fact existed as to whether vendor was estopped from asserting a statute of limitations defense against purchaser where the representations made by the builder were disputed.  In Galaxy Builders, it was disputed whether the vendor has represented that it would "take care of the problem."  Id.  But "when only one inference can be drawn from the facts, the question is one of law."  L & H Transport, Inc. v. Drew Agency, Inc., 403 N.W.2d 223, 227 (Minn. 1987).

Here, it is not disputed that minor web-like cracking of stucco is normal and repairable, and that Palmer-Soderberg repaired those cracks in the stucco.  And it is not disputed that Palmer-Soderberg made no assurances that it would remedy any structural problems or requested that Hoffman not file a lawsuit.  Hoffman argues that by attempting cosmetic repairs, Palmer-Soderberg was assuring him that such repairs would take care of the problem.  But Palmer-Soderberg and the letter from Minnesota Lath clearly state that the problems were structural and not caused by the stucco.  Such statements would not reasonably induce a party to forego suit.  On this record, there is no genuine issue of material fact, and the district court properly found that as a matter of law, equitable estoppel does not toll the statute of limitations.

II.

            Hoffman contends that the district court erred in concluding that Van Hook's bankruptcy precluded his claims because Van Hook did not schedule Hoffman as a creditor, and the automatic bankruptcy stay does not apply to actions that were not or could not have been commenced prior to the bankruptcy.  Because we find that Hoffman's claims were barred by the statute of limitations, this issue is moot.  Accordingly, we decline to address it.

            Affirmed.      

[1] A portion of the statute not at issue here was subsequently amended in 2004.  See 2004 Minn. Laws ch. 196, § 1, at 357.

[2] Hoffman's remaining non-warranty claims are for (1) breach of contract; (2) strict liability; (3) negligent design and construction; (4) fraud, misrepresentation and fraudulent concealment; (5) false promises, misleading statements, and deceptive practices in violation of Minn. Stat. § 325 F. 69; and (6) promissory estoppel.