In a recent ruling, White Cloud Public Schools v Bri-Car Roofing & Sheet Metal, Inc., et al, (December 2014), the Michigan Court of Appeals affirmed dismissal of White Cloud Public School’s breach of contract claim against a roofing company, Bri-Car, holding that the claim was time barred. In that case, White Cloud claimed that Bri-Car did not properly attach roof shingles to the roof decking and that this defective work later caused the roof to collapse. Bri-Car moved for summary disposition, arguing that the school’s breach of contract claim was barred by the six-year statute of limitations applying to contract claims.
The parties’ construction contract stated that the architect’s Certificate of Substantial Completion established the date of substantial completion. The Certificate stated that Bri-Car’s work was substantially complete on February 1, 2004. The parties’ contract also provided that the statute of limitations (SOL) started not later than the date of substantial completion. White Cloud claimed that the SOL should have started on March 17, 2004, the date when the architect actually signed the Certificate. The trial court rejected the school’s claim based upon the unambiguous contract language which provided that the date of substantial completion was the date identified in the Certificate, February 1, 2004, not the date the Certificate was signed. Consequently, the school’s claim filed on March 17, 2010, more than six years later, was too late.
The Court of Appeals court also rejected White Cloud’s claim that the SOL was tolled (stopped) because Bri-Car fraudulently concealed the defective construction. The appellate court reviewed the school’s complaint that Bri-Car failed to report obvious construction defects and signed the Certificate of Substantial Completion, knowing that the roof was defectively designed. Nonetheless, the Court held that Bri-Car’s alleged actions did not amount to affirmative action by Bri-Car to conceal the roof’s defective conditions, particularly where there was no evidence that the school and Bri-Car had a fiduciary relationship such that Bri-Car had an affirmative duty to disclose.
Lesson learned for owners – don’t sit on contract rights, particularly when bumping up against an expiring statute of limitations.
Lesson learned for contractors – pay attention to contract language, particularly as it relates to the statute of limitations, to assure that the contract does not extend the statute of limitations beyond commercial expectations or beyond the limits established by Michigan law.
