#28064-r-GAS
2017 S.D. 46
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
SUZANNE BRUDE, Plaintiff and Appellant,
v.
SHANE BREEN d/b/a YELLOW JACKET
IRRIGATION AND LANDSCAPING, Defendant, Third-Party
Plaintiff, and Appellee,
v.
GREGORY AND ELIZABETH JAMISON, Third-Party Defendants.
****
APPEAL FROM THE CIRCUIT COURT OF
THE SECOND JUDICIAL CIRCUIT
MINNEHAHA COUNTY, SOUTH DAKOTA
****
THE HONORABLE JOHN R. PEKAS
Judge
****
RONALD A. PARSONS, JR.
STEVEN M. JOHNSON
KIMBERLY L. JOHNSON of
Johnson Janklow Abdallah
Reiter & Parsons LLP
Sioux Falls, South Dakota Attorneys for appellant.
MELANIE L. CARPENTER
JORDAN J. FEIST of
Woods, Fuller, Shultz
and Smith, PC
Sioux Falls, South Dakota Attorneys for appellee.
****
ARGUED MAY 30, 2017
OPINION FILED 08/02/17
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SEVERSON, Justice
[¶1.] Suzanne Brude brought suit against Shane Breen, doing business as
Yellow Jacket Irrigation and Landscaping (Yellow Jacket), for negligence in
constructing a retaining wall from which Brude suffered an injury. Yellow Jacket
moved for summary judgment, asserting that the claim was barred by the statute of
repose. The circuit court granted summary judgment in favor of Yellow Jacket.
Brude appeals, asserting that the court erred because the ten-year limitation in the
statute of repose had not expired. We reverse and remand.
Background
[¶2.] In 2005, Yellow Jacket Irrigation and Landscaping contracted for and
completed a landscaping project at the residence of Greg and Elizabeth Jamison. At
issue in this case is landscaping that Yellow Jacket originally completed in
September 2005. The area of landscaping at issue includes a patio with retaining
walls on its sides and a fire pit above a section of the retaining wall. The retaining
walls were repaired in 2007. At that time, Yellow Jacket fixed some stone pavers
that had settled and shifted. The Jamisons and Breen have different recollections
of the next time that Yellow Jacket worked on the retaining wall; it was either 2011
or 2013. The Jamisons asked Yellow Jacket to fix their patio area because some of
the landscaping stones settled and leaned. Greg Jamison testified in his deposition
that because the fix was fairly extensive and would require the retaining walls to be
torn down and rebuilt, the Jamisons asked Yellow Jacket to make the fire pit area a
little larger at the same time.
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[¶3.] Suzanne Brude was at the Jamison residence on October 7, 2014. In
order to retrieve some branches from the fire pit area, she stepped onto the portion
of the retaining wall in front of the Jamison’s fire pit. One of the capstones she
stepped on gave way, and she fell onto the patio below. She suffered an injury that
required surgery the next day. On November 6, 2015, Brude commenced this action
against Shane Breen, the sole proprietor operating Yellow Jacket Irrigation and
Landscaping. Yellow Jacket filed a third-party complaint against the Jamisons,
contending that the Jamisons were responsible for any damages awarded to Brude.
The Jamisons have since settled this matter and take no position in this appeal.
[¶4.] On July 29, 2016, Yellow Jacket moved for summary judgment
asserting that the statutory time period to bring a claim had expired because the
retaining wall and fire pit had been substantially completed more than ten years
prior to the commencement of this action. See SDCL 15-2A-3. After submissions by
the parties and a hearing on the motion, the circuit court granted summary
judgment for Yellow Jacket. Brude appeals raising one issue for our review. She
asserts that the changes to the landscaping that occurred in either 2011 or 2013
constituted “an improvement to real property” under SDCL 15-2A-3 and therefore
restarted the ten-year period to bring a claim. Thus, she claims that the court erred
when it granted summary judgment.
Standard of Review
[¶5.] “In reviewing a grant or denial of summary judgment we must
determine whether the moving party demonstrated the absence of any genuine
issue of material fact and established entitlement to judgment on the merits as a
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matter of law.” Clark Cty. v. Sioux Equip. Corp., 2008 S.D. 60, ¶ 8, 753 N.W.2d 406,
409 (quoting Behrens v. Wedmore, 2005 S.D. 79, ¶ 18, 698 N.W.2d 555, 565).
“Those resisting summary judgment must show that they will be able to place
sufficient evidence in the record at trial to support findings on all the elements on
which they have the burden of proof.” Id. (quoting Bordeaux v. Shannon Cty. Sch.,
2005 S.D. 117, ¶ 14, 707 N.W.2d 123, 127). We must determine the applicability of
the statute of repose to Yellow Jacket’s latest work on the retaining wall. “Because
the application of a legal test to the historical facts of this case requires us to
consider legal concepts and ‘exercise judgment about the values that animate legal
principles,’ we review the . . . determination de novo.” Id. ¶ 10, 753 N.W.2d at 410
(quoting In re Dorsey & Whitney Tr. Co., 2001 S.D. 35, ¶ 6, 623 N.W.2d 468, 471).
Analysis
[¶6.] A statute of repose is an affirmative defense, and Yellow Jacket had
the initial burden of proving entitlement to it. See id. ¶ 17, 753 N.W.2d at 412.
“[W]here a defendant, by motion for summary judgment, asserts this type of
affirmative defense that bars an action ‘and presumptively establishes the defense
by showing the case was instituted beyond the statutory period, the burden then
shifts to the plaintiff to establish the existence of material facts in avoidance of the
statute.’” Id. (quoting Conway v. Conway, 487 N.W.2d 21, 23 (S.D. 1992)). The
statute of repose at issue, SDCL 15-2A-3, provides:
No action to recover damages for any injury to real or personal
property, for personal injury or death arising out of any
deficiency in the design, planning, supervision, inspection, and
observation of construction, or construction, of an improvement
to real property, nor any action for contribution or indemnity for
damages sustained on account of such injury or death, may be
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brought against any person performing or furnishing the design,
planning, supervision, inspection, and observation of
construction, or construction, of such an improvement more than
ten years after substantial completion of such construction. The
date of substantial completion shall be determined by the date
when construction is sufficiently completed so that the owner or
his representative can occupy or use the improvement for the
use it was intended.
The parties agree that the initial construction of the landscaping was completed in
September 2005 and that it constituted an improvement to real property at that
time. Brude was injured in October 2014, and the claim was brought in November
2015. Therefore, Yellow Jacket met its initial burden of presumptively showing
that the action was brought beyond the statutory period in SDCL15-2A-3. See also
SDCL 15-2A-5 (providing that an injury occurring in the tenth year after
substantial completion may be brought within one year after the date on which the
injury occurred but may not be brought more than eleven years after the
substantial completion of construction).
[¶7.] The next question before this Court is whether Brude met her burden
to establish the existence of material facts in avoidance of the statute. In response
to Yellow Jacket’s motion for summary judgment and its statement of undisputed
material facts, Brude maintained that Yellow Jacket’s work in 2011/2013 restarted
the statute of repose because it constituted construction of an improvement to real
property. She provided a report indicating that the latest work in 2011/2013 was
not done in accordance with industry standards.∗ She also provided her own
statement of undisputed material facts, which set forth that the rebuild was not
∗ The Court was unable to find any other report in the record indicating that
the original construction was performed negligently.
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performed correctly and caused the capstones to dislodge. And Brude set forth facts
indicating that her injuries arose from a portion of the retaining wall where Yellow
Jacket performed work in 2011/2013.
[¶8.] Before we can determine whether Brude met her burden to set forth
material facts in avoidance of the statute, we must clarify how the ten-year time
frame under SDCL 15-2A-3 is calculated. Citing to this Court’s decision in Pitt-
Hart v. Sanford USD Med. Ctr., 2016 S.D. 33, ¶ 18, 878 N.W.2d 406, 413, Brude
asserts that her time in which to bring an action is measured from the latest
construction that led to her injury and that the ten-year period started in
2011/2013. In Pitt-Hart, we addressed SDCL 15-2-14.1, which provides that “[an]
action . . . can be commenced only within two years after the alleged malpractice,
error, mistake, or failure to cure shall have occurred[.]” (Emphasis added.); Pitt
Hart, 2016 S.D. 33, ¶ 18, 878 N.W.2d at 413. We noted that “[a] statute of
repose . . . is measured not from the date on which the claim accrues but instead
from the date of the last culpable act or omission of the defendant.” Pitt Hart, 2016
S.D. 33, ¶ 18, 878 N.W.2d at 413 (quoting CTS Corp. v. Waldburger, ___ U.S. ___,
___, 134 S. Ct. 2175, 2182, 189 L. Ed. 2d 62 (2014)).
[¶9.] In this case, the statute of repose explicitly provides for a different date
from which to measure. It states, in pertinent part,
No action to recover damages . . . for personal injury or death
arising out of any deficiency in the design, planning,
supervision, inspection, and observation of construction, or
construction, of an improvement to real property . . . may be
brought . . . more than ten years after substantial completion of
such construction. The date of substantial completion shall be
determined by the date when construction is sufficiently
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completed so that the owner or his representative can occupy or
use the improvement for the use it was intended.
SDCL 15-2A-3 (emphasis added). The time to bring a claim did not begin to run
upon the last culpable act of Yellow Jacket but instead upon the date of substantial
completion of the improvement to real property. Thus, if the latest construction of
the retaining wall and fire pit was not an improvement to real property, then
substantial completion of construction occurred in September 2005, making Brude’s
claim untimely. If, however, construction in 2011/2013 constituted an improvement
to real property, then the statute of repose started that year upon substantial
completion of the construction, and the time period in SDCL 15-2A-3 had not run in
November of 2015 when Brude commenced suit.
[¶10.] Yellow Jacket asserts that Brude’s claim is untimely because the work
in 2011/2013 was not an improvement and only amounted to repairs. Even if the
work in 2011/2013 amount to a repair, Brude’s claim may still be timely if the
injury arose out of the work done in 2011/2013 and the repair was not within the
scope of SDCL 15-2A-3. However, Brude’s claim may still be timely if the work in
2011/2013 amounted to a repair, the injury arose out of the 2011/2013 work, and a
repair is not within the scope of SDCL 15-2A-3. Brude set forth facts indicating
that she fell from a portion of the wall that was negligently repaired by Yellow
Jacket in either 2011 or 2013 and that, therefore, her injury did not arise from the
original construction of an improvement to real property. Accordingly, we must
determine whether a repair to an improvement to real property falls within the
scope of SDCL 15-2A-3.
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[¶11.] South Dakota does not have an explicit statute providing that repairs
to an improvement to real property fall outside the scope of the statute of repose.
But the plain language of SDCL 15-2A-3 clearly provides that it will only apply to
this case if the injury arose out of the construction of an improvement to real
property. This Court distinguished improvements to real property from repairs in
Clark Cty. v. Sioux Equip. Corp., 2008 S.D. 60, ¶ 11-12, 753 N.W.2d 406, 410-11. In
that case, Clark County sued Sioux Equipment in 2006 for negligence, breach of
implied and express warranties, and breach of implied warranty of fitness for a
particular purpose in regard to a fuel storage and dispensing system that was
installed in 1991. A fuel leak occurred in 2003 for which the County incurred
remediation expenses. Sioux Equipment argued that the 1991 installation was an
improvement to real property and that, therefore, the claim was barred under
SDCL 15-2A-3. The county argued that the installation was a replacement or
repair of a previous system, not an improvement, so SDCL 15-2A-3 did not apply.
We applied a common-sense test to determine whether there was an “improvement
to real property.” Under the test, we determine whether there is “[a] permanent
addition to or betterment of real property that enhances its capital value and that
involves the expenditure of labor or money and is designed to make the property
more useful or valuable as distinguished from ordinary repairs.” Clark Cty., 2008
S.D. 60, ¶ 11, 753 N.W.2d at 410 (emphasis added). Thus, if an ordinary repair is
not an improvement and SDCL 15-2A-3 applies only to improvements, it is inherent
that SDCL 15-2A-3 does not apply to claims for injuries arising from ordinary
repairs.
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[¶12.] We find helpful the Wisconsin Court of Appeals’ explanation of
Wisconsin’s statute of repose as follows:
The purpose of the statute of repose is to protect contractors who
are involved in permanent improvements to real property. Daily
repairs are not improvements to real property as that phrase is
used in the statute of repose. The legislature has chosen to
protect persons or entities which make permanent
improvements to real property, not to absolve those who make
regular repairs or do maintenance work. This distinction is
reasonable because improvements to real property have a
completion date whereas regular repairs and maintenance can
continue ad infinitum.
Peter v. Sprinkmann Sons Corp., 860 N.W.2d 308, 315 (Wis. Ct. App. 2015).
Despite the absence of an explicit provision in our statutes, the purpose of a statute
of repose as stated by the Wisconsin Court of Appeals is similar to the findings set
forth by South Dakota’s Legislature. SDCL 15-2A-1 provides in part:
The Legislature finds that subsequent to the completion of
construction, persons involved in the planning, design, and
construction of improvements to real estate lack control over the
determination of the need for, the undertaking of and the
responsibility for maintenance, and lack control over other
forces, uses and intervening causes which cause stress, strain,
wear, and tear to the improvements and, in most cases, have no
right or opportunity to be made aware of or to evaluate the effect
of these forces on a particular improvement or to take action to
overcome the effect of these forces. Therefore, it is in the public
interest to set a point in time following the substantial
completion of the project after which no action may be brought
for errors and omissions . . . .
Therefore, the Legislature also recognized the difference between the initial
“planning, design, and construction of improvements to real estate” and the
“maintenance” or repairs of said improvements. Here, Yellow Jacket did have
control over the repair work because it performed the work. See Hartford Fire Ins.
Co. v. Westinghouse Elec. Corp., 450 N.W.2d 183, 186 (Minn. Ct. App. 1990)
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(holding that replacement of generator seal constituted ordinary repair and
therefore was not subject to the statute of repose).
[¶13.] Having determined that repairs do not fall under the statute of repose,
Brude has met her burden to set forth material facts to avoid application of the
statute. She set forth facts indicating that the work in 2011/2013 could be
considered an improvement to real property (restarting the period of repose)
because it involved, among other things, enlarging the landscaping area and the
expenditure of labor. Furthermore, even if it was not an improvement, she set forth
sufficient facts that her injury did not arise out of the 2005 construction of an
improvement to real property; it allegedly arose out of Yellow Jacket’s latest
2011/2013 work on the landscaping. Therefore, we need not determine whether the
work in 2011/2013 was a repair or an improvement. In either case, SDCL 15-2A-3
does not bar Brude’s claim. The circuit court erred by granting summary judgment
to Yellow Jacket on the basis of SDCL 15-2A-3.
[¶14.] Our decision is consistent with the Illinois case regarding a retaining
wall that the parties have discussed. See Schott v. Halloran Constr. Co., 982
N.E.2d 965 (Ill. App. Ct. 2013). In Schott, plaintiff brought a suit in 2010 after she
fell off an unguarded retaining wall in 2001. The plaintiff alleged that defendant
negligently failed to build a barrier to prevent people from falling off the wall. The
retaining wall was built in 1990 and portions were rebuilt in 1994 after a heavy
rain caused portions to fall over. Plaintiff fell from a portion of the wall that was
not repaired in 1994. The Illinois Appellate Court determined that the retaining
wall was an improvement to real property at the time when it was built in 1990. Id.
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at 969-70. It also concluded that the work done in 1994 was a mere repair of an
existing structure and did not constitute the “‘construction of an improvement to
real property’ within the meaning of the statute of repose.” Id. at 970. Therefore,
plaintiff’s claim was barred by the statute of repose. The court also noted that the
second reason it rejected plaintiff’s claims was because “the portion of the retaining
wall from which [plaintiff] stepped or fell was not damaged by rain and was not
repaired or rebuilt in 1994. The portion of the wall from which [plaintiff] stepped or
fell was the original retaining wall built . . . in 1990, more than 10 years prior to the
accident.” Id. Thus, the court saw “no reason why an improvement to some portion
of the property other than that on which the plaintiffs were injured should extend
or renew the statute of repose with respect to their injuries.” Such a determination
indicates that a claim with respect to repairs is distinguished from those that arise
from the construction of an improvement to real property.
Conclusion
[¶15.] The circuit court erred when it granted summary judgment in favor of
Yellow Jacket on the basis of SDCL 15-2A-3. Regardless of whether the work in
2011/2013 constituted a repair or an improvement to real property, SDCL 15-2A-3
does not bar the claim at issue. We reverse and remand.
[¶16.] GILBERTSON, Chief Justice, and ZINTER and KERN, Justices, and
RANK, Circuit Court Judge, concur.
[¶17.] RANK, Circuit Court Judge, sitting for WILBUR, Retired Justice,
disqualified.
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