Fuelberth v. Heartland Heating & Air Conditioning , 307 Neb. 1002 ( 2020 )


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  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    01/15/2021 08:07 AM CST
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    Nebraska Supreme Court Advance Sheets
    307 Nebraska Reports
    FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
    Cite as 
    307 Neb. 1002
    Troy M. Fuelberth and Julie K. Fuelberth, husband
    and wife, appellants, v. Heartland Heating &
    Air Conditioning, Inc., a Nebraska
    corporation, appellee.
    ___ N.W.2d ___
    Filed December 11, 2020.   No. S-20-178.
    1. Summary Judgment: Appeal and Error. An appellate court will affirm
    a lower court’s grant of summary judgment if the pleadings and admit-
    ted evidence show that there is no genuine issue as to any material facts
    or as to the ultimate inferences that may be drawn from those facts and
    that the moving party is entitled to judgment as a matter of law.
    2. ____: ____. An appellate court reviews the district court’s grant of sum-
    mary judgment de novo, viewing the record in the light most favorable
    to the nonmoving party and drawing all reasonable inferences in that
    party’s favor.
    3. Limitations of Actions: Breach of Warranty: Contractors and
    Subcontractors. Where the basis of a claim is improper workmanship
    resulting in defective construction, the Neb. Rev. Stat. § 25‑223 (Reissue
    2016) statute of limitations runs from the date of substantial comple-
    tion of the project, not the date of any specific act which resulted in
    the defect.
    4. Limitations of Actions. A cause of action accrues and the statute of
    limitations begins to run when the aggrieved party has the right to insti-
    tute and maintain suit.
    5. Actions: Breach of Contract: Limitations of Actions. If a contract is
    divisible, breaches of its severable parts give rise to separate causes of
    action, and the statute of limitations will generally begin to run at the
    time of each breach. If, however, a contract is indivisible, an action can
    be maintained on it only when a breach occurs or the contract is in some
    way terminated, and the statute of limitations will begin to run from that
    time only.
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    Nebraska Supreme Court Advance Sheets
    307 Nebraska Reports
    FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
    Cite as 
    307 Neb. 1002
    6. Contracts. A contract which in its nature and purpose is susceptible of
    division and apportionment is divisible and severable.
    Appeal from the District Court for Cedar County: James G.
    Kube and Bryan C. Meismer, Judges. Reversed and remanded
    for further proceedings.
    Allison Rockey Mason and David E. Copple, of Copple,
    Rockey & Schlecht, P.C., L.L.O., for appellants.
    Todd B. Vetter and Luke P. Henderson, of Fitzgerald, Vetter,
    Temple, Bartell & Henderson, for appellee.
    Heavican, C.J., Miller‑Lerman, Cassel, Stacy, Funke,
    Papik, and Freudenberg, JJ.
    Papik, J.
    Troy M. Fuelberth (Fuelberth) and Julie K. Fuelberth hired
    Heartland Heating & Air Conditioning, Inc. (Heartland), to
    design, construct, and install an interior in‑floor geothermal
    system and an exterior icemelt system for a shop building on
    their farm. The Fuelberths later sued Heartland, alleging that
    Heartland’s work was defective. The Fuelberths now appeal
    from the district court’s entry of summary judgment in favor
    of Heartland on statute of limitations grounds. Because we
    find that Heartland was not entitled to summary judgment, we
    reverse, and remand for further proceedings.
    BACKGROUND
    Parties’ Dispute.
    In 2009, the Fuelberths decided to build a shop building on
    their farm. Fuelberth hired a general contractor to construct the
    shop building, and he arranged for other contractors to per-
    form various tasks related to the building. Fuelberth selected
    Heartland to design, construct, and install heating and air
    conditioning systems. Fuelberth’s primary contact at Heartland
    was Mike Wiederin, a shareholder, officer, and employee
    of Heartland.
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    Nebraska Supreme Court Advance Sheets
    307 Nebraska Reports
    FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
    Cite as 
    307 Neb. 1002
    Fuelberth initially contacted Wiederin in 2010. Fuelberth
    expressed interest in having an interior in‑floor geothermal
    system that would heat and cool the building and an exterior
    icemelt system that would melt ice off the driveway. After
    some discussions, Heartland provided Fuelberth with a written
    estimate for the project.
    Heartland, through Wiederin, agreed to design, construct,
    and install the interior system and the exterior system. The
    agreement was oral. Heartland thereafter designed, constructed,
    and installed both systems.
    On November 14, 2016, the Fuelberths sued Heartland. In
    the complaint, they alleged that on or about November 15,
    2012, the exterior system failed and that in the summer of
    2016, they discovered that the interior system had also failed.
    The Fuelberths alleged that the failures had occurred as a result
    of Heartland’s defective work. According to the Fuelberths,
    they faced significant repair and replacement costs as a result
    of the systems’ failures. In their complaint, the Fuelberths
    alleged two theories of recovery: negligence and breach of an
    implied warranty of workmanlike performance.
    Summary Judgment.
    After the parties engaged in some discovery, Heartland
    moved for summary judgment. At a hearing on the motion,
    Heartland argued that it was entitled to summary judgment on
    statute of limitations grounds.
    In support of its summary judgment motion, Heartland
    offered Wiederin’s deposition in which he testified that both
    the interior system and the exterior system were completely
    installed by January 2012. Heartland also offered Fuelberth’s
    deposition. In his deposition, Fuelberth acknowledged that the
    interior system was “[p]artially” working by January 2012,
    but he contended that it was not working properly. Fuelberth
    also testified that the exterior system was not operational
    until November 2012 when Wiederin came to the property to
    pour glycol into the system and take other steps to make it
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    Nebraska Supreme Court Advance Sheets
    307 Nebraska Reports
    FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
    Cite as 
    307 Neb. 1002
    operational. Fuelberth testified that Wiederin performed this
    work sometime between November 1 and 12, 2012.
    The district court entered summary judgment in favor of
    Heartland. The district court concluded that the Fuelberths’
    claims were subject to the 4‑year statute of limitations set forth
    in Neb. Rev. Stat. § 25‑223 (Reissue 2016) and that, under that
    statute, the limitations period begins to run upon substantial
    completion of the project. The district court then analyzed
    whether there were genuine issues of material fact as to when
    substantial completion occurred. It did so by considering the
    interior system and the exterior system separately.
    As to the interior system, the district court determined there
    was no dispute that it was substantially complete by January
    2012. Because the Fuelberths’ complaint was not filed until
    November 14, 2016, the district court found that Heartland
    was entitled to summary judgment on the Fuelberths’ claims
    concerning the interior system.
    The district court also found that Heartland was entitled to
    summary judgment on the Fuelberths’ claims concerning the
    exterior system. Here, the district court, relying on Fuelberth’s
    deposition testimony, concluded that there was no dispute that
    the exterior system was substantially complete by no later
    than November 12, 2012. The district court then reasoned that
    because the Fuelberths filed their complaint more than 4 years
    after November 12, 2012, their claims as to the exterior system
    were also barred by the statute of limitations.
    The Fuelberths timely appealed.
    ASSIGNMENT OF ERROR
    The Fuelberths assign three errors on appeal, but they can
    be effectively restated as one: The district court erred by
    granting Heartland summary judgment on statute of limita-
    tions grounds.
    STANDARD OF REVIEW
    [1] An appellate court will affirm a lower court’s grant of
    summary judgment if the pleadings and admitted evidence
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    Nebraska Supreme Court Advance Sheets
    307 Nebraska Reports
    FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
    Cite as 
    307 Neb. 1002
    show that there is no genuine issue as to any material facts
    or as to the ultimate inferences that may be drawn from those
    facts and that the moving party is entitled to judgment as a
    matter of law. Russell v. Franklin County, 
    306 Neb. 546
    , 
    946 N.W.2d 648
    (2020).
    [2] An appellate court reviews the district court’s grant of
    summary judgment de novo, viewing the record in the light
    most favorable to the nonmoving party and drawing all reason-
    able inferences in that party’s favor.
    Id. ANALYSIS Arguments on
    Appeal.
    The sole issue in this appeal is whether Heartland was enti-
    tled to summary judgment on statute of limitations grounds. The
    parties agree that § 25‑223 sets forth the statute of limitations
    governing the Fuelberths’ claims. See Murphy v. Spelts‑Schultz
    Lumber Co., 
    240 Neb. 275
    , 
    481 N.W.2d 422
    (1992) (holding
    that § 25‑223 applies to claims concerning negligent construc-
    tion of improvement on real estate brought against contractors
    or builders, whether based on negligence or breach of war-
    ranty). Section 25‑223 provides, in part, as follows:
    Any action to recover damages based on any alleged
    breach of warranty on improvements to real property or
    based on any alleged deficiency in the design, planning,
    supervision, or observation of construction, or construc-
    tion of an improvement to real property shall be com-
    menced within four years after any alleged act or omis-
    sion constituting such breach of warranty or deficiency.
    If such cause of action is not discovered and could not be
    reasonably discovered within such four‑year period, . . .
    then the cause of action may be commenced within two
    years from the date of such discovery or from the date of
    discovery of facts which would reasonably lead to such
    discovery, whichever is earlier.
    [3] In Adams v. Manchester Park, 
    291 Neb. 978
    , 983, 
    871 N.W.2d 215
    , 218‑19 (2015), we stated that “where the basis
    of the claim is improper workmanship resulting in defective
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    Nebraska Supreme Court Advance Sheets
    307 Nebraska Reports
    FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
    Cite as 
    307 Neb. 1002
    construction, the § 25‑223 statute of limitations runs from
    the date of substantial completion of the project, not the date
    of any specific act which resulted in the defect.” Heartland
    argued in the district court and continues to argue here that
    the interior system was substantially completed no later than
    January 31, 2012, and the exterior system was substantially
    completed no later than November 12, 2012. The district
    court agreed with Heartland that there was no genuine issue
    of fact that the respective systems were substantially complete
    by these dates and granted Heartland summary judgment on
    this basis.
    The Fuelberths argue on appeal that there were genuine
    issues of material fact as to when substantial completion
    occurred. While they make separate arguments with respect
    to both the interior system and the exterior system, they also
    assert that the systems functioned together and that one system
    could not be considered substantially complete if the other was
    not also substantially complete. We begin our analysis with the
    question of whether the Fuelberths’ claims accrued at separate
    times or whether they accrued on the same substantial comple-
    tion date.
    One Statute of Limitations Period or Two?
    As noted, we have held that where the basis of a claim
    is improper workmanship resulting in defective construction,
    the statute of limitations period under § 25‑223 begins to run
    from the date of substantial completion of the project. In this
    case, that raises the question of whether the installation of the
    interior system and the exterior system was one project such
    that the statute of limitations would begin to run when the
    entire project was substantially complete or two separate proj-
    ects such that the statute of limitations on a claim related to
    improper workmanship in one system would begin to run when
    that system was substantially complete.
    [4] A statute of limitations begins to run as soon as the
    claim accrues. See Alston v. Hormel Foods Corp., 
    273 Neb. 422
    , 
    730 N.W.2d 376
    (2007). A cause of action accrues and
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    Nebraska Supreme Court Advance Sheets
    307 Nebraska Reports
    FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
    Cite as 
    307 Neb. 1002
    the statute of limitations begins to run when the aggrieved
    party has the right to institute and maintain suit. Pennfield
    Oil Co. v. Winstrom, 
    272 Neb. 219
    , 
    720 N.W.2d 886
    (2006).
    Accordingly, if the Fuelberths had the right to sue Heartland
    for defective construction as soon as one system was sub-
    stantially complete, the statute of limitations on the cause of
    action related to that system would begin to run before the
    statute of limitations began to run on a cause of action related
    to the other system. Alternatively, if the Fuelberths could not
    institute a suit until the agreed‑to work as a whole was sub-
    stantially complete, a single statute of limitations would begin
    to run on claims related to defective construction of any part
    of the project at that point.
    [5] Whether the Fuelberths could institute and maintain
    suit as soon as one system was substantially complete or were
    required to wait until the substantial completion of the work as
    a whole depends on whether the agreement between Heartland
    and the Fuelberths was divisible or indivisible. If a contract is
    divisible, “breaches of its severable parts give rise to separate
    causes of action, [and] the statute of limitations will gener-
    ally begin to run at the time of each breach.” 15 Richard A.
    Lord, A Treatise on the Law of Contracts by Samuel Williston
    § 45.20 at 403‑04 (4th ed. 2014). If, however, a contract is
    indivisible, “an action can be maintained on it only when a
    breach occurs or the contract is in some way terminated, and
    the statute of limitations will begin to run from that time only.”
    Id. at 405. [6]
    We have previously treated the question of whether
    a contract was divisible or indivisible as one of fact. See
    Honstein Trucking v. Sandhills Beef, Inc., 
    209 Neb. 422
    , 
    308 N.W.2d 331
    (1981). In an early case, we observed that gener-
    ally where a contract has several undertakings each supported
    by distinct consideration, it is divisible. See Burwell & Ord
    Irrigation & Power Co. v. Wilson, 
    57 Neb. 396
    , 
    77 N.W. 762
    (1899). More recently, we have indicated that whether a
    contract is divisible or indivisible is a question of intentions
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    Nebraska Supreme Court Advance Sheets
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    FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
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    307 Neb. 1002
    apparent in the instrument. See Gaspar v. Flott, 
    209 Neb. 260
    ,
    
    307 N.W.2d 500
    (1981). In an unambiguous contract, it is to
    be determined from the language, the subject matter, and the
    construction placed upon it by the parties in light of the sur-
    rounding circumstances.
    Id. “A contract which
    in its nature and
    purpose is susceptible of division and apportionment is divis-
    ible and severable.” Reichert v. Mulder, 
    121 Neb. 11
    , 14, 
    235 N.W. 680
    , 682 (1931). See, also, 
    Gaspar, supra
    .
    In this case, there are genuine issues of fact as to whether
    the agreement between Heartland and the Fuelberths was divis-
    ible or indivisible. The subject matter of the agreement was the
    design and installation of both an interior system and an exte-
    rior system, but there was evidence that the parties intended
    to enter an agreement in which the Fuelberths would pay one
    sum for all the work Heartland agreed to perform, as opposed
    to several undertakings supported by distinct consideration. In
    August 2010, Heartland gave a written estimate of the scope
    of work to be completed. That written estimate described the
    project as an installation of floor heating in a shop in various
    numbered “zones.” Those zones included a number of locations
    in the interior of the shop and another labeled “(7) ICE MELT.”
    The description went on to state that the bid included labor
    and various specified parts and equipment and totaled $78,000.
    There is no indication in the written estimate that the Fuelberths
    had agreed to pay a certain price for the exterior system and
    another price for the interior system. Further, Fuelberth testi-
    fied in his deposition that in negotiating the agreement with
    Heartland, “we didn’t change components much, it was like [a]
    package deal[,] we’re going to do this, this is what it’s going
    to cost.”
    If the parties’ agreement was, in fact, indivisible, the
    Fuelberths’ cause of action did not accrue until the entire proj-
    ect was substantially complete. In order to assess Heartland’s
    entitlement to summary judgment, then, we must consider
    whether there were genuine issues of material fact as to when
    the project as a whole was substantially complete.
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    FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
    Cite as 
    307 Neb. 1002
    Substantial Completion.
    We find that a reasonable fact finder could conclude that
    the project as a whole was not substantially complete until
    November 12, 2012. Fuelberth testified at his deposition
    that the exterior system was not operational until sometime
    between November 1 and 12, 2012, when Wiederin came to
    the Fuelberths’ property to pour glycol into the system and take
    other steps necessary to ready it for operation.
    If the Fuelberths’ claims accrued on November 12, 2012,
    their complaint was timely filed. Although the district court
    was correct that the Fuelberths filed their complaint more than
    4 years after November 12, 2012, it does not inevitably follow
    that the complaint filed on November 14, 2016, was untimely.
    A Nebraska statute, Neb. Rev. Stat. § 25‑2221 (Reissue 2016),
    provides a general rule for computing time. We have previ-
    ously applied this rule in determining whether an action was
    timely filed under a civil statute of limitations. See George P.
    Rose Sodding & Grading Co. v. Dennis, 
    195 Neb. 221
    , 
    237 N.W.2d 418
    (1976). Section 25‑2221 provides, in relevant part,
    as follows:
    Except as may be otherwise more specifically pro-
    vided, the period of time within which an act is to be
    done in any action or proceeding shall be computed by
    excluding the day of the act, event, or default after which
    the desigated period of time begins to run. The last day
    of the period so computed shall be included unless it is a
    Saturday, a Sunday, or a day during which the offices of
    courts of record may be legally closed as provided in this
    section, in which event the period shall run until the end
    of the next day on which the office will be open.
    Under § 25‑2221, if the Fuelberths’ cause of action accrued
    on November 12, 2012, the statute of limitations started to run
    on the following day, November 13, 2012. The last day of the
    4‑year period as measured from that day would be November
    12, 2016. However, November 12, 2016, was a Saturday.
    Under § 25‑2221, then, the period of limitations would run
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    FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
    Cite as 
    307 Neb. 1002
    until the following Monday, November 14, 2016. That is the
    day on which the Fuelberths filed their complaint.
    Disposition.
    Because a reasonable finder of fact could have concluded
    that Heartland and the Fuelberths entered into an indivisible
    contract to design, construct, and install both the interior sys-
    tem and the exterior system and that the entire project was
    not substantially complete until November 12, 2012, the dis-
    trict court erred by entering summary judgment in favor of
    Heartland on statute of limitations grounds.
    CONCLUSION
    For reasons we have explained, the district court erred by
    granting summary judgment in favor of Heartland. We thus
    reverse the district court’s grant of summary judgment and
    remand the cause to the district court for further proceedings.
    Reversed and remanded for
    further proceedings.