Lormic Development Corp. v. North American Roofing Co. , 95 N.C. App. 705 ( 1989 )

383 S.E.2d 694 (1989)

LORMIC DEVELOPMENT CORPORATION and South Island Properties, a Michigan General Partnership, Plaintiffs,
v.
NORTH AMERICAN ROOFING CO., INC., and Diversitech General, Inc., Defendants.

No. 8926SC23.

Court of Appeals of North Carolina.

October 3, 1989.

Underwood, Kinsey & Warren, P.A. by William L. Sitton, Jr., Charlotte, for plaintiffs-appellants.

Hedrick, Eatman, Gardner & Kincheloe by John F. Morris and Mika Z. Savir, Charlotte, for defendant-appellee Diversitech General, Inc.

LEWIS, Judge.

Plaintiffs assert that the trial court erred in granting defendant Diversitech's motion for summary judgment on all of plaintiffs' claims. Summary judgment is a drastic measure which should be used with caution since no person should be deprived of a trial on a genuine issue of material fact. Williams v. Carolina Power & Light Co., 296 N.C. 400, 402, 250 S.E.2d 255, 257 (1979); See also, Sauls v. Charlotte Liberty Mutual Insurance Co., 62 N.C.App. 533, 303 S.E.2d 358 (1983). In considering a motion for summary judgment a trial court is bound to view all the evidence and the inferences therefrom in the light most favorable to the non-movant. Foster v. Winston-Salem Joint Venture, 303 N.C. 636, 641, 281 S.E.2d 36, 40 (1981). "The slightest doubt as to the facts entitles the non-moving party to a trial." Ballenger v. Crowell, 38 N.C.App. 50, 53, 247 S.E.2d 287, 290 (1978). A review of the evidence contained in the record reveals several issues of material fact exist as to plaintiffs' claims entitling them to a trial on the merits.

Addressing first plaintiffs' claim on the breach of express warranty, we find that a genuine issue of material fact exists as to whether plaintiffs gave defendants proper notice of the defects in the roofing system. Neither party denies that they agreed from the outset that warranties would be issued on the materials and workmanship performed in constructing and installing the roofing system. However, plaintiffs contend that they were unaware of any 30-day notice provision contained in Diversitech's warranties until after the warranties were actually issued on February 25, 1986. Alternatively, they argue that the duty to notify Diversitech in writing of any defects within 30 days did not arise until the warranties were actually issued in February 1986.

The "Sample" warranty attached to the original contract made no reference to Diversitech whatsoever, and all other pertinent data, such as the date, the signature of the Diversitech representative, the type of roofing membrane the warranty covered, and the dates for which the warranty was effective were absent on the sample warranty. Furthermore, the sample warranty carried the letterhead of "General Tire Building Products Company" and the terms of the sample warranty only referenced General Tire, whereas the warranties signed and issued by Diversitech carried their own letterhead and specifically referenced Diversitech's duties and obligations under the warranty.

We find as a matter of law that the parties did intend for the provisions of the General Tire sample warranty to ultimately govern Diversitech's obligations under the issued warranty. Paragraph five of the contract specifically references the General Tire warranty attached to the contract as the provisions which would govern the parties' rights and liabilities. Diversitech, as supplier of General Tire's roofing system, simply substituted its letterhead and name in the executed warranty. However, it is clear from the absence of specific data in the sample warranty that the parties did not intend for the provisions contained in the sample warranty to take effect until after the warranty was actually executed in February, 1986. Until the warranties were actually executed, plaintiffs owed defendants no duty to formally notify them of any defects in the roofing system. This being so, a genuine issue of material fact exists as to whether plaintiffs timely gave defendants notice of the defects within 30 days after their discovery once the warranties were executed.

The evidence is unclear as to whether the leaking problems were temporarily corrected by North American and Diversitech before they issued the warranties in February and then at some point prior to plaintiff's November 1986 letter, the leaking started once again. If this is indeed what happened, a jury could find that plaintiffs did in fact give defendants timely notice of the defects within thirty days of their discovery after the warranties went into effect. Resolving any doubts in favor of the plaintiffs, we hold that the trial court erred in granting summary judgment on this issue.

Plaintiffs further assign as error the entry of summary judgment on the issue of breach of implied warranty of merchantibility. Paragraph six of both the sample General Tire warranty attached to the February 22, 1984 contract, as well as the Diversitech warranty issued on February 25, 1986 conspicuously recite: "Except as stated herein, there are no warranties, express or implied, including warranties of merchantibility or fitness for a particular purpose." Under our U.C.C. 2-314, sellers of goods who enter into a contract for the sale of goods are deemed to warrant that the goods are merchantable unless the contract of sale contains an effective disclaimer of this warranty. G.S. 25-2-314. Since we have found that the parties agreed that the terms and conditions of the sample warranty would ultimately govern the rights and liabilities of the parties after its execution, we find that once Diversitech executed its warranty in February, 1986, the implied warranty of merchantibility was effectively disclaimed. We affirm the trial court's ruling in favor of the defendant on this issue.

Finally, the plaintiffs assign as error the entry of summary judgment against them on the issue of negligence. Because we adhere to the lex loci delicti rule in determining conflicts of laws issues in tort, South Carolina tort law governs the determination of this issue. Childress v. Johnson Motor Lines, 235 N.C. 522, 524, 70 S.E.2d 558, 560 (1952): Boudreau v. Baughman, 322 N.C. 331, 335, 368 S.E.2d 849, 854 (1988) ("[f]or actions sounding in tort, the state where the injury occurred is considered the situs of the claim. Thus, under North Carolina law, when the injury giving rise to a negligence or strict liability claim occurs in another state, the law of that state governs....") In the present case, the injury to plaintiff's shopping center occurred in South Carolina, therefore South Carolina law governs plaintiff's negligence claim.

Under South Carolina law, product suppliers owe a duty to foreseeable users of their products to exercise reasonable care to provide products that are reasonably fit for their intended use. Madden v. Cox, 284 S.C. 574, 328 S.E.2d 108 (Ct.App. 1985), appeal dismissed, 286 S.C. 127, 332 S.E.2d 102 (1985).

The affidavits submitted by plaintiffs' expert reveals that at least part of the damage was due to the failure to provide an underlayment board. Use of an underlayment board in the installation of insulation for this type of roofing system is generally accepted industry practice and is recommended by most, if not all, manufacturers of such insulation. Plaintiffs' expert also determined that the leaking was caused by improper installation in violation of the manufacturer's specifications.

It is apparent from studying the record and the various affidavits from both parties that the cause of the leaking in plaintiffs' shopping center, the quality and type of materials used, and the degree of care used in the installation of the roofing system are all vigorously disputed. Diversitech, as supplier of the roof had a duty to provide plaintiffs with a roofing system free from foreseeable defects. See, JKT Co., Inc. v. Hardwick, 274 S.C. 413, 265 S.E.2d 510 (1980) (Verdict against defendant manufacturer/seller affirmed in action based on negligence for leaking roof where defendant used defective materials in the installation of plaintiffs' roofing system).

We find that there are genuine issues of material fact on the issue of defendant's negligence.

Affirmed in part, Reversed in part.

HEDRICK, C.J., and ORR, J., concur.