New Riegel Local School Dist. Bd. of Edn. v. Bueherer Group Architecture & Eng., Inc. , 2019 Ohio 5040 ( 2019 )

[Cite as New Riegel Local School Dist. Bd. of Edn. v. Bueherer Group Architecture & Eng., Inc., 2019-
Ohio-5040.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
SENECA COUNTY
NEW RIEGEL LOCAL SCHOOL
DISTRICT, BOARD OF EDUCATION,
CASE NO. 13-17-03
PLAINTIFF-APPELLANT,
-and-
STATE OF OHIO,
PLAINTIFF-APPELLEE,
v.
OPINION
THE BUEHRER GROUP
ARCHITECTURE & ENGINEERING,
INC., ET AL.,
DEFENDANTS-APPELLEES.
NEW RIEGEL LOCAL SCHOOL
DISTRICT, BOARD OF EDUCATION,
CASE NO. 13-17-04
PLAINTIFF-APPELLANT,
-and-
STATE OF OHIO,
PLAINTIFF-APPELLEE,
v.
OPINION
THE BUEHRER GROUP
ARCHITECTURE & ENGINEERING,
INC., ET AL.,
DEFENDANTS-APPELLEES.
Case Nos. 13-17-03, 13-17-04 and 13-17-06
NEW RIEGEL LOCAL SCHOOL
DISTRICT, BOARD OF EDUCATION,
CASE NO. 13-17-06
PLAINTIFF-APPELLANT,
-and-
STATE OF OHIO,
PLAINTIFF-APPELLEE,
v.
OPINION
THE BUEHRER GROUP
ARCHITECTURE & ENGINEERING,
INC., ET AL.,
DEFENDANTS-APPELLEES.
Appeal from Seneca County Common Pleas Court
Trial Court Nos. 15 CV 0115
Judgment Affirmed
Date of Decision: December 9, 2019
APPEARANCES:
Christopher L. McCloskey and Tarik Kershah for Appellant
Gregory D. Brunton and Allison R. Thomas for The Buehrer Group
Architecture & Engineering, Inc.
Marc A. Sanchez for Ohio Farmers Insurance Company
Shannon J. George and Matthew T. Davis for Studer-Obringer, Inc.
P. Kohl Schneider, Colleen A. Mountcastle and Melanie R. Irvine for
Charles Construction Services, Inc.
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Case Nos. 13-17-03, 13-17-04 and 13-17-06
WILLAMOWSKI, J.
{¶1} These appeals are before this court upon remand from the Ohio
Supreme Court. New Riegel Local School Dist. Bd. of Education v. Buehrer Group
Architecture & Engineering, Inc., et al., 157 Ohio St. 3d 164, 2019-Ohio-2851, 133
N.E.3d 482. Plaintiff-appellant New Riegel Local School District Board of
Education (“the School”) brought this appeal from the judgment of the Court of
Common Pleas of Seneca County granting the judgment on the pleadings filed by
defendants-appellants the Buehrer Group Architecture & Engineering, Inc. (“the
Group”), Studer-Obringer, Inc. (“SOI”), Charles Construction Services, Inc.
(“CCS”), and Ohio Farmers Insurance Company (“OFIC”). For the reasons set forth
below, the judgments are affirmed.
{¶2} This case arises from the construction of a new Kindergarten through
12th Grade School Facility Project (“the Project”) built as part of the Ohio Classroom
Facilities Assistance Program. Doc. 2. As a result of the Project, the School entered
into contracts with multiple contractors starting in February of 2000. Id. The Group
contracted with the School to provide professional design services for the Project.
SOI contracted with the school to serve as the general trades contractor for the
Project. Id. CCS contracted with the school to serve as the roofing contractor for
the Project. The School began occupying the school building on December 19,
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Case Nos. 13-17-03, 13-17-04 and 13-17-06
2002, Doc. 88, Ex. K. The State issued a Certificate of Completion transferring all
of the interest of the State in the Project to the School on March 3, 2004. Doc. 24.
{¶3} Over time, the School had issues with the facilities, including but not
limited to condensation and moisture intrusion allegedly caused by design and
construction errors. Doc. 2. A complaint was filed by the School on April 30, 2015.
Id. The complaint was brought in the name of the School with the State of Ohio
and OSFC as involuntary plaintiffs. Id. The complaint named the Group, SOI,
CCS, and American Buildings Company, among others, as defendants. Id. The
complaint alleged in Count One that the Group breached its contract by failing to
perform in accord with professional standards by failing “to properly design the
roofing system and through-wall flashing system for the Project in a manner which
prevented moisture intrusion, heat loss, and condensation related issues, [failing] to
properly observe and report its findings related to defective work, [failing] to make
appropriate recommendations for repair and improvement, and [failing] to comply
with all state and local statutory requirements.” Id. at 7. The complaint also alleged
that both SOI and CCS had breached its contract by failing to conform to the
requisite standard of care to perform in a workmanlike manner. Doc. 2. The Group,
SOI, and CCS filed answers denying the allegations in the complaint and listing
several affirmative defenses, including the statute of repose. Doc. 21, 34, and 35.
On February 10, 2016, the School filed an amended complaint raising the same
alleged breach of contract claims against the Group, SOI, and CCS as the first
complaint did. Doc. 62. The Group, SOI and CCS all filed answers to the amended
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Case Nos. 13-17-03, 13-17-04 and 13-17-06
complaint raising the same affirmative defenses. Doc. 65, 67, and 68. The Group
and SOI filed motions for judgment on the pleadings pursuant to Civil Rule 12(C).
Doc. 70 and 71. Both claimed that the claims raised by the School were time-barred
by the statute of repose as set forth in R.C. 2305.131(A)(1). Id. The School filed
memoranda in opposition to these motions. Doc. 73 and 79.
{¶4} The School then filed a second amended complaint on June 10, 2016.
Doc. 88. This complaint added OFIC as a defendant as the surety for SOI, but did
not make any changes to the claims against SOI, the Group, or CCS. Id. The Group,
SOI, CCS, and OFIC all filed answers to the second amended complaint Doc. 93,
99, 102, 113. The Group and SOI then renewed their respective motions for
judgment on the pleadings pursuant to Civil Rule 12(C). Doc. 95 and 108. On
August 24, 2016, the trial court granted the Group’s and SOI’s motions for judgment
on the pleadings. Doc. 116 and 117. These judgments were based upon the statute
of repose as set forth in R.C. 2305.131. Id.
{¶5} After the trial court had granted both SOI’s and the Group’s motions
for judgment on the pleadings based upon the statute of repose, CCS filed its own
motion for judgment on the pleadings also based upon the statute of repose. Doc.
124. On October 31, 2017, the trial court granted CCS’s motion for judgment on
the pleadings. Doc. 129. Likewise, OFIC filed a motion for judgment on the
pleadings on September 6, 2016. Doc. 119. OFIC argued that since SOI was
dismissed, OFIC was no longer liable as the surety for SOI and must also be
dismissed. Id. The School filed its response to OFIC’s motion on September 9,
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Case Nos. 13-17-03, 13-17-04 and 13-17-06
2016. Doc. 120. In the same entry that granted CCS’ motion for judgment on the
pleadings, the trial court also granted OFIC’s motion for judgment on the pleadings
and both parties were dismissed. Doc. 129.
{¶6} On January 25, 2017, the School filed notices of appeal from these
judgments of dismissal. Doc. 134, 137, and 143. The judgment dismissing SOI was
assigned appellate case number 13-17-03. The judgment dismissing OFIC and CCS
was assigned appellate case number 13-17-06. The dismissal of the Buehrer Group
was assigned appellate case number 13-17-04. On appeal, these cases were all
reversed on the grounds that pursuant to the holding of the Ohio Supreme Court in
Kocisko v. Charles Shutrump & Sons Co., et al., 21 Ohio St. 3d 98, 488 N.E.2d 171
(1986), the statute of repose did not apply to a breach of contract case, only those
based in tort. Id. at 99. Since the causes of action in the cases before us, when read
in a light most favorable to the School, were based upon breaches of contract claims,
this Court determined it had no choice but to follow Supreme Court precedent and
find the statute of repose to be inapplicable. See New Riegel Local School Dist. Bd.
of Education, et al. v. The Buehrer Group Architecture & Engineering, Inc., et al.,
3d Dist. Seneca Nos. 13-17-03, 13-17-04, and 13-17-06, 2017-Ohio-8522 and 2017-
Ohio-8521. SOI, CCS, the Group, and OFIC appealed these holdings to the Ohio
Supreme Court. On July 17, 2019, the Ohio Supreme Court reversed this Court and
remanded the matter to us on the grounds that stare decisis no longer compelled this
Court to apply the holding in Kocisko to these claims. Thus, the matter is remanded
for us to review.
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Case Nos. 13-17-03, 13-17-04 and 13-17-06
{¶7} On remand, this Court will address the following relevant assignments
of error from the School.1
First Assignment of Error
The trial court erred in dismissing [the School’s] breach of
contract claims against [SOI], [CCS], and [The Group], by
finding that the Ohio Statute of Repose, R.C. 2305.131, barred
[the School’s] claims for breach of contract.
Second Assignment of Error
The trial court erred in dismissing the claims against [SOI] and
[CCS] as those contracts were entered with [the State] and
general limitations periods do not apply to the State of Ohio.
***
Fourth Assignment of Error
The trial court erred in dismissing [the School’s] claims against
[OFIC], as surety for [SOI], on the basis that [the School’s] surety
bond claim against [OFIC] was barred by the virtue of the
dismissal of the claims against [SOI].
{¶8} In the first assignment of error, as it applies to SOI, CCS, and the
Group, the School claims that the trial court erred in dismissing with prejudice the
claims against those parties. The dismissal was granted by the trial court pursuant
to the statute of repose which limits actions for damages based upon defective and
unsafe conditions in improvements to real property.
(A)(1) Notwithstanding an otherwise applicable period of
limitations specified in this chapter or in section 2125.02 of the
Revised Code and except as otherwise provided in divisions
(A)(2), (A)(3), (C), and (D) of this section, no cause of action to
1
The third assignment of error was dealt with in appellate case number 13-17-05 and is not before this
court on remand.
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Case Nos. 13-17-03, 13-17-04 and 13-17-06
recover damages for bodily injury, an injury to real or personal
property, or wrongful death that arises out of a defective and
unsafe condition of an improvement to real property and no cause
of action for contribution or indemnity for damages sustained as
a result of bodily injury, an injury to real or personal property,
or wrongful death that arises out of a defective and unsafe
condition of an improvement to real property shall accrue against
a person who performed services for the improvement to real
property or a person who furnished the design, planning,
supervision of construction, or construction of the improvement
to real property later than ten years from the date of substantial
completion of such improvement.
***
(G) As used in this section, “substantial completion” means the
date the improvement to real property is first used by the owner
or tenant of the real property or when the real property is first
available for use after having the improvement completed in
accordance with the contract or agreement covering the
improvement, including any agreed changes to the contract or
agreement, whichever occurs first.
R.C. 2305.131.
{¶9} The School argued that the statute of repose does not apply because
they are bringing suit for breach of contract, not for a tort and the statute of repose
does not apply to breach of contract claims. In support of this argument the School
cites to Kocisko supra, which held that the statute of repose did not apply in that
case because it was a breach of contract case, not a tort case and the statute of repose
does not apply to a breach of contract case.2 However, the Supreme Court of Ohio
2
This court notes that the case was based upon a prior version of R.C. 2305.131 that is no longer in effect,
but that the relevant language is quite similar to the current version.
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Case Nos. 13-17-03, 13-17-04 and 13-17-06
recently held that Kocisko is not applicable in this case and that the statute did apply.
New Riegel, supra, 2019-Ohio-2851 at ¶ 21-23.
{¶10} R.C. 2305.131 specifies that no cause of action for damages to real
property, resulting from the improvement to that real property, can be brought after
10 years from the time the improvements were substantially completed. The School
is trying to collect damages resulting from an improvement, i.e. the Project, to real
property. The School began occupying the building in 2002 and the Certificate of
Completion was issued in 2004. The School did not file its complaint until 2015,
which exceeds the ten year time limit set forth in the statute. The statute specifically
prohibits this. Thus, it would appear that the statute specifically prohibits the filing
of the claims in this case.
{¶11} The Supreme Court of Ohio has held that the statute of repose “applies
to civil actions commenced after the effective date of the statute regardless of when
the cause of action accrued.” Oaktree Condominium Assn., Inc. v. Hallmark Bldg.
Co., 139 Ohio St. 3d 264, 2014-Ohio-1937, ¶ 8, 11 N.E.3d 266. The plain language
of R.C. 2305.131(A), cuts off liability for injuries arising out of defective conditions
of an improvement to real estate that are brought more than ten years after the
substantial completion of the improvement. Substantial completion is defined as
the date when the owner of the property first uses the property after the
improvements are completed. Even if we view this date in a light most favorable to
the School and use the date of the certificate of completion, which was March 3,
2004, the complaint was not filed until April 30, 2015. This is more than ten years
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Case Nos. 13-17-03, 13-17-04 and 13-17-06
after the latest possible date of substantial completion. For that reason, the first
assignment of error is overruled.
{¶12} The School argues in its fourth assignment of error that the trial court
erred in dismissing OFIC as surety for SOI. A surety’s liability “is dependent upon,
and can be no greater than, that of the principal.” State v. Herbert, 49 Ohio St. 2d
88, 358 N.E.2d 1090 (1976). If the claim against the principal is barred by the
statute of repose, then the claim against the surety is barred as well. Bd. of
Education of Tuslaw Local School Dist. v. CT Taylor Co., Inc., 5th Dist. Stark No.
2018CA00099, 2019-Ohio-1731, ¶ 33. Having determined that the trial court
correctly granted judgment on the pleadings based upon the statute of repose, there
are no longer any outstanding claims against SOI. The result of this is that the claim
against OFIC, as the surety of SOI, must also fail. The trial court did not err in
dismissing OFIC and the fourth assignment of error is overruled.
{¶13} In the second assignment of error, the School argues that the trial court
erred in dismissing the claims pursuant to the statute of repose because the contracts
were entered with the State and the limitation does not apply to the State. This court
has already determined that the State is not a party to this matter. New Riegel Local
School Dist., Bd. of Education v. Buehrer Group Architecture & Engineering, Inc.,
et al., 3d Dist. Seneca No. 13-17-05, 2017-Ohio-8523, ¶ 7. In that opinion, this
Court stated that there was a contract between the State of Ohio and the School
which permitted the School to act as a limited agent of the State and bind the State
to the necessary contracts to build the new facility. Id. at ¶ 6. However, this limited
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Case Nos. 13-17-03, 13-17-04 and 13-17-06
agency ended when the State issued the Certificate of Completion. Id. The
Certificate of Completion “specified that the School was solely responsible for the
ownership and management of the property, specifically any enforcement of
warranties and guarantees associated with the project.” Id. Thus, this court held
that the State was not a real party in interest and was properly dismissed from the
case, leaving only the School as the plaintiff. Id.
{¶14} The State and the School are not the same entity, thus the same rules
do not apply to the School as would apply to the State. A school district is a political
subdivision, not a State entity. R.C. 2744.01(F). The School does not argue and
points to no authority which would permit it to have sovereign immunity from the
statute of repose as a political subdivision. This Court has found no such authority.
Since the School is not entitled to claim the sovereign immunity of the State, in this
case, the second assignment of error is overruled.
{¶15} Having found no error prejudicial to the Appellant in the particulars
assigned and argued, the judgments of the Court of Common Pleas of Seneca
County are affirmed.
Judgments Affirmed
ZIMMERMAN, P.J. and SHAW, J., concur.
/hls
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