Employers Commercial Union Co. v. Westinghouse Electric Corp. , 15 N.C. App. 406 ( 1972 )

190 S.E.2d 364 (1972) 15 N.C. App. 406

EMPLOYERS COMMERCIAL UNION COMPANY OF AMERICA (formerly Commercial Union Insurance Company of New York)
v.
WESTINGHOUSE ELECTRIC CORPORATION.

No. 7226SC100.

Court of Appeals of North Carolina.

August 2, 1972.

Fairley, Hamrick, Monteith & Cobb, by S. Dean Hamrick, Charlotte, for plaintiff-appellant.

Carpenter, Golding, Crews & Meekins, by John G. Golding, Charlotte, for defendant-appellee.

BROCK, Judge.

The plaintiff-appellant's sole assignment of error on this appeal is to the action of the trial court in granting the defendant's motion for summary judgment.

The trial court did not state the reason for granting the defendant's motion under G.S. § 1A-1, Rule 56; therefore, the parties have argued each of the grounds set out in defendant's motion. The first of these is that the action is barred by the statute of limitations. Defendant asserts that the three year limitation is applicable. Plaintiff-appellant contends that the factual situation of this case is controlled by the provisions of the six year statute of limitations contained in G.S. § 1-50(5). Plaintiff resourcefully argues that the transformer in question was part of the realty and that this action is one to recover damages arising from a defective improvement to real property made by defendant.

We feel that it would serve no useful purpose to discuss the plaintiff's interpretation of the factual situation relating to the transformer and its contention that the transformer be considered "an improvement to real property" or part of the realty. It is sufficient to note that the transformer was not part of the realty at any time Westinghouse was repairing it. The evidence shows that Great Lakes severed and removed it from its plant, and sent it to defendant's plant in Charlotte by railroad flatcar for repair. We think G.S. § 1-50(5) clearly was not enacted to cover situations as at issue here, and that the six year limitation is not applicable in this case.

The theories upon which plaintiff seeks to recover damages are negligent failure to repair and breach of warranty of material and workmanship in the repair contract. Thus the period prescribed for the commencement of this action, whether regarded as arising out of contract or of tort, is three years. G.S. § 1-52; Thurston Motor Lines v. General Motors Corp., 258 N.C. 323, 128 S.E.2d 413.

In this case the defendant properly plead the statute of limitations; therefore, the burden was upon plaintiff to show that its action was begun within the time permitted by statute. Jewell v. Price, 264 N.C. 459, 142 S.E.2d 1.

Plaintiff instituted this action on 13 March 1970, and it contends that its cause of action, through subrogation, did not accrue until on or after 13 March 1967. Plaintiff contends that this action comes within the authority of Styron v. Loman-Garrett Supply Company, 6 N.C.App. 675, 171 S.E.2d 41, and authorities cited therein.

In the Styron case, a cooling system; in Heath v. Moncrieff Furnace Co., 200 N.C. 377, 156 S.E. 920, a furnace; and in Nowell v. Great Atlantic & Pacific Tea Co., 250 N.C. 575, 108 S.E.2d 889, a building, were guaranteed by the manufacturer or contractor to perform to certain standards, were constructed, furnished and installed by the defendants in those cases and put into operation by the defendants, and the defendants kept working on them and attempting to make them operate according to the prescribed standard. In the above cases, the defendants' work was not completed.

In the present case plaintiff is not bringing suit for a failure on defendant's part to complete the work contracted for and undertaken, but for damages alleged to have been suffered because of deficiencies in repair work completed in March 1967. Westinghouse completed its work under the contract of repair and placed the repaired transformer on a railway flat-car, F.O.B. Charlotte, on 9 March 1967. At this time the originally contracted repair work was completed, and the transformer was no longer in the control of defendant, but in the hands of Great Lakes' agent (railroad). Therefore, the defendant had relinquished control over the transformer more than three years before the date of the institution of this lawsuit.

In this case the transformer was sent back to the Westinghouse plant after its failure on 19 March 1967, at which time defendant completely reworked the transformer in compliance with the warranty of material and workmanship in its contract to repair. This activity was not a continuation of negligent and unsuccessful efforts to repair the transformer. There was no allegation or suggestion of negligence or breach of warranty in the second effort to repair. The damages complained of by plaintiff were alleged to have been caused by reason of negligence or breach of warranty occurring during the repair work performed while the transformer was in possession of defendant on the first occasion. This possession ended when defendant delivered the transformer to Great Lakes, F.O.B. Charlotte, on 9 March 1967.

The plaintiff-appellant further contends that the statute of limitations began to run, not at the time of completion and delivery of the repaired transformer to Great Lakes, but at a later time, 13 March 1967, when Great Lakes received it and had an opportunity to inspect it. We do not agree.

The courts of this State have consistently held that the statute of limitations for claims for injury or damage from a defective product begins to run from the date of the sale and delivery of the product (not the date of the ultimate failure of the product or the injury). Bradley v. Lewis Motors, Inc., 12 N.C.App. 685, 184 S.E.2d 397; Jarrell v. Samsonite Corp., 12 N.C.App. 673, 184 S.E.2d 376; State v. Cessna Aircraft Corp., 9 N.C.App. 557, 176 S.E.2d 796; Thurston Motor Lines v. General Motors Corp., supra. G.S. § 1-15(b) was enacted after this cause of action arose and it has no application to this case.

The summary judgment for defendant on the ground that plaintiff's action was not commenced within three years from the date its cause of action accrued is

Affirmed.

HEDRICK, J., concurs.

VAUGHN, J., concurs in result.