Beltway Park Baptist Church, Inc. v. Guy Bolton D/B/A Bolton Steel Erectors ( 2020 )

Opinion filed February 21, 2020
In The
Eleventh Court of Appeals
__________
No. 11-18-00049-CV
__________
BELTWAY PARK BAPTIST CHURCH, INC., Appellant
V.
GUY BOLTON D/B/A BOLTON STEEL ERECTORS, Appellee
On Appeal from the 42nd District Court
Taylor County, Texas
Trial Court Cause No. 49047-A
MEMORANDUM OPINION
This appeal arises from a summary judgment. Appellee, Guy Bolton d/b/a
Bolton Steel Erectors, filed a motion for summary judgment alleging that all of the
claims asserted by Appellant, Beltway Park Baptist Church, Inc., were barred by the
applicable statutes of limitations. After conducting a hearing on the motion, the trial
court entered an order granting Bolton’s motion for summary judgment. The trial
court’s summary judgment dismissed all of Beltway’s causes of action with
prejudice. In a single issue, Beltway challenges the summary judgment. It asserts
that the trial court erred in granting summary judgment because there is a genuine
issue of material fact regarding the accrual date for its claims. We affirm.
Background Facts
In 2009, Beltway contracted with Bolton to construct improvements on
Beltway’s property. During the construction, Beltway’s facility director noticed that
the roof of the building leaked. The next year, in the spring of 2010, Bolton and
Goldsmith Construction, the company hired by Beltway to serve as a consultant and
onsite supervisor for the work, completed construction of the building. Beltway
alleged that, after Bolton turned over the building to Beltway, the building continued
to leak every time it rained from 2010 to 2017.
In an e-mail sent on September 19, 2012, Beltway’s Administrative Pastor,
Bruce Reinhardt, described the situation as follows to representatives of Goldsmith:
“[W]e’ve really put up with a ‘new’ leaking roof since we moved into the newly
constructed areas.” This e-mail indicated that Beltway had hired a roofing company
to evaluate the building. On October 4, 2012, the roofing company provided
Beltway with a written report describing the deficiencies of the building and
construction.
Beltway contacted Bolton about the leaking building more than once in 2012.
Reinhardt’s e-mail of September 19, 2012, stated that Bolton had come out “three
times” that year and that “all he [did was] recommend that WE repair things.” In
that same e-mail, Reinhardt stated that Beltway “deserve[s] a non-leaking roof and
it’s our full contention that we have paid for that service but have never received the
appropriate satisfaction.” A month later, in an October 18, 2012 e-mail, Beltway’s
Director of Facilities, Bobby Copelin, stated that Bolton “went on and on about how
he couldn’t fix the problem properly because the building wasn’t designed right.”
The next year, on May 15, 2013, Reinhardt sent an internal e-mail to another
pastor at the church, David McQueen. The e-mail reiterated that Beltway was having
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problems with leaking water after rain and stated that Reinhardt had again discussed
the issue with Bolton. In the e-mail, Reinhardt stated that Bolton was “lying about
our communication[s] with him.” Further, Reinhardt discussed “possible litigation
if this isn’t resolved.”
Beltway filed the underlying action on May 13, 2015, asserting causes of
action for negligence, gross negligence, breach of contract, breach of duty of good
and workmanlike manner, and violations of the Texas Deceptive Trade Practices Act
(DTPA). Subsequently, Bolton filed a motion for summary judgment, asserting that
summary judgment was proper because the applicable statutes of limitations barred
all of Beltway’s claims. In response, Beltway filed an amended petition that added
causes of action for fraud and fraud by nondisclosure. Beltway responded to the
motion for summary judgment by relying on the discovery rule, the doctrine of
fraudulent concealment, Bolton’s alleged breach of the duty of good faith, estoppel,
and the continuing-tort doctrine. After a hearing, the trial court rejected Beltway’s
arguments and granted Bolton’s motion for summary judgment.
Analysis
Beltway presents a single issue for our review concerning whether it raised a
genuine issue of material fact as to the accrual date of its claims and whether the
applicable statutes of limitations barred such claims. We review a trial court’s grant
of summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862
(Tex. 2010) (citing Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211,
215 (Tex. 2003)). When reviewing a summary judgment, we review the evidence
in the light most favorable to the nonmovant, indulge every reasonable inference in
favor of the nonmovant, and resolve any doubts against the motion. Schlumberger
Tech. Corp. v. Pasko, 544 S.W.3d 830, 833 (Tex. 2018) (citing City of Keller v.
Wilson, 168 S.W.3d 802, 824 (Tex. 2005)).
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When a defendant moves for summary judgment on the affirmative defense
of limitations, the defendant has the burden to conclusively establish that defense.
KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.
1999). To meet this burden, the defendant must conclusively prove when the cause
of action accrued and negate the discovery rule, if the discovery rule applies and has
been pleaded or otherwise raised. Id. The defendant negates the discovery rule by
proving as a matter of law that there is no genuine issue of material fact regarding
when the plaintiff discovered or, in the exercise of reasonable diligence, should have
discovered its injury. Id.
The limitations period for negligence and gross negligence is two years. Hunt
Oil Co. v. Live Oak Energy, Inc., 313 S.W.3d 384, 387 (Tex. App.—Dallas 2009,
pet. denied) (citing TEX. CIV. PRAC. & REM. CODE ANN. § 16.003 (West 2017))
(negligence); Hall v. Stephenson, 919 S.W.2d 454, 467 (Tex. App.—Fort Worth
1996, writ denied) (citing CIV. PRAC. & REM. § 16.003(a)) (gross negligence). A
claim for a violation of the DTPA is also subject to a two-year statute of limitations.
See TEX. BUS. & COM. CODE ANN. § 17.565 (West 2011); Nghiem v. Sajib, 567
S.W.3d 718, 720 (Tex. 2019). Claims for breach of contract and fraud are subject
to a four-year statute of limitations. Exxon Corp. v. Emerald Oil & Gas Co., 348
S.W.3d 194, 203, 216 (Tex. 2011) (citing CIV. PRAC. & REM. §§ 16.004(a)(4), .051
(West 2002)). A claim for breach of the implied warranty of good and workmanlike
manner, when not alleged as a violation of the DTPA, may be subject to a four-year
statute of limitations. Nghiem, 567 S.W.3d at 720, 725.
Beltway asserts that its claims did not accrue until May 15, 2013, when,
according to Beltway, Bolton made a misrepresentation to convince Beltway to
forestall litigation. Beltway bases this assertion on Reinhardt’s e-mail to McQueen
on May 15, 2013, wherein Reinhardt stated: “Bolton said that he does not want any
of us to waste money on a lawsuit so he and a crew will be out tomorrow to fix the
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roof.” As stated by Beltway in its brief: “This case is about a contractor that built a
bad building, made representations to the owner that he would fix what he had
broken - and even represented if you don’t sue me I promise I will fix your building.”
The question of when a cause of action accrues is a question of law. Provident
Life & Accident Ins., 128 S.W.3d at 221. Generally, a cause of action accrues when
facts come into existence that authorize a claimant to seek a judicial remedy, when
a wrongful act causes some legal injury, or whenever one person may sue another.
Am. Star Energy & Minerals Corp. v. Stowers, 457 S.W.3d 427, 430 (Tex. 2015).
For example, a claim for breach of contract accrues when the contract is breached.
Cosgrove v. Cade, 468 S.W.3d 32, 39 (Tex. 2015). Bolton asserts that, at the latest,
Beltway’s causes of action accrued in the fall of 2010 after Beltway moved into the
newly constructed portion of the church building and experienced leaks. We agree.
Discovery Rule
Beltway asserts that the discovery rule deferred the limitations period because
the harm was “inherently undiscoverable.” The discovery rule defers accrual of a
claim until the injured party learned of, or in the exercise of reasonable diligence
should have learned of, the wrongful act causing the injury. Cosgrove, 468 S.W.3d
at 36. As the party seeking summary judgment on the affirmative defense of
limitations, Bolton had the burden to negate the discovery rule by proving as a matter
of law that there is no genuine issue of fact about when Beltway discovered or should
have discovered the nature of the injury. See B. Mahler Interests, L.P. v. DMAC
Constr., Inc., 503 S.W.3d 43, 48 (Tex. App.—Houston [14th Dist.] 2016, no pet.)
(citing KPMG Peat Marwick, 988 S.W.2d at 748).
The discovery rule is limited to “circumstances where ‘the nature of the injury
incurred is inherently undiscoverable and the evidence of injury is objectively
verifiable.’” Cosgrove, 468 S.W.3d at 36 (quoting Comput. Assocs. Int’l, Inc. v.
Altai, Inc., 918 S.W.2d 453, 456 (Tex. 1996)). “An injury is inherently
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undiscoverable if it is by nature unlikely to be discovered within the prescribed
limitations period despite due diligence.” S.V. v. R.V., 933 S.W.2d 1, 7 (Tex. 1996).
An injury is not inherently undiscoverable when it could be discovered through the
exercise of reasonable diligence. BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 66
(Tex. 2011). “Knowledge of injury initiates the accrual of the cause of action and
triggers the putative claimant’s duty to exercise reasonable diligence to investigate
the problem, even if the claimant does not know the specific cause of the injury or
the full extent of it.” Emerald Oil & Gas Co., 348 S.W.3d at 209.
“The discovery rule may apply to a breach of contract claim, but ‘those cases
should be rare, as diligent contracting parties should generally discover any breach
during the relatively long four-year limitations period provided for such claims.’”
Clear Lake Ctr., L.P. v. Garden Ridge, L.P., 416 S.W.3d 527, 543 (Tex. App.—
Houston [14th Dist.] 2013, no pet.) (quoting Via Net v. TIG Ins. Co., 211 S.W.3d
310, 315 (Tex. 2006)). Because contracting parties generally are not fiduciaries, due
diligence requires that each party protect its own interests. Via Net, 211 S.W.3d at
314.
The summary judgment evidence conclusively establishes that Beltway’s
alleged injury was not inherently undiscoverable. To the contrary, Beltway
discovered the alleged construction defects as early as 2009 and knew that they
existed when Bolton completed the project in 2010. As noted by Beltway in its brief,
“[t]his is not a question of whether or not everyone had knowledge that the building
was broken. This is about the fact that Bolton made representation after
representation that Bolton was fixing the building.” The injury allegedly suffered
by Beltway was not inherently undiscoverable because Beltway knew about the
alleged construction defects for five years before filing suit against Bolton.
Therefore, the summary judgment evidence conclusively negates the discovery rule.
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Fraudulent Concealment
Beltway also contends that Bolton’s allegedly fraudulent concealment
deferred the accrual date for Beltway’s causes of action until May 15, 2013. A
plaintiff asserting fraudulent concealment as a defense in the summary judgment
context to a claim of limitations has the burden of producing evidence that raises a
genuine issue of material fact as to each element that would support his assertion.
KPMG Peat Marwick, 988 S.W.2d at 749; Am. Petrofina, Inc. v. Allen, 887 S.W.2d
829, 830 (Tex. 1994). In fraud and fraudulent concealment cases, “accrual is
deferred because a person cannot be permitted to avoid liability for his actions by
deceitfully concealing wrongdoing until limitations has run.” S.V., 933 S.W.2d at 6.
Fraudulent concealment tolls the statute of limitations until the injured party,
using reasonable diligence, discovered or should have discovered the injury. KPMG
Peat Marwick, 988 S.W.2d at 750. The fraudulent-concealment doctrine is an
affirmative defense to limitations that estops a defendant from relying on the defense
of limitations if the defendant was under a duty to make a disclosure but fraudulently
concealed the existence of a cause of action from the party to whom it belongs.
Doe v. Roman Catholic Archdiocese of Galveston-Houston ex rel. Dinardo, 362
S.W.3d 803, 810 (Tex. App.—Houston [14th Dist.] 2012, no pet.) (citing Seureau v.
ExxonMobil Corp., 274 S.W.3d 206, 228 (Tex. App.—Houston [14th Dist.] 2008,
no pet.)). “Fraudulent concealment requires showing that the ‘defendant actually
knew the plaintiff was in fact wronged, and concealed that fact to deceive the
plaintiff.’” ExxonMobil Corp. v. Lazy R Ranch, LP, 511 S.W.3d 538, 544 (Tex.
2017) (quoting Marshall, 342 S.W.3d at 67). However, “[f]raudulent concealment
will not . . . bar limitations when the plaintiff discovers the wrong or could have
discovered it through the exercise of reasonable diligence.” Kerlin v. Sauceda, 263
S.W.3d 920, 925 (Tex. 2008).
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Here, there is no evidence in the record to support Beltway’s assertion that
Bolton fraudulently concealed any construction defects. To the contrary, Beltway
had known about the alleged construction defects since 2009, which preceded
Bolton’s completion of the project in 2010. In 2012, Reinhardt stated that the church
had dealt with the leaking roof since Beltway moved into the newly constructed
areas in 2010. Thus, the alleged legal wrong was not hidden from Beltway; it knew
about the roof leak issues five to six years before filing suit against Bolton.
Therefore, Beltway did not raise any genuine issues of material fact to support its
assertion that any concealment by Bolton deferred the accrual date of Beltway’s
causes of action.
Equitable Estoppel
Beltway alternatively argues that, even if the court finds that there was no
fraudulent concealment or that the discovery rule does not apply, Bolton was
equitably estopped to assert the defense of limitations. Beltway bases this contention
on the May 15, 2013 e-mail from Reinhardt to McQueen. A plaintiff may invoke
equitable estoppel to prevent an opponent from prevailing on limitations if the
opponent, his or her agent, or representatives make representations that induce the
plaintiff to delay filing suit within the applicable limitations period. Forrest v. Vital
Earth Res., 120 S.W.3d 480, 486 (Tex. App.—Texarkana 2003, pet. denied) (citing
Cook v. Smith, 673 S.W.2d 232, 235 (Tex. App.—Dallas 1984, writ ref’d n.r.e.)).
To defeat Bolton’s limitations defense with a claim of equitable estoppel,
Beltway was required to present summary judgment evidence sufficient to raise a
fact issue for each element of his claim of equitable estoppel. Exxon Mobil Corp. v.
Rincones, 520 S.W.3d 572, 593 (Tex. 2017). The elements of equitable estoppel are
as follows: (1) a false representation or concealment of material facts; (2) made with
knowledge, actual or constructive, of those facts; (3) with the intention that it should
be acted on; (4) to a party without knowledge or means of obtaining knowledge of
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the facts; and (5) who detrimentally relies on the representation or concealment.
Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 515–16
(Tex. 1998) (citing Schroeder v. Tex. Iron Works, Inc., 813 S.W.2d 483, 489 (Tex.
1991)). When equitable estoppel is alleged in avoidance of a limitations defense,
the failure to file suit must be unmixed with any want of diligence on the plaintiff’s
part. Medina v. Tate, 438 S.W.3d 583, 591 (Tex. App.—Houston [1st Dist.] 2013,
no pet.); Leonard v. Eskew, 731 S.W.2d 124, 129 (Tex. App.—Austin 1987, writ
ref’d n.r.e.); see Rincones, 520 S.W.3d at 593–95 (Plaintiff’s knowledge “well
before limitations ran” of a viable cause of action precluded application of equitable
estoppel to defeat a limitations defense.).
Beltway asserts that, when viewed most favorably to Beltway, the summary
judgment evidence shows that Bolton made a representation to Beltway in May 2013
that, if Beltway would forego litigation, Bolton would fix the alleged construction
problems. In response, Bolton cites a line of cases for the proposition that
unsuccessful remedial efforts alone cannot toll limitations. See PPG Indus., Inc. v.
JMB/Houston Ctrs. Partners Ltd. P’ship, 146 S.W.3d 79, 95–96 (Tex. 2004).
We first note that limitations for the causes of action subject to a two-year
statute of limitations had already expired prior to May 2013. Beltway has not cited
any authority, and we have found none, that an expired limitations period is revived
under the doctrine of equitable estoppel. Accordingly, Beltway’s claim of equitable
estoppel has no application to Beltway’s claims for negligence, gross negligence, or
violations of the DTPA.
Limitations for Beltway’s claims for breach of contract, fraud, and breach of
the implied duty of good and workmanlike manner had not expired in May 2013
because they were subject to a four-year statute of limitations. Beltway asserts that
Bolton’s offer to repair the roof leak in May 2013 in order to forestall litigation
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resulted in Bolton being equitably estopped to later claim limitations as a defense.
We disagree. In PPG Industries, the Texas Supreme Court stated as follows:
[A]lmost one hundred years ago, we held a seller’s repair efforts do not
extend the limitations period for breach of warranty claims. Texas
courts have been applying that rule ever since, as do the courts of most
other states.
Serious problems would arise if the rule were otherwise. For
example, if the statute of limitations was tolled every time a car needed
repairs during a warranty period (and what car does not), the warranty
period would become perpetual, and dealers would be loath to make
any. We should encourage sellers to attempt repairs; tolling limitations
every time they do might discourage them from doing so at all.
146 S.W.3d at 95 (footnotes omitted). Thus, Texas courts have generally held that
unsuccessful remedial efforts alone cannot toll limitations. See, e.g., id. at 96
(seller’s repair efforts alone not enough to extend limitations period for consumer’s
breach of warranty claims); Dean v. Frank W. Neal & Assocs., 166 S.W.3d 352, 360
(Tex. App.—Fort Worth 2005, no pet.) (“[W]e have not found any cases in which
the mere making of repairs, without more, estopped a defendant from asserting
limitations.”); Pako Corp. v. Thomas, 855 S.W.2d 215, 219 (Tex. App.—Tyler 1993,
no writ) (“Neither the attempts to repair, nor the vendor’s representatives’ assurances
of the success of the efforts, toll the running of the statute of limitations.”); Clade v.
Larsen, 838 S.W.2d 277, 281 (Tex. App.—Dallas 1992, writ denied) (“Nor does
remedial performance, such as structural repairs, toll the running of the statute of
limitations.”); Bishop–Babcock–Becker Co. of Tex. v. Jennings, 245 S.W. 104, 105
(Tex. App.—Austin 1922, no writ) (vendors’ efforts to repair defects in machinery
and assurances of success did not affect limitations; rather, limitations was put in
motion by discovery of the defect and was “not interrupted by subsequent attempts
to remedy the defects nor by assurances given”).
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The summary judgment evidence does not raise an issue of fact on Beltway’s
claim of equitable estoppel to defeat Bolton’s limitations defense. Reinhardt’s
e-mail of May 15, 2013, indicated that Bolton said “that he does not want any of us
to waste money on a lawsuit so he and a crew will be out tomorrow to fix the roof.”
Reinhardt followed that sentence with a statement that two men from the church
would be there the next day to meet with Bolton and “we’ll see what happens.”
Thus, the delay that Bolton is alleged to have induced was one day in length.
Approximately sixteen additional months passed after May 2013 before limitations
on the four-year causes of action expired in the fall of 2014. Reinhardt testified in
his deposition that the roof leaked each time it rained during 2013 and 2014.
Beltway has not provided evidence to explain the delay in filing suit prior to the fall
of 2014. See Medina, 438 S.W.3d at 591. Furthermore, Bolton’s offer in May 2013
was to repair the original defect that Beltway had been alleging since 2009. Under
PPG Industries, Bolton’s offer to remediate the alleged defect did not toll the
application of the statute of limitations.
Continuing Tort
Beltway also argues that, because Bolton’s representations to repair the
original defect constituted a continuing tort, the tortious causes of action did not
accrue until May 15, 2013, the date of Bolton’s last representation. A cause of action
for a continuing tort accrues when the tortious conduct ceases. Upjohn Co. v.
Freeman, 885 S.W.2d 538, 542 (Tex. App.—Dallas 1994, writ denied) (citing
Tectonic Realty Inv. Co. v. CNA Lloyd’s of Tex. Ins. Co., 812 S.W.2d 647, 654 (Tex.
App.—Dallas 1991, writ denied)). “The doctrine of continuing tort, with its
extension of accrual date, is rooted in a plaintiff’s inability to know that the ongoing
conduct is causing him injury.” Rincones, 520 S.W.3d at 592. The Texas Supreme
Court has “neither endorsed nor addressed” the continuing-tort doctrine. Id.
However, the Waco, Dallas, and Austin courts of appeals have applied it “in cases
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of false imprisonment, negligent infliction of emotional distress, and continued use
of injury-producing medicine.” Id.
If a plaintiff discovers its injury and its cause, the rationale for the continuing-
tort doctrine no longer applies, and the statute of limitations commences to run at
that point. Upjohn, 885 S.W.2d at 544 (citing Atha v. Polsky, 667 S.W.2d 307, 310
n.10 (Tex. App.—Austin 1984, writ ref’d n.r.e.)). As noted in Rincones, “[w]e
follow our rule that ‘a cause of action generally accrues at the time when facts come
into existence which authorize a claimant to seek a judicial remedy’ and the ‘fact
that damage may continue to occur for an extended period after accrual does not
prevent limitations from starting to run.’” 520 S.W.3d at 593 (quoting Murray v.
San Jacinto Agency, Inc., 800 S.W.2d 826, 828 (Tex. 1990)). The continuing-tort
doctrine is inapplicable in this case because Beltway’s alleged injury arises from a
single act—Bolton’s construction of improvements on Beltway’s property.
Fraud
Finally, Beltway contends that Bolton’s May 2013 representation also
constituted common law fraud and that a cause of action for it did not accrue until it
was made. The elements for fraud are as follows: (1) that a material representation
was made; (2) the representation was false; (3) when the representation was made,
the speaker knew it was false or made it recklessly without any knowledge of the
truth and as a positive assertion; (4) the speaker made the representation with the
intent that the other party should act upon it; (5) the party acted in reliance on the
representation; and (6) the party thereby suffered injury. In re FirstMerit Bank, N.A.,
52 S.W.3d 749, 758 (Tex. 2001). The limitations period for a fraud cause of action
“does not start to run until the fraud is discovered or the exercise of reasonable
diligence would discover it.” Hooks v. Samson Lone Star, Ltd. P’ship, 457 S.W.3d
52, 57 (Tex. 2015) (citing Marshall, 342 S.W.3d at 69).
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Beltway asserts that it delayed filing suit because of Bolton’s alleged
representation in May 2013. This delay is the injury upon which Beltway’s fraud
claim is premised. Thus, Beltway’s fraud claim is essentially the same as its claim
of equitable estoppel. The First Court of Appeals dealt with an analogous situation
in Hixon v. Tyco Int’l, Ltd., No. 01-08-0050-CV, 2011 WL 1584767 (Tex. App.—
Houston [1st Dist.] Apr. 21, 2011, no pet.) (mem. op.). The court concluded that the
plaintiffs’ attempt to recast their time-barred claims as new claims based upon
“faulty repairs and faulty assurances” failed because the only damages asserted by
the plaintiffs for the new claims were that they were induced to not timely sue the
defendants. Id. at *5–6 (citing PPG Indus., 146 S.W.3d at 95–96). We agree with
the reasoning of the court in Hixon. Otherwise, a plaintiff could use a defendant’s
offer to repair as a basis for tolling the statute of limitations, a practice that is not
permitted. See PPG Indus., 146 S.W.3d at 95–96.
We overrule Beltway’s sole issue.
This Court’s Ruling
We affirm the judgment of the trial court.
JOHN M. BAILEY
CHIEF JUSTICE
February 21, 2020
Panel consists of: Bailey, C.J.,
Stretcher, J., and Wright, S.C.J.1
Willson, J., not participating.
1
Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland,
sitting by assignment.
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