Fuelberth v. Heartland Heating & Air Conditioning

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
01/08/2021 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
307 Nebraska Reports
FUELBERTH v. HEARTLAND HEATING & AIR CONDITIONING
Cite as 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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Nebraska Supreme Court Advance Sheets
307 Nebraska Reports
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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Nebraska Supreme Court Advance Sheets
307 Nebraska Reports
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.