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Lawrence v. General Panel Corp.

Supreme Court of South Carolina

January 4, 2019

Mark Lawrence, individually and on behalf of others similarly situated, Plaintiff,
v.
General Panel Corp., a division of Perma "R" Products, Inc., Defendant. Appellate Case No. 2017-002350

          Heard September 19, 2018

          ON CERTIFICATION FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA Richard M. Gergel, United States District Judge

          Blake A. McKie and J. Rutledge Young III, both of Duffy & Young, LLC, of Charleston, for Plaintiff.

          Everett A. Kendall II, and Richard E. McLawhorn, both of Sweeny Wingate & Barrow, P.A., of Columbia, for Defendant.

          FEW JUSTICE

         This Court accepted the following certified question from the United States District Court for the District of South Carolina:

Did South Carolina Act 27 of 2005 amend section 15-3-640 of the South Carolina Code (Supp. 2018) so that, in an action for damages based upon a defective improvement to new-construction real property, the date of "substantial completion of the improvement" is measured from the date of the certificate of occupancy (unless the parties establish a different date by written agreement), superseding the Supreme Court of South Carolina's decision in Ocean Winds Corp. of Johns Island v. Lane, 347 S.C. 416, 556 S.E.2d 377 (2001)?

         I. Facts and Procedural History

         Mark Lawrence constructed his home near Mount Pleasant, South Carolina, using structural insulated panels manufactured by General Panel Corporation. Structural insulated panels-referred to in the residential construction industry as SIPs-are a structural alternative to traditional wood-frame construction. Lawrence claims faulty installation of the General Panel SIPs used in constructing his home allowed water intrusion, which in turn caused the panels to rot, damaging the structural integrity of his home. He brought this claim in federal district court alleging General Panel was liable for providing defective installation instructions to the subcontractor installing the SIPs.

         General Panel filed a motion for summary judgment in the district court. The motion was based on section 15-3-640-a statute of repose-which provides, "No actions to recover damages based upon or arising out of the defective or unsafe condition of an improvement to real property may be brought more than eight years after substantial completion of the improvement." General Panel's entitlement to summary judgment under section 15-3-640 depended on the date of "substantial completion." The subcontractor completed the installation of the SIPs in Lawrence's home by March 2007. The home was not finished, however, until over a year later. Charleston County issued a certificate of occupancy on December 10, 2008. Lawrence filed his lawsuit against General Panel on December 8, 2016, more than eight years after installation of the SIPs, but less than eight years after the certificate of occupancy was issued.

         II. Ocean Winds and the 2005 Amendments

         In Ocean Winds, also a certified question from the district court, the entity that "developed, built, and owned a condominium project on Seabrook Island" brought a lawsuit against the manufacturer of windows installed in the condominium buildings. 347 S.C. at 417, 556 S.E.2d at 378. The developer sought indemnity for liability the developer might incur to the homeowners' association for water intrusion and other structural problems resulting from defective windows. Id. The certified question in that case asked us to determine whether the section 15-3-640 statute of repose[1] ran from "substantial completion of the installation of the windows or . . . substantial completion of the building as a whole." 347 S.C. at 418, 556 S.E.2d at 378. We held "the statute of repose began running when installation of the windows was complete." 347 S.C. at 419, 556 S.E.2d at 379.

         Under Ocean Winds, therefore, the date of substantial completion for installation of the SIPs in Lawrence's home was March 2007. As the district court found in its certification order, "If Ocean Winds is still good law, Plaintiff's claims are barred." However, as the district court also found, "If Ocean Winds has been superseded by [the 2005 amendments to section 15-3-640], the statute of repose does not bar any of Plaintiff's claims."

         The 2005 amendment that is important to this case added a sentence to section 15-3-640. The new sentence provides, "For any improvement to real property, a certificate of occupancy . . . shall constitute proof of substantial completion of the improvement . . ., unless the contractor and owner . . . establish a different date of substantial completion." Act No. 27, 2005 S.C. Acts 107, 110; § 15-3-640. We accepted this certified question from the federal district court to determine whether the Legislature intended to "supersede" our holding in Ocean Winds when it added that sentence to section 15-3-640. Lawrence argues the Legislature intended the date ...


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