United States District Court, D. South Carolina, Beaufort Division
ORDER AND OPINION
RICHARD M. GERGEL UNITED STATES DISTRICT COURT JUDGE
matter is before the Court on Plaintiff Hampton Hall,
LLC's motion for alter or amend (Dkt. No. 195). For the
reasons set forth below, the Court denies the motion.
brief, Defendant Chapman Coyle Chapman & Associates
Architects, AIA ("CCC") was responsible for the
design and oversight of the construction of amenity
facilities for Plaintiff Hampton Hall LLC, including a golf
clubhouse, fitness center, and community clubhouse. (Dkt. No.
34 at ¶ 3.) Defendant Choate Construction Company
("Choate") was the general contractor. (Dkt. No. 34
at ¶ 7.) Plaintiff filed the present action on May 12,
2017. (Dkt. No. 1-1.) On February 14, 2018, Choate filed a
third-party complaint against several of its subcontractors
involved with the construction at issue. (Dkt. No. 38.) On
December 26, 2018, the Court granted summary judgment to
Defendants CCC and Choate on all claims related to the
community clubhouse, ruling that the statute of limitations
barred Plaintiffs claims ("Court's Order").
(Dkt. No. 173.) Plaintiff has now moved for the Court to
reconsider that Order, arguing that the Court's Order was
a clear error of law and that newly produced evidence creates
a dispute of material fact regarding when Plaintiff
discovered their causes of action and whether equitable
estoppel applies. (Dkt. No. 195.) Plaintiff also identifies
at least one South Carolina case issued after the Court's
Order discussing the discovery rule as applied to
construction defects. (Id.) Defendants oppose the
motion, and Plaintiff filed a reply. (Dkt. Nos. 200, 201,
59(e) of the Federal Rules of Civil Procedure governs motions
to alter or amend a judgment; however, the rule does not
provide a legal standard for such motions. The Fourth Circuit
has articulated "three grounds for amending an earlier
judgment: (1) to accommodate an intervening change in
controlling law; (2) to account for new evidence not
available at trial; or (3) to correct a clear error of law or
prevent manifest injustice." Pac. Ins. Co. v. Am.
Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir.
1998) citing EEOC v. Lockheed Martin Corp., 116 F.3d
110, 112 (4th Cir. 1997); Hutchinson v. Staton, 994
F.2d 1076, 1081 (4th Cir. 1993). "Rule 59(e) motions may
not be used, however, to raise arguments which could have
been raised prior to the issuance of the judgment, nor may
they be used to argue a case under a novel legal theory that
the party had the ability to address in the first
instance." Id. at 403 (internal citations
omitted). Rule 59(e) provides an "extraordinary remedy
that should be used sparingly." Id. (internal
citation omitted). The decision to alter or amend a judgment
is reviewed for an abuse of discretion. Id. at 402.
initial matter, Plaintiff argues that its failure to file a
response to Defendant Choate's motion for summary
judgment (Dkt. No. 144), a motion joining Defendant CCC's
motion (Dkt. No. 138), should be deemed excusable neglect
permitting the Court to consider this motion to alter or
amend. Plaintiff has submitted new evidence not previously
available, produced on January 15, 2019, and identified a
recently issued case from the South Carolina Court of Appeals
that is relevant to the Court's inquiry. Therefore,
regardless of the Plaintiffs failure to respond to one of two
motions for summary judgment, the Court will address
argues that the Court misapplied the discovery rule when
applying the statute of limitations. Under "the
discovery rule, the statute of limitations only begins to run
from the date the injured party either knows or should know,
by the exercise of reasonable diligence, that a cause of
action exists for the wrongful conduct." True v.
Monteith, 327 S.C. 116, 489 S.E.2d 615, 616 (1997).
Under South Carolina law, the "exercise of reasonable
diligence" requires that the injured party "act
with some promptness where the facts and circumstances of an
injury place a reasonable person of common knowledge and
experience on notice that a claim against another party might
exist." Dean v. Ruscon Corp., 321 S.C. 360, 468
S.E.2d 645, 647 (1996).
primarily focuses on the Court's determination that a
January 16, 2009 letter from David W. Smith, an attorney at
Toll Brothers, identifying "anticipated breach of
contract and negligence claims" based on water leaks at
the community clubhouse, demonstrated that Plaintiff was
aware of its causes of action in 2009. (Dkt. No. 138-5; 173.)
Plaintiff, however, has submitted new evidence demonstrating
that Defendant Choate engaged in extensive repairs of the
community clubhouse in 2009 and 2010 in response to the
letter. Plaintiff submitted recently produced documents
showing that Defendant Choate conducted repairs,
waterproofing and discovered truss failures in 2009 and 2010.
(Dkt. No. 195-1.) In December 2009, Choate engaged a company
to perform thermal imaging to identify areas of unusual
moisture and microbial conditions at the community clubhouse.
(Dkt. No. 195-6.) An investigation and report conducted in
March 2010 reviewed the repairs by Defendant Choate and
concluded that there were "no residual issues or
concerns of Hampton Hall Club" and noted that
"Hampton Hall Club personnel expressed complete
satisfaction regarding the repairs." (Dkt. No. 195-4.)
these water intrusion and truss issues were repaired in 2009
and 2010, Plaintiff argues that it could not have discovered
the more extensive underlying issues allowing water into the
community clubhouse, such as the absence of a weep screed,
until destructive testing was performed in 2017. (Dkt. No.
195 at 22 - 26.) In the alterative, Plaintiff argues that
because Defendant Choate engaged in repairs, it is equitably
estopped from asserting the statute of limitations as its
2009 and 2010 repairs induced Plaintiff to delay filing suit.
(Dkt. No. 195 at 26.)
the Court found that the January 16, 2009, letter began the
statutory period, Plaintiffs arguments regarding repairs in
2009 and 2010 ignore the fact that, regardless of the 2009
letter, it is undisputed that Plaintiff knew of multiple
additional instances of water intrusion in 2011, 2012 and
2013. (Dkt. Nos. Dkt. No. 138-1 at 10; 138-9.) Undisputed
invoices demonstrate that in September 2011, Hampton Hall
hired a roofing contractor for at least twenty-three hours of
labor at the "Clubhouse" to conduct repairs on
tile, metal flashings, and "install new double layer
of 60mil water proofing membrane in affected areas."
(Dkt. No. 138-9 at 23.) Further, while Plaintiff focuses on
destructive testing in 2017, it is undisputed that as of
August 2011, Plaintiff engaged a roofing contractor to
perform "[destructive testing of tile roof at
valley/wall transition above left of main entry."
(Id. at 18.) These undisputed invoices for repairs
at the community clubhouse, some requiring as much as sixty
hours of repair work and repeated repairs for water intrusion
from 2011 through 2013 demonstrate that a reasonable person
of common knowledge and experience would be on notice that a
claim existed more than three years prior to May 12, 2017,
when the case was filed. (Dkt. No. 1.)
has also not identified any evidence showing that Defendants
Choate or CCC conducted repairs or otherwise prevented
Plaintiffs from filing suit at any time after 2011. Further,
while Plaintiffs motion focuses on issues only discovered
with destructive testing, such as the lack of a weep screed,
and attempts to distinguish the 2011 through 2013 repairs as
more routine issues such as "fixing cracked tiles"
and using "waterproofing materials," Plaintiffs
causes of action are based on multiple issues that it is
undisputed it knew of between 2011 and 2013, such as a
failure to install water resistant barriers and improper
installation of parapets and stucco. (See, e.g.,
Dkt. No. 34 at ¶¶ 25(d), (e), (f), (i); 36 (e),
(fj, (h), (k).) Therefore, Plaintiffs claims regarding the
community clubhouse remain barred by the applicable three
year statute of limitations.
holding is supported by the cases cited by Plaintiff. In
Centex Homes v. S. C. State Plastering, LLC, No.
4:08-CV-2495-TLW, 2010 WL 2998519 (D.S.C. July 28, 2010), the
plaintiff initially found water damage in 2002, and
defendants participated in extensive repairs to address the
damage. The Court therefore found that the there was a
dispute regarding whether the statute of limitations began to
run in 2002. Id. at *5 - 6. However, notably, when
the plaintiff discovered new water damage in 2006 it filed
suit by 2008, within the statute of limitations. Id.
at *2. So too here, after Plaintiff indicated it knew in 2009
it had a cause of action based on the community clubhouse, it
was required to file suit within three years after seeing the
issues reoccur in 2011, 2012 and 2013. Indeed, many of these
issues from 2011, 2012 and 2013 are independent claims in
Plaintiffs Amended Complaint. The same is true in
Stoneledge at Lake Keowee Owners 'Ass 'n, Inc. v.
IMK Dev. Co., LLC, 425 S.C. 268, 275, 821 S.E.2d 504,
508 (Ct. App. 2018), reh'gdenied (Dec. 13,
2018). In Stoneledge, once rain returned in 2008 and
2009 and water intrusion reoccurred, the Plaintiff filed suit
by February 2010, within the statutory period. Notably, in
Stoneledge, while the ultimate cause of the water
intrusion were latent defects, the ...