Breazeale v. Infrastructure & Dev. Eng'g, Inc.

228 N.E.3d 670

2023-Ohio-4046

Grant BREAZEALE, and Dana Breazeale, Plaintiffs-Appellants,

v.INFRASTRUCTURE & DEVELOPMENT ENGINEERING, INC., Defendant-Appellee.

APPEAL NO. C-230172

Court of Appeals of Ohio, First District, Hamilton County.

Date of Judgment Entry on Appeal: November 8, 2023

Civil Appeal From: Hamilton County Court of Common Pleas, TRIAL NO. A-2102849.

Ulmer & Berne LLP, Jason P. Conte Cincinnati, and Jason A. Snyder, for Plaintiffs-Appellants.

Reminger Co., LPA, and B. Scott Jones, for Defendant-Appellee.

OPINION.

Kinsley, Judge.

{¶1} Plaintiffs-appellants Grant and Dana Breazeale appeal from the trial court’s grant of summary judgment in favor of defendant-appellee Infrastructure & Development Engineering, Inc., ("IDE"). The Breazeales argue the trial court erred in finding their claims were time-barred, because the discovery rule tolled the statute of limitations. They make a compelling case for why the policy underlying the discovery rule should apply to homeowners like them, given that professional negligence in construction design may not be discovered or even discoverable until well after the existing statute of limitations has run. But given the Ohio Supreme Court’s well-established precedent that the discovery rule is inapplicable to professional negligence claims, we must follow the law that compels the result the trial court reached: the Breazeales are out of time to pursue a professional negligence case against IDE. We therefore reluctantly overrule the Breazeales’ assignment of error and affirm the judgment of the trial court.

Factual and Procedural Background

{¶2} In 2015, IDE performed a geotechnical investigation in connection with a proposed home development. IDE certified that a registered professional oversaw all earthwork at the property and that all earthworks were constructed in accordance with the approved plans and recommendations in IDE’s geotechnical report.

{¶3} The Breazeales purchased the property in March 2017. After the purchase, the Breazeales used another contractor to install an inground pool, additional retaining walls, and other landscaping. In March 2021, a landslide developed on the northwest side of the property, which required emergency stabilization of the home’s foundation. In addition to damaging the foundation of the home, this landslide also damaged the interior of the home, the yard, the landscaping, utilities, the retaining walls, and the pool.

{¶4} The Breazeales filed their complaint against IDE in August 2021, alleging professional and gross negligence. Both claims alleged that IDE had breached the standard of care owed by geotechnical engineers. IDE moved for summary judgment arguing the Breazeales’ claims were barred by the economic loss rule and the statute of limitations in R.C. 2305.09(D). The trial court granted summary judgment in favor of IDE, which the Breazeales appealed. On appeal, this court held that the Breazeales’ claims were not barred by the economic loss rule and remanded the cause for further proceedings, without reaching the applicability of the statute of limitations in R.C. 2305.09(D). See Breazeale v. Infrastructure & Dev. Eng., Inc., 1st Dist. Hamilton, 2022-Ohio-4601, 203 N.E.3d 861, ¶ 13, 16.

{¶5} On remand, IDE again moved for summary judgment, arguing that the Breazeales’ claims were barred by the four-year statute of limitations in R.C. 2305.09(D). The Breazeales argued that the discovery rule applied, meaning their claims accrued at the time the alleged negligence was discovered in 2021 and not at the time of the alleged negligent act in 2015. The trial court again granted summary judgment in favor of IDE, finding that the discovery rule was not applicable to professional negligence claims. The trial court also found that the Breazeales’ gross negligence claim was predicated on the same allegedly negligent conduct by IDE, which relied upon the professional standard of care, and was therefore similarly time-barred.

{¶6} The Breazeales now appeal.

Standard of Review

{¶7} Summary judgment decisions are reviewed de novo. Al Neyer, LLC v. Westfield Ins. Co., 2020-Ohio-5417, 163 N.E.3d 106, ¶ 13 (1st Dist.). Summary judgment is proper under Civ.R. 56(C) where "(1) no genuine issue of material fact remains, (2) the moving party is entitled to judgment as a matter of law, and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and construing the evidence most strongly in favor of the nonmoving party, that conclusion is adverse to the party against whom the motion for summary judgment is made." Civ.R. 56(C); see Al Neyer, LLC at ¶ 14. The moving party has the initial burden of informing the court of the basis for the motion and identifying the portions of the record that set forth specific facts demonstrating entitlement to summary judgment. Al Neyer, LLC at ¶ 15. If the moving party fails to meet its burden, summary judgment is not appropriate. Id.

Discovery Rule

[1] {¶8} Because the Breazeales allege professional and gross negligence claims against IDE, they were required to bring these claims within four years after they accrued pursuant to R.C. 2305.09(D). Given IDE completed its geotechnical work on the property in September 2015, the Breazeales had until September 2019 to bring their claims against IDE. The Breazeales, however, did not file their complaint until August 2021, and their claims were therefore untimely, unless the discovery rule applied.

{¶9} We explained the discovery rule in Chateau Estate Homes v. Fifth Third Bank:

As a general rule, a cause of action accrues at the time the wrongful act is committed. An exception to the general rule is the discovery rule. It provides that a cause of action does not arise until the plaintiff knows, or by the exercise of reasonable diligence should know, that he or she has been injured by the defendant’s conduct. The discovery rule tolls the running of the statute of limitations.

(Citations omitted.) Chateau Estate Hames v. Fifth Third Bank, 2017-Ohio-6985, 95 N.E.3d 693, ¶ 13 (1st Dist.).

{¶10} The Ohio Supreme Court has broadly rejected the applicability of the discovery rule to professional negligence claims without regard to the underlying nature of the profession. While the court initially declined to apply the discovery rule to professional negligence claims specifically against accounts in Investors REIT One v. Jacobs, 46 Ohio St.3d 176, 546 N.E.2d 206 (1989), its holding in Flaystar Bank, F.S.B. v. Airline Union’s Mtge. Co., 128 Ohio St.3d 529, 2011-Ohio-1961, 947 N.E.2d 672, was more generic. There, the court held that "[a] cause of action for professional negligence accrues on the date that the negligent act is committed, and the four-year statute of limitations commences on that date." Id. at syllabus.

{¶11} Courts have applied this rule to the design professions in cases involving real property damage. One such example is Life Time Fitness, Inc. v. Chagrin Valley Eng. Ltd., N.D.Ohio No. l:13-cv-566, 2014 WL 6879082 (Dec. 4, 2014). There, the defendant designed a parking lot in 2008 and construction of the parking lot was completed in 2009. Id. at 2. The plaintiff filed a complaint against the defendant in 2013 after noticing defects in the parking lot beginning in 2010. Id. Though the plaintiff argued that the cause of action did not accrue until the damage occurred, the court held that "claims for professional negligence against engineers for design services accrue at the time the negligent act was complete," meaning when "the engineering design was complete." Id. at 5, 8. Relying on Life Time Fitness, the court in Varwig v. JA Doyle LLC, 6th Dist. Lucas No. L-22-1035, 2023-Ohio-210, 2023 WL 384225, ¶ 33, rev’d on reconsideration on other grounds, 6th Dist. Lucas No. L-22-1035, 2023-Ohio-2251, 2023 WL 4286939, appeal not accepted, 2023-Ohio-3670, 218 N.E.3d 973, similarly held that the discovery rule was inapplicable to negligent design and supervision claims in a residential construction dispute.

[2] {¶12} The Breazeales argue that despite this well-established precedent, the Ohio Supreme Court’s decision in Harris v. Liston, 86 Ohio St.3d 203, 714 N.E.2d 377 (1999), carved out an exception for the applicability of the discovery rule to professional negligence claims when damage to real property is involved. In Harris, the court held that the discovery rule tolled the statute of limitations for an ordinary negligence action against a developer-vendor of real property for damage to the property. Id. at 207, 714 N.E.2d 377.

{¶13} While we agree that Harris allows for application of the discovery rule to ordinary negligence claims involving latent damage to real property, we cannot extend this holding to professional negligence claims in light of the Ohio Supreme Court’s clear holding in Flagstar, which was decided years after Harris. Unlike its holding in Investors REIT One, which was limited to professional negligence claims against accountants, the court unequivocally held in Flagstar that, "A cause of action for professional negligence accrues when the act is committed." Flagstar, 128 Ohio St.3d 529, 2011-Ohio-1961, 947 N.E.2d 672, at ¶ 27. Importantly, because the court did not distinguish between professions in its holding, we can assume that it was intended to broadly apply to all kinds of professional negligence.

{¶14} Further, the court in Flagstar reiterated its reasoning from Investors REIT One that the General Assembly elected not to include professional negligence claims within the discovery rule allowance in R.C. 2305.09. (Citations omitted.) Id. at ¶ 16, citing Investors REIT One, 46 Ohio St.3d 176, 546 N.E.2d 206, at paragraph 2a of the syllabus. Applying this reasoning here, the General Assembly could have, but did not, create an exception to the nonapplicability of the discovery rule for professional negligence claims involving damage to real property, just as it did for certain trespass, conversion, and fraud...