Omstead v. BPG Inspection

903 S.E.2d 7

OMSTEAD

v.BPG INSPECTION, LLC et al.

S23G0771

Supreme Court of Georgia.

Decided: June 11, 2024

Superior Court, Gwinnett County, Joseph Iannazzone, Judge

James Darren Summerville, Kristopher Robert Alderman, The Summerville’ Firm, LLC, 1226 Ponce de Leon Avenue, NE, Atlanta, Georgia 30306, Lance D. Lourie, Stephen Roberts Chance, Andrew John King, Lourie Chance Forlines Carter & King, PC, 5607 Glenridge Drive, Suite 500, Atlanta, Georgia 30342, for Appellant.

Leah Ward Sears, Edward Davison Burch, Jr., Edward H. Wasmuth, Jr., Smith, Gambrell & Russell, LLP, 1105 W. Peachtree Street NE, Suite 1000, Atlanta, Georgia 30309, Charles Samuel Conerly, Smith Conerly, LLP, 402 Newnan Street, Carrollton, Georgia 30117, for Appellee.

Madeleine Norine Simmons, Stewart Miller Simmons, 55 Ivan Allen Jr Blvd., NW, Suite 700, Atlanta, Georgia 30308, Madeline Elizabeth McNeeley, Harris Lowry Manton LLP, 1418 Dresden Drive NE, Unit 250, Brookhaven, Georgia 30319, Caleb Frank Walker, The McArthur Law Firm, 6055 Lakeside Commons Drive, Suite 400, Macon, Georgia 31210, for Amicus Appellant.

Meagan Myers Hanson, Georgians for Lawsuit Reform, 270 Peachtree Street NW, Suite 2200, Atlanta, Georgia 30303, John Phillip Jett, Kevin Bradford Sears, Kilpatrick Townsend & Stockton LLP, 1100 Peachtree Street, NE, Suite 2800, Atlanta, Georgia 30309, for Amicus Appellee.

McMillian, Justice.

In early 2020, Albert Omstead and BPG Inspection, LLC, a home inspection company, entered into a contract setting out the terms for an inspection of a home and property that he and his wife, Jessique Omstead, desired to purchase. One of the agreed-upon terms was a one-year limitation providing that Mr. Omstead could not sue BPG Inspection or its employees after one year from the inspection. After the inspection was performed, the Omsteads purchased the home. More than a year later, Mr. Omstead died after a retaining wall at his home collapsed on him. Mrs. Omstead then filed a wrongful death suit against BPG Inspection and one of its inspectors, James Golden (collectively, "BPG").¹ The trial court determined on the cross-motions for summary judgment that for various reasons, the one-year limitation was unenforceable, but the Court of Appeals reversed. We granted review to consider whether the Court of Appeals erred in approving the one-year limitation and whether the limitation is void as against public policy. We conclude that the one-year limitation is enforceable and that the provision is not void as against public policy. Accordingly, we affirm.²

[1, 2] 1. We review the legal issues raised in a grant or denial of a motion for summary judgment de novo. See City of Winder v. Barrow County, 318 Ga. 550, 899 S.E.2d 157 (2024)); Toyo Tire North America Mfg., Inc. v. Davis, 299 Ga. 155, 161 (2), 787 S.E.2d 171 (2016). However, when factual issues are presented. on cross-motions for summary judgment, as they are here, "we view the evidence in the light most favorable to the nonmovants." Raffensperger v. Jackson, 316 Ga. 383, 387 (2), 888 S.E.2d 483 (2023).

So viewed, in early 2020, Albert Omstead engaged BPG Inspection to inspect a property the Omsteads wanted to purchase. Golden, a BPG employee, inspected the property on February 13, 2020. On the same day and before the inspection, Mr. Omstead signed an agreement ("Inspection Agreement" or "Agreement") provided by BPG, which contained several limitations on liability, including a provision limiting BPG’s liability to one year from the inspection. In pertinent part, this one-year limitation stated in bolded font:

YOU MAY NOT FILE A LEGAL ACTION, WHETHER SOUNDING IN TORT (EVEN IF DUE TO OUR NEGLIGENCE OR OTHER FAULT), CONTRACT, ARBITRATION OR OTHERWISE, AGAINST US OR OUR EMPLOYEES MORE THAN ONE YEAR AFTER THE INSPECTION, EVEN IF YOU DO NOT DISCOVER A DEFECT UNTIL AFTER THAT.

In exchange for a $380 inspection fee, Golden performed an inspection and prepared an inspection report ("Report"). The Report provided numerous comments on items needing repair or posing health and safety concerns, but stated that "[l]atent, inaccessible, or concealed defects are excluded from this inspection." Instead, the Report described the inspection’s scope as "a non-invasive examination of readily accessible systems and components as outlined in the Standards of Practice of the American Society of Home Inspectors" or in the client’s "specific state standards." As part of the inspection, Golden looked at a retaining wall running the length of the property’s driveway. The Report noted that the wall had been "[i]nspected," which the Report defined as "visually observed and appears to be functioning as intended." The Report did not identify defects in the retaining wall or recommend that the wall be repaired.

On March 7, 2020, Golden, at the request of Omstead’s real estate agent, returned to the property to reinspect several items that the Omsteads had requested that the seller repair pursuant to BPG’s recommendations. After that inspection, a second inspection report and summary of key findings were generated, but neither document identified defects in the retaining wall or recommended that the wall be repaired.³

Following the inspections, the Omsteads purchased the property. On July 16, 2020, Omstead posted on Instagram photos of the retaining wall and garage, with a caption including the observation that "[t]here are cracks in the retaining wall that spit water when it rains, but no official drain holes."

Over a year later, during a rainstorm on July 19, 2021, Mr. Omstead began placing a plastic tarp and a piece of particle board on top of the retaining wall to divert water away from the garage. As he was doing so, the wall collapsed on him, and he died as a result.

In September 2021, Omstead filed suit against BPG and Golden for wrongful death, alleging negligence, fraud, breach of contract, and breach of express and implied warranties, among other claims. She later added a count for gross negligence.⁴ BPG moved for summary judgment, seeking to enforce the Inspection Agreement’s limitations on liability, including its one-year limitation. Omstead filed a cross-motion for summary judgment, asking, among other things, that the trial court hold that the one-year limitation provision was void as against public policy and, in the alternative, that the limitation did not apply to Omstead’s claims because it is an exculpatory clause that must be read strictly against the drafter and the clause only refers to claims for property damage.

The trial court denied BPG’s motion for summary judgment and granted Omstead’s cross-motion, concluding that the Agreement’s limitations on liability did not apply to Omstead’s personal injury and wrongful death claims, and that to the extent they did, they were void as against public policy.

The Court of Appeals reversed and directed the trial court to enter summary judgment in favor of BPG. As an initial matter, the Court of Appeals held that though the Inspection Agreement was between BPG and Mr. Omstead, BPG could assert the Agreement’s one-year limitation as a defense against Omstead’s claims as well. See BPG Inspection, LLC v. Omstead, 367 Ga. App. 128, 131-32 (1), 883 S.E.2d 593 (2023) (" ‘any defense which would have been good against the decedent is good against his representatives in a wrongful death action’ " (emphasis omitted; quoting United Health Svcs. of Ga. v. Norton, 300 Ga. 736, 738 (2), 797 S.E.2d 825 (2017)). Next, the Court of Appeals concluded, as a matter of contractual interpretation, that the Agreement’s one-year limitation applied to all of Omstead’s claims, including her tort claims, because the limitation expressly applied to any "legal action, whether sounding in tort (even if due to [BPG’s] negligence or other fault), contract, arbitration or otherwise[.]" See 367 Ga. App. at 132 (1), 883 S.E.2d 593 (quoting Inspection Agreement). Finally, the Court of Appeals held that the one-year limitation was enforceable and not void as against public policy. See id. at 132-36 (1), 883 S.E.2d 593.

We granted review on two questions: (1) Did the Court of Appeals err in approving a provision in a contract between a home inspection company and a consumer that limits the home inspection company’s liability for claims arising out of any breach of its legal or contractual duties to within one year after the inspection? (2) Is such a provision void as against public policy?

2. We first consider whether the Court of Appeals erred in enforcing the one-year limitation against Omstead. First, Omstead argues that the one-year limitation applies only to contract claims and not claims involving bodily injury or wrongful death or to claims for gross negligence and fraud. Next, she asserts that the Court of Appeals erred in treating the one-year limitation as a "statute of limitation" even though the limitation functioned as a "contractually-effectuated statute of repose," which Omstead claims Georgia law prohibits. Third, she argues that the one-year limitation impermissibly voids "professional standards of conduct." We address each argument in turn.

[3, 4] (a) "The cardinal rule of [contract] construction is to ascertain the intention of the parties. Where the language in a contract is unambiguous, that task is often a straightforward one." Sutherlin v. Sutherlin, 301 Ga. 581, 584-85 (II) (A), 802 S.E.2d 204 (2017) (citation and punctuation omitted). Turning to the language of the contract, we observe that the one-year limitation provides: "You may not file a legal action, whether sounding in tort (even if due to [BPG’s] negligence or other fault), contract, arbitration or otherwise[.]" By its plain language, the one-year limitation expressly applies to tort and contract claims. Thus, as a threshold matter, we agree with the Court of Appeals’s interpretation of the one-year limitation as applying to Omstead’s wrongful death claims, which sound in tort and contract. See First Acceptance Ins. ...