S. States Chem., Inc. v. Tampa Tank & Welding, Inc.

359 Ga.App. 731

858 S.E.2d 72

SOUTHERN STATES CHEMICAL, INC. et al.

v.TAMPA TANK & WELDING, INC. et al.

A19A0960

Court of Appeals of Georgia.

March 25, 2021

Reconsideration Denied June 14, 2021

Certiorari Denied September 21, 2021

George H. Carley ; Arnall Golden Gregory, Jeffrey Y. Lewis, J. Tucker Barr, Andrew C. Stevens ; Edwin W. King, Jr., for appellants.

Swift Currie McGhee & Hiers, Bradley S. Wolff, Mike O. Crawford ; Gordon Rees Scully Mansukhani, Cecily J. McLeod, Kimberly C. Sheridan, for appellees.

Gilbert Harrell Sumerford & Martin, Mark D. Johnson, Mark M. Middleton, amici curiae.

Phipps, Senior Appellate Judge.

In this long-running dispute, Southern States Chemical, Inc., and Southern States Phosphate and Fertilizer Company (collectively, "Southern" or "Appellants") appeal from the trial court's grant of summary judgment in favor of defendants Tampa Tank & Welding, Inc. f/k/a Tampa Tank, Inc. ("Tampa Tank"), and Corrosion Control, Inc. ("CCI"). Southern contends that the trial court erred in (1) applying the statute of repose for improvements to real property, OCGA § 9-3-51, to bar its claims for breach of contract; (2) ruling that its claims were barred by the statute of limitation; and (3) dismissing its claim for breach of contract per se.

In Southern States Chemical, Inc. et al. v. Tampa Tank & Welding, Inc. et al. , 353 Ga. App. 286, 836 S.E.2d 617 (2019) (" Southern States III "),¹ we affirmed the trial court's grant of summary judgment to Tampa Tank and CCI. In Division 2, we held that the only warranty under which Southern could seek damages was the express one-year warranty found in the contract between Southern and Tampa Tank. Id. at 290-292 (2), 836 S.E.2d 617. In Division 3, we concluded that the statute of repose barred Southern's contract and express warranty claims against Tampa Tank and CCI. Id. at 292-295 (3), 836 S.E.2d 617. In Division 4, we affirmed the trial court's ruling that Southern failed to exercise due diligence in discovering any asserted fraud. Id. at 295 (4), 836 S.E.2d 617. Because we concluded that Southern's claims were barred by the statute of repose, we declined to address any other arguments. Id. at 296 (5), 836 S.E.2d 617.

Southern filed a petition for writ of certiorari in the Supreme Court of Georgia. While the petition was pending, the legislature amended the statute of repose applicable to improvements to real property to provide that it does not apply to actions for breach of contract. OCGA § 9-3-51 (c) (effective July 1, 2020). The Supreme Court granted Southern's petition for certiorari, vacated our prior judgment, and remanded the case for reconsideration in light of the amendment. See Case No. S20C0690 (Aug. 10, 2020). Thus, we vacate Division 3 of our earlier opinion addressing the statute of repose and remand the case to the trial court to reconsider this ruling. The Supreme Court's order did not consider or address Divisions 2 and 4 of our original opinion, and thus Divisions 2 and 4 of our original opinion in Southern States III remain unchanged. We now address Southern's claim that the trial court erred in ruling that its contract claims were barred by the statute of limitation. For the reasons that follow, we conclude that Southern's claim for breach of the express one-year warranty is not barred by the statute of limitation, but its claim for breach of contract per se, if such a claim exists, is barred by the statute of limitation. Accordingly, we affirm in part, reverse in part, and vacate in part, and remand the case with direction.

The relevant facts have been set forth in this Court's prior opinion:

The record shows that Appellants manufacture, buy, sell, and store sulfuric acid in bulk at a facility in Savannah. In 2000, Appellants contacted Tampa Tank about renovating a 24-foot tall, 130-foot wide storage tank (the "[Duval] tank") that had previously stored molten sulfur, such that it would be suitable for storing up to 2.2 million gallons of sulfuric acid. Appellants and Tampa Tank engaged in contract negotiations for at least nine months. On August 21, 2000, a contract in the form of a letter proposal drafted by Tampa Tank was signed and executed by ... Southern States. Prior to January 2002, the parties also engaged in subsequent written change orders altering the contract. There is no merger clause in any of these documents.

The initial letter proposal between Tampa Tank and Appellants contained the following express one-year warranty provision: "All material and workmanship are guaranteed for a period of twelve (12) months from the date of completion of this work." ....

The [Duval] tank renovation was completed in January 2002. The renovation required Tampa Tank to install an impervious plastic ("HDPE") liner directly on top of the steel floor of the tank. Tampa Tank then welded a new steel floor above the old floor of the tank, and a layer of sand filled the gap between the old floor and the new floor. In order to prevent corrosion of the new floor, Tampa Tank installed a cathodic corrosion control system ("cathodic system") in the sand layer. Tampa Tank installed, but did not design, the cathodic system; it contracted with CCI to provide the design, materials, on-site technical assistance, and testing of the system.

During installation, Tampa Tank's foreman consulted with CCI over the phone regarding the installation of the magnesium strips of the cathodic system, but CCI did not assist with the installation on[-]site. CCI's contract with Tampa Tank only required it to design the cathodic system, procure the materials for its installation, and test the system once installed. Appellants contend that Tampa Tank misplaced magnesium ribbons, which are a key component of the cathodic system, drove a Bobcat bulldozer over the sand layer after the ribbons were installed, which tampered with the integrity of the system, and failed to properly seal the new floor, which left it open to corrosive rainwater.

Appellants contend that CCI failed to properly test, design and commission the cathodic system. After the tank's renovation was substantially completed in January 2002, CCI performed a post-installation commissioning inspection of the cathodic system. The report resulting from that inspection indicated that the cathodic system was working and properly installed. However, the cathodic system and the sand layer it was installed upon had been covered up with steel plates by the time CCI arrived on[-]site to perform its inspection. CCI inspected the cathodic system when the tank was empty, and it was possible that a portion of the steel plates was not in contact with the sand layer during the testing because there was no liquid pressing the plates down into the sand. Appellants contend that CCI failed to properly test the cathodic system by neglecting to confirm that Tampa Tank kept the sand layer dry, by failing to verify that Tampa Tank had not driven a Bobcat over the floor, and by conducting an inspection when the tank was empty, which only put the cathodic system to limited use. Appellants also fault CCI for not having an engineer on-site to ensure that the corrosion protection system was installed properly. CCI made no warranty to Appellants about the tank. After inspection, CCI prepared a post-installation report concluding that the Duval Tank's cathodic system had been properly installed and was fully functioning. CCI sent the report to Tampa Tank, but not to Appellants.

On July 3, 2011, it was discovered that sulfuric acid was leaking from the base of the Duval Tank.

See Southern States Chemical, Inc. v. Tampa Tank & Welding, Inc. , 331 Ga. App. XXVI, slip op. at 3-6 (Case No. A14A2012) (March 27, 2015) (unpublished) (" Southern States I ").

Southern first filed suit against Tampa Tank and CCI in January 2012, setting forth claims for, inter alia, breach of contract, based on a promise that the tank would last for 40 years, and negligence. The complaint was subsequently amended several times. In February 2014, the trial court granted Tampa Tank and CCI's motions for summary judgment, finding that all of Southern's claims were barred by the statute of repose, OCGA § 9-3-51, and denied Southern's motion for partial summary judgment on negligence per se based on a violation of OCGA § 43-15-24, the Professional Engineering Statute. In Southern States I , this Court reversed the trial court's grant of summary judgment in favor of Tampa Tank and CCI and remanded the case to the trial court to determine if the defendants were estopped from raising the statute of repose defense based on alleged fraud. Southern States I , slip op. at 11 (1). Specifically, we instructed the trial court to determine if a genuine issue of fact existed as to whether Tampa Tank and CCI "fraudulently concealed any defects in the renovation, installation or testing" of the Duval Tank and whether Southern exercised due diligence. Id. This Court also found that, given the express one-year warranty in the contract between Tampa Tank and Southern, the parol evidence rule barred any evidence regarding an oral promise of a forty-year warranty. Southern States I , slip op. at 13-14 (2). Finally, this Court reversed the trial court's denial of Southern's motion for partial summary judgment on its claim for negligence per se and remanded the case to the trial court with direction. Southern States I , slip op. at 18 (3).

After the case was remanded to the trial court following Southern States I , Southern filed a fourth amended complaint which included numerous tort claims, claims for negligence per se and breach of contract per se based on violations of the Professional Engineering Statute, OCGA § 43-15-24, and, for the first time, a claim for breach of contract based on Tampa Tank's express one-year warranty.²

In July 2015, the trial court found that there were genuine issues of material fact as to whether Tampa Tank and CCI made knowingly false statements to Southern and whether t...