Bernard Schoninger Shopping Centers, Ltd. v. J.P.S. Elastomerics, Corp.

United States Court of Appeals,

Eleventh Circuit.

No. 95-4636.

BERNARD SCHONINGER SHOPPING CENTERS, LTD., a successor to

Schoninger Management Corporation, Plaintiff-Appellant,

v.

J.P.S. ELASTOMERICS, CORP., successor to J.P. Stevens & Co.,

Inc., Defendant-Appellee.

Jan. 6, 1997.

Appeal from the United States District Court for the Southern

District of Florida. (No. 93-739-CIV-EBD), Edward B. Davis, Judge.

Before TJOFLAT, Circuit Judge, and RONEY and PHILLIPS*, Senior

Circuit Judges.

TJOFLAT, Circuit Judge:

The controversy in this diversity suit stems from a leaky

roof. The owner of the porous building seeks money damages against

the installer of the roof under several legal theories. The

district court held the owner's claims barred on the ground that

the applicable statute of limitations had run. The district court

entered summary judgment for the installer, and the owner appeals.

We affirm.

I.

Bernard Schoninger Shopping Centers, Ltd., the appellant, is

a limited partnership organized under the laws of Florida.1

Schoninger owns and manages ten shopping centers, one of which

*

Honorable J. Dickson Phillips, Jr., Senior U.S. Circuit

Judge for the Fourth Circuit, sitting by designation.

1

Schoninger's predecessor, Schoninger Management

Corporation, Inc., was the owner of the subject building at the

time the roof was installed. We refer to both the corporation

and the limited partnership hereinafter as "Schoninger."

includes a Kmart located in Bradenton, Florida. In July 1984,

Schoninger decided to refurbish the roof of the Kmart building, a

roof with an area greater than 100,000 square feet. Schoninger

sought bids for the project and chose J.P. Stevens & Company, Inc.,

the predecessor of the appellee, J.P.S. Elastomerics, Inc.2 JPS is

a Delaware corporation which manufactures and sells roofing

products, including a synthetic material called "Hipalon Hi-Tuff

Membrane" (the "membrane"). When unrolled, attached, and sealed to

an existing roof, the membrane resembles a large plastic sheet that

repels water from the roof. In this case, the membrane covers the

original Kmart roof, which was not removed. The original roof

consists of a one-half-inch, gypsumboard deck with tar and gravel

on top and fiberglass insulation underneath.

The employees of JPS themselves do not install the membrane.

Instead, JPS maintains standard agreements with various

subcontractors, or "applicators," to install the membrane. From a

list of these authorized applicators, Schoninger chose General

Roofing Industries, Inc. ("GRI") to attach the membrane to the

Kmart roof. GRI then contracted with Schoninger to do the work. 3

GRI used an installation manual supplied by JPS to purchase the

supplies required to complete the project. These supplies included

2

J.P. Stevens & Company, Inc. and J.P.S. Elastomerics, Inc.

are referred to hereinafter as "JPS."

3

3 As we indicate in the text infra, the record does not

contain these parties' agreements with one another. Apparently,

their agreements were oral. The parties appear to have exchanged

correspondence in reaching their agreements, but such

correspondence is not in the record. All that is in the record

is the written warranty JPS issued to Schoninger on September 18,

1984.

an unspecified amount of JPS' membrane, a large quantity of

one-half-inch-thick wood fiberboard to be placed under the

membrane, and several thousand "toggle bolts" to secure the

membrane and fiberboard to the Kmart roof.4

In early September 1984, GRI notified JPS that GRI had

completed its work on the Kmart roof. On September 7, 1984, an

employee of JPS, Paul Dillenbeck, met with an employee of GRI, Dan

Caldwell, and an employee of Olympic Manufacturing Group, Inc.,5

Stan Choiniere, to inspect the completed work. In a report dated

the same day, Choiniere described defects in the installation of

the toggle bolts. Schoninger did not receive a copy of Choiniere's

report, but JPS and GRI apparently did.

Dillenbeck also filed an inspection report, dated September 8,

1984 ("Dillenbeck's first report"), which characterized GRI's work

as entirely good. Despite corporate policy to the contrary, JPS

sent a copy of Dillenbeck's first report to Schoninger. In a

separate report dated September 10, 1984 ("Dillenbeck's second

report"), however, Dillenbeck listed five defects in the work done

on the Kmart roof. Attached to Dillenbeck's second report was a

"punch list" of flaws that required the attention of GRI; the

punch list bears the signature of GRI's Dan Caldwell. Schoninger

never received Dillenbeck's second report. Although the Choiniere

report and Dillenbeck's second report catalogued several

deficiencies in the Kmart roof, Dillenbeck's superiors at JPS

4

A toggle bolt is a long metal bolt with a "V"-shaped,

spring-loaded catch at one end.

5

Olympic Manufacturing Group, Inc. made the toggle bolts

used to re-roof the Kmart building.

nevertheless issued to Schoninger a ten-year, written warranty for

the roof, effective September 18, 1984.6

On September 29, 1984, the tenant of the Kmart building

reported leaks in the newly completed roof. Schoninger contacted

GRI, which performed repairs. The leaks persisted, however, and

the warranty department of JPS became involved in coordinating the

repair efforts. The roof continued to leak. On August 5, 1988,

JPS terminated GRI as the subcontractor responsible for repairing

the Kmart roof. JPS reassigned the task to National Skyway

Roofing, Inc. Shortly thereafter, however, JPS terminated National

Skyway and reassigned the work to Atlantic Roofing, Inc., which

continued to attempt to repair the Kmart roof. The roof never

stopped leaking. In September 1991, JPS informed Schoninger that,

due to water damage, at least one portion of the original roof

would require replacement.

Schoninger filed this complaint on March 18, 1993, in the

Circuit Court of Dade County, Florida. The complaint alleged seven

claims, including the following: fraud, negligent

misrepresentation, breach of express warranty, breach of implied

warranty of fitness for particular purpose, breach of implied

warranty of merchantability, and negligence in the design,

6

The written warranty provides as follows:

"[JPS] warrants to [Schoninger] ... that subject to the

terms, conditions, and limitations stated herein, [JPS]

will repair any leaks in the Hi-Tuff Roofing System

("Roofing System'), but not to exceed [Schoninger's]

original cost of the installed roof over the life of

this Warranty, installed by a[JPS] Authorized Roofing

Applicator for a period of -TEN- years commencing with

the date of the final inspection and acceptance of the

Roofing System installation by [JPS]...."

manufacture, and installation of the roofing system.7 On April 20,

1993, JPS removed the case to the United States District Court for

the Southern District of Florida pursuant to 28 U.S.C. § 1441

(1994).8

After more than eighteen months of discovery, JPS moved for

summary judgment, contending that Schoninger's claims were barred

by Fla. Stat. ch. 95.11(3)(c) (1995).9 On April 13, 1995, the

district court granted the motion, holding that Schoninger's claims

were time-barred. This appeal followed.

II.

Our review of a district court's grant of summary judgment is

de novo. Duke v. Massey, 87 F.3d 1226, 1230 (11th Cir.1996). We

7

For reasons that are not apparent from the record or the

briefs on appeal, Schoninger did not allege a claim based on the

ten-year, written warranty that JPS had given to Schoninger on

September 18, 1984.

8

The district court had removal jurisdiction: Schoninger

and JPS are citizens of different states, and the amount in

controversy—although never authoritatively calculated by the

parties—clearly exceeds $50,000, exclusive of interest and costs.

See 28 U.S.C. § 1332(a)(1) (1995). Based on his experience with

similar roofs, the consultant hired by the plaintiff roughly

estimated the replacement cost of the damaged portion of the

Kmart roof to be $245,000. We have no reason to doubt the

validity of this approximation.

9

Simultaneously, Schoninger moved the district court for

leave to amend its complaint for the purpose of adding

allegations of fact to its claim of fraud. The district court

denied Schoninger's motion.

In this appeal, Schoninger contends that the court

abused its discretion; it asks that we remand the case for

further proceedings on its fraud claim. We find no abuse of

discretion. Schoninger's motion came late in the

case—twelve days before the discovery cut-off date and one

month before the parties' pretrial stipulation was to be

filed. The additional factual allegations Schoninger

presented would not have saved Schoninger's fraud claim from

dismissal on summary judgment.

view in the light most favorable to the plaintiff the evidence

bearing on the issue of when its cause of action arose. We give

the plaintiff the benefit of all reasonable inferences on this

point. Florida law determines when the applicable statute of

limitations began to run in this case, but federal law determines

whether the evidence supporting this starting date suffices to

entitle the defendant to summary judgment. See Hutcherson v.

Progressive Corp., 984 F.2d 1152, 1155 (11th Cir.1993).

III.

A.

Schoninger argues that the district court erred in applying

the four-year statute of limitations contained in Fla. Stat. ch.

95.11(3)(c) to each of Schoninger's claims. This provision applies

to "[a]n action founded on the design, planning, or construction of

an improvement to real property." Fla. Stat. ch. 95.11(3)(c)

(1995). Schoninger contends that the installation of the membrane

on the Kmart roof was not an "improvement to real property." We

reject this argument.

Although chapter 95 does not define an "improvement," the

Florida Supreme Court has defined it as "[a] valuable addition made

to property (usually real estate) or an amelioration in its

condition, amounting to more than mere repairs or replacement of

waste, costing labor or capital, and intended to enhance its value,

beauty or utility or to adapt it for new or further purposes."

Hillsboro Island House Condominium Apartments, Inc. v. Town of

Hillsboro Beach, 263 So.2d 209, 213 (Fla.1972) (quoting Black's Law

Dictionary 890 (4th ed.1969) (internal quotes omitted)). According

to Schoninger, the "replacement" of the entire Kmart roof was a

"mere repair." The record does not support this contention.

Schoninger did not hire JPS because the Kmart roof needed

immediate repair; Schoninger hired JPS to attach to the Kmart

building an entirely new, ostensibly durable covering. Howard

Schoninger stated as much when he identified his reason for hiring

JPS: "I knew I would need a roof eventually." The installation of

over 100,000 square feet of membrane and fiberboard at a cost of

tens of thousands of dollars is a "valuable addition" to the Kmart

building, and it therefore qualifies as an "improvement." See

Pinnacle Port Community Ass'n, Inc. v. Orenstein, 952 F.2d 375, 378

(11th Cir.1992).

In addition, Fla. Stat. ch. 95.11(3)(c) applies to " "any'

action arising out of improvements to real property, whether

founded on contract or on negligence." Dubin v. Dow Corning Corp.,

478 So.2d 71, 72 (Fla. 2nd Dist.Ct.App.1985) (emphasis added).

Schoninger's claims for negligent misrepresentation, breach of

express and implied warranties, and negligence in the design,

manufacture, and installation of the membrane are obviously based

on contract or negligence. Therefore, Fla. Stat. ch. 95.11(3)(c)

clearly applies to all of Schoninger's claims except its fraud

claim.10

10

Schoninger contends that, when Schoninger and JPS

originally contracted to refurbish the Kmart roof, JPS

represented that the finished roof would not leak for at least

ten years while knowing that this representation was false.

Schoninger claims that it relied on this misrepresentation and

purchased a defective roof. This claim fails because the record

contains no evidence that would permit a trier of fact to find

that, at the time JPS and Schoninger agreed to the roofing

project, JPS knowingly misrepresented a material fact.

As for the latter claim, Schoninger contends that the

district court should have applied the time limit for fraud, Fla.

Stat. ch. 95.11(3)(j),11 the operation of which is described in Fla.

Stat. ch. 95.031(2).12 Schoninger asserts in its brief that, unlike

the provision applied by the district court, the fraud provision

starts the limitations period only when the plaintiff discovers the

"facts constituting the fraud." We find, however, little

difference between this language and that of Fla. Stat. ch.

95.11(3)(c): "when the action involves a latent defect, the time

runs from the time the defect is discovered or should have been

discovered with the exercise of due diligence." Fla. Stat. ch.

95.11(3)(c) (1995). Both statutes start running when the plaintiff

discovers the defendant's error. Even if we could glean some

semantic distinction from the two provisions, both statutes provide

However, Schoninger's brief implies, but does not

assert, that the evidence established another, distinct

fraud claim. This claim can be articulated as follows:

when GRI finished the project, JPS inspected GRI's work and

discovered that it was defective. Nonetheless, JPS advised

Schoninger through Dillenbeck's first report that the work

had been done properly and that the roof would not leak.

Relying on this representation, Schoninger accepted JPS's

ten-year written warranty and, in exchange, gave up its

common law causes of action against JPS. We shall assume,

for purposes of this appeal, that Schoninger's complaint has

been amended to incorporate this theory of recovery and that

the record supports this allegation.

11

Fla. Stat. ch. 95.11(3)(j) provides a four-year statute of

limitations for "[a] legal or equitable action founded on fraud."

Fla. Stat. ch. 95.11(3)(j) (1995).

12

Fla. Stat. ch. 95.031(2) states that "[a]ctions for ...

fraud under s. 95.11(3) must be begun within the period

prescribed in this chapter, with the period running from the time

the facts giving rise to the cause of action were discovered or

should have been discovered with the exercise of due diligence."

Fla. Stat. ch. 95.031(2) (1995).

a four-year limitations period, rendering the distinction at best

academic. We therefore decline to reverse the district court's

application of Fla. Stat. ch. 95.11(3)(c) to Schoninger's implied

fraud claim.

B.

Having determined that Fla. Stat. ch. 95.11(3)(c) applies to

all of Schoninger's claims, we must decide when the statute began

to run. Schoninger argues that the district court erred in holding

as a matter of law that the statute began to run before March 18,

1989.13 As noted supra, the limitations period contained in Fla.

Stat. ch. 95.11(3)(c) starts running "from the time the defect is

discovered or should have been discovered with the exercise of due

diligence." Fla. Stat. ch. 95.11(3)(c) (1995). Under Schoninger's

approach, it could not have learned of JPS' misconduct until JPS

told Schoninger that the Kmart roof needed major repairs.

Schoninger therefore asserts that Fla. Stat. ch. 95.11(3)(c) did

not begin running until September 19, 1991, the date on which JPS

informed Schoninger of the state of the Kmart roof.

Schoninger analogizes this case to Board of Trustees v.

Caudill Rowlett Scott, Inc., 461 So.2d 239 (Fla. 1st

Dist.Ct.App.1984), appeal denied, 472 So.2d 1180 (Fla.1985). In

Caudill, a community college sued the contractors that built

several campus buildings. The first buildings were completed

approximately nine years before the litigation commenced. The

13

Schoninger filed its complaint on March 18, 1993.

Therefore, the four-year statute of limitations contained in Fla.

Stat. ch. 95.11(3)(c) must have started running after March 18,

1989 for Schoninger's complaint to have been timely filed.

underground pipes installed by the defendants started leaking

shortly thereafter, and the defendants attempted several

unsuccessful repairs. Eight years after the completion of the

buildings, the college conducted an extensive survey and discovered

that the leaks were caused by improper installation of the pipes.

The trial court found that the first leaks had started the running

of Fla. Stat. ch. 95.11(3)(c), but the Florida District Court of

Appeal reversed. The appellate court held that a genuine issue

existed "whether the college had discovered, or by diligence should

have discovered, the corroded pipes which are the basis of its

cause of action." Caudill at 243. Based on this case, Schoninger

claims that a genuine issue of fact remains regarding when Fla.

Stat. ch. 95.11(3)(c) began to run here. We disagree.

The court itself in Caudill distinguished leaky pipe cases

from leaky roof cases: " "roof leaks' which occur as soon as the

roof is finished indicate that either the architect, the roofing

contractor, or the material supplier is at fault; ... defects in

underground water pipes are not as easily detectable as defects in

a roof, which become apparent after every rainstorm." Caudill at

244. Kmart reported multiple leaks to Schoninger on September 29,

1984, shortly after the construction was completed. Between this

date and March 18, 1989, Schoninger's records indicate Kmart

complained of approximately fifty leaks. New roofs do not leak;

they do not require a period to "settle" before they become

watertight. We hold that the first reported series of leaks

started the statute of limitations running. See Dubin v. Dow

Corning Corp., 478 So.2d 71, 73 (Fla. 2nd Dist.Ct.App.1985) (citing

Kelley v. School Bd. of Seminole County, 435 So.2d 804, 806

(Fla.1983)). Schoninger cannot rely on a lack of knowledge of the

specific cause of the defects in the Kmart roof to protect it from

the running of Fla. Stat. ch. 95.11(3)(c). See Almand Constr. Co.

v. Evans, 547 So.2d 626, 628 (Fla.1989).

Even assuming arguendo that the statute started running only

when Schoninger could attribute the leaks to improper installation,

Schoninger had such knowledge on August 28, 1986, more than six

years before Schoninger filed its complaint. On that day, Howard

Schoninger sent a letter to JPS in which he quoted a report he

received from the tenant of the Kmart building:

"[T]he probable source of the leaks is water running under the

improperly secured flashings that were installed by General

Roofing, Inc., along with J.P. Stevens Roof. The items do not

appear to be properly secured or sealed to prevent water

seeping under them. The toggle-bolt fasting devices that are

used to secure the recovery board and single ply membrane for

the J.P. Stevens roof, appear to be improperly secured...."

This quote demonstrates conclusively that Schoninger was on notice

of its remaining causes of action long before March 18, 1989. We

hold that, as a matter of Florida law, Fla. Stat. ch. 95.11(3)(c),

the applicable statute of limitations, began to run on September

29, 1984. As a matter of federal law, we hold that the weight of

the evidence supporting this starting date entitles JPS to summary

judgment pursuant to Fed.R.Civ.P. 56(c).

AFFIRMED.