J-McDaniel Construction Co. v. Dale E. Peters Plumbing Ltd.
2014 Ark. 282, 2014 WL 2814947, 436 S.W.3d 458 (2014)
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Rule of Law:
Claims for contribution among tortfeasors remain valid in Arkansas under the Uniform Contribution Among Tortfeasors Act (UCATA), as clarified by the retroactive Act 1116 of 2013, even after modifications to joint and several liability. A claim for indemnity can arise from an implied or quasi-contract or equitable principles based on a 'special relationship' between parties like a general contractor and subcontractor, and the statute of limitations for these derivative claims accrues upon payment, not the original injury.
Facts:
- J-McDaniel Construction Company, Inc. (McDaniel) began constructing a new home in Little Rock in late 2005.
- McDaniel hired Dale E. Peters Plumbing Ltd. (Peters) to install plumbing, Robert Bostic Hauling and Excavating, Inc. (Bostic) to perform excavation and site-preparation, and Esquire Marble Company (Esquire) to install a shower in the master bedroom.
- Susan and David Conrad (the Conrads) purchased the completed home from McDaniel on June 2, 2006.
- Shortly after moving in, from fall 2006, the Conrads noticed several problems with the home, including settlement cracks, misaligned doors, and a foul odor in the master bathroom.
- McDaniel and Peters attempted to remedy the problems from fall 2006 through summer 2009, but these attempts were unsuccessful.
Procedural Posture:
- On December 2, 2009, Susan and David Conrad filed a complaint in the Pulaski County Circuit Court against J-McDaniel Construction Company, Inc., alleging negligence and breach of implied warranties.
- On December 23, 2009, McDaniel filed an answer and a third-party complaint against Dale E. Peters Plumbing Ltd. and Robert Bostic Hauling and Excavating, Inc., asserting various claims.
- On November 16, 2010, the Conrads amended their complaint to add claims against John B. McDaniel and Barbara G. McDaniel personally.
- On December 10, 2010, Peters filed a cross-claim against Bostic.
- On December 21, 2010, Bostic filed a motion for summary judgment on Peters’s cross-claim, which the circuit court denied on March 9, 2011.
- On March 1, 2011, McDaniel filed an amended third-party complaint, adding Esquire Marble Company as a third-party defendant and including claims for contribution and indemnity.
- On April 20, 2011, Peters filed a motion for summary judgment on the third-party complaint.
- On May 17, 2011, Bostic filed a motion for summary judgment on the third-party complaint and a motion for reconsideration of the denial of its motion for summary judgment on Peters’s cross-claim.
- On May 18, 2011, Esquire filed a motion for summary judgment.
- On August 22, 2011, the circuit court entered an order granting summary judgment for Peters, Bostic (on reconsideration of the cross-claim), and Esquire, dismissing them with prejudice.
- On December 19, 2011, the circuit court entered an order stating that the Conrads had settled their claims against McDaniel and their matter was dismissed.
- McDaniel filed a timely notice of appeal from the August 22, 2011 order.
- The Supreme Court of Arkansas dismissed McDaniel's appeal on April 18, 2013, for lack of a final, appealable order because unresolved claims remained (J-McDaniel Constr. Co. v. Dale E. Peters Plumbing Ltd., 2013 Ark. 177).
- On June 14, 2013, McDaniel filed a motion for reconsideration with the circuit court, arguing for the applicability of Act 1116 of 2013.
- McDaniel also filed a notice of resolution of the Conrads’ claims and an amended release and settlement agreement, releasing all appellees.
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Issue:
Did the circuit court err in granting summary judgment and dismissing a general contractor's third-party claims for contribution and indemnity against its subcontractors, considering the applicability and retroactivity of Act 1116 of 2013, and whether an implied or equitable right to indemnity could exist?
Opinions:
Majority - Cliff Hoofman
Yes, the circuit court erred in granting summary judgment and dismissing McDaniel's third-party claims for contribution and indemnity because material issues of fact remained unresolved and the claims were not moot or time-barred. The court held that Act 1116 of 2013, which explicitly states its remedial and retroactive nature, clarified that a cause of action for contribution under the Uniform Contribution Among Tortfeasors Act (UCATA) continues to exist subsequent to the Civil Justice Reform Act of 2003 (CJRA)'s modification of joint and several liability. Therefore, the circuit court's dismissal of the contribution claim based on the CJRA was erroneous. The court affirmed that derivative claims for contribution and indemnity do not accrue, and their statutes of limitations do not begin to run, until the tortfeasor has paid more than their pro rata share of liability, thereby rejecting the argument that McDaniel's claims were time-barred. Furthermore, the court found that unresolved questions of fact remained regarding whether the underlying settlement extinguished the appellees' liability to the Conrads, which is a requirement for contribution, and whether the nature and extent of the relationships between McDaniel and the subcontractors (Peters and Bostic) could give rise to a claim for equitable or implied indemnity. The circuit court's general grant of summary judgment without specific findings meant all these potential grounds were subject to review, and the presence of these factual disputes rendered summary judgment improper.
Analysis:
This case is highly significant for clarifying the legal landscape surrounding contribution and indemnity claims in Arkansas, particularly in the construction context. It confirms the continued viability and retroactive application of Act 1116 of 2013, ensuring that the Uniform Contribution Among Tortfeasors Act (UCATA) still provides a mechanism for sharing liability, despite previous judicial interpretations following the Civil Justice Reform Act of 2003. The ruling also opens the door wider for equitable indemnity claims between contractors and subcontractors by acknowledging the possibility of a 'special relationship' giving rise to such a claim, even without an express written contract. This decision provides critical guidance for parties involved in multi-party litigation by reiterating that derivative claims accrue upon payment and emphasizing the need for a thorough factual inquiry into settlements and relationships before granting summary judgment on such claims.
