David L. Meade, Esq. James R. Sheatsley, Esq.
Shinaberry & Meade Gorman & Sheatsley & Company
Charleston, West Virginia Attorney for Gray Lumber Company
Attorney for the Appellants
Dwane L. Tinsley
Charleston, West Virginia
Attorney for Colony Construction
Pat C. Fragile
Wooton, Wooton & Fragile
Beckley, West Virginia
Attorney for Joe Linville
James G. Anderson, III
Anderson, Parkulo & Stansbury
Beckley, West Virginia
Attorney for Reed, Patton & Associates, Pat S. Reed, and William P. Patton, Jr.
The Opinion of the Court was delivered Per Curiam.
"A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syllabus point 3, Aetna Casualty & Surety Company v. Federal Insurance Company of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).
This is an appeal by James P. Thomas and Helen C. Thomas, the plaintiffs in
an action for damages relating to the defective construction of a house, from an order of the
Circuit Court of Raleigh County granting the defendants summary judgment on multiple
counts of the appellants' complaint. On appeal, the appellants claim that the trial court,
given the status of the record, acted prematurely in awarding summary judgment. After
reviewing the issues, and the record presented, this Court agrees and as a consequence, this
Court reverses the decision of the circuit court.
In late 1991, the appellants, James P. Thomas and Helen C. Thomas, who were
former West Virginians, but who had worked out of state for some time, contemplated
returning to West Virginia for their retirement and contacted Reed Patton & Associates about
purchasing a house, which was then partially completed on a lot owned by Reed, Patton &
Associates. The documents in this case indicate that upon contacting Reed, Patton &
Associates, the Thomases explained that they were retiring and were interested in purchasing
a quality house since they did not wish to deal with house problems during their later years.
According to the documents filed by the Thomases, they were expressly
assured by Reed, Patton & Associates and by William Patton and Pat Reed, who owned the
stock of Reed, Patton & Associates, that the builder of the house in which they were
interested did excellent work, that no problems would arise, and that if any defects became
apparent, they would promptly be repaired.
The party actually constructing the house was Colony Construction Company,
the stock of which was owned by Laura Linville. This company was apparently being
operated by Laura's husband, Joe Linville. The documents allege that prior to 1990, William
Patton of Reed, Patton & Associates, had owned certain of the shares in Colony
Construction, but that he had sold them to Laura Linville. The documents also indicate that
Joe Linville of Colony Construction also represented to the Thomases that if any defects
became apparent in the house being built for Reed, Patton, and Associates, the defects would
According to the Thomases, based upon the representations made to them, they
agreed to purchase the house on October 21, 1991, for the purchase price of $120,000.00.
Upon agreeing to purchase the property, they signed a Real Estate Purchase Agreement
drafted by Reed, Patton & Associates. In this agreement, Reed, Patton & Associates
apparently served as both the broker and the seller in the transaction.
After the Thomases moved into their new home in January 1992, a number of
problems and defects surfaced including excessive water under the house, water leaking into
the fireplace from the chimney, siding breaking loose and buckling, inappropriate water
pressure, and overloading of electrical circuits.
The Thomases requested that Reed, Patton & Associates correct the problems,
and by letter dated April 28, 1992, William Patton, Jr. assured the Thomases that the defects
would be corrected as soon as the weather allowed.
Thereafter, certain of the defects were partially corrected, but other defects
became obvious. The Thomases learned that an air-conditioning unit had been installed
without proper drainage and that more siding was coming loose from the house. Water
problems continued. In October 1993, Reed, Patton & Associates undertook to repair certain
of the problems, but the basement continued to fill up with water, and the Thomases were
required to hire a contractor to correct the defects in order to continue to live in the house.
In 1994, cracks began to appear in the ceilings, and the floors began to sag.
In July 1994, the roof began to sag. The Thomases contacted William Patton and Reed,
Patton & Associates about certain of these problems. On September 13, 1994, the Thomases
received a letter from an attorney for Reed, Patton & Associates and for William Patton and
Pat Reed. In the letter Reed, Patton & Associates refused to repair the roof defects. As a
consequence, the Thomases were forced to hire and pay structural engineers and contractors
to evaluate and repair the roof.
On March 17, 1995, the Thomases filed a complaint against Reed, Patton &
Associates, Inc., against Pat Reed and William Patton, individually, against Colony
Construction Company, and against Joe Linville, individually. They also sued Gray Lumber
Company which had provided materials for the house. In the complaint, which raised both
contract and tort issues, they alleged that all the defendants had breached expressed and
implied warranties as to the construction and workmanship of the house and that the house
was constructed negligently of defective materials. They claimed that they had detrimentally
relied on intentional, reckless and negligent misrepresentations by the defendants, and that
the defendants, Reed Patton & Associates, Inc., and its principals, had been guilty of fraud
and concealment, and breach of duty to inform of defects. The Thomases also claimed that
the various parties were engaged in a joint venture in constructing and selling the house and
that as joint venturers each should be liable for the derelictions of the others.
The defendants, Reed, Patton & Associates, Inc., Pat Reed, William Patton,
Joe Linville, and Colony Construction Company, did not file answers. Instead, they filed
motions to dismiss and motions for summary judgment under Rule 56 of West Virginia Rules
of Civil Procedure. Reed, Patton & Associates attached an affidavit prepared by its
president, William Patton, and the real estate purchase agreement entered into with the
Thomases as well as the deed. The affidavit alleged that the subject of the complaint was
"a contractual matter" and that it did not concern personal injury. William Patton and Pat
Reed filed individual motions which in essence covered the same matter.
Colony Construction Company filed a motion to dismiss in which it stated that
there was no relationship or privity of contract between it and the Thomases. An affidavit
signed by Joe Linville was attached to this motion. In the affidavit Colony Construction
Company indicated that it was "engaged" by Reed, Patton & Associates for the construction
of the speculation house and that it had no relationship or contact with the Thomases,
contractual or otherwise, and it asserted that there was no privity of contact with the
Thomases. The affidavit also stated that there was no basis for claim of personal injury
against Colony Construction Company.
Gray Lumber Company also filed a motion to dismiss in which it stated that
it had no contractual relationship with the Thomases, and also stated that no contractual
arrangements existed between Colony Construction Company and Gray Lumber Company
upon which allegations of fraud, misrepresentation, etc., could lie against Gray Lumber
Company. Gray Lumber Company also filed an answer in which it admitted that it had
supplied materials for the Thomas' roof and that Gray was engaged in the business of selling
new construction material and providing certain building design and in installing materials
in new homes.
On July 19, 1995, the motions made by the various parties defendant were
argued before the Circuit Court of Raleigh County. Colony Construction Company's
attorney stated that no written contract existed between Reed, Patton & Associates, and
Colony Construction Company. The court questioned Colony as to the Thomas' allegations
of joint venture. Colony replied that this was "an issue of fact, obviously that we deny." It
also asserted, however, that since there was no written contract, there could be no joint
Counsel for Joe Linville stated that since Joe Linville was an employee of
Colony, he was exempt from liability.
Counsel for Gray Lumber Company admitted that Gray had provided
construction materials for the home, and fabricated roof trusses. He also asserted, for the
first time, that the Thomas' tort claims were barred by the statute of limitations. He further
argued that any contractual claims which the Thomases had could not be asserted against
Gray Lumber Company because of lack of privity between the Thomases and Gray Lumber
At the conclusion of the proceedings the court entered summary judgment on
multiple issues in the Thomas' complaint. Specifically, the court granted summary judgment
as to all defendants except Colony Construction Company as to the warranty and contract
claims. It was also granted as to all defendants on the detrimental reliance claims and the
joint venture claims. Summary judgment was entered on all the negligence claims on the
basis of the statute of limitations and as to all the other claims except as to defendants
Colony Construction Company, Gray Lumber Company, and Joe Linville.
As previously indicated, the principal issue in the present case is whether the
trial court properly granted summary judgment.
In Aetna Casualty & Surety Company v. Federal Insurance Company of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963), this Court examined the circumstances under which a grant of summary judgment was appropriate. In Syllabus Point 3 of that case the court stated:
A motion for summary judgment should be granted only
when it is clear that there is no genuine issue of fact to be tried
and inquiry concerning the facts is not desirable to clarify the
application of the law.
As can be seen from what has already been said about the present case, these
were various causes of action asserted against various parties in the present case.
One of the principal claims asserted against Reed, Patton & Associates and its
stockholder-agents, William Patton and Pat Reed, was contractual in nature and was that
Reed, Patton & Associates was, in effect, the vendor/builder of the house which they
purchased, and that as such vendor/builder, Reed, Patton & Associates impliedly warranted
the fitness and habitability of the house. The Thomases also claimed that the implied
warranty was breached when the house did not prove to be fit and habitable in accordance
with its intended use.
The trial court in granting summary judgment on this claim, in effect, rejected
the Thomas' position because the court concluded that West Virginia's implied warranty of
habitability and fitness did not apply to a party in the position of Reed, Patton & Associates
since in the trial court's view Reed, Patton & Associates was the owner-seller of the house,
rather than its builder.
The concept of an implied warranty of habitability and fitness for a new home was initially adopted by this Court in the case of Gamble v. Main, 171 W.Va. 469, 300 S.E.2d 110 (1983). The basic rule relating to the warranty as set forth in Syllabus Point 1 of the Gamble case stated:
The purchaser of a new home is entitled to an implied
warranty of habitability or fitness which requires that the
dwelling be constructed by the builder in a workmanlike manner
and that the property be reasonably fit for its intended use of
Although the syllabus point refers to the builder of such a home, the body of the opinion
makes reference to a "builder--vendor" and the real question posed by the present case is
whether Reed, Patton & Associates is a "builder--vendor" as contemplated by the Gamble
case. As previously indicated, the circuit court, in effect, found that it was not.
In Gamble v. Main, Id., the court identified a number of reasons for adopting the implied warranty of habitability or fitness. Among other things, the court quoted with approval a portion of McDonald v. Minnecki, 79 N.J. at 287-89, 398 A.2d at 1289-90, which stated:
Tribunals have come to recognize that "[t]he purchase of
a new home is not an everyday transaction for the average
family...Courts have also come to realize that the two parties
involved in this important transaction generally do not bargain
as equals. The average buyer lacks the skill and expertise
necessary to make an adequate inspection....Furthermore, most
defects are undetectable to even the most observant layman and
the expense of expert advice is often prohibitive....The
purchaser therefore ordinarily relies heavily upon the greater
expertise of the vendor to ensure a suitable product....and this
reliance is recognized by the building trade.....
Gamble v.Main, Id., at 472, 300 S.E.2d at 113-14. In effect, a substantial part of the
rationale for adopting the implied warranty rule is the notion that builder--vendors of new
houses are generally in a much better position to recognize defects in workmanship
potentially effecting habitability and fitness than are the purchasers.
In the discussion of the implied warranty rule after Gamble v. Main, Id., the
court did not clarify what is meant by a builder--vendor. See e.g. Sewell v. Gregory, 179
W.Va. 585, 371 S.E.2d 82 (1988). Thus, the real question in the present case is whether
Reed, Patton & Associates qualifies as a "builder--vendor." within the meaning of Gamble
v. Main, supra.
In arguing this point, it is apparent that the parties have focused on semantics.
Reed, Patton & Associates has been called by one side merely a real estate agent, or broker,
and not a builder--vendor, and the other side urges the Court to extend the Gamble rule to
parties semantically called vendors. The trial court has also addressed this question
essentially in terms of the semantic designation of the parties.
In reviewing the cases considered by this Court in announcing and discussing
the implied warranty rule, the Court notes that it has principally looked at the roles played
by the parties involved in the disputes, rather than at what they were precisely called from
a semantic point of view. A key question in this Court's view was not whether someone was
called a real estate agent or a builder, but whether one party, who arguably was involved in
the construction of the house, regardless of what such party was called, was actually in the
business of having houses built and selling them, and was, because of its history and
experience, and because the nature of its business, in a position to have the skill and
expertise necessary to make an adequate inspection and to detect defects. As previously
indicated, the fact that a vendor--builder was generally in that position, as opposed to a
purchaser who was not in that position, was a factor which ultimately impelled this Court to
recognize the implied warranty rule. In line with this, the Court said in note 6 of Gamble
v. Main, supra, that the implied warranty was not extended to a homeowner who built his
own home and sold it on a non-recurring basis. The essential rationale for this position was
the court did not believe that the average homeowner who built his own home on a non-recurring basis was in a position superior to the average purchaser of a home.
From the documents filed in the present case it does appear that Patton, Reed
& Associates possibly fell into the category of parties who, because of their experience, and
because of the nature of their business, generally possessed skill and expertise necessary to
make an adequate inspection, and who, in effect, were in a better position to detect defects
in workmanship than the ordinary purchaser. The documents in the case also raise the
question of whether Reed, Patton & Associates was involved in a joint venture with Colony
Construction Company in the construction of the Thomas' house. These facts suggests that
Reed, Patton & Associates could have been a "builder--vendor" within the meaning of
Gamble v. Main, supra.
Although the facts of the present case suggest that Reed, Patton & Associates
qualifies as an owner-builder, in this Court's view the facts are inconclusive. The Court
believes that for ultimate resolution of this case it would be desirable to determine how many
houses Reed, Patton & Associates has constructed, or caused to be constructed, and sold as
new houses. It would also be desirable to determine the history of its supervisory
involvement with the construction of new houses in general, as well as its involvement with
the construction of the house in issue in the present case. Further, it would be desirable to
determine the construction expertise of the principal parties in the organization. Lastly, the
question of whether it was actually involved as a joint venturer with Colony Construction
Company is critical.
In effect, the Court believes that additional development of the facts would be
desirable to clarify the application of the law to the implied warranty issues in this case.
Under such circumstances Syllabus Point 3 of Aetna Casualty and Surety Company v.
Federal Insurance Company of New York, supra, indicates that summary judgment is
inappropriate, and in view of this, this Court believes that the summary judgment in the
present case must be set aside.
Another claim made by the Thomases in the present case was that various
defendants had made express warranties relating to the quality workmanship and materials
involved in the construction of their house. They claim that these warranties had been made
before, during and after they entered into a contract to purchase the house.
In entering into the contract to purchase the house, the Thomases signed a
statement indicating that the seller had not made any representations or warranties relating
to the physical condition of the property and indicating that they would not hold the seller
bound by any agreement to alter, improve or repair the property not specifically set forth in
In granting summary judgment the circuit court, in effect, found that the
Thomases, by signing the contract containing these stipulations, precluded themselves from
asserting any warranties or representations not specifically set forth in the agreement, and
made prior to our contemporaneous with the execution of the written contract. The court
also found that any oral representations involved in this case were made prior to, or
simultaneously with, the creation of the writing.
While this Court believes that in the absence of fraud, the parol evidence rule
would preclude the Thomases from asserting any claim against the "seller" for
representations not set forth in the agreement, the Court believes that the Thomas' claim in
bringing this action is broad enough to cover parties who may not necessarily have been
parties to the sales contract. The Court believes that clarification of the facts is desirable to
determine who precisely the "seller" was in the agreement signed by the Thomases. The
Court does not believe that the agreement would bar the assertion of express warranties
against any party not a party to that agreement, or not privy to the agreement. Further, the
Court notes that the parol evidence rule allows parol evidence even where there is an express
contract to show an additional independent or collateral agreement. See Weirton Savings and
Loan Company v. Cortez, 157 W.Va. 691, 203 S.E.2d 468 (1974). And it is also admissible
to prove a new or distinct agreement. See Wilkinson v. Searls, 155 W.Va. 475, 184 S.E.2d
735 (1971). Finally, the Court believes that parol evidence is admissible to contradict a
writing in a case of fraud, Hartmann v. Windsor Hotel Company, 136 W.Va. 681, 68 S.E.2d
Another claim asserted by the Thomases is that the trial court erred in holding
that there was no joint venture involved in the present case.
This Court has indicated that a joint venture is an association of two or more
persons for the purpose of making money to carry out a single business enterprise or
transaction for profit. Pownall v. Cearfoss, 129 W.Va. 487, 40 S.E.2d 886 (1946).
The Thomases, in their complaint, also alleged that all the defendants engaged
in a joint venture. They claimed that Reed, Patton & Associates acted as a real estate broker
in marketing and selling the house and was the active owner of the house. They also claimed
that Colony Construction Company and Joe Linville contributed their skills, labor and time
as general contractors in the construction of the house, and that Gray Lumber Company,
Colony Construction Company, Joe Linville and Reed, Patton & Associates contributed
materials. Lastly, they claimed that Reed, Patton & Associates, William Patton, Pat Reed,
Colony Construction Company, and Joe Linville supervised subcontractors. In paragraph
47 of their complaint they asserted that all the parties were engaged in a joint venture as
owner and seller, materials, designer, contractor of construction, and seller of the premises,
and that each performed acts beneficial to the others.
In this Court's view the documents filed thus far are sufficient to suggest that
all the defendants, or at least some of the defendants, were associating together for the
purpose of carrying out a single business transaction for their joint profit, and that there is
a potentiality that a joint venture did exist as a joint venture is defined under our law.
At the very least, this Court believes that a full examination and development
of the facts as to the contribution of each, and as to how the profit of each was to be
determined, is ultimately necessary for a fair resolution of the Thomas' joint venture claim.
In view of the fact that further development is desirable, this Court believes that the trial
court again erred in awarding summary judgment. In conjunction with this, the Court notes
that Colony Construction Company rather clearly recognized before the trial court that the
joint venture issue was a question of fact.
Another assertion made by the Thomases on appeal is that the trial court erred
when it decided as a matter of law, and before discovery had been conducted, that they had
discovered all the elements of their actions for defective workmanship and materials more
than two years before the institution of their suit, and that as a consequence their claims for
negligent workmanship and materials, and other tort claims, were barred by the statue of
As previously indicated, the Thomases entered into a purchase contract for the
property in question on October 21, 1991, and they actually moved into the house in January
1992. They noticed certain problems with the property almost immediately after moving
in, and, as time progressed, they noticed additional problems. They did not file the
complaint instituting the present action until March 17, 1995.
The circuit court apparently concluded that the two-year statute of limitations
contained in W.Va. Code 55-2-12 governed the question of whether the tort aspects of the
Thomas' complaint were timely filed, and the court, after examining the circumstances of
the case, ruled that the Thomases discovered or reasonably should have discovered the
circumstances leading to their rights to action more than two years prior to the institution of
the action, and that as a consequence the action was barred by the statute of limitations.
The Court notes that W.Va. Code 55-2-6a establishes a separate limitations period for defects in builder's construction of improvements on real property. That statute provides:
No action, whether in contract or in tort, for indemnity or
otherwise, nor any action for contribution or indemnity to
recover damages for any deficiency in the planning, design,
surveying, observation or supervision of any construction or the
actual construction of any improvement to real property, or, to
recover damages for any injury to real or personal property, or,
for an injury to a person or for bodily injury or wrongful death
arising out of the defective or unsafe condition of any
improvement to real property, may be brought more than ten
years after the performance or furnishing of such services or
construction: Provided, That the above period shall be told
according to the provisions of section twenty-one [ 55-2-21] of
this article. The period of limitation provided in this section
shall not commence until the improvement to the real property
in question has been occupied or accepted by the owner of real
property, whichever occurs first.
This Court has indicated that the purpose of this statutory enactment was to set
an arbitrary time period after which no action, whether in contract or tort, may be initiated
against architects and builders. The Court has also indicated that pre-existing statute of
limitations for both contract and tort actions continued to operate within the outside limits
set by the statute. See Gibson v. West Virginia Department of Highways, 185 W.Va. 214,
406 S.E.2d 440 (1991), and Shirkey v. Mackey, 184 W.Va. 157, 399 S.E.2d 868 (1990).
Further, in Basham v. General Shale, 180 W.Va. 526, 377 S.E.2d 830 (1988), the Court held
that the ten-year period contained in this statute is not applicable in an action against the
manufacturer of allegedly defective construction materials.
The Thomases on appeal do not take issue with the fact that the two-year
statute of limitations applies to the tort aspects of their case in spite of the wording of W.Va.
Code 55-2-6a. They do, however, contend that they were subjected to a continuing tort
within the meaning of Handley v. Town of Shinnston, 169 W.Va. 617, 289 S.E.2d 201
(1982), and that the defendants or certain of the defendants concealed what was occurring
The general proposition in this State is that the limitation's period in an action
commences running from the date of injury. Hall's Park Motel, Inc. v. Rover Construction,
Inc., 194 W.Va. 308, 460 S.E.2d 444 (1995), State ex rel Ashworth v. State Road
Commission, 147 W.Va. 430, 128 S.E.2d 471 (1962), and Boyd v. Beebe, 64 W.Va. 216, 61
S.E. 304 (1908). There are, however, a number of special situations which can effect the
application of this general rule. One of those situations is discussed in Jones v. Trustees of
Bethany College, 177 W.Va. 168, 351 S.E.2d 183 (1986). That situation arises where within
a brief, discrete period of time all the elements of a tort occur or manifest themselves and the
plaintiff suffers a noticeable injury, then for substantial period of time thereafter the plaintiff
sustains a worsening of the injury. In such a situation the breach of duty by the tortfeasor
is completed, but the damage is ongoing. See DeRocchis v. Matlack, Inc., 194 W.Va. 417,
460 S.E.2d 663 (1995).
Contrary to the assertions in the present case, this Court does not believe that
any tort committed by the defendants was a continuing tort within the meaning of Handley
v. Shinnston, supra. Instead, any tort committed fell within the category discussed in the
Hall's Park Motel case, i.e., a potential tort committed was committed and the breach of
duty was completed at the time the Thomas' house was completed and turned over to them.
There was evidence, or there are allegations, that the damage arising from the breach of duty
was continuous or might have been continuing, but the evidence rather clearly suggests that
the Thomases were aware of the defects in 1992. Accordingly, this Court cannot conclude
that the trial court erred in finding, in effect, that there was no continuing tort and that the
limitation period, not taking into consideration any allegation of attempt by the defendants
to conceal the defects, began to run in 1992, and that the Thomas' action was accordingly
barred by the statute of limitations.
In spite of this, the Court notes that the Thomas' claim that the defendants,
after being contacted regarding certain defects, engaged in fraudulent concealment of certain
aspects of the situation.
In Sattler v. Bailey, 184 W.Va. 212, 400 S.E.2d 220 (1990), this Court
recognized that the limitations period in a statute of limitations is tolled when a wrongdoer
does something to prevent discovery of the wrong. Under this rule, the limitation period on
the Thomas' claims would not begin to run as to those defects which they were prevented
from discovery until they actually discovered such defects.
It is not altogether clear to this Court what defects were known to the
Thomases more than two years prior to the filing of this action, and what defects became
known only within two years prior to the filing of this action. Further, the Court cannot say
from what is available whether the defendants actually did attempt to conceal the defects
from the Thomases.
Under the circumstances of the case, the Court believes that at the very least
further development of the evidence is necessary to clarify the application of the law and
under such circumstances the rule in Aetna Casualty & Surety Company v. Federal
Insurance Company of New York, supra, indicates that summary judgment is inappropriate.
Another claim made by the Thomases is that circuit court erred in holding as
a matter of law that defendants, William Patton and Pat Reed were not individually liable for
breach of contract.
The Thomas' claim that William Patton and Pat Reed were individually liable because they made separate agreements with them to persuade them to enter into the purchase contract. The trial court, in essence, ruled that William Patton and Pat Reed acted solely as agents and that as a consequence they were not personally liable on any agreement which they entered into.
As with the other points, this Court believes that it is desirable to develop the
record further to determine whether there were, in fact, separate agreements which were
outside the agents' authority and whether such agreements were collateral agreements within
statute of frauds, which must be in writing to be enforceable or whether they were of such
a separate nature as to be enforceable if only orally made.
For the reasons stated, this Court concludes that the summary judgment order
of the circuit court must be reversed and this case must be remanded for further development.
The judgment of the Circuit Court of Raleigh County is, therefore, reversed, and this case is remanded for further development.
Reversed and remanded.