In Brooks v. CalAtlantic Homes of Texas, Inc., 2017 Tex. App. Lexis 9466, the Court of Appeals of Texas considered whether a defendant moving for summary judgment on the grounds that the statute of repose expired also bears the burden of establishing the absence of applicable exceptions to the statute of repose. In Texas, a plaintiff alleging a construction defect in an improvement to real property must file a lawsuit within ten years of the date of substantial completion of the improvement. The only exceptions to the statute of repose are willful misconduct and fraudulent concealment in connection with the allegedly defective work. The Court of Appeals held that, when the defendant moves for summary judgment and establishes that the plaintiff did not file suit within the ten year statutory period, the plaintiff bears the burden of establishing that the exceptions of either willful misconduct or fraudulent concealment apply to defeat the defendant’s right to summary judgment. Discussing the plaintiff’s willful misconduct claim, the Brooks court held that merely showing that the defendant deviated from the applicable construction plans was insufficient to establish willful misconduct. The Brooks case reminds us that, while a defendant moving for summary judgment based on an affirmative defense bears the burden of proving the elements of that defense, in order to overcome the movant’s right to summary judgment, the plaintiff bears the burden to raise a genuine issue of fact as to exceptions to the affirmative defense. The Brooks case also reminds us that, in Texas, simply establishing that a contractor deviated from the applicable construction plans is not enough to raise a question of fact as to the willful misconduct exception to the statute of repose.
In Brooks, Charles Brooks, in 1998, purchased property in Las Colinas that contained a retaining wall. The retention wall was originally constructed in 1993 by CalAtlantic Homes of Texas, Inc., formerly known as Standard Pacific of Texas (“Standard Pacific”). In 2016, Mr. Brooks sued Standard Pacific, alleging that the wall was deteriorating and shifting. Mr. Brooks sought damages for deceptive trade practices, breach of warranty, and negligence. Standard Pacific, asserting that Mr. Brooks’ claims were barred by the ten-year statute of repose set forth by section 16.009(a) of the Texas Civil Practice and Remedies code (the “Code”), moved for summary judgment.
Mr. Brooks did not deny that the lawsuit was filed after the ten-year statute of repose period, but contended that Standard Pacific engaged in willful misconduct, which is an exception to the statute of repose. To support his claim, Mr. Brooks provided an affidavit from a professional engineer stating that the retention wall deviated from the original engineering plans. In addition, Mr. Brooks submitted his own affidavit stating that Standard Pacific’s deviations from the plans were based on a lack of engineering inspections and calculations, which created a hazard to public safety. The trial court granted Standard Pacific’s summary judgment motion, holding that the statute of repose had expired. Mr. Brooks filed an appeal, arguing that Standard Pacific failed to meet its burden that it did not engage in willful misconduct and, thus, should not have been granted summary judgment.
The Court of Appeals acknowledged that section 16.009(e)(3) of the Code creates an exception to the ten-year statute of repose for willful misconduct. However, the court found that, once the defendant establishes that the statute of repose applies, the plaintiff then bears the burden of showing that a genuine issue of fact exists as to willful misconduct in order to defeat the defendant’s right to summary judgment. While the code does not define “willful misconduct,” the court defined the term by deferring to previous decisions, which equate willful misconduct to gross negligence. The court found that, in order for a plaintiff to establish willful misconduct, the plaintiff must show that the defendant had actual, subjective awareness that its conduct would create a dangerous condition. While Mr. Brooks presented facts indicating that Standard Pacific did not follow the construction plans, Mr. Brooks failed to raise any genuine issue of fact as to whether Standard Pacific was aware that its deviations created a risk of danger. As such, the court found that Mr. Brooks failed to meet his burden of raising an issue of fact with respect to Standard Pacific’s willful misconduct and upheld the trial court’s decision granting summary judgment in Standard Pacific’s favor.
Because the Brooks case holds that the plaintiff has the burden of proofing the willful misconduct exception to the statute of repose defense, when faced with a legitimate statute of repose defense in Texas, it is critical to consider whether there is sufficient evidence to prove willful misconduct (or fraudulent concealment) before proceeding with a lawsuit against a contractor for defective work. Unless there is evidence that the contractor was aware that its action or inaction would cause a dangerous condition, a plaintiff will not be able to overcome the statute of repose defense.