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Case Number: 2018 OK CIV APP 31
Judge: DEBORAH B. BARNES
Court: OURT OF CIVIL APPEALS OF THE STATE OF OKLAHOMA, DIVISION IV
Plaintiff's Attorney: Dan L. Holloway, Marissa T. Osenbaugh
Description: Plaintiff originally filed suit against Defendants on January 31, 2011. However, the trial court dismissed Plaintiff's original petition without prejudice and, in January 2012, Plaintiff re-filed its petition. As stated above, Plaintiff asserted theories of breach of contract and negligence against Trinity. However, in March 2012, Trinity filed a motion to dismiss in which it argued, among other things, that Plaintiff's negligence theory is barred by the applicable two-year statute of limitations. Trinity pointed out that, in the petition filed in January 2012, Plaintiff alleged it "learned, in the late Spring of 2006," that Trinity had not fulfilled its contractual duties and was "proceeding with no intention to perform according to the contract and associated building plans, and instead . . . wholly failed to perform as contracted and in a good and workmanlike manner[.]"6 Trinity asserted that because the original petition was not filed until January 2011 -- almost five years after Plaintiff "learned" of the above allegations -- the negligence theory was asserted well outside the two-year limitations period and is, therefore, barred.
¶9 In Plaintiff's response to the motion to dismiss, it asserted that a question of fact was nevertheless presented as to precisely when Plaintiff discovered Trinity's alleged negligence -- in particular, a question of fact remained as to when Plaintiff learned of Trinity's failure to ensure that the construction conformed to Trinity's design plans. However, in an order filed in May 2012, the trial court dismissed Plaintiff's negligence theory as barred by the applicable statute of limitations. The trial court granted Plaintiff "leave to amend [its] Petition in respect to this claim." Plaintiff did not file an amended petition.
¶10 In October 2015, Trinity filed a motion for summary judgment as to the remaining theory of breach of contract. Trinity correctly asserted that while a five-year statute of limitations applies to an allegation of breach of a written contract, a three-year limitations period applies to an alleged breach of any other contract, whether oral or implied. Trinity asserted that, in the present case, "[t]here is no written contract, only an oral agreement between the parties" and, thus, Plaintiff was required to file its petition within three years of either the discovery of the alleged breach in the late spring of 2006, or within three years of the completion of the construction project in February 2007. Thus, according to Trinity, because Plaintiff did not file its petition until 2011, its breach of contract theory is also barred.
¶11 The trial court granted Trinity's motion for summary judgment in the January 2016 order. Plaintiff appeals from both the dismissal7 and summary judgment rulings entered in favor of Trinity.
STANDARD OF REVIEW
¶12 The standard of review for a district court's decision granting a motion to dismiss is de novo. Dani v. Miller, 2016 OK 35, ¶ 10, 374 P.3d 779. When reviewing a dismissal ruling, we "test the law that governs the claim, not the underlying facts." Id. (citations omitted). That is, we take as true all factual allegations made by the plaintiff in its petition, together with all reasonable inferences, and if relief is possible under any set of facts that can be gleaned from the petition, the motion to dismiss will be denied. Id. ¶¶ 10 & 11.
¶13 This appeal also concerns the trial court's order granting Trinity's motion for summary judgment.
Summary judgment is proper only if it appears to the court that there is no substantial controversy as to the material facts and that one of the parties is entitled to judgment as a matter of law. Only when the evidentiary materials eliminate all factual disputes relative to a question of law is summary judgment appropriate on that issue. The trial court's ruling on the legal issue is reviewed de novo as a question of law. However, an appellate court will reverse the grant of summary judgment if the materials submitted to the trial court indicate a substantial controversy exists as to any material fact.
Plano Petroleum, LLC v. GHK Exploration, L.P., 2011 OK 18, ¶ 6, 250 P.3d 328 (citations omitted) (internal quotation marks omitted). "When this Court reviews the trial court's grant of summary judgment, all inferences and conclusions drawn from the evidence must be viewed in the light most favorable to the party opposing the motion." Geyer Bros. Equip. Co. v. Standard Res., L.L.C., 2006 OK CIV APP 92, ¶ 7, 140 P.3d 563 (citation omitted).
¶14 A two-year statute of limitations applies to Plaintiff's negligence theory. "The statute of limitations applicable to an action for negligence is found in 12 O.S. 2011 § 95(A)(3) and it provides that such a claim must be filed two (2) years after the cause of action shall have accrued." Calvert v. Swinford, 2016 OK 100, ¶ 6, 382 P.3d 1028 (footnote omitted).8 As to the accrual date, "Oklahoma . . . follows the discovery rule allowing limitations in certain tort cases to be tolled until the injured party knows or, in the exercise of reasonable diligence, should have known of the injury." Calvert, ¶ 11 (footnote omitted). However, even when applying the discovery rule to this case, it is clear -- pursuant to Plaintiff's own allegations in its petition -- that the negligence theory is barred under the two-year statute of limitations.
¶15 As set forth above, Plaintiff alleges in its petition that it "learned, in the late Spring of 2006," that Trinity had not fulfilled its alleged duties and was "proceeding with no intention to perform according to the contract and associated building plans, and instead . . . wholly failed to perform as contracted and in a good and workmanlike manner[.]" The time period during which Plaintiff alleges it learned Trinity had "wholly failed" in this regard (i.e., the late spring of 2006) falls almost five years prior to the date in January 2011 that Plaintiff filed its original petition.9
¶16 As stated above, the trial court provided Plaintiff with the opportunity to amend its petition, but Plaintiff declined.10 Even when applying the discovery rule to this case, as Plaintiff requests, and even when taking Plaintiff's allegations as true, Plaintiff knew or, in the exercise of reasonable diligence, should have known of the alleged injury caused by Trinity's acts or omissions more than two years prior to the filing of this action in January 2011. Therefore, we conclude the trial court did not err in dismissing Plaintiff's negligence theory asserted against Trinity as barred by the two-year statute of limitations.11
II. Breach of Contract
¶17 The parties agree that an agreement was reached between Trinity and Plaintiff, but they disagree as to whether or not their agreement should be categorized as a contract in writing for purposes of determining the applicable statute of limitations.12 For example, Trinity states: "There is no written contract, only an oral agreement between the parties." Trinity bases this assertion on the fact that although it sent what it describes as a written proposal to Plaintiff, this document was never signed. Trinity states: "The written proposal from [Trinity] is only a proposal, and any acceptance was oral as the proposal is not signed -- thereby creating an oral contract."
¶18 Trinity's argument is motived by the fact that although the statute of limitations for "[a]n action upon any contract, agreement, or promise in writing" is five years, the limitations period is only three years for "[a]n action upon a contract express or implied not in writing[.]" 12 O.S. 2011 § 95(A)(1) & (2). That is, if an "instrument constitutes a written contract" then "the five-year statute of limitations applies; if not, the three-year statute of limitations applies." Harlow Pub. Co. v. Patrick, 1937 OK 579, ¶ 3, 72 P.2d 511 (citations omitted). Because the original petition was filed in January 2011, a three-year limitations period would reach back only to January 2008, after Plaintiff (pursuant to its own allegations) "learned" in the late spring of 2006 of the particular failures described above, and after it is undisputed Plaintiff moved into the new church and noticed deficiencies in the construction in 2007.13 However, a five-year limitations period would reach back to January 2006, prior to all these occurrences.
¶19 In support of the assertion that the agreement constitutes a contract in writing, Plaintiff has attached to its response to the motion for summary judgment an affidavit of its representative -- David Brooks (Pastor Brooks) -- who states in his affidavit that he is "the Senior Pastor at Christ's Legacy Church" and that, "because of the recommendation of James Van Hoose, [I] contacted and met with Kevin Galliart, an architect who was employed by and who owned [Trinity], to design and provide all related architectural services for [Plaintiff's] new church building[.]" According to additional evidentiary materials attached to Plaintiff's response, in May 2004 Galliart sent a letter to Pastor Brooks which states:
I enjoyed meeting you and I appreciate you allowing me the opportunity to introduce [Trinity] to you. [Trinity] is a firm qualified and interested in performing architectural work for [Plaintiff]. I feel confident that no other firm combines the qualities of integrity and experience as effectively as [Trinity].
I have enclosed a proposal for your proposed new facility and information that will further introduce our firm . . . . Thank you again for this opportunity, and if you should have any questions or require any additional information please feel free to contact us at any time.
Thank you for your time and consideration.
Kevin Galliart, NCARB
¶20 The written "proposal" attached to this letter is entitled "Qualifications and Proposal." In addition to certain introductory information about Trinity, this document sets forth what are described as "the critical aspects of the project":
v Provide A/E services for the design and construction of a new 35,000 +/- sf. facility.
v Provide design/design development documents for owner review and approval, to determine potential square footage, costing.
v Provide construction documents for pricing, permit and construction as per attached scope of services.
v Help the owner with the negotiation with a selected contractor for cost effective timely construction of the project.
v Assist the owner during construction to ensure the project is in conformance with the construction documents and the project schedule.
v Help in the selection of critical design team members.
¶21 The document also sets forth, among other things, the following:
We propose a lump sum approach to be billed based upon percentage of completion of each phase. Based upon our understanding of the scope of services as outlined previously in this proposal our fees are as follows:
v Architectural $40,000.00
v Civil Engineering $15,255.00
v Structural Engineering $20,000.00
v Reimbursable expenses $ 1,500.00
Total A/E Fees: $76,755.00
. . . .
All fees for services are based on our understanding of the scope of services as outlined in this proposal. An invoice will be submitted monthly based upon completion of each phase. Additional services (i.e. services not described above) will be charged on a cost basis [at the listed hourly rates].
¶22 Pastor Brooks testified at his deposition that he did not sign this document; however, when presented with the document during his deposition, he observed: "I don't see any place for it to be signed." When questioned whether he had a written contract with Trinity, Pastor Brooks, referring to the above-quoted document, stated: "I have a paper that [Galliart] said, we agree to provide these following services, and he listed them including this, this, this, this and this with an amount on it. [Galliart] and I agreed that's what I would pay him for those services."14
¶23 In his affidavit, Pastor Brooks makes the following pertinent assertions, among others:
7. After discussion, [Galliart] presented a written offer to me which laid out in detail all of the services that he, acting for [Trinity], would provide, as well as the total fee to be paid to [Trinity] for designing and overseeing all of the related architectural services involved in the construction of the new church building.
8. I accepted his offer; and thereafter both I and [Galliart] spoke and acted in accord with the written details of the contract we both considered final and binding in all conversations and activities by us that were related to the construction of the new church building.
9. Thereafter, in conformance with the contract, [Galliart] designed the new church building and oversaw all of the related architectural services involved in the construction of the new church building, and periodically billed the church accordingly.
. . . .
16. I was recently deposed by [Galliart's] attorneys and was asked if there was ever a contract between the church and [Trinity].
17. I stated that my opinion was there was a written contract between the two parties which laid out in detail the services [Galliart] would provide and the payment that would be made by the church.
18. As a non-attorney, I did not understand the meaning and validity of the subsequent questioning which appeared to insist that the law requires every written contract to be signed by the parties before it could be enforceable.
19. I believed then, and still believe, that the church had a binding written contract with [Trinity].
¶24 In the present case, it appears from the evidentiary materials that neither party signed the proposal. However, the parties do not dispute that they entered into a binding agreement. Trinity merely argues that because its proposal was either orally accepted by Plaintiff, or accepted through subsequent performance, an oral or implied contract was created.
¶25 We disagree with Trinity that the mode of acceptance of a contract necessarily dictates whether that contract is or is not in writing for purposes of determining the applicable statute of limitations. By statute in Oklahoma, "[i]f a proposal prescribes any conditions concerning the communication of its acceptance, the proposer is not bound unless they are conformed to; but in other cases any reasonable and usual mode may be adopted." 15 O.S. 2011 § 68 (emphasis added). See also 15 O.S. 2011 § 70 ("Performance of the conditions of a proposal, or the acceptance of the consideration offered with a proposal, is an acceptance of the proposal."). Thus, if a written proposal does not prescribe conditions concerning the communication of its acceptance, it may be accepted in "any reasonable and usual mode" under the circumstances -- the contract formed under such circumstances does not become an oral or implied contract merely because the acceptance is other than by signature.
¶26 As articulated in the Restatement, "[a]cceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer." Restatement (Second) of Contracts § 50(1) (1981). As in Oklahoma, "[u]nless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances." Id. § 30(2). Although "the offeror is entitled to insist on a particular mode of manifestation of assent" and "[t]he terms of the offer may limit acceptance to a particular mode," id. at cmt. a., the evidentiary materials in the present case disclose no such insistence or terms as to a particular mode of acceptance. Indeed, as articulated in the Restatement, the "form of acceptance" is unlikely "to affect the substance of the bargain" and "is often quite immaterial," id., and "[i]nsistence on a particular form of acceptance is unusual" -- "[o]ffers often make no express reference to the form of acceptance," id. at cmt. b. Even when offers do provide the form of acceptance, "[l]anguage referring to a particular mode of acceptance is often intended and understood as suggestion rather than limitation; the suggested mode is then authorized, but other modes are not precluded." Id. See also J. E. Keefe, Jr., Annotation, What Constitutes a Contract in Writing Within Statute of Limitations, 3 A.L.R.2d 809 (Originally published in 1949) (Stating, among other things, that "[a] written contract within the meaning of the statute of limitations is generally defined as one which in all its terms is in writing," and "[i]t has been observed that two persons may adopt a writing containing all the terms of a contract so that it would constitute a contract in writing, even though it is signed by neither.").
¶27 Thus, at the very least, disputes of material fact exist -- disputes which render summary judgment inappropriate -- as to whether the written proposal was accepted, and properly accepted, either orally or through performance.15 Cf. Farmers' Produce Co. v. McAlester Storage & Comm'n Co., 1915 OK 530, ¶ 0, 150 P. 483 (Syllabus by the Court) ("Where there is no direction as to the mode of communicating the acceptance of a proposed contract, the acceptance may be accomplished" through "any reasonable and usual mode" "unless it can be fairly and reasonably inferred from the offer, or other prior communications, that some other means is expected, and that would be a question of fact to be determined by the jury[.]"). If the written proposal was properly accepted, and if it constitutes the parties' contract, then clearly their contract is in writing and the five-year statute of limitations applies.16 As indicated above, a five-year statute of limitations reaches back in this case to January 2006, prior to any triggering events thus far uncovered.
¶28 For these reasons, we conclude summary judgment was inappropriately granted as to the breach of contract theory asserted against Trinity.
Outcome: We conclude the trial court did not err in dismissing Plaintiff's negligence theory asserted against Trinity as barred by the two-year statute of limitations. However, we conclude summary judgment was inappropriately granted as to the breach of contract theory asserted against Trinity. Accordingly, we affirm in part, reverse in part, and remand for further proceedings.