Robert Gormley & a. v. Rough Diamond Development, LLC & a.

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2019-0273, Robert Gormley & a. v. Rough
Diamond Development, LLC & a., the court on March 10, 2020,
issued the following order:

Having considered the briefs and oral arguments of the parties, the court
concludes that a formal written opinion is unnecessary in this case. The
plaintiffs, Robert and Laurie Gormley, appeal an order of the Superior Court
(Temple, J.) dismissing their action against the defendants, Rough Diamond
Development, LLC (Rough Diamond) and State Farm Fire & Casualty Co. (State
Farm), for damages related to the design and construction of their home, on
the ground that it is barred by the eight-year statute of repose, see RSA 508:4-
b (2010). We affirm.

The plaintiffs allege the following facts, which we accept as true for the
purposes of this appeal. In March 2009, the plaintiffs purchased a single-
family residence in Merrimack. The home had been renovated in 2008, and, in
early 2009, Rough Diamond built an addition to the property. In May 2009,
just two months after the plaintiffs bought the property, a fire destroyed the
addition. At the time, the plaintiffs had a homeowners’ insurance policy issued
by State Farm. State Farm covered the loss and engaged another contractor to
rebuild the addition as it had originally been constructed, based upon the
design prepared by Rough Diamond. During the construction, the plaintiffs
lived in a hotel. They returned to the home in the fall of 2009.

Since then, the floor joists supporting the addition have rotted and
deteriorated significantly. The rot, caused by high moisture and humidity
levels, has significantly weakened the overall strength of the joists. In addition,
the moisture and humidity have caused mold and fungus to grow on the joists.
The rot and mold have rendered the addition uninhabitable. The entire floor
assembly and crawl space must be reconstructed properly, with appropriate
humidity-level controls.

In June 2018, as a result of these alleged shortcomings, the plaintiffs
sued Rough Diamond for negligence and violations of the New Hampshire
Consumer Protection Act, see RSA ch. 358-A (2009 & Supp. 2019), and sued
State Farm for breach of contract. The defendants moved to dismiss on the
ground that the plaintiffs’ claims are barred by the eight-year statute of repose.
See RSA 508:4-b, I. The trial court granted the motion, finding that the latest
date on which the construction was substantially completed was December 21,
2009, and that the plaintiffs’ lawsuit filed more than eight years later was
barred by the statute of repose. In so ruling, the trial court rejected the
plaintiffs’ assertion that the statute of repose is unconstitutional as applied to
them because it violates their right to a remedy under Part I, Article 14 of the
State Constitution. However, the court granted the plaintiffs leave to amend
their complaint.

In their amended complaint, the plaintiffs alleged that they “did not
discover” the fact that their floor joists had “significantly rotted and
deteriorated” until “the fall of 2015.” In addition, they alleged that “after the
expiration of the limitations period in the applicable statute of repose,” Mrs.
Gormley discovered that she had “debilitating symptoms as a result of the mold
that has accumulated underneath the addition.” (Emphasis omitted.)

The defendants again moved to dismiss on statute of repose grounds.
The plaintiffs again argued that it was unconstitutional to apply the statute of
repose to their claims, and the trial court again rejected that argument. This
appeal followed.

In reviewing the trial court’s grant of a motion to dismiss for failure to
state a claim, our standard of review is whether the allegations in the plaintiffs’
pleadings are reasonably susceptible to a construction that would permit
recovery. Plaisted v. LaBrie, 165 N.H. 194, 195 (2013). We assume that the
plaintiffs’ well-pleaded allegations of fact are true and construe all reasonable
inferences in the light most favorable to them. Id. We then engage in a
threshold inquiry that tests the facts in the complaint against the applicable
law, and if the allegations do not constitute a basis for legal relief, we must
hold that granting the motion to dismiss was proper. See id.

On appeal, the plaintiffs argue that RSA 508:4-b, I, as applied to them,
deprives them “of due process under the state access to the courts provision in
the New Hampshire Constitution because it deprives [them] of a right to a
remedy.” We interpret this as an argument that applying RSA 508:4-b, I, to
their claims deprives the plaintiffs of their right to a remedy under Part I,
Article 14 of the State Constitution. To the extent that the plaintiffs may have
intended to make a different argument under the State Constitution, we
conclude that they have failed to develop it sufficiently for our review. See
Lennartz v. Oak Point Assocs., 167 N.H. 459, 464 (2015).

The plaintiffs assert only an as-applied challenge to RSA 508:4-b, I. As
such, their challenge “concedes that RSA 508:4-b, I, may be constitutional in
many of its applications, but contends that it is not so under the particular
circumstances of this case.” Id. at 462 (quotation and brackets omitted). “The
constitutionality of a statute involves a question of law, which we review de
novo.” Id. “Further, we presume statutes to be constitutional and we will not
declare one invalid except upon inescapable grounds.” Id.

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 RSA 508:4-b, I, provides:

Except as otherwise provided in this section, all actions to
recover damages for injury to property, injury to the person,
wrongful death or economic loss arising out of any deficiency in the
creation of an improvement to real property, including without
limitation the design, labor, materials, engineering, planning,
surveying, construction, observation, supervision or inspection of
that improvement, shall be brought within 8 years from the date of
substantial completion of the improvement, and not thereafter.

RSA 508:4-b, I, is a statute of repose. Big League Entm’t v. Brox Indus., 149
N.H. 480, 484 (2003). Unlike a statute of limitations, which generally begins to
run at the time of injury or discovery of the injury, a statute of repose usually
begins to run at the time of a defendant’s act. See id. at 483. Thus, statutes of
repose “extinguish a cause of action after a fixed period of time regardless of
when the action accrues, potentially barring a plaintiff’s suit before there has
been an injury or before the action has arisen.” Id.

“RSA 508:4-b functions as a statute of repose because it begins to run
from the date of substantial completion of the improvement, wholly
independent of any accrual of the cause of action.” Id. at 484 (quotation
omitted). Moreover, “the legislative findings and purpose clearly demonstrate
that the purpose of the statute is to relieve potential defendants from infinite
liability perpetuated by the discovery rule.” Id.; see Rankin v. S. St. Downtown
Holdings, 172 N.H. 500, 508 (2019); Laws 1990, 164:1.

We have held that a plaintiff must comply with both the statute of repose
and the applicable statute of limitations. Big League Entm’t, 149 N.H. at 484.
Thus, in a case involving a three-year statute of limitations, we “conclud[ed]
that the plaintiff’s claim must have been filed within three years of the accrual
of the cause of action but no later than eight years after substantial completion
of the project.” Id.

Part I, Article 14 of the State Constitution provides:

Every subject of this state is entitled to a certain remedy, by having
recourse to the laws, for all injuries he may receive in his person,
property, or character; to obtain right and justice freely, without being
obliged to purchase it; completely, and without any denial; promptly, and
without delay; conformably to the laws.

“The purpose of this provision is to make civil remedies available and to guard
against arbitrary and discriminatory infringements upon access to courts.”
Huckins v. McSweeney, 166 N.H. 176, 180 (2014). “The right to a remedy is
not a fundamental right, but is relative and does not prohibit all impairments

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of the right of access.” Id. (quotation omitted). Moreover, “Part I, Article 14
does not guarantee that all injured persons will receive full compensation for
their injuries.” Id. (quotation omitted). Part I, Article 14 “is basically an equal
protection clause in that it implies that all litigants similarly situated may
appeal to the courts both for relief and for defense under like conditions and
with like protection and without discrimination.” Id. at 181 (quotation
omitted). Accordingly, “we have addressed alleged violations of a litigant’s right
to a remedy and to equal protection by engaging in a single analysis.” Id.

In Lennartz and Winnisquam Regional School District v. Levine, 152 N.H.
537 (2005), we upheld RSA 508:4-b, I, against constitutional challenges similar
to those in this case. In Lennartz, the construction at issue was substantially
completed in November 2003; the plaintiff was injured six years later; and she
filed a negligence action three years after she was injured (nine years after the
construction was substantially completed). Lennartz, 167 N.H. at 461. The
plaintiff argued that “the trial court erred in concluding that RSA 508:4-b, I,
did not violate her rights to equal protection and to a remedy under the New
Hampshire Constitution.” Id. at 462. The plaintiff asserted that the statute of
repose is unconstitutional “because it barred her accrued cause of action
without application of the discovery rule.” Id. Addressing her arguments in a
single analysis and applying our intermediate scrutiny test, we upheld the
constitutionality of RSA 508:4-b, I, because it bears a substantial relationship
to its admittedly important governmental objective, to prevent potentially
infinite liability in the building industry. Id. at 462-63.

Lennartz was based in large part on Levine. In that case, the defendant
completed substantial construction of a replacement roof in the spring of 1992.
Levine, 152 N.H. at 538. Structural problems with the roof were discovered in
2001. Id. The plaintiff school district filed suit thereafter. Id. The trial court
denied the defendant’s motion to dismiss on statute of repose grounds, ruling
that the statute of repose was unconstitutional. Id. In response to the
defendant’s appellate arguments, the school district argued that the eight-year
period in the statute is inherently unreasonable because it eliminates a cause
of action before the wrong given rise to it can be discovered. Id. We construed
the school district’s argument as an equal protection argument. Id. In
rejecting it, we applied our then-current test for intermediate scrutiny, and
concluded that “[t]he legislature’s rationale for conferring upon the building
industry a limited period of time in which a claim could be brought is
reasonable, not arbitrary, and bears a fair and substantial relationship to the
legislative purpose” of the statute, which is to “protect[ ] the building industry
from infinite liability.” Id. at 540; see Lennartz, 167 N.H. at 463 (identifying the
test we applied in Levine).

In the instant appeal, the plaintiffs argue that Lennartz is not dispositive
because, there, the plaintiff’s “claim and damages” had “fully accrued several
years before she filed a lawsuit, and well within the period set forth in the

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statute of repose.” By contrast, the plaintiffs contend, they “were still
investigating their claims . . . when . . . the statute of repose expired.”
However, the very nature of a statute of repose is to extinguish a cause of
action after a set period of time, regardless of when it accrues, and the
legislative purpose of the statute is to relieve potential building trade
defendants from “infinite liability perpetuated by the discovery rule.” Big
League Entm’t, 149 N.H. at 483, 484. Accordingly, we fail to see how the
allegation that the plaintiffs were still investigating their claims when the
statute of repose expired renders its application to those claims
unconstitutional.

The plaintiffs contend that Levine is distinguishable because, in that
case, we “did not address the constitutional challenge being asserted here —
that the statute of repose denies [them] a right to a remedy.” As previously
explained, however, because Part I, Article 14 “is basically an equal protection
clause . . . , we have addressed alleged violations of a litigant’s right to a
remedy and to equal protection by engaging in a single analysis.” Huckins,
166 N.H. at 181 (quotation and citation omitted). Thus, although we analyzed
the arguments in Levine under the equal protection clause of our State
Constitution, Levine applies to the plaintiffs’ right-to-a-remedy claim.

To support their arguments, the plaintiffs rely upon cases from other
jurisdictions. To the extent that they urge us to overrule Lennartz and Levine
and adopt the rule from those jurisdictions, we decline their invitation. See
Jacobs v. Director, N.H. Div. of Motor Vehicles, 149 N.H. 502, 504-06 (2003).

“The doctrine of stare decisis demands respect in a society governed by
the rule of law, for when governing legal standards are open to revision in every
case, deciding cases becomes a mere exercise of judicial will with arbitrary and
unpredictable results.” Id. at 504 (quotations omitted). “[W]hen asked to
reconsider a holding, the question is not whether we would decide the issue
differently de novo, but whether the ruling has come to be seen so clearly as
error that its enforcement was for that very reason doomed.” State v. Quintero, 162 N.H. 526, 539 (2011) (quotation omitted). Thus, we will overturn a
decision only after considering: (1) whether the rule has proven to be
intolerable simply by defying practical workability; (2) whether the rule is
subject to a kind of reliance that would lend a special hardship to the
consequence of overruling; (3) whether related principles of law have so far
developed as to have left the old rule no more than a remnant of abandoned
doctrine; and (4) whether facts have so changed, or come to be seen so
differently, as to have robbed the old rule of significant application or
justification. Id. at 532-33. Although these factors guide our judgment, no
single factor is wholly determinative, because the doctrine of stare decisis is not
one to be either rigidly applied or blindly followed. Id. at 533. Having failed to
brief any of the four stare decisis factors, the plaintiffs have not persuaded us

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that our decisions in Lennartz and Levine should be overruled. See Ford v.
N.H. Dep’t of Transp., 163 N.H. 284, 290 (2012).

Affirmed.

HICKS, BASSETT, HANTZ MARCONI, and DONOVAN, JJ., concurred.

Timothy A. Gudas,
Clerk

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