In Stoneledge at
Lake Keowee Owners' Assoc., Inc. v. IMK Dev. Co., LLC, No. 2015-000417,
2018 WL 4905772, at *1 (S.C. Ct. App. Oct. 10, 2018), the South Carolina Court
of Appeals affirms the trial court’s decision to deny a request for a directed
verdict and allow the jury to determine whether or not the claims were
time-barred.
In 2002, a developer
began construction on a townhouse community on Lake Keowee. A few of the units
were sold in 2003, but the majority went unfinished and unsold. In 2005, a few
of the existing homeowners complained about leaks around their porches. There
was also visible damage to the exterior of a few of the unfinished and unsold
units.
During the spring of
2009, the developer began receiving numerous complaints regarding leaks around
the decks and porches. Some homeowners also noticed water running through the
crawl-space of their homes during heavy rains. The HOA completed destructive
testing on the porches and decks and found significant damage. The HOA also
found hidden rot caused by water intrusion to structural columns. In February
2010, the HOA filed an action against the developer on behalf of all homeowners.
Under South Carolina
law, a cause of action for negligence must be brought within three years. The
three-year statute of limitations begins to run when the underlying cause of
action reasonably ought to have been discovered. The test for whether the injured
party is aware of the action turns on whether the circumstances of the case
would put a person of common knowledge and experience on notice that some right
of his has been invaded, or that some claim against another party may exist.
The issue in this case was whether or not the homeowners were “aware” of the
defects in 2005, when the first complaints were made, or, whether the defects
were latent and not truly discoverable until 2009 when the destructive testing
was completed by the HOA.
The trial court judge
denied the developer’s request for a directed verdict. The judge ruled that
there was disputed evidence on when the defects were discoverable and the issue
was to be determined by the jury. The developer appealed, arguing that the tacit
admission by some of the homeowners that they were aware of some leaks in 2003
should have been enough to dismiss the claims. The South Carolina Appeals Court
disagreed.
While noting that the
first complaints were made around 2005, the HOA presented competent evidence
that the defects were hidden by stone veneers and exterior walls and could not
be seen without destructive testing. Because the HOA presented evidence that
the latent defects could not have been discovered through the exercise of
reasonable diligence until 2009, the issue as to when they were discoverable was
a question that was required to be submitted to the jury.
