Opinion
No. 340.
Argued June 5, 1969. —
Decided June 27, 1969.
APPEAL from a judgment of the circuit court for Milwaukee county: LEANDER J. FOLEY, JR., Circuit Judge. Affirmed.
For the appellant there were briefs by Robert P. Russell, corporation counsel, and James J. Bonifas, deputy corporation counsel, and oral argument by Mr. Bonifas.
For the respondents there was a brief by Niebler Herro, attorneys, and Chester J. Niebler of counsel, all of Menomonee Falls, and oral argument by Chester J. Niebler.
The critical facts in this matter are undisputed. Milwaukee County, appellant, and Schmidt, Garden Erikson, a Chicago architectural firm, respondents, entered into a written contract on April 6, 1949, for architectural services.
Among other provisions the contract provided that respondents were to (1) prepare plans and specifications for an addition to Milwaukee County General Hospital, (2) exercise general supervision of construction, (3) interpret plans and specifications, (4) issue certificates of payment, (5) keep accounts, and (6) assume general administration of the work.
Upon completion of specifications and general working drawings, architectural fees equaling 75 percent of the commission rate, based upon estimated costs, became due. The remaining 25 percent was to be paid from time to time during the execution of the work with the amount thereof computed upon final cost of work.
In July, 1949, respondents, with appellant's approval, associated with Brust Brust, Milwaukee architects, and the latter by written agreement assumed complete charge of architectural supervision and undertook other responsibilities for which they were to receive 20 percent of the fee paid respondents. Final payment was to become due upon completion of the project.
In June, 1957, the structure was approximately 99.5 percent complete and appellant had taken partial occupancy. On or about August 25, 1957, the building was open to visitors. At this time, operating and recovery rooms of the new addition were in use and had been in use since November 13, 1956. The dietary department and cafeteria opened December 19, 1956; the morgue in January, 1957; first aid in February, 1957; X ray in March, 1957; physiotherapy in April, 1957; and medical records in May, 1957. Resident patients, however, were still confined to the old hospital.
As of December 17, 1957, final certificates of payment had been issued to all contractors except the heating contractor. On October 4, 1957, $541,726.71 had been paid out to the heating contractor but a balance of $2,000 was withheld. The final certificate of payment for $2,000 was not issued to the heating contractor until March 23, 1959.
Beginning in the latter part of 1957 and continuing throughout 1958, the parties corresponded frequently regarding deficiencies. In October, 1957, appellant submitted a list of 32 deficient items to respondents. One of these related to heating. In April and November, 1958, appellant informed respondents that the heating was unacceptable. Ultimately the heating contractor was requested to check the heating and to balance the heating system in certain sections. On March 20, 1959, the contractor informed the associate architect that all outstanding items relating to heating had been completed. Thereafter, on March 23, 1959, the final certificate of payment was issued to the heating contractor. The next day, March 24, 1959, respondents submitted their invoice for final payment of the balance due for architectural fees. In total, respondents received approximately $598,000.
On March 18, 1965, this action was commenced against respondents by service of summons. On April 2, 1965, a complaint was served. That complaint alleged in part as follows:
"7. Notwithstanding the defendants' knowledge, skill and experience, they prepared and furnished plans and specifications which were defective in failing to provide adequate heating for the addition. As a result, substantial areas of the hospital addition were underheated and incapable of occupancy either by patients or personnel. Heating was so inadequate that water service pipes in various areas froze and it became necessary to introduce supplemental heating and other temporary measures to prevent excessive infiltration of cold air. Notwithstanding the efforts exerted by plaintiff to alleviate the conditions, heating and temperature control was inadequate.
"8. Upon information and belief, the defendants, in their performance of the contract:
"(a) Failed to calculate heat losses based upon windows installed in conformity with the drawings, plans and specifications.
"(b) Prepared and furnished drawings, plans and specifications which prescribed air units heating coils improperly sized for capacity and which did not provide final air temperature specified.
"(c) Prepared and furnished plans and specifications which prescribed a system of circulation in which pumps were to connect with common supply and return headers, thereby establishing a common system pressure drop precluding attainment of the pumping conditions in the individual zones, as required by plans and specifications.
"(d) Prepared and furnished plans and specifications which failed to provide for installation of:
"i. Expansion joints in erection of exterior brick walls.
"ii. Exhaust fans generating sufficient heat and capacity to properly purge laboratory fume hoods.
"iii. Windows in air-conditioned surgical areas requiring sterile conditions adequate and sufficient to provide and maintain such sterile conditions.
"iv. An emergency electrical generator independent in its operation of the central source of supply; that the plans and specifications should have provided for installation of an independent self-sustaining electrical emergency generator.
"9. As a result of the defendants' failure to prepare and furnish adequate and sufficient drawings, plans and specifications and to properly and efficiently supervise and inspect construction, all in breach of its contract, the hospital addition was not fit and suitable for the purpose for which it was designed and erected, and plaintiff was, and will in the future be, required to expend substantial sums of money to remedy the defects. Notwithstanding these deficiencies resulting from the defendants' activities, they issued certificates of payment to various contractors engaged in the construction of the addition.
"10. Upon information and belief the defendants in the preparation of drawings, plans and specifications and inspection and supervision of construction work failed to exercise due diligence and skill and due to their breach of the duties assumed by them, pursuant to the contract provisions and arising from their status as professional architects and engineers, the plaintiff has already expended $74,000.00 to remedy defects and will be required to expend an additional $507,000.00 and accordingly has sustained damages in the amount of $581,000.00."
Respondents answered, demurred, and set up as an affirmative defense and as grounds for demurrer the statute of limitations. The issue of limitations was tried to the court and judgment was entered dismissing plaintiff-appellant's complaint on its merits on the ground that the cause of action was barred by sec. 893.19(5), Stats., which reads as follows:
"893.19 Within 6 years; . . .
". . .
"(5) An action to recover damages for an injury to property, or for an injury to the character or rights of another, not arising on contract, except in case where a different period is expressly prescribed."
The county of Milwaukee appeals from that judgment.
This appeal turns on the answer to a single question: On March 18, 1959, six years prior to the commencement of this action, had the statute of limitations started to run on such action against the plaintiff?
The trial court correctly saw this as the lone issue in this controversy and in holding that sec. 893.19(5), Stats., rather than sec. 893.19(3), applied in this matter, the trial court necessarily concluded that the cause of action was not in contract but in tort. Since either subsection invokes a six-year statute of limitation, the crucial inquiry must be as to from which event the statute of limitations started to run and this, in turn, depends on the nature of the action.
The trial court, as the respondents here now contend, regarded the cause of action as being in tort, namely, malpractice. The trial court concluded that "[t]he cause of action either arises from an act of omission in design or an act of omission in the supervision of the construction."
If respondents are correct that plaintiff's cause of action is in tort and as in malpractice the cause of action accrues when the injury caused by the professional malpractice occurs, as distinguished from when the injury is discovered at a later date, then the cause of action would seem to have accrued well before the critical date here, March 18, 1959.
McCluskey v. Thranow (1966), 31 Wis.2d 245, 142 N.W.2d 787. See also Reistad v. Manz (1960), 11 Wis.2d 155, 105 N.W.2d 324 (physicians); Peppas v. Marshall Ilsley Bank (1957), 2 Wis.2d 144, 86 N.W.2d 27 (banking); Suskey v. Davidoff (1958), 2 Wis.2d 503, 87 N.W.2d 306 (physicians and surgeons).
Appellant's only argument that its cause of action, if in tort, survives the six-year statute, is that the respondents committed an act of professional malpractice when they issued the final certificate for the heating contract on March 23, 1959 (such date being later than the crucial date of March 18, 1959). We agree with respondents that the issuance of this certificate was merely an "administrative" act.
Attached to the certificate of payment was a sworn contractor's statement indicating that the contractor had completed his contract as of January 31, 1959. There was nothing for the architects to do but confirm that completion, which they did. Moreover, respondents correctly contend that even if the issuance of that certificate were a "supervisory" act, there was no allegation in the complaint that such act was in any way improper; this follows from the fact that in the complaint there is no allegation of improper supervision on or after March 18, 1959, and the design (plans and specifications) was completed long before March 18, 1959.
We must necessarily conclude that, to the extent that plaintiff's complaint states a cause of action in tort, that action is barred by the statute of limitations, sec. 893.19 (5), Stats.
But on demurrer we must search to see whether plaintiff states any cause of action. Here, plaintiff vigorously contends that the county has properly pleaded a cause of action for breach of contract and that the six-year statute of limitations began running at a later date and the county is not barred by that statute.
In Klingbeil v. Saucerman, this court held that malpractice could sound either in tort or contract. We said:
(1917), 165 Wis. 60, 160 N.W. 1051.
". . . It was stated in Frechette v. Ravn [ 145 Wis. 589, 130 N.W. 453] that an action in tort for' malpractice was `plainly one to recover damages for injuries to the person.' Why? Because defendant's conduct resulted in an injury to the person of plaintiff. If it did so because of the tort, which consisted in a breach of duty created by law, it is difficult to see why it does not do so when the same identical conduct produces the same identical result, though the complaint charges the breach of a duty created by contract between the parties instead of the breach of a duty created by law. Damages may flow from the breach of both duties, and likewise an injury to the person may result from the breach of a contract as well as from a tort. Where, as in malpractice, there is an option to sue in tort or on contract, each cause of action is grounded upon the same identical acts of the defendant, namely, his failure to exercise the proper skill or care, or both. The very same conduct gives plaintiff his option as to remedies." (Emphasis added.)
Id. at pages 61, 62. See also Frechette v. Ravn (1911), 145 Wis. 589, 130 N.W. 453.
More recently, in Suskey v. Davidoff, this court recognized that an action for malpractice could sound in tort or in contract. Citing the Klingbeil Case, the court provided that:
Supra, footnote 1.
". . . The two-year notice requirement was applicable to an action in malpractice . . . whether sounding in tort or in contract for breach of implied agreement to treat with proper skill and care." (Emphasis added.)
Id. at page 505.
In reviewing the complaint, particularly paragraphs 9 and 10, in light of Klingbeil and Suskey, it appears that the plaintiff county has indeed alleged a cause of action in contract. In Klingbeil we held that a malpractice action in tort or in contract is grounded upon the "identical acts of the defendant." Those acts of defendant are described in the complaint by phrases such as "all in breach of its contract," and "failed to exercise due diligence and skill and due to their breach of the duties assumed by them, pursuant to the contract provisions."
Then too, in Frechette, this court, while attempting to determine whether a malpractice action sounded in tort or in contract, looked to see whether the damages sought were recoverable in contract or in tort. In that case the court stated:
Supra, footnote 3.
". . . Damages are asked for mental pain and suffering as well as for the injury to the hands and arms. . . . Such damages are hardly recoverable in an action on contract."
Id. at page 591.
In the instant case, the complaint alleges that:
". . . the plaintiff has already expended $74,000.00 to remedy defects and will be required to expend an additional $507,000.00 and accordingly has sustained damages in the amount of $581,000.00."
Such damages are recoverable in a contract action.
But even assuming that the complaint states a cause of action in contract, when does the statute of limitations begin to run?
Appellant cites Krueger v. V. P. Christianson Silo Co. as its only authority for the proposition that its cause of action did not accrue nor did the statute of limitations begin to run until respondents completed their contract by issuing the certificate of payment on March 23, 1959.
(1932), 206 Wis. 460, 240 N.W. 145.
In Krueger, this court stated:
". . . If defendant failed to build the silo in a substantial and workmanlike manner as required by that contract, the breach occurred on or about September 1, 1920, when defendant completed the erection of the silo. Plaintiff's cause of action arose at that time, and the statute of limitations commenced to run from that time even though plaintiff did not know of the breach."
Id. at page 462.
Such language, standing alone, appears to support the contention of appellant. However, the Krueger court went on to quote from Ott v. Hood,
(1913), 152 Wis. 97, 100, 101, 139 N.W. 762.
"`A cause of action on contract, whether for damages or otherwise, commences to run from the time of the breach, whether the facts are known to the party having the right or not, and if the latter, whether through ignorance, neglect, or mistake of such party or fraud of his adversary. There is no exception (citing cases).
"`The inexorable nature of our statutes of limitations is most emphatically illustrated by Pietsch v. Milbrath, 123 Wis. 647, 101 N.W. 388, 102 N.W. 342, and, in effect, by all the other cited cases, by use therein of this language from Bank of Hartford County v. Waterman, 26 Conn. 324, 330: "Ignorance of his rights on the part of a person against whom the statute has begun to run will not suspend its operation. He may discover his injury too late to take advantage of the appropriate remedy. Such is one of the occasional hardships necessarily incident to a law arbitrarily making legal remedies contingent on mere lapse of time."'" (Emphasis added.)
Supra, footnote 8, at pages 462, 463.
Thus, in a breach of contract case, a cause of action accrues and the statute of limitations begins to run from the moment the breach occurs. If this be so, then, in the instant case, appellant's action is barred even though in contract. Any defect in design of the building took place long before March 18, 1959. Any failure to properly supervise and inspect also took place prior to March 18, 1959. Attached to the final certificate of payment issued on March 23, 1959, is a sworn statement of the contractor which indicates that work on the heating system had been completed on January 31, 1959. Thus the work which respondents would be expected to supervise and inspect was completed before March 18, 1959. The only act performed by respondents after March 18, 1959, was the issuance of the final certificate of payment on March 23, 1959. This act did not amount to an act of supervision or inspection.
By the Court. — Judgment affirmed.