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Scully v. First Magnolia Homes Inc.

The 6-year statute of limitation under O.C.G.A. § 9-3-24 for simple written contracts did not begin to run on the plaintiffs' negligent construction suit arising out of the use of synthetic stucco in the construction of their home until closing, since the home was owned by the builder at the time of substantial completion.

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This appeal arises from a suit alleging that the appellees negligently installed synthetic stucco siding on appellants Kelly and Mark Scully’s home. The Scullys appeal the affirmance of the grant of summary judgment in favor of appellee First Magnolia Homes and its president Henry Burns, arguing that the Court of Appeals erred by concluding that their claims for breach of contract and negligence were barred by the applicable statutes of limitation. As explained below, we conclude that the Court of Appeals incorrectly held that the statute of limitations for the Scully’s breach of contract claim commenced running when a purchase and sale agreement was executed, rather than when the sale was closed. The Court of Appeals, however, correctly held that the statute of limitations for the Scully’s tort claim commenced running when the Scullys, through the exercise of reasonable diligence, should have discovered that their home was being damaged due to defective synthetic stucco siding. Accordingly, we reverse in part and affirm in part. On September 8, 1996, the Scullys entered into a New Construction Purchase and Sale Agreement with First Magnolia to purchase a model home that had already been constructed. The sale closed on October 10, 1996.

Within a year of moving into the home, the Scullys became aware through media accounts that faulty stucco siding installed on homes such as theirs was causing moisture damage to houses. In November 1997, the Scullys asked a real estate agent, their neighbor Pamela Gebhart, whether they should be concerned about the stucco siding on their house and whether it should be replaced. Gebhart replied that in her opinion, concerns about faulty stucco installation and resulting moisture damage, though not entirely baseless, were exaggerated at that time.

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