M.G. Longstreet, LLC v. James Hardie Building Products, Inc.

Background

M.G. Longstreet owns three multifamily apartment buildings known as the Arbor Glen Apartments. In 2002, it purchased James Hardie’s Sentry fiber-cement siding, which came with a 25-year express limited warranty. The warranty stated that, when properly used, installed, and maintained, the siding would remain non-combustible, resist hail and termite damage, and not crack, rot, or delaminate. It provided replacement or specified reimbursement as the exclusive remedy and disclaimed all other express or implied warranties.

Inspections in 2015 and 2016 identified delaminating paint, siding, and broken siding corners. M.G. Longstreet submitted a warranty claim on December 2, 2016. James Hardie offered $86,000, calculated under the warranty’s formula, but refused to pay a later remediation estimate totaling $1,035,715. M.G. Longstreet replaced the siding in late summer 2019 and alleged that additional damage was discovered during removal. It later filed this action, asserting six counts.

Legal standard

James Hardie moved to dismiss under Rule 12(b)(6), which tests whether the complaint states a legally sufficient claim. The court generally accepted the complaint’s factual allegations as true and considered whether they plausibly supported relief. Because the statute of limitations is ordinarily an affirmative defense, dismissal on that basis was proper only if the time bar appeared on the face of the complaint.

Analysis

Count I: Breach of express warranty

The court held that the express limited warranty was a warranty of future performance. The warranty referred to a 25-year period and promised that the siding would continue to meet specified conditions during that period. The court rejected the argument that the warranty’s replacement-and-reimbursement remedy changed its legal character; the remedy and the type of warranty were separate issues.

For a warranty of future performance, the claim accrues when the breach is or should have been discovered. The complaint identified several possible accrual dates, including James Hardie’s offer of $86,000, its refusal to pay the remediation estimate, and events during the siding replacement. Because the complaint did not establish a single accrual date that made the claim untimely, the court denied the motion to dismiss Count I. The court did not decide the ultimate merits of that claim.

Count II: Negligence

The court granted the motion to dismiss Count II. M.G. Longstreet alleged that James Hardie owed duties concerning the siding’s design, manufacture, marketing, and performance. The court found that M.G. Longstreet cited no authority establishing those duties independently of the contract. Because the only alleged duties arose from the parties’ contract, the negligence claim failed as a matter of law.

Counts III and IV: Implied warranties

The court granted the motion to dismiss Counts III and IV. The express warranty conspicuously disclaimed implied warranties of merchantability and fitness for a particular purpose. The court also noted that these claims were time-barred because implied-warranty claims accrued upon delivery, and the siding was purchased between February and June 2002.

Counts V and VI: Minnesota statutory claims

The court granted the motion to dismiss Counts V and VI, claims under Minnesota’s Unlawful Trade Practices Act and False Statement in Advertising Act. It held that the six-year limitations period began on the dates of sale, which occurred between February and June 2002. The court rejected M.G. Longstreet’s argument that alleged intentional misrepresentations delayed the limitations period because the complaint did not factually establish fraudulent concealment. The siding had remained in M.G. Longstreet’s possession, and generalized allegations were insufficient.

Disposition

The court ordered that James Hardie’s motion to dismiss was GRANTED IN PART, AND DENIED IN PART: it GRANTED the motion to dismiss Counts II–VI and DENIED the motion to dismiss Count I.