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N.C. Supreme Court: GrailCoat Must Honor SuperFlex Warranty

Overturning a trial judge and a divided Court of Appeals, the North Carolina Supreme Court has ruled that the maker of a home-siding finish must honor its full 20-year warranty.

Earlier rulings had sided with defendant GrailCoat, which claimed that North Carolina’s six-year statute of repose barred the plaintiffs’ attempt to enforce the longer warranty. The state Supreme Court, however, found that by contracting for a period that exceeded the repose, GrailCoat waived the statute’s protections.

WBM represented the plaintiffs in the case. George and Deborah Christie in 2004 had decided to custom build a home, with contractor Hartley Construction suggesting that the Christies considering using SuperFlex, a GrailCoat exterior cladding system for their siding. SuperFlex is marketed to be “fully warranted for 20 years to not crack, craze, fatigue or delaminate from the substrate.”

Several years later, the Christies noticed cracks and blistering in the SuperFlex, with moisture rotting their home’s siding, compromising its structural integrity. In April 2011, the Christies notified GrailCoat of the problem. The company offered to replace the SuperFlex, but wouldn’t pay for installation or any damage from the moisture. The Christies filed suit that October.

A trial judge and a split Court of Appeals agreed with GrailCoat that the state’s statute of repose bars cases “arising out of the defective or unsafe condition of an improvement to real property” after six years. Writing for the Supreme Court, Justice Bob Edmunds said that GrailCoat had “bargained away the protections of the statute of repose” when it “knowingly and freely” entered into a contract with the Christies that provided for a 20-year warranty. “That warranty stands in its entirety,” Edmunds wrote.

WBM partner Scott Harris praised the ruling. “This is a great result for homeowners/consumers in North Carolina and should ensure that manufacturers cannot offer long-term warranties to induce purchase and then state that statute of repose insulates them from liability for not complying with those warranties,” he said.

The opinion can be found here.