Ala. Teachers Credit Union v. Design Build Concepts, Inc. (334 F. Supp. 3d 1171, 2018)

KARON OWEN BOWDRE, CHIEF UNITED STATES DISTRICT JUDGE

Rain drops kept falling on their heads ... or at least leaking through the roof, ceilings, and walls of the building that the Defendant's predecessor designed and constructed. Yet Alabama Teachers Credit Union patiently endured ten years of water torture before finally seeking legal relief from its soggy dilemma. Ten years of rain showers, leaking into ATCU's building, with every drop serving as a reminder to ATCU of the Defendants' alleged failure to mop up the situation. Now, the mop has been handed to the court, albeit a little too late.

Before the court is Design Build/IBT LLC's ("IBT") Motion for Summary Judgment (doc. 78); Plaintiff Alabama Teachers Credit Union's Motion to Strike IBT's motion for summary judgment (doc. 83); ATCU's Motion to Strike IBT's Reply in Support of Summary Judgment (doc. 97); and ATCU's Motion for Leave to File a third Amended Complaint (doc. 82).

ATCU and IBT submitted a "Joint Proposed Plan for Initial Limited Discovery" in this case on June 20, 2017, which the court adopted on June 26, 2017. (Docs. 56, 57). As agreed in the joint plan, the court's order limited discovery to issues related to IBT's affirmative defenses and an asset purchase agreement between IBT and Design Build Concepts, Inc. After IBT filed its motion for summary judgment on September 15, 2017, ATCU filed motions to strike IBT's motion for summary judgment and IBT's reply brief in support of summary judgment, arguing that IBT's briefings exceeded the limited scope of discovery. (Docs. 83, 97). ATCU's motion for leave to file a third amended complaint arises from its alleged discovery of evidence that IBT fraudulently suppressed material information regarding design flaws in ATCU's building. The motion seeks to add a ninth count of fraudulent suppression.

As explained below, the court will DENY ATCU's motion to strike IBT's motion for summary judgment (doc. 83); DENY its motion to strike IBT's reply brief (doc. 97); DENY ATCU's motion to file a third amended complaint (doc. 82), and will GRANT summary judgment in favor of IBT on all counts.

I. FACTUAL BACKGROUND

The Construction and Completion of the Building

On April 17, 2003, Plaintiff Alabama Teachers Credit Union and Design-Build Concepts, Inc. (a Georgia corporation) entered into a Program Services Agreement for DBC to design and construct a building for ATCU in Gadsden, Alabama. (Doc. 80-2). The agreement contained two warranties that began to run the date on which the building's "Certificate of Substantial Completion" was issued.

More specifically, the one-year warranty provided that "all materials and component parts used in the construction of the [building] will be free from defects under normal use and service and all workmanship will be within tolerances normally accepted in the industry. If a defect occurs, DBC ... will repair, replace or pay the Owner the reasonable cost of repairing or replacing the defective item(s)." The four-year warranty provided that "DBC will correct or repair any Major Structural Defects in the [building]," meaning "those defects in the materials or workmanship that reduce the stability, safety, or structural integrity of the [building] below acceptable standards or restrict the normal intended use of all or a part of the [building]." (Id. at 3).

ATCU moved into the building in January 2006, and the Certificate of Substantial Completion was issued on March 6, 2006. (Doc. 80-4). However, items remaining to be completed on the February 28, 2006, punch list included roof leaks and water intrusion damage. (Doc. 80-9).

IBT's Purchase of DBC's Assets

On July 31, 2007, IBT purchased substantially all of DBC's assets and assumed some of its liabilities pursuant to an asset purchase agreement-a deal ATCU alleges was a de facto merger. (Doc. 25-1). On August 3, 2007, Jim Givan (DBC's president) and Mylle Mangum (CEO of IBT Enterprises) sent a letter to Ron Summerall (president of ATCU) announcing that DBC had "reached an agreement to merge" with IBT Enterprises. (Doc. 85-5 at 58). The letter assured Mr. Summerall that the DBC team would continue to provide services to ATCU and would work with ATCU as in the past.

Then, on April 25, 2008, Mr. Givan sent Mr. Summerall a second letter, advising him that DBC had "merged capabilities with IBT Enterprises, LLC," had "transferred to Design Build Concepts/IBT, LLC all its assets as of July 31, 2007, and [would] conduct business in that name going forward." (Doc. 85-5 at 59). The letter further stated that IBT would "remain the surviving entity, continuing performance under your [Program Services] Agreement." Last, the letter explained the Program Services Agreement "contemplates [that ATCU's] consent to the transfer of substantially all of DBC's assets may be required, as such transfer under the Agreement may constitute an assignment." Mr. Summerall signed the letter, DBC's officers and employees continued working for IBT after the asset purchase in the same capacities as before, IBT continued using the "DBC" name on its website, and IBT operated out of DBC's former office. (Doc. 84 at 11, 24).

Problems Continue with ATCU's Building

Aside from the initial leaks indicated on the February 2006 punch list, ATCU discovered more leaks and subsequent damage within four to six months after moving into the building. (Doc. 85-3 at 17). ATCU notified DBC of the problems, and DBC began making site visits to attempt to repair the defects. (Id. at 28). Thus began a long cycle of ATCU experiencing water intrusion damage, and DBC's (and later, IBT's), fruitless assurances and efforts to solve the problems. The record is sparse regarding DBC's and IBT's efforts to repair the building between 2006 and 2010, so ATCU's case centers on the events described below.

IBT's Chief Operating Officer, Mr. Lock, wrote Mr. Summerall on November 30, 2010, acknowledging five years of failed attempts to repair the leaks in ATCU's building. (Doc. 80-15). On December 8, 2010, Mr. Lock notified Mr. Summerall that he planned to obtain a quote from a roofing company to inspect the building's roofing membrane and flashing system, and to make any necessary repairs or adjustments. (Doc. 80-16). His email assured ATCU that IBT would "get to the bottom of the problem and bring this to a final resolution once and for all." (Doc. 80-15). Mr. Lock also told ATCU that if the leaks continued after the repairs or replacement of the membrane, IBT would continue searching for the source of the problem and solve it. (Doc. 85-13).

Approximately two weeks later, Mr. Lock wrote Mr. Summerall again with an update on the status of obtaining quotes to remove and replace the roof pavers and to inspect or replace the roofing membrane. (Doc. 80-17). He suggested the work would begin at the beginning of 2011. However, as of Mr. Lock's February 24, 2011, email to ATCU, the work still had not been completed. (Doc. 84 at 15-16). The record is unclear as to whether the parties resolved this particular issue, providing only that Mr. Lock followed up on the work on August 25, 2011. (Id. ).

On September 6, 2011, ATCU notified IBT of a new leak that appeared in the building's foyer. (Doc. 85-18 at 3). IBT responded that it would follow up with its client services manager, Billy Cowan. (Id. at 2). Four days later, on September 10, Mr. Cowan notified Mr. Lock that he had scheduled an inspection of the ATCU roof by Fiber-Tite, the roofing manufacturer; GKL Roofing, the original subcontractor that installed the roof and made multiple repairs at IBT's instruction; and Clarks Custom Roofing, whom IBT requested provide pricing for flashing around roof vents. (Doc. 85-19).

On October 31, 2011, Clarks Custom Roofing emailed Mr. Cowan regarding the cost to install drip edge flashing as IBT had requested. (Doc. 85-20). Clarks stated that the building envelope was "badly designed" and the roofing manufacturer, the exterior insulation finishing system ("EIFS") installer, and the roofing installer must have known that the work was unacceptable. Mr. Cowan forwarded the email to his IBT colleagues, but not to anyone at ATCU. (Doc. 85-27 at 3-4). No one at IBT ever revealed this information to ATCU. (Doc. 85-21 at 2-3).

Sometime in 2012, ATCU's loan manager, Mr. Clark, met Mr. Cowan and GKL on-site to discuss various repairs. (Doc. 84 at 18). After that visit, GKL made multiple attempts to repair the building up until sometime in 2015, but no evidence suggests that IBT paid GKL for those visits. IBT alleges that its last site visit occurred sometime in 2012, and its final email correspondence with ATCU occurred no later than February 2013. (Doc. 79 at 11). ATCU alleges that IBT made site visits in February 2013, but the court gleans no evidence supporting that proposition from the emails ATCU submitted. (Docs. 85-23; 85-24).

ATCU alleges GKL's repairs were on behalf of IBT, were according to IBT's instruction, and were an attempt to satisfy IBT's warranty obligations (docs. 84 at 18; 85-24; 85-27). However, Randall Lipscomb, a principal of GKL, testified that DBC hired GKL as the original subcontractor to install the roof at the ATCU building, but GKL never acted or represented itself as DBC's or IBT's agent. (Doc. 80-24 at 1). GKL's communications with IBT ceased sometime in 2013, and Mr. Lipscomb did not communicate with any IBT employee or representative after that time. (Id. at 2).

After direct communications between IBT and ATCU ceased in 2013, the building continued leaking. (Doc. 79 at 12). In late 2015 or early 2016, ATCU retained a building envelope consultant, Stephen Ward & Associates, to inspect ATCU's building to determine the source of the leaks. (Doc. 85-26 at 2). On July 15, 2016, SWA issued a report of its findings and recommendations, which revealed latent defects in the building of which ATCU was unaware. (Doc. 85-25). The report identified, among other defects, a bad EIFS membrane assembly design within the building's walls. The defects were products of the initial design and DBC's construction, so SWA would have discovered them if ATCU had hired the company back in 2007. (Doc. 80-5 at 30). ATCU sent the report to IBT on August 24, 2016, and requested that IBT inspect the building to develop a plan of action to address the defects and to correct the problems that IBT had repeatedly failed to properly repair. IBT did not respond.

ATCU Files Suit

ATCU filed suit against DBC and IBT in the Circuit Court of Etowah County on November 10, 2016, (doc. 1-1 at 6), and Defendants removed the case to this court on December 16, 2016. (Docs. 1-1 at 6; 1). As previously noted, this court dismissed all claims and crossclaims against DBC. Only ATCU's claims against IBT remain, which include breach of contract; negligence; fraudulent misrepresentation; breach of warranty; negligent hiring, training, and supervision; professional negligence; and negligent performance of warranty obligation.

II. STANDARD OF REVIEW

Summary judgment allows a trial court to decide cases when no genuine issues of material fact are present and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56. When a district court reviews a motion for summary judgment, it must determine two things: whether any genuine issues of material fact exist, and whether the moving party is entitled to judgment as a matter of law. Id.

The court must "view the evidence presented through the prism of the substantive evidentiary burden," to determine whether the non-moving party presented sufficient evidence on which a jury could reasonably find for the nonmoving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court must not weigh the evidence and making credibility determinations because these decisions belong to a jury. See id. at 254, 106 S.Ct. 2505.

Further, all evidence and inferences drawn from the underlying facts must be viewed in the light most favorable to the non-moving party. See Graham v. State Farm Mut. Ins. Co. , 193 F.3d 1274, 1282 (11th Cir. 1999). However, the nonmoving party "need not be given the benefit of every inference but only of every reasonable inference." Id. (emphasis added).

The non-moving party "must do more than simply show that there is some metaphysical doubt as to the material fact." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). If the evidence is "merely colorable, or is not significantly probative, summary judgment may be granted." Anderson , 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted).

After both parties have addressed the motion for summary judgment, the court must grant the motion only if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56.

III. DISCUSSION

On June 20, 2017, ATCU and IBT submitted a "Joint Plan for Initial Limited Discovery," which the court adopted in its Order dated June 26, 2017. (Docs. 56, 59). Pursuant to that Order, the parties were to engage in limited discovery "on issues related to Defendant's affirmative defenses (specifically that the claims are time barred) and to the Asset Purchase Agreement" between IBT and DBC. The plan also provided that, following the period of limited discovery, IBT would file a motion for summary judgment "on its affirmative defenses." After IBT moved for summary judgment, ATCU filed a motion to strike the motion, or in the alternative, for leave to conduct additional discovery needed to respond appropriately. (Doc. 83).

As an initial matter, the court will DENY ATCU's motion to strike (doc. 83) because it finds IBT's briefs in support of its motion for summary judgment adequately comply with the Joint Plan. The court is capable of disregarding IBT's arguments to the extent they exceed the plan. Therefore, the court clarifies that its decision in this Memorandum Opinion is based solely on the issues of 1) IBT's affirmative defenses; and 2) successor liability, if any, arising out of its asset purchase agreement with DBC.

In essence, ATCU claims that DBC breached the two companies' Program Services Agreement by failing to properly construct the building; that DBC and IBT breached the Program Services Agreement's warranty provisions by failing to effectively repair the building's defects; that DBC negligently constructed the building; that DBC and IBT were negligent in their attempts to repair the building; and that DBC and IBT fraudulently misrepresented that they would complete or had already completed the required repairs. Again, ATCU asserts that IBT is liable for its own conduct, as well as DBC's, pursuant to the doctrine of successor liability.

As for its affirmative defenses, IBT contends that each of ATCU's claims is untimely-barred either by Alabama's statute of limitations or statute of repose. In response, ATCU argues that IBT should be equitably estopped from asserting the statute of limitations, and the statute of repose does not bar its claims. ATCU further argues that its claims for negligence, breach of contract, and breach of warranty arising out of the defects discovered in 2016 are not untimely because those defects were latent and, consequently, the limitations period regarding those claims did not begin to run until their discovery.

As explained below, the question of successor liability significantly affects the other issues in this case, such as the applicable statute of limitations and repose. Therefore, the court will first address that question, followed by an analysis of IBT's affirmative defenses and ATCU's arguments against the applicability of those defenses. Last, the court addresses ATCU's motion seeking leave to amend its complaint.

A. Whether IBT may be held liable for DBC's conduct (Successor Liability)

ATCU argues that IBT bears liability for DBC's conduct under three exceptions to the general rule of successor non-liability. IBT disagrees, and argues that IBT's purchase of DBC was an asset purchase, which legally shields IBT from successor liability. The parties also disagree as to whether Alabama or Georgia law governs the successor liability issue. Therefore, the court will first address the choice of law question, then apply the appropriate law to the facts to determine whether ATCU may hold IBT liable for DBC's conduct.

IBT maintains that Georgia law governs the question of successor liability because its asset purchase agreement with DBC provides that Georgia law governs the agreement's validity and interpretation. ATCU, on the other hand, focuses on exceptions to the general rule of successor non-liability, and provides Alabama case law showing that a purchaser may be liable for its successor's conduct even when the purchase is legally styled as an asset purchase agreement. Thus, ATCU argues that even if IBT's purchase of DBC constitutes an asset purchase agreement under Georgia law, ATCU may still hold IBT

liable for DBC's conduct under Alabama law-so long as certain factors are present.

A federal court sitting in diversity applies the conflict-of-laws rules of the state in which it sits. Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Therefore, this court must apply Alabama's choice of law rules regarding whether, and under what circumstances, IBT may be held liable for DBC's conduct under the doctrine of successor liability.

To begin, the court notes that Alabama honors choice of law provisions within valid contracts. See Cherry, Bekaert & Holland v. Brown , 582 So.2d 502, 507 (Ala. 1991). Because the asset purchase agreement between IBT and DBC so provides, the court agrees with IBT that Georgia law governs any issues concerning the validity and interpretation of that agreement. However, that finding does not dictate that Georgia law exclusively governs the question of successor liability.

In Alabama, the same state's law that governs the plaintiff's claims against the defendant also governs the question of whether a successor entity may be held liable for its predecessor's conduct-even if the actual business deal between the successor and predecessor is governed by the law of another state. See Am. Nonwovens, Inc. v. Non Wovens Eng'g, S.R.L. , 648 So.2d 565, 567-70 (Ala. 1994). Here, the parties do not dispute that Alabama law governs ATCU's claims against IBT because they arise out of DBC's building contract with ATCU-not out of IBT's purchase agreement with DBC. Therefore, while Georgia law governs the contract by which IBT purchased DBC's assets, "Alabama law governs the question of whether" IBT may be held liable as DBC's successor. Id. at 570.

Alabama law provides scenarios in which Alabama courts should look beyond the form of a purchase agreement and impute the seller's liability to the purchaser. And because ATCU relies on those scenarios to establish successor liability, the court does not need to interpret the asset purchase agreement or make any determination regarding its validity. The court can assume as true IBT's assertion that, under Georgia law, the contract is an asset purchase agreement rather than a merger.

However, the court must determine whether the facts in this case would lead an Alabama court to impute DBC's liability to IBT despite the fact that its purchase of DBC was an asset purchase rather than a merger. Under Alabama law, "where one company sells or otherwise transfers all its assets to another company, the transferee is not liable for the debts and liabilities of the transferor unless (1) there is an express agreement to assume the obligations of the transferor, (2) the transaction amounts to a de facto merger or consolidation of the two companies, (3) the transaction is a fraudulent attempt to escape liability, or (4) the transferee corporation is a mere continuation of the transferor." Prattville Memorial Chapel v. Parker , 10 So.3d 546, 555 (Ala. 2008) (internal quotations omitted).

ATCU argues that IBT is liable for DBC's debts and liabilities because three of these four exceptions apply to IBT's relationship with DBC. As shown below, the court finds that IBT expressly assumed DBC's warranty obligations in existence at the time of the Asset Purchase Agreement. It also finds that IBT is a mere continuation of DBC. The court makes no determination regarding the other two exceptions because the parties only provided New York and Georgia case law regarding the de facto merger theory, and ATCU did not submit any argument for the fraud-based exception.

An express agreement

IBC and DBC executed an asset purchase agreement on July 31, 2007, by which IBT acquired DBC's assets, some of its liabilities, and its goodwill. (Doc. 84 at 10). IBT expressly assumed the liabilities laid out in the asset purchase agreement's "Section 1.2 Assumed Liabilities," which include "(A) accounts payable and accrued expenses ..." and "(B) obligations for warranty or repair work for services provided by DBC to customers of the Business prior to the Effective Date." (Doc. 25-1 at 2-3).

So, the court finds that IBT did assume DBC's obligations for warranty and repair work that DBC was contractually bound to perform at the time the asset purchase agreement was executed. That assumption of liability would allow ATCU to hold IBT liable for failure to meet warranty and repair obligations in effect at the time IBT and DBC executed the asset purchase agreement.

Continuation of the transferor

A second exception to the rule that a transferee corporation generally is not liable for the liabilities of the transferor is if "the transferee corporation is a mere continuation of the transferor." Prattville Memorial Chapel , 10 So.3d at 555. The Supreme Court of Alabama has established that a purchasing corporation is a mere continuation of the selling corporation if

(1) There was basic continuity of the enterprise of the seller corporation, including, apparently, a retention of key personnel, assets, general business operations and even the [seller's] name;

(2) The seller corporation ceased ordinary business operations, liquidated, and dissolved soon after distribution of consideration received from the buying corporation;

(3) The purchasing corporation assumed those liabilities and obligations of the seller ordinarily necessary for the continuation of the normal business operations of the seller corporation; and

(4) The purchasing corporation held itself out to the world as the effective continuation of the seller corporation.

Id. at 555-56 (quoting Turner v. Wean United, Inc. , 531 So.2d 827, 830 (Ala. 1988) (internal quotation marks omitted) (alteration in original) ).

For this "mere continuation" exception to apply, the plaintiff must establish each of the four factors with substantial evidence. Id. at 557. The court now turns to the evidence ATCU submitted in support of each factor.

(1) Basic continuity of enterprise

In support of the first factor, ATCU provides that, after executing the asset purchase agreement, DBC's officers and employees continued working for IBT; IBT operated out of the same office as DBC; IBT purchased all of DBC's assets; and, as of February 20, 2017, IBT still held itself out to the public as "Design Build Concepts" on its website (doc. 85-8). IBT does not dispute any of these facts, and the court finds they tend to show a continuity of the enterprise.

(2) Cessation of operations and dissolution

The second factor requires ATCU to show that DBC "ceased ordinary business operations, liquidated, and dissolved soon after distribution of consideration received from the buying corporation." Prattville Memorial Chapel , 10 So.3d at 555. To do so, ATCU argues that although the official dissolution of DBC did not occur until 2010 (doc. 43-11 at 6), DBC's cessation of business after IBT's purchase of its assets in July 2007, resulted in a de facto dissolution-thereby satisfying the second factor's requirement that the plaintiff show that the dissolution occurred "soon after" receiving consideration from the purchasing company.

While the delay between the date of the asset purchase and DBC's formal dissolution could suggest that the dissolution was not "soon" after the purchase, ATCU has shown that DBC discontinued doing business almost immediately after the purchase agreement. The agreement itself recognizes that DBC was selling all its assets and liabilities, which included preexisting contracts and accounts. The asset purchase left DBC without assets, revenue, employees, office, or any business operations. Thus, for all practical purposes, DBC no longer existed upon the selling of its business to IBT. Therefore, the court agrees that this factor weighs in favor of finding that IBT is a mere continuation of DBC.

(3) Assumption of liabilities and obligations necessary for continuation of seller's normal business operations

Along with all of DBC's assets, IBT assumed DBC's warranty and repair obligations it was bound to perform for its preexisting customers, as well as DBC's accounts payable and accrued expenses. (Doc. 25-1 at 2-3). Therefore, the court finds IBT "assumed those liabilities and obligations of the seller ordinarily necessary for the continuation of the normal business operations of the seller corporation;" this factor weighs in favor of finding that IBT is a continuation of DBC. See Parker , 10 So.3d at 556.

(4) Whether IBT held itself out as the effective continuation of DBC

In support of the fourth factor, that IBT held itself out to the world that it was the effective continuation of DBC, ATCU provides that IBT continued using the "Design Build Concepts" name and logo long after the asset purchase. For example, as of February 2017, IBT was still using DBC's name on its website. See, e.g. Turner v. Wean United, Inc., 531 So.2d 827, 831-32 (Ala. 1988) (finding purchaser did not hold itself out as the same company because it did not attempt to avail itself of the benefit of the old company name).

Also, Jim Givan, President and CEO of DBC, wrote to ATCU on April 25, 2008, notifying ATCU that DBC had transferred to IBT all its assets. (Doc. 85-6). Mr. Givan wrote that he was "excited about this merger , as it will allow us to offer clients a more complete package of design/build, consulting and training services," and that he was "enthusiastic about our future operations and continued relationship with [ATCU]." (Emphasis added). Given IBT's continued use of the DBC name and Mr. Givan's representations to ATCU, the court finds this fourth factor also weighs in favor of finding that IBT is a continuation of DBC.

While ATCU has presented substantial evidence of each of the four factors required to show that IBT is a mere continuation of DBC, IBT has offered nothing to contest that evidence. Rather, it only argued that the court cannot find its purchase of DBC was a de facto merger under Georgia law. However, IBT's argument misses the mark on two fronts.

First, as already explained, Alabama courts apply Alabama law to determine whether an exception to successor non-liability applies. See Am. Nonwovens, Inc. v. Non Wovens Eng'g, S.R.L. , 648 So.2d 565, 567 (Ala. 1994). So, whether the asset purchase agreement would constitute a de facto merger under Georgia law is irrelevant. Second, the de facto merger theory is only one of four means of establishing successor liability. Even if the agreement did not constitute a de facto merger, IBT may still be held liable if any of the other three exceptions apply.

ATCU presented substantial evidence that convinces this court that IBT is the continuation of DBC under Alabama law. In light of such evidence-and IBT's failure to dispute that evidence-the court finds that IBT may be held liable for DBC's alleged breaches of contract and tortious conduct as DBC's successor.

B. Which Alabama Statute of Limitations Controls

IBT argues that each of ATCU's claims in this case is untimely under Alabama law. Because this court sits in diversity, and because the claims arise out of a contract made in Alabama, Alabama substantive law, including the statute of limitations, governs these proceedings. See Mississippi Valley Title Ins. Co. v. Thompson , 802 F.3d 1248, 1251 n.2 (11th Cir. 2015). However, under Alabama law, not only do the limitations periods for claims arising in tort, contract, and fraud vary, see Ala. Code § 6-2-30 et seq. , the Code of Alabama also provides special limitations periods for certain claims brought against licensed general contractors. See Ala. Code § 6-5-220 et seq. Therefore, the court must determine which Alabama statute controls the limitations period for each of ATCU's claims.

Generally, Alabama law provides that the limitations period for breach of contract claims is six years, and the limitations period commences when the contract is breached. AC, Inc. v. Baker , 622 So.2d 331, 333 (Ala. 1993) (citing Ala. Code § 6-2-34(9) ). Negligence claims have a limitations period of only two years, which commences the date the injury occurs. Ala. Code § 6-2-38(l) ; Henson v. Celtic Life Ins. Co. , 621 So.2d 1268, 1274 (Ala. 1993). Finally, the statute of limitations for fraudulent misrepresentation is also two years, Ala. Code § 6-2-38(l), but begins to run "when the plaintiff was privy to facts which would 'provoke inquiry in the mind of [a person] of reasonable prudence, and which, if followed up, would have led to the discovery of the fraud.' " Auto-Owners Ins. Co. v. Abston , 822 So.2d 1187, 1195 (Ala. 2001) (quoting Willcutt v. Union Oil Co. , 432 So.2d 1217, 1219 (Ala. 1983) ).

But, the Alabama Code provides a different limitations period for all claims brought against a "builder," as the Code defines that term. Section 6-5-221(a) provides,

[a]ll civil actions in tort, contract, or otherwise against ... builders who constructed, or performed or managed the construction of, an improvement on or to real property designed by and constructed under the supervision, administration, or observation of an architect or engineer, or designed by and constructed in accordance with the plans and specifications prepared by an architect or engineer, for the recovery of damages ... shall be commenced within two years next after a cause of action accrues or arises, and not thereafter.

Given the different limitations periods for claims against "builders," this court must determine whether IBT satisfies the statute's definition of that term. Section 6-5-220(a) defines "builder" as "[a]ny individual, partnership, firm, or corporation that constructed, or performed or managed the construction of, an improvement, or any portion thereof, on or to real estate, and at the time of the construction was licensed as a general contractor in the State of Alabama."

Both parties agree that IBT does not fit § 6-5-220(a)'s definition of "builder" because IBT never performed or managed the construction of ATCU's building-that all occurred before IBT purchase DBC's assets. But the parties disagree as to whether the statute's definition encompasses a "builder's" transferee who may be held liable for the builder's conduct. While ATCU argues in favor of a narrow interpretation of the statute, IBT argues that the legislature intended the statute to apply to claims against builders' successors in liability.

IBT contends that the Supreme Court of Alabama's decision in the Housing Authority of the City of Huntsville v. Hartford Accounting & Indemnification Co., 954 So.2d 577 (Ala. 2006) controls. In Hartford , the court addressed the question of whether a builder's surety may assert the special two-year statute of limitations defense found in § 6-5-221 despite the fact that the surety was not itself an "architect, engineer, or builder." The court's rationale for concluding that the surety could assert the defense is telling, and this court finds it applicable here.

To begin, the court in Hartford noted that "while it appears that the two-year limitations period does not expressly apply to a surety, the statute does not limit the application of any existing common-law doctrine." Hartford , 954 So.2d at 582. The court based this proposition on § 6-5-228, which states that "[n]othing contained in this article shall be construed as affecting any period of limitation for any cause of action ... against any person other than architects, engineers and builders as defined in this article."

Next, the court acknowledged that statutory interpretation "begins with the plain language of the statute itself," and noted that § 6-5-220 et seq. does not mention the common-law doctrine allowing sureties to assert the defenses available to their principals. Id. Thus, the court reasoned, because that common law principal existed at the time the Alabama legislature enacted § 6-5-221, the legislature's choice not to expressly address the doctrine suggests that it did not intend for the statute to limit the doctrine. Id.

Therefore, the Supreme Court of Alabama concluded that the statute's plain language does not "compel the conclusion that the legislature ... expressly limited the common-law doctrine that allows a surety to assert the defenses that are available to its principal." Id. The court continued:

On its face, the statute applies only to "architects, engineers and builders," and it expressly states that all other periods of limitation for any cause of action against any other party are unaffected by the statute.... [T]he statute simply does not apply to [Defendant], who is a surety and not an architect, engineer, or builder. The statute neither expands nor limits defenses available to [Defendant]; instead, it has no effect on [Defendant] at all. If, under the common law, a surety may assert the statute of limitations available to its principal, then according to § 6-5-228, that common-law rule is unaffected by § 6-5-221. Therefore, [Defendant] may assert the limitations period available to its principal, whatever that period may be.... To hold that § 6-5-221 does not allow [Defendant] to assert a statute-of-limitations defense that is available to its principal ... would be to do exactly the opposite of what § 6-5-228 commands, because such a construction ... would directly affect a period of limitation for a cause of action against a person other than an architect, engineer, or builder.

Id.

This court disagrees with ATCU's assertion that Hartford is limited to the situation in which a surety seeks to assert defenses available to its principal. The Supreme Court of Alabama's rationale is clear: according to § 6-5-228, a defendant capable of asserting an architect's, engineer's, or a builder's statute of limitations defense under the common law may assert that defense even if the defendant itself does not fall within the categories of persons to which § 6-5-221 applies.

The court interpreted the statute's silence regarding the common-law doctrine allowing a surety to assert the defenses available to its principal as indicating the legislature's intent to leave that common-law rule unaffected. In fact, the court interpreted § 6-5-228 to function as a protection against the elimination of such common-law rules. The court did not explicitly or implicitly limit its holding to cases involving sureties. And, following the court's rationale to its logical end, this court concludes that § 6-5-221 does not negate other common-law rules in effect at the time the statute was written that allow certain defendants to assert the defenses of those with whom they are in privity.

Now, applying the court's holding in Hartford to the present case, this court asks whether, under Alabama common law, a defendant who is assigned successor liability may assert its predecessor's defenses. The answer to that question is yes. For example, in Rivers v. Stihl, Inc. , 434 So.2d 766, 773 (Ala. 1983), the Supreme Court of Alabama recognized that a successor in interest could assert its predecessor's assumption-of-the-risk defense against the plaintiff's claims. This theory is logical, and logically applies in the present case.

In Clardy v. Sanders , 551 So.2d 1057, 1061 (Ala. 1989), the Supreme Court of Alabama explained that the very reason the de facto merger and mere continuation theories exist to allow for successor liability is because the successor organization is essentially the same entity as the predecessor that caused the injury. Therefore, because they are treated as the same entity for purposes of liability, it stands to reason that successors in interest must be capable of asserting their predecessors' affirmative defenses. To allow successor liability while prohibiting affirmative defenses would lead to undesirable results.

The present case is a perfect example. Stripping a successor's access to its predecessor's affirmative defenses would include eliminating the statute-of-limitations defense, a defense the Alabama legislature intentionally created for public policy reasons. See, e.g., Cline v. Ashland, Inc. , 970 So.2d 755 (Ala. 2007) (recognizing the legislature's choosing the harsh results of barring untimely claims over the harsh results of old and stale cases). This result would also be illogical: a plaintiff's claims against an entity could lie dormant for decades past the limitations period, and then be inexplicably resurrected upon the tortfeasor's sale of the company (so long as the plaintiff convinced the court of successor liability). Such a scenario would be entirely unreasonable and defeat the purpose behind having a statute of limitations in the first place.

Therefore, this court is convinced of the following: 1) Alabama common law allows a successor in liability to assert its predecessor's affirmative defenses, including the statute of limitations and repose; 2) that this common law rule dates at least as far back as the Supreme Court of Alabama's 1983 ruling in Rivers v. Stihl, Inc. , 434 So.2d 766 (Ala. 1983) ; and 3) because the Alabama legislature did not enact § 6-5-221 until 1994, see Mitchell v. Richmond , 754 So.2d 627, 629 (Ala. 1999), the common law rule allowing successors in liability to assert their predecessor's affirmative defenses existed when § 6-5-221 was enacted and was not affected by it.

Therefore, given the Supreme Court of Alabama's conclusion that Ala. Code § 6-5-228 protects against the elimination of such common-law rules existing at the time § 6-5-221 was enacted, this court finds that IBT may assert DBC's statute-of-limitations defense, even though IBT is not a "builder" under the statute's definition of the term. Consequently, because IBT is a mere continuation of DBC under Alabama law, the two-year statute of limitations within Ala. Code § 6-5-221 governs all ATCU's claims against IBT that specifically arise under the theory of successor liability.

C. Whether ATCU's claims are untimely under Ala. Code § 6-5-220 et seq.

For ATCU's claims arising under successor liability to be timely under Ala. Code § 6-5-221(a), ATCU must have filed them within two years after the causes of action accrued. Importantly, the statute provides that the accrual date depends on whether the damage is latent. The cause of action generally "accrues or arises" when the injury or property damage occurs; but in cases where the injury or damage is either "latent or by its nature is not discoverable in the exercise of reasonable diligence at the time of its occurrence," the claim is deemed to arise or accrue "at the time the damage or injury is or in the exercise of reasonable diligence should have been first discovered, whichever is earlier." § 6-5-221(e). The statute further provides that the claim arises or accrues "whether or not the full amount of damages is apparent at the time of the first ... damage, and cannot be extended as a continuous wrong." Id.

Thus, § 6-5-221(e) applies the "discovery rule" in construction cases where the injury or damage is latent. Dickinson v. Land Developers Const. Co. , 882 So.2d 291, 298 (Ala. 2003). Therefore, this court must determine the accrual date of each of ATCU's claims involving latent damage against IBT that arises under successor liability according to the discovery rule. The rule also applies to ATCU's fraudulent misrepresentation claim. See Ala. Code § 6-2-3.

ATCU's claims against IBT within Counts I, II, V, VI, and VII exclusively rely on the doctrine of successor liability because they seek damages from IBT based on DBC's actions or omissions before the asset purchase took place. Therefore, the two-year statute of limitations in Ala. Code § 6-5-221 governs the timeliness of each of those claims. While ATCU's claims in Counts III, IV, and VIII likewise seek to hold IBT liable for DBC's actions, the claims also seek to hold IBT liable for its own conduct. Therefore, the court will address the claims in those counts in Part "D."

Counts I, II, V, VI, and VII

In Count I of ATCU's Second Amended Complaint, ATCU alleges IBT bears liability for DBC's breach of its contractual agreement to construct the building in a good, sound, workmanlike, and professional manner, and to construct a building free from defects. (Doc. 40 at 3). Count II seeks to hold IBT liable for DBC's negligent construction, management, and supervision of its employees'

and subcontractors' work on the building. (Id. at 6). Count V alleges IBT is liable for DBC's negligent hiring, training, and supervision of its employees and subcontractors regarding the design and construction of the building. (Id. at 13). In Count VI, ATCU claims IBT is liable for DBC's breach of its contractual obligation to properly design the building to ensure adequate waterproofing and to properly coordinate, administer, and inspect the work on the building to ensure conformity with the design documents. (Id. at 15). And Count VII alleges that IBT is liable for DBC's professional negligence for breaching its duty to provide architectural and related services in compliance with professional industry standards. (Id. at 16).

Thus, all the breach of contract and tort claims within Counts I, II, V, VI, and VII arise from DBC's alleged failure to construct and deliver to ATCU the type of building for which it had contracted. And, all the claims arise out of the building's insufficient waterproofing. But, ATCU's "punch list" from February 2006 includes notations of roof leaks and water intrusion damage, and ATCU admits that it continued noticing more water intrusion problems during the first half of 2006 (four to six months after moving into the building).

ATCU notified DBC of the leaks, and DBC investigated and made unsuccessful attempts to repair the leaky building on numerous occasions. (Doc. 84 at 9-10). Therefore, the water leaks and the resulting damage were by no means latent, unnoticed, or hidden. ATCU was well aware of the building's water intrusion problems more than ten years before filing this lawsuit in November 2016. To the extent the claims in Counts I, II, V, VI, and VII arise out of those defects, damages, and injuries of which ATCU was so well aware, the discovery rule does not apply; the claims accrued well before November 10, 2014, and those claims are untimely under § 6-5-221's two-year limitations period. See Dickinson v. Land Developers Const. Co. , 882 So. 2d 291, 299 (Ala. 2003) (holding the discovery rule did not apply where plaintiffs discovered a number of overt problems with their home, which should have led them to the source of the problems, more than two years before filing suit).

Latent Defects

To argue the defects were latent, ATCU presented Mr. Summerall's deposition testimony, which provides that some defects in the building were undiscovered until Stephen Ward & Associates, Inc. investigated the source of the leaks in July 2016 (doc. 85-25 at 6). ATCU argues that these defects were latent, the discovery rule applies, and the statute of limitations for its claims for negligence, breach of contract, and breach of warranty related to these latent defects did not begin to run until ATCU discovered these deficiencies in 2016.

To support this argument, ATCU relies on Dickinson v. Land Developers Const. Co. , 882 So. 2d 291 (2003). In Dickinson , the defendant builder entered into a contract with the plaintiff homeowners for the construction of their home. The plaintiffs moved into the home in 1993. Between that time and 1995, the Dickinsons discovered broken seals on windows, problems with French doors, a leak in the "pool bath," cracks in the driveway, and a water leak under the driveway. Id. at 295. The plaintiffs sent the defendant builder a punch list of those items several months after moving into the home, and three more letters in the months and years following. The builder never responded at all.

Eventually, in 1999, the Dickinsons hired a structural engineer who discovered a separation between the brick veneer and the doorframes of the doors at the rear of the home, which he determined were caused by the rotting of a belowground basement wall. The engineer also found the driveway and other concrete surfaces were cracking because the builder constructed them on fill soils. The Dickinsons filed suit against the builder that same year.

The trial court in Dickinson applied Ala. Code § 6-5-221, found that the damage to the home had occurred more than two years before the Dickinsons filed suit, and entered summary judgment for the builder. The court held that the plaintiffs either discovered all the home's defects, "or were privy to facts that would provoke inquiry in a [person] of reasonable prudence, and which, if followed up, would have led to the discovery of all the defects more than two years before they filed their complaint." Dickinson , 882 So. 2d at 299 (internal quotations omitted).

The Supreme Court of Alabama agreed with the trial court that the Dickinsons' claims arising out of the home's defects regarding the window seals, "pool bath," cracked driveway, and leak underneath the driveway were untimely because the Dickinsons had discovered those issues more than two years before filing suit. While the Dickinsons did not necessarily know the exact source of those problems, the problems were quite evident. Thus, the discovery rule did not apply to those claims, and they accrued the moment the damage occurred.

But, the court disagreed with the defendant builder that all the Dickinsons' claims were untimely. The court reasoned that the Dickinsons' knowledge of the defects listed above was insufficient, as a matter of law, to provoke a reasonable person to inquire and discover within the limitations period that their home was partially resting on an underground, rotten wooden wall, or that their concrete surfaces were constructed on improperly compacted fill soils. More specifically, the court stated:

[T]he issue is not whether the [plaintiffs] had general knowledge of problems with the construction of the house or whether a reasonable person would have sought professional help in an attempt to discover the source of the problems and fix them.... Instead, the issue is whether [the builder] has produced sufficient evidence on which to hold as a matter of law that the problems ... with the [plaintiffs'] house, of which the [plaintiffs] were aware shortly after the house was constructed, would have put a reasonable person ... on notice that he should have 1) investigated the underground wooden wall and the fill-soil area himself , or 2) gone beyond seeking [the builder's] assistance in determining the source or sources of the problems and the proper way to fix those problems.

Dickinson , 882 So. 2d at 299-300 (emphasis in original).

In finding that the defendant builder had not produced sufficient evidence to hold, as a matter of law, that the Dickinsons should have been put on notice as to the rotten wall or the improperly compacted fill soils, the court found that a reasonable person in the Dickinsons' position would not have had the "inclination or ability to perform a sufficient self-investigation" of the wall or fill soil. The court opined that a reasonable person could have believed any number of issues could have caused the problems the Dickinsons were experiencing, and the Dickinsons attempted to solve the problems through the builder.

Thus, the court in Dickinson differentiated between two sets of defects with the plaintiffs' home: the first set included those defects the homeowners discovered during the first two years they lived in the house, and the second set included the rotten sub-grade wooden wall and the improperly compacted fill soils that the homeowners discovered four or five years later. The court affirmed the trial court's holding that the claims arising from the first set of defects were untimely as a matter of law. But the court reversed the trial court's decision regarding the second set of defects because those defects were latent-the builder had not shown that the plaintiffs had discovered them, or reasonably should have discovered them, before the plaintiffs' structural engineer inspected the home.

In the present case, ATCU also argues two different groups of defects-those that occurred from the time it first occupied the building in 2006, and those allegedly latent defects that Stephen Ward & Associates discovered in 2016. Among the allegedly latent defects, ATCU includes the following: absence of a vapor barrier and the required drainage in the EIFS assembly; improper installation of the EIFS directly onto the OSB wall sheathing; and unsealed, missing, and improperly installed flashing. Mr. Summerall testified that all these conditions were separate and different from those that DBC and IBT had attempted to repair. (Doc. 85-3 at 31). Ultimately, ATCU argues that it should not reasonably be expected to have discovered these defects because it relied on DBC and IBT to diagnose and repair the building.

Because the court in Dickinson differentiated between the defects the Dickinsons discovered soon after moving into the home, and those they discovered only with the help of a structural engineer, this court must question whether the defects in this case require such a differentiation. In making its determination, the court in Dickinson noted that no reasonable person would know that the below-grade wooden wall in the Dickinsons' home was a problem at all; the Dickinsons had no reason to look underground for a piece of rotten wood or improperly compacted fill soils that might be causing the problems with their window seals, French doors, leak in the "pool bath," leak under the driveway, and cracked sidewalk. Only when the engineer found the serious structural damage to their home did they discover the rotten belowground wall and the improperly compacted fill soil. In other words, no obvious connection existed between the latent structural problems and the problems the Dickinsons had discovered years before.

Unlike the latent defects in Dickinson , the defects that SWA found in this case were totally intertwined with ATCU's water intrusion problems. Nothing in Dickinson overtly linked the defects the homeowners found in the early stages of living in the home to the rotten belowground wall or improperly compacted fill dirt. But here, ATCU's decade-long water intrusion problem was directly linked to the very defects that SWA found. If a newly constructed roof and walls continue to leak, a reasonable person would conclude a problem exists with their materials, design, or construction.

In Dickinson , the Supreme Court of Alabama stated that a reasonable person would not pay to have a third party fix and diagnose problems with their house without first allowing their expert homebuilder to perform that duty-a duty that the homebuilder is generally required to perform ." Dickinson , 882 So. 2d at 301. While true, this statement is inapplicable in this case. Unlike the builder in Dickinson , DBC and IBT did try to diagnose and repair the building-many times. And their contractual duty to do so eventually ended upon the expiration of their warranty agreements.

Although a reasonable person may not initially pay for a third party to diagnose the building's problems, a reasonable person certainly would take an alternative course of action before allowing ten years to pass without any significant progress. ATCU hinted at the argument that IBT modified or extended the initial warranty agreements by continuing to make repair attempts on the building after the original express warranties expired. But, ATCU produced no evidence or legal theory to support such an argument. So, the court finds no basis for concluding that IBT's repair attempts have any effect on the reasonableness of ATCU's delay in hiring a third party to investigate the leaks.

ATCU waited ten years from the first time it discovered water intrusion, nine years after IBT purchased DBC, six years after its four-year warranty expired, and six years after DBC dissolved before hiring a third party to investigate the building's water intrusion problems. The defects were not new; Mr. Summerall acknowledged that SWA would have found the same defects had they investigated back in 2007 (doc. 85-3 at 32). Unlike the latent defects in Dickinson , the allegedly latent defects in this case were directly connected to the problems that ATCU had discovered ten years before filing this suit.

Therefore, this court concludes that ATCU discovered or reasonably should have discovered the allegedly latent defects well before SWA's investigation. Thus, the claims arising from the defects that SWA found in 2016 accrued when the damage occurred, which was well before November 10, 2014. Any claims arising from the so-called latent defects are untimely as a matter of law. Consequently, all ATCU's claims within Counts I, II, V, VI, and VII are untimely, and IBT is entitled to summary judgment as to each of them.

D. Whether ATCU's claims against IBT in Counts III, IV, and VIII are untimely

While Counts I, II, V, VI, and VII are claims for which ATCU seeks to hold IBT liable for only DBC's alleged misconduct, Counts III, IV, and VIII contain claims arising out of both DBC's and IBT's alleged misconduct. So, Alabama Code § 6-5-221 governs ATCU's claims within those counts based on successor liability, while § 6-2-34(9) and § 6-2-38(l) govern those claims directly against IBT.

Alabama Code § 6-2-34(9) provides a six-year limitations period for ATCU's breach of warranty claims directly against IBT, and § 6-2-38(l) provides a two-year limitations period for ATCU's claims directly against IBT for fraud and negligent failure to perform warranty obligations. The court now addresses each of these claims with the appropriate statute of limitations in mind.

Count III

ATCU alleges in Count III that DBC and IBT breached "express and verbal" warranties that the building would be free from defects, and that DBC and IBT would make any required repairs. DBC's Program Services Agreement with ATCU provided two express warranties: 1) a one-year warranty that DBC would use quality materials and component parts free from defects and quality workmanship in the construction of the building, and that DBC would make necessary repairs of defective items; and 2) a four-year warranty protecting major structural defects in the building that "reduce the stability, safety, or structural integrity of the building." (Doc. 79 at 5-6).

The warranty periods began running upon the issuance of the Certificate of Substantial Completion, which was issued on March 6, 2006. Therefore, the one-year warranty expired on March 6, 2007, and the four-year warranty expired on March 6, 2010. Consequently, the latest date on which DBC or IBT could have breached an express warranty is March 6, 2010.

The statute of limitations for a breach of contract claim, including an express contractual warranty, is six years. Ala. Code § 6-2-34(9). Even if IBT's failure to make the repairs required by the agreement's warranty provisions did constitute a breach of warranty, ATCU was continuously aware of that breach from the time IBT first began making unsuccessful repair attempts back in 2008. Therefore, latency is not an issue. And because more than six years passed between March 6, 2010 (the last possible date on which a breach could have occurred), and November 10, 2016 (the date ATCU filed suit), § 6-2-34(9) bars ATCU's breach of warranty claims as a matter of law. Alabama Code § 6-5-221 places an even shorter statute of limitations of two years on any claim that IBT is liable for DBC's breach of warranty. Therefore, any claim based on successor liability would also be untimely.

ATCU appears to argue that DBC or IBT created additional warranties by promising and attempting to repair the building after the express warranties expired, but submitted no evidence or legal authority supporting that theory. ATCU presented no authority that such assurances constitute legally binding warranties, or any evidence that IBT received any type of consideration in exchange for such assurances. Thus, the court can only consider IBT's alleged assurances as illusory ; "there is no 'mutuality of obligation' and the contract is unenforceable." Ex parte McNaughton , 728 So.2d 592, 603 (Ala. 1998).

Mr. Byrd, IBT's former client service manager, testified that his attempts to repair ATCU's building from 2008 until 2011 were based not upon DBC's or IBT's warranty obligations, but rather upon the company's pride regarding its service after the sale. (Doc. 85-10 at 9). Mr. Byrd attributed the company's 85 percent "return client rate" to this type of post-warranty effort. The Alabama Supreme Court has expressly recognized such efforts as good business practice rather than any type of implied warranty. See City of Birmingham v. Cochrane Roofing & Metal Co. , 547 So.2d 1159, 1168 (Ala. 1989).

ATCU has not shown any evidence of express or implied warranties in existence after DBC's initial warranties expired on March 6, 2010. Thus, neither DBC nor IBT could have breached any warranty after their expiration. Consequently, ATCU's claims in Count III are untimely as a matter of law.

Count IV

In Count IV, ATCU alleges that DBC and IBT fraudulently misrepresented that they would repair, and that they had repaired the building's water intrusion problems. ATCU asserts that the misrepresentations occurred numerous times between ATCU's first request that DBC or IBT evaluate the cause of the leaks and make all necessary repairs, and Mr. Lock's representation in 2012 that IBT had made the repairs necessary to stop further moisture intrusion and to correct the roof leaks. The parties agree that IBT had no further direct communications with ATCU after February 2013.

The statute of limitations for fraudulent misrepresentation is two years in Alabama, and begins to run "when the plaintiff was privy to facts which would 'provoke inquiry in the mind of [a person] of reasonable prudence, and which, if followed up, would have led to the discovery of the fraud.' " Ala. Code § 6-2-38(l) ; Auto-Owners Ins. Co. v. Abston , 822 So.2d 1187, 1195 (Ala. 2001).

For ATCU's November 10, 2016, claims of fraudulent misrepresentation to be timely under Alabama law, they must have accrued on or after November 10, 2014. But by that time, DBC and/or IBT had been representing to ATCU that they would make the necessary repairs-and that they had made the necessary repairs-for approximately eight years. Further, IBT ceased all site visits and direct communication with ATCU no later than February 2013, more than three years before ATCU filed suit.

ATCU complained of water leaks and the resulting damage from February 2006 all the way up until it filed this lawsuit. ATCU alleges that, from 2006 through 2012, DBC or IBT repeatedly represented that they would repair the problems and that they were hopeful that those repairs had been succes