Water Works and Sewer Board of the City of Guntersville v. Glass Steel Inc

The Water Works and Sewer Board of the City of Guntersville, Alabama, contracted with Glass Steel Inc. to construct a 1.5-million-gallon water storage tank using glass-fused-to-steel panels. Following completion, the tank experienced premature rust, corrosion, and significant leakage. The Board sued Glass Steel Inc. and other defendants for breach of contract, breach of express and implied warranties, and negligence, alleging the panels were defective and unfit for potable water storage. The trial court granted the defendants' motion for summary judgment, ruling that the claims were barred by the statute of limitations and that no implied warranty of fitness applied to the transaction. The Board appealed, contending that the cause of action did not accrue until the leaks were discovered and that the supplier owed a continuing duty. The dispute reached the Alabama Supreme Court, which issued a pivotal ruling on June 5, 2023.

The Supreme Court of Alabama reversed the trial court's grant of summary judgment and remanded the case for further proceedings. The court held that genuine issues of material fact existed regarding when the Board's cause of action accrued under the discovery rule, and that factual disputes precluded summary judgment on the existence and breach of implied warranties.

Whether the trial court erred in granting summary judgment by finding that the Board's claims were time-barred under the applicable statute of limitations, and whether the sale of the specialized tank panels carried an implied warranty of fitness for a particular purpose that could be enforced against the manufacturer.

This decision reinforced the application of the discovery rule in construction defect litigation involving public infrastructure, ensuring that government entities are not unfairly barred from suing for latent defects. It also clarified that suppliers of specialized components for public projects can be subject to implied warranty claims, significantly affecting how contractors and manufacturers allocate risk and structure their contracts with municipalities.