Luzadder v. Despatch Oven Co.

• Decision Date: 18 December 1987
• Docket Number: 87-3142,Nos. 87-3030,s. 87-3030
• Citation: 834 F.2d 355
• Parties: , Prod.Liab.Rep.(CCH)P 11,598 Betty Jane LUZADDER, Executrix of the Estate of David P. Luzadder, Deceased, v. DESPATCH OVEN COMPANY and Eclipse Inc. v. BROCKWAY, INC., a corporation; Honeywell, Inc. Appeal of Betty Jane LUZADDER.
• Court: U.S. Court of Appeals — Third Circuit

Page 355

834 F.2d 355

56 USLW 2331, Prod.Liab.Rep.(CCH)P 11,598

Betty Jane LUZADDER, Executrix of the Estate of David P.

Luzadder, Deceased, v. DESPATCH OVEN COMPANY and Eclipse Inc. v. BROCKWAY, INC., a corporation; Honeywell, Inc.

Appeal of Betty Jane LUZADDER.

Nos. 87-3030, 87-3142.

United States Court of Appeals, Third Circuit.

Argued Sept. 10, 1987.

Decided Nov. 27, 1987.

Rehearing and Rehearing In Banc Denied Dec. 18, 1987.

Lawrence R. Chaban (argued), Kenneth J. Yablonski, Yablonski, Costello and Leckie, Washington, Pa., for appellant.

Vincent A. DeFalice (argued), Timothy J. Burdette, Patrick R. Riley, Egler, Anstandig, Garrett & Riley, Pittsburgh, Pa., for Despatch Oven Co.

Kim R. Bobrowsky (argued), Law Offices of Robert G. Simasek, Pittsburgh, Pa., for Eclipse, Inc.

Gregory F. Buckley (argued), Louis C. Long, Louis B. Loughren, Meyer, Darragh, Buckler, Bebenek and Eck, Pittsburgh, Pa., for Honeywell, Inc.

Before SLOVITER, STAPLETON, Circuit Judges, and BROTMAN, ^* District Judge.

OPINION OF THE COURT

BROTMAN, District Judge:

The present appeal calls upon this court to interpret a Pennsylvania statute of repose, 42 Pa.Cons.Stat.Ann. Sec. 5536 (Purdon 1981), which extinguishes certain actions arising out of defects in improvements made to real property not commenced within twelve years of the making of such improvements. The district court below granted summary judgment in favor of appellees Despatch Oven Company, Eclipse, Inc., and Honeywell, Inc., determining that plaintiff's claim was barred by Sec. 5536. Because we conclude that these defendant manufacturers do not fall within the class of persons sought to be protected by Pennsylvania's repose statute, we reverse the district court's grant of summary judgment.

I.

This action arises out of an accident which occurred on December 2, 1980 at the Brockway Plant, owned by Brockway Glass Company ("Brockway"), in Washington, Pennsylvania. Appellant's husband, David Luzadder, was injured when a natural gas fired furnace ("the oven") exploded. This oven was manufactured by Despatch Oven Company ("Despatch") and contained component parts manufactured by co-defendant Eclipse, Inc. ("Eclipse") and third-party defendant Honeywell, Inc. ("Honeywell"). The oven was sold to Brockway in March, 1965 and Brockway installed it for use in its glass molding operation.

As a result of the December, 1980 accident, appellant's husband suffered severe injuries. Appellant and her husband filed suit against Despatch and Eclipse in December, 1981. In May, 1982, appellant's husband committed suicide. Appellant amended her complaint to include a wrongful death claim, alleging that her husband's suicide was the result of a post-traumatic syndrome.

Eclipse filed a third-party complaint against Honeywell in June, 1983. Honeywell filed a crossclaim against Eclipse. Plaintiff asserted no claim against Honeywell.

Motions for summary judgment, Fed.R.Civ.P. 56, on the basis of Pennsylvania's Statute of Repose, 42 Pa.Cons.Stat.Ann. Sec. 5536, were filed by Despatch, Eclipse and Honeywell on February 4, 1986. These motions were granted in December, 1986, 651 F.Supp. 239. Appellant then moved for sanctions under Fed.R.Civ.P. 11 against Despatch and Eclipse, claiming that these parties should have raised the Sec. 5536 defense earlier in the proceedings. Eclipse had raised this defense in its answer while Sec. 5536 had not been raised by Despatch in its pleadings. The motion for sanctions was denied. Appellant then filed this appeal, challenging both the grant of summary judgment and the denial of sanctions. ¹

II.

(A) Whether 42 Pa.Cons.Stat.Ann. Sec. 5536 is a Statute of Limitations or a Statute of Repose?

Appellant argues that Sec. 5536 ² is a waivable statute of limitations, and not a non-waivable statute of repose. Thus, appellant urges, appellee Despatch waived any defense provided by Sec. 5536 by not raising it in its pleadings.

Section 5536, which went into effect in 1978, is a substantial reenactment of Pa.Stat.Ann. tit. 12, Sec. 65.1 (repealed). ³ Nonetheless, while the substance of the provisions appears to have remained the same, the legislature did modify the language of Sec. 65.1 in enacting Sec. 5536.

The limiting language of Sec. 65.1 reads "no action ... shall be brought ... more than twelve years after completion of such an improvement" while the parallel language of Sec. 5536 is "a civil action ... must be commenced within twelve years after completion of construction of such improvement." Appellant concedes that the predecessor statute, Sec. 65.1, was a non-waivable statute of repose. Appellant, however, points to the changes in statutory language in arguing that Sec. 5536 is a waivable statute of limitations.

Initially, it should be noted that, while the Pennsylvania Supreme Court has yet to characterize Sec. 5536 as either a statute of limitations or a statute of repose, the weight of precedent in Pennsylvania's lower courts goes decidedly against appellant's interpretation. See Fetterhoff v. Fetterhoff, 354 Pa.Super. 438, 512 A.2d 30, 32 (1986) ("Since this [Sec. 5536] is a statute of repose, the liability is extinguished upon passage of the twelve years and it is a non-waivable right, contrary to a statute of limitations, which is waived, if not alleged, in a responsive pleading."); Catanzaro v. Wasco Products, Inc., 489 A.2d 262, 264, 339 Pa.Super. 481, (1985); Mitchell v. United Elevator Co., Inc., 290 Pa.Super. 476, 434 A.2d 1243 (1981). In fact, appellant cites no Pennsylvania caselaw which supports her position. Furthermore, federal district courts which have interpreted this provision have unquestioningly held that Sec. 5536 is a statute of repose. Springman v. Wire Machinery Corporation of America, 666 F.Supp. 66, 67 (M.D.Pa.1987); Vasquez v. Whiting Corporation, 660 F.Supp. 685, 686 (E.D.Pa.1987); Facenda v. Applied Powers, Inc., No. 87-0980, slip op. (E.D.Pa. July 17, 1987); Gnall v. Illinois Water Treatment Co., 640 F.Supp. 815, 817 (M.D.Pa.1986).

Above and beyond the weight of this authority, we find plaintiff's argument unpersuasive. That the Pennsylvania Legislature would make such a substantial change in the nature and effect of this statute through a seemingly inconsequential alteration of its language, and in the absence of any legislative debate, ⁴ is a conclusion which is not easily, nor do we believe, prudently reached.

Additionally, Sec. 5536, which bars actions not brought within twelve years of the making of the improvement to real property, is drafted not as a statute of limitations but as a statute of repose. Statutes of repose, unlike most statutes of limitations, start to run, as does Sec. 5536, at the completion of certain conduct by the defendant. Whereas a claim under a statute of limitations accrues when a plaintiff either suffers or discovers the harm complained of, "[s]tatutes of repose by their nature [ ]impose on some plaintiffs the hardship of having a claim extinguished before it is discovered, or perhaps before it even exists...." W. Keeton, Prosser and Keeton on Torts Sec. 30, p. 168 (5th Edition 1984). Such is the function of Sec. 5536.

Therefore, Sec. 5536 being a statute of repose, plaintiff's claim against Despatch, if the statute applied to that claim, was extinguished in 1977--twelve years after the Despatch oven was installed at the Brockway plant and four years before this suit was filed. Despatch's failure to raise the Sec. 5536 defense in its answer would not revive this claim.

The court must next determine whether Sec. 5536 applies to the claims asserted by plaintiff. In order for Sec. 5536 to be applicable, it must be found (1) that appellees are within the class of persons protected by statute; and (2) that the products manufactured by appellees are improvements to real property within the meaning of Sec. 5536. ⁵

(B) Whether Defendants Are Within the Class of Persons Protected by Section 5536.

The district court, after determining that the oven was an improvement to real property, concluded that Sec. 5536 applied to Despatch as the manufacturer of the oven and to Eclipse and Honeywell as manufacturers of component parts of the oven. A conflicting result, however, has been reached by two other district courts in opinions issued after the district court rendered its decision in this case. These later cases held that Sec. 5536 does not bar actions against a manufacturer who plays no role in the installation of a product. Vasquez v Whiting Corp., 660 F.Supp. 685 (E.D.Pa.1987) (Cahn, J.); Springman v. Wire Machinery Corp. of America, 666 F.Supp. 66 (M.D.Pa.1987) (Muir, J.). ⁶

On the other hand, recent Pennsylvania Superior Court decisions have given a more expansive interpretation to Sec. 5536. See, e.g., Catanzaro, 339 Pa.Super. 481, 489 A.2d 262 (1985) (manufacturer of skydome protected under repose statute); Mitchell, 290 Pa.Super. 476, 434 A.2d 1243 (1981) (manufacturer of elevator system protected by Sec. 5536). ⁷ However, as with the issue of what constitutes an improvement under Sec. 5536, the Pennsylvania Supreme Court has yet to speak on the scope of coverage of Sec. 5536. In the absence of such a pronouncement, a federal court sitting in diversity must predict how the Supreme Court would decide the issue. McGowan v. University of Scranton, 759 F.2d 287, 291 (3d Cir.1985). In so predicting, decisions from a state intermediate appellate court become "presumptive evidence, rather than absolute pronouncement of state law." National Surety Corp. v. Midland Bank, 551 F.2d 21, 30 (3d Cir.1977).

In first looking at the language of Sec. 5536, it is evident that manufacturers are not covered under the plain meaning of the statute. Section 5536 speaks in terms of "any person lawfully performing or furnishing the design, planning, supervision or observation of construction, or construction of any improvement to real property...." Nowhere does the statute speak of the manufacture of an...