Integrity Floorcovering, Inc. v. Broan-Nutone, LLC

• Decision Date: 07 April 2008
• Docket Number: No. 07-1824.,07-1824.
• Citation: 521 F.3d 914
• Parties: INTEGRITY FLOORCOVERING, INC., Appellant, v. BROAN-NUTONE, LLC, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

521 F.3d 914

INTEGRITY FLOORCOVERING, INC., Appellant, v. BROAN-NUTONE, LLC, Appellee.

No. 07-1824.

United States Court of Appeals, Eighth Circuit.

Submitted: December 14, 2007.

Filed: April 7, 2008.

Lisa M. Dailey, argued, Minneapolis, MN (Joseph F. Lulic, on the brief), for appellant.

William A. LeMire, argued, Minneapolis, MN (Aaron M. Ponce, on the brief), for appellee.

Before RILEY, COLLOTON, and BENTON, Circuit Judges.

RILEY, Circuit Judge.

In this diversity action, Integrity Floorcovering, Inc. (Integrity) and Chicago Avenue Partners, Ltd. (CAP) (collectively, plaintiffs), filed separate suits against Broan-Nutone, LLC (Broan), the manufacturer of a bathroom ventilation fan which allegedly malfunctioned and separately damaged an apartment building owned by CAP and a commercial warehouse building owned by Integrity.¹ Broan moved for summary judgment, arguing the claims were barred by Minnesota Statute § 541.051, subd. 1(a), which provides a ten-year statute of repose for lawsuits "arising out of the defective and unsafe condition of an improvement to real property." The district court² applied the Minnesota statute of repose and granted summary judgment in favor of Broan. The plaintiffs appeal. Doing our best to anticipate what the Minnesota Supreme Court would do with this challenging diversity question, we affirm.

I. BACKGROUND³

The plaintiffs allege bathroom ventilation fans, manufactured by Broan, malfunctioned and damaged a Minnesota apartment building owned by CAP and a commercial warehouse building owned by Integrity. The fans were sold in Minnesota. The Integrity fire occurred on February 2, 2004. The fan was originally installed' in the Integrity building in 1979, in a bathroom without a window or other natural ventilation. The CAP fire occurred on May 6, 2002. The fan in the CAP building was installed sometime between 1978 and 1981, in an apartment bathroom also without a window or natural ventilation.

Integrity does not dispute the fan was hard-wired into the building's electrical system. In its separate suit, CAP contended the fan was not hard-wired, but utilized a plug. Whether considered fully hard-wired or not, the Broan fan required installation significantly beyond simply plugging the unit into an outlet. The fan needed ventilation directly to the outside air, not into walls or ceiling space. The fan was to be installed into a hole in the ceiling, fastened by nails into a stud or joist. Assembly required the services of someone "... familiar with methods of installing electrical wiring ... [or] a qualified electrician." The fan also had to be connected to the building's power supply, bringing the power cable to the fan, and utilizing a ground wire and grounding clip. Once installed, if the motor were to fail or otherwise need replacing, the motor could apparently be replaced fairly simply, given that the "[c]omplete, compact motor assembly install[ed] with one screw ... [and] plug[ged] into [the] housing receptacle."

Broan moved for summary judgment, arguing the claims were barred by Minn. Stat. § 541.051, subd. 1(a), which provides a ten-year statute of repose for an "action by any person ... to recover damages for any injury to property, real or personal ... arising out of the defective and unsafe condition of an improvement to real property ... brought against any person ... furnishing ... materials...." The plaintiffs argued Broan was not a member of the class of persons covered by the statute of repose. Alternately, the plaintiffs contended their claims fell under an exception to the statute of repose for lawsuits filed against "the manufacturer or supplier of any equipment or machinery installed upon real property." The district court found the statute applied to Broan, and the bathroom ventilation fan did not qualify as "equipment or machinery" under Minnesota law. The district court thus granted summary judgment in favor of Broan.

II. DISCUSSION

We review the grant of summary judgment de novo, viewing the record most favorably to the non-moving party. See Fenney v. Dakota, Minn. & E. R.R. Co., 327 F.3d 707, 711 (8th Cir.2003). Summary judgment is proper if, after viewing all the evidence and drawing all reasonable inferences in the light most favorable to the nonmoving party, no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); accord Libel v. Adventure Lands of Am., Inc., 482 F.3d 1028, 1033 (8th Cir.2007).

As a diversity case, we must apply Minnesota law. See White Consol. Indus., Inc. v. McGill Mfg. Co., Inc., 165 F.3d 1185, 1187 (8th Cir.1999). We review the district court's interpretation of Minnesota law de novo. See Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991). In resolving any substantive issues of state law, we are bound by the decisions of the Minnesota Supreme Court. See Kovarik v. American Family Ins. Group, 108 F.3d 962, 964 (8th Cir.1997). If the Minnesota Supreme Court has not spoken on a particular issue, we must attempt to predict how the Minnesota Supreme Court would decide an issue and "may consider relevant state precedent, analogous decisions, considered dicta ... and any other reliable data." Id. (citation omitted).

A. Application of Minn.Stat. § 541.051

The plaintiffs first argue the statute of repose does not apply in this case because Minn.Stat. § 541.051 does not limit claims for damages caused by defective products, and because "it was not the intent of the legislature to protect product manufacturers such as Broan."⁴ This argument fails.

The district court correctly found the plain language of the statute covers the bathroom ventilation fan and Broan as its manufacturer. The statute creates a ten year period of repose relating to "damages for any injury to property, real or personal ... arising out of the defective and unsafe condition of an improvement to real property" and covers "any person ... furnishing ... materials." Minn.Stat. § 541.051, subd. 1(a) (emphasis added). The Minnesota Supreme Court defines an "improvement to real property" as "a permanent addition to or betterment of real property that enhances its capital value and that involves the expenditure of labor or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs." State Farm Fire & Cas. v. Aquila Inc., 718 N.W.2d 879, 884 (Minn.2006) (citation omitted). Noting that the fan, located in an interior room, was required by Minnesota building codes, and provided for the removal of humidity, preventing or minimizing mildew, rust, peeling paint, and other property deterioration, the district court logically, and correctly, found the fan was a permanent addition designed to make the property more useful and valuable and, thus, an improvement to real property.

The plaintiffs also contend the Minnesota legislature never intended the statute of repose to apply to product liability claims involving widespread damage. This contention is flawed. As discussed more fully in the following section, Minnesota courts have determined product manufacturers are protected under the repose statute when they manufacture "ordinary building materials" and are exempted from protection when the products are classified as "equipment or machinery." See Red Wing Motel Investors v. Red Wing Fire Dep't, 552 N.W.2d 295, 297 & n. 2 (Minn. Ct.App.1996) (adopting language from Cape Henry Towers, Inc. v. Nat'l Gypsum Co., 331 S.E.2d 476, 480 (Va.1985), recognizing the Minnesota statute of repose was modeled after Virginia's, and "accord[ing] weight to [Virginia's] interpretation of the borrowed provision." (citation omitted)). Thus, as interpreted by the Minnesota courts, the statute plainly covers at least some product liability claims. As Broan aptly notes, "Cape Henry's distinction between `ordinary building materials' and `equipment or machinery' possesses meaning only if its purpose is to distinguish between different types of products installed on real property."

Integrity admits at least some product liability claims are covered, but contends, "[i]n a typical claim for construction defect, a plaintiff may be entitled to the cost of repair or replacement of a defective component used in his home[,]" but such a claim "is quintessentially different in character from a claim arising from a product malfunctioning and actually causing widespread property damage[.]" Integrity thus claims, "It was never the intention of the legislature to protect a manufacturer such as Broan from liability arising from its fan failing and causing a fire." This claim also is unavailing. The plain language of the statute bars "damages for any injury to property, real or personal ... arising out of the defective and unsafe condition of an improvement to real property" and covers "any person ... furnishing ... materials." Minn.Stat. § 541.051, subd. 1(a) (emphasis added). The statute in no way distinguishes between the type, scope, or degree of damages at issue, nor the kinds of materials furnished. Thus, the plain language of the statute controls, and we need not consider the parties' varying interpretations of legislative history. See Hutchinson Technology, Inc. v. Comm'r of Revenue, 698 N.W.2d 1, 8 (Minn.2005) (finding "no cause to look beyond the plain language of the statutes to legislative history that might create, rather than eliminate, ambiguity.").

Finally, Integrity asserts, if the statute is read according to its plain terms, "an artificial distinction would exist wherein one plaintiff may be able to bring a claim against the manufacturer of a defective product, but a different plaintiff could not bring the exact same claim against the same manufacturer for the same product because the product was installed upon real property." This assertion fails to recognize both the role of the courts, and the rationale of the legislature. Even if such...