Beverly Hills Fire Litigation, In re

• Decision Date: 31 May 1984
• Citation: Beverly Hills Fire Litigation, In re, 672 S.W.2d 922 (Ky. 1984)
• Parties: In re BEVERLY HILLS FIRE LITIGATION.
• Court: Supreme Court of Kentucky

Page 922

672 S.W.2d 922

In re BEVERLY HILLS FIRE LITIGATION.

Supreme Court of Kentucky.

May 31, 1984.

Stanley M. Chesley, Waite, Schneider, Bayless & Chesley Co., L.P.A., Louis F. Gilligan, Keating, Muething & Klekamp, Cincinnati, Ohio, William D. Hillmann, Covington, Thomas C. Spraul, Spraul & Reyering, Cincinnati, Ohio, for plaintiffs.

Charles S. Cassis, Mark R. Feather, Brown, Todd & Heyburn, Louisville, for Bryant Electric Co.

Robert C. Ewald, Wyatt, Tarrant & Combs, Louisville, for Reynolds Metal Co.

John David Cole, Cole, Harned & Broderick, Bowling Green, for South Wire Co. and Triangle PWC.

C. Alex Rose, Handmaker, Weber, Meyer & Rose, Louisville, for Pass & Seymour, Inc.

William V. Johnson, Johnson, Cusack & Bell, Chicago, Ill., for Marmon Group.

W. Andrew Patton, Roger Healey, Kohnen & Kohnen, Cincinnati, Ohio, for John I. Pauling, Inc.

Lee O. Fitch, Miller, Searl & Fitch, Portsmouth, Ohio, for Hatfield Wire & Cable Co.

William T. McCracken, Crabbe, Brown, Jones, Potts & Schmidt, Columbus, Ohio, for General Electric Co.

Jacob K. Stein, Bruce M. Allman, Paxton & Seasongood, Cincinnati, Ohio, for Slater Electric Company, Inc. and Square D.

James M. Wiles, Wiles, Doucher, Tressler & Van Buren Co., L.P.A., Columbus, Ohio, for Leviton Manufacturing Co. and Rhode Island Insulated Wire Co.

Donald L. Stepner, Adams, Brooking & Stepner, Covington, for Columbia Cable & Wire Co.

CERTIFICATION OF THE LAW

LEIBSON, Justice.

The Hon. Henry R. Wilhoit, Jr., Judge, United States District Court, Eastern District of Kentucky, has certified to us for decision a question of Kentucky law as it applies to the above-styled litigation.The question as stated by the United States District Court is:

"Is KRS 413.135 unconstitutional as applied to facts of this case by virtue of Kentucky Constitution Secs. 14,54 and/or 241?"Memorandum Opinion and Order, Wilhoit, J., p. 5.

KRS 413.135 is the "no action"statute enacted in 1966 for the protection of architects and builders.¹Its title is "Actions for damages arising out of injury resulting from construction of improvements to real estate."It provides, in pertinent part:

"No action to recover damages, whether based upon contract or sounding in tort, resulting from or arising out of any deficiency in the design, planning, supervision, inspection or construction of any improvement to real property ... arising out of such deficiency ... shall be brought against any person performing or furnishing the design, planning, supervision, inspection or construction of any such improvement after the expiration of five (5) years following the substantial completion of such improvement."

For reasons that will be stated following a recitation of the facts, we have concluded that:

(1) Properly construed this statute has no application here to what is essentially a products liability case.

(2) Otherwise construed, this statute would be "special"legislation in violation of the Kentucky Constitution, Sec. 59.

The certification from United States District Court states the "relevant facts and the nature of the controversy" as follows:

"This is a class action tort suit involving a fire that destroyed the Beverly Hills Supper Club in Southgate, Kentucky on the evening of May 28, 1977.One hundred and sixty-five (165)people were killed in the fire, and numerous others were injured.

The Supper Club was substantially rebuilt in 1970 and 1971 following a previous fire in 1970.No significant improvements were made to the Supper Club since that time...."Memorandum Opinion and Order, Wilhoit, J., p. 6.

The certification further states:

"For a more detailed discussion of the facts of this case, the Court incorporates the Sixth Circuit opinion located at In Re Beverly Hills Fire Litigation, 695 F.2d 207(CA 61982), by reference."Id.

The Sixth Circuit opinion contains the following additional pertinent background information:

"Plaintiffs named as defendants several manufacturers of 'old technology' aluminum branch circuit wiring, claiming those materials had been installed in the supper club and had caused the fire.

Shortly before the trial was scheduled to begin, the trial judge ordered that it be bifurcated.The jury first would consider the question of 'causation in fact.'If aluminum wiring were found to be a cause of the fire, the jury would then determine questions of liability and damages.

... Plaintiffs asserted that the fire originated at an aluminum duplex receptacle.The receptacle, a standard electrical outlet into which electrical appliances are plugged, was allegedly located in the cubbyhole and connected to aluminum branch circuit wiring.

Plaintiffs claimed that, due to a number of physical characteristics of old technology wiring, heat developed at the connection of the aluminum branch circuit wiring to the receptacle, and that this heat eventually ignited the wooden studs and other building materials in the wall...."695 F.2d at 210-211.

After twenty-two (22) days of trial over a period of eleven (11) weeks, the jury found for the defendants on the "causation" question, the only issue submitted in the bifurcated proceedings.The United States Court of Appeals for the Sixth Circuit reversed, set aside the jury's verdict and ordered a new trial because "one of the jurors performed an improper experiment when he investigated the condition of the aluminum wiring in connections in his home."695 F.2d at 211.The Sixth Circuit held that this "one error ... is of such importance that it alone mandates vacating the judgment."Id.

On remand, before the new trial could take place, the defendants"renewed their original motion for summary judgment based upon Kentucky's no-action statute, KRS Sec. 413.135."Memorandum Opinion and Order, Wilhoit, J., p. 2.To understand the question referred to us regarding KRS Sec. 413.135some additional background information, gleaned from the Sixth Circuit opinion, is necessary.

Before the first trial took place the defendants had moved for a summary judgment based on KRS 413.135, claiming the aluminum wire which they manufactured was subject to the protection of Kentucky's "no-action"statute when installed as a component of the supper club since it was an improvement to real property.The Sixth Circuit recites:

"The trial judge denied defendants' motions, finding the statute did not apply to those providing materials for construction projects.He determined that the statute should be narrowly construed because application of the statute would work a harsh result on those whose claim was barred without notice, and because the class of persons to whom the statute applies is uncertain.Since the judge did not view defendants as among the class of persons either named or intended to be protected by the statute, he found it unnecessary to decide whether the statute was offensive to Ky. Const. Secs. 14,54and241.At least at this juncture of the proceedings, we agree with the result reached by the trial judge, but not necessarily with his reasoning."695 F.2d at 223-224.

The Sixth Circuit affirmed the decision of the trial judge on this point, but did so on the basis that our Court, in Saylor v. Hall, Ky., 497 S.W.2d 218(1973), "... considered the constitutional defects of section 413.135" and "concluded that, because section 413.130(now KRS 413.135) could cut off a common law right to recovery before a cause of action even accrues, it violated Ky. Const. Secs. 14,54and241."The court quoted from Saylor v. Hall, supra, 497 S.W.2d at 224:

"The statutory expressions as they relate to actions based on negligence perform an abortion on the right of action, not in the first trimester, but before conception."695 F.2d at 226.

The Sixth Circuit states the "tentative conclusion that the trial judge in this case did not err in refusing to apply the Kentucky 'no action'statute."Id. at 227.But the Sixth Circuit further states:

"If the Kentucky courts render an authoritative decision bearing upon the question while this case is open, the district court remains free to reconsider its position both in the light of that change and of any changes in the posture of the case on remand."Id.

The defendants have renewed their motion for summary judgment asserting that Carney v. Moody, Ky., 646 S.W.2d 40(1982), is a definitive opinion overruling Saylor v. Hall and restoring the viability of KRS 413.135.Plaintiffs counter that the Carney decision was cited to the Sixth Circuit on defendants' Petition for Rehearing and was implicitly rejected by that court when it denied the Petition for Rehearing.It is at this juncture that the Federal District Court asks us to decide if KRS 413.135 is unconstitutional "as applied to the facts of this case by virtue of Kentucky Constitution Secs. 14,54 and/or 241?"Memorandum Opinion and Order, Wilhoit, J., p. 5.

In this caseplaintiffs allege defendants are liable for the manufacture of a defective product, "old technology" aluminum wire, subsequently used as a component part of a building.Presumably this aluminum wire has many foreseeable uses having no connection with improvements to real estate.When asked to consider whether KRS 413.135 is a bar to plaintiffs' claims, before passing on the constitutionality of KRS 413.135 as an abstraction, the threshold question is whether the statute includes a products liability claim of this nature in the first place.This was the approach of the trial judge before the first trial.We agree.The trial judge originally expressed the opinion that the Kentucky statute was not applicable to the facts of this case.

The Sixth Circuit viewed the case differently.It designated the defendant manufacturers in this case as " 'materialmen' who design products for construction projects," and as such, "within the contemplation of the statute."695 F.2d at 224.But the language of the statute does not express coverage for "materialmen" nor does it cover "construction...