Brennaman v. R.M.I. Co.

• Decision Date: 05 October 1994
• Docket Number: No. 93-241,93-241
• Citation: 70 Ohio St.3d 460,639 N.E.2d 425
• Parties: , 63 USLW 2308, Prod.Liab.Rep. (CCH) P 14,065 BRENNAMAN et al., Appellants, v. R.M.I. COMPANY; Bechtel Group, Inc. et al., Appellees.
• Court: Ohio Supreme Court

Page 460

70 Ohio St.3d 460

639 N.E.2d 425, 63 USLW 2308, Prod.Liab.Rep. (CCH) P 14,065

BRENNAMAN et al., Appellants, v. R.M.I. COMPANY; Bechtel Group, Inc. et al., Appellees.

No. 93-241.

Supreme Court of Ohio.

Submitted March 29, 1994.

Decided Oct. 5, 1994.

SYLLABUS BY THE COURT

1. When determining whether an item is an improvement to real property under R.C. 2305.131, a court must look to the enhanced value created when the item is put to its intended use, the level of integration of the item within any manufacturing system, whether the item is an essential component of the system, and the item's permanence.

2. R.C. 2305.131, a statute of repose, violates the right to a remedy guaranteed by Section 16, Article I of the Ohio Constitution, and is, thus, unconstitutional. (Sedar v. Knowlton Constr. Co. [1990], 49 Ohio St.3d 193, 551 N.E.2d 938, overruled.)

In 1956, the predecessor in interest of R.M.I. Company, National Distillers Product Corporation, contracted with Bechtel Corporation to perform certain engineering and construction services related to the construction of a titanium metal plant in Ashtabula, Ohio. The project involved the refurbishing of an existing structure and construction of several smaller buildings, including what Bechtel chose to call "Sodium Handling Area 1100." The project was completed and turned over to National Distillers during the summer of 1958. In Area 1100, sodium is unloaded from railroad tank cars and piped to storage facilities, eventually to be used in the production of titanium sponge.

The sodium handling area consists of a warehouse-type building with large doors at each end. Railroad tracks run into the building, allowing tank cars to be rolled in for unloading. Unloading is accomplished by connecting the tank car to the plant's piping and storage system by the use of a spool piece. The spool piece is a pipe approximately two feet long, threaded at one end and flanged at the other. The threaded end attaches to the tank car and the flange is connected to a valve which is in turn attached to the facility's main piping system. Once the tank car is connected to the piping system, the sodium is heated to a liquid state, pumped out of the car and piped to storage tanks within the facility.

On August 31, 1986, a valve connecting the spool piece to the main piping system in Area 1100 began to leak. Arthur A. McClellan and Robin K. Brennaman Terry, both general mechanics for R.M.I., were assigned the task of replacing the defective valve.

In order to complete the replacement, a sodium plug in the piping system immediately downstream from the valve needed to be created. This was accomplished by cooling the liquid sodium back to a solid state in a small portion of the pipe. Upon arriving at Area 1100, McClellan and Terry checked to see if the proper procedures had been made and then began removing the leaking valve. After they had removed the valve and placed it on the floor, a molten stream of sodium escaped from the system. McClellan, Terry, and fellow employee Edward Hensler were all splashed with molten sodium. The sodium ignited. Terry and Hensler died and McClellan was seriously injured as a result of the chemical release.

Within a year, on August 24, 1987, Lillian J. Hensler, administrator of the estate of Edward Hensler, Arthur A. McClellan and Marlene McClellan filed suit against R.M.I. Company. In a related suit, Jeannette Brennaman, executor of the estate of Robin K. Brennaman Terry, filed suit against the same defendant on August 31, 1987, also within a year of the accident. The two actions were consolidated and Bechtel (named as Bechtel Group, Inc. in the complaint), the William Powell Company ("Powell"), manufacturer of the valve being replaced, and Ohio Pipe Valves and Fittings, Inc. ("Ohio Pipe"), the distributor of the valve, were added as defendants. An amended complaint alleged negligence, products liability and breach of warranty on the part of Bechtel in the design and construction of the sodium handling system. Ultimately, R.M.I. was voluntarily dismissed and the remaining defendants moved for summary judgment. The trial court granted summary judgment to Bechtel, Powell and Ohio Pipe. The court of appeals affirmed summary judgment as to Bechtel and Powell, but reversed as to Ohio Pipe. The court of appeals held that the ten-year architects' and engineers' statute of repose for improvements to real property barred appellants' actions against Bechtel as a matter of law. Thereafter, plaintiffs filed their notice of appeal to this court.

The matter is now before this court upon the allowance of a motion to certify the record.

Nurenberg, Plevin, Heller & McCarthy Co., L.P.A., Thomas Mester, Richard C. Alkire, Joel Levin and Sandra J. Rosenthal, Cleveland, for appellants.

Ulmer & Berne, Murray K. Lenson and Edwin J. Hollern, Cleveland, for appellee Bechtel Group, Inc.

Weston, Hurd, Fallon, Paisley & Howley and William H. Baughman, Jr., Cleveland, for appellee William Powell Co.

Casper & Casper, Michael R. Thomas and Margaret H. McCollum, Middletown, urging reversal for amicus curiae Ohio Academy of Trial Lawyers.

Means, Bichimer, Burkholder & Baker Co., L.P.A., Robert G. Stafford, Richard W. Ross and Sherille D. Akin, Columbus, urging affirmance for amici curiae Ohio Ass'n of Consulting Engineers and American Consulting Engineers Council.

PFEIFER, Justice.

I

We are first asked to decide whether the law of fixtures should be applied when determining if an improvement to real property exists as that term is used in R.C. 2305.131. Citing Zangerle v. Std. Oil of Ohio (1945), 144 Ohio St. 506, 30 O.O. 151, 60 N.E.2d 52, appellants argue that fixture law should be applied and if it is, Sodium Handling Area 1100 is personal property, not a fixture, and hence cannot be classified as an improvement to real property. Therefore, appellants contend that R.C. 2305.131 is inapplicable and this action must be remanded to the trial court. Bechtel maintains that the court of appeals correctly relied on the Sixth Circuit's decision in Adair v. Koppers Co., Inc. (1984), 741 F.2d 111, and affirmance is therefore appropriate.

Central to our disposition of this matter is R.C. 2305.131, which provides:

"No action to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained as a result of said injury, shall be brought against any person performing services for or furnishing the design, planning, supervision of construction, or construction of such improvement to real property, more than ten years after the performance or furnishing of such services and construction. This limitation does not apply to actions against any person in actual possession and control as owner, tenant, or otherwise of the improvement at the time the defective and unsafe condition of such improvement constitutes the proximate cause of the injury or damage for which the action is brought."

R.C. 2305.131 bars tort actions against designers and engineers of improvements to real property which are brought more than ten years after completion of the construction services. Sedar v. Knowlton Constr. Co. (1990), 49 Ohio St.3d 193, 551 N.E.2d 938; Kocisko v. Charles Shutrump & Sons Co. (1986), 21 Ohio St.3d 98, 21 OBR 392, 488 N.E.2d 171. It is undisputed that Bechtel provided design and engineering services relative to the sodium handling facility more than ten years prior to appellants' injuries. Therefore, if applicable, R.C. 2305.131 would bar litigation of appellants' negligence action against Bechtel.

In support of their argument that the law of fixtures should apply, appellants rely on Zangerle v. Std. Oil, supra. In Zangerle, we were asked to interpret the phrase "land and improvements thereon" found in Section 2, Article XII of the Ohio Constitution in light of G.C. 5388 (115 Ohio Laws 564). G.C. 5388 provided preferential tax treatment for certain personal property that was not regarded as an improvement to real property and was used in certain industries. See now R.C. 5711.22(D). With little discussion, we applied a fixture analysis to determine whether the property at issue was an improvement to land, or whether it was personalty. Appellants now ask us to extend that analysis to an interpretation of R.C. 2305.131.

It is a general axiom of statutory construction that once words have acquired a settled meaning, that same meaning will be applied to a subsequent statute on a similar or analogous subject. R.C. 1.42; cf. Goehring v. Dillard (1945), 145 Ohio St. 41, 30 O.O. 274, 60 N.E.2d 704. The rule is premised on the assumption that the General Assembly is aware of the meaning previously ascribed to words when enacting new legislation. Id.; R.C. 1.49. This rule of construction is not appropriate here, as the threshold requirement of similarity in purpose and subject between R.C. 2305.131 and Section 2, Article XII has not been met. Zangerle dealt with personal property taxation, whereas the present action is based on a dissimilar statute of repose. R.C. 2305.131 was enacted in response to the expansion of common-law liability of architects and builders to third parties who lacked privity of contract. Sedar, supra, 49 Ohio St.3d at 199, 551 N.E.2d at 945, citing Hartford Fire Ins. Co. v. Lawrence, Dykes, Goodenberger, Bower & Clancy (C.A.6, 1984), 740 F.2d 1362, 1368. Without similarity of purpose or subject, the law of prior cases should not be interpolated in subsequent cases. Therefore, since improvements to realty arise in two distinct contexts, the words of the statute must be read according to their common usage. R.C. 1.42.

This is precisely the reasoning applied by the Sixth Circuit in Adair and adopted by the court of appeals. After rejecting the plaintiff's fixture argument, the Ad...