Canton Lutheran Church v. SOVIK, MATHRE, ETC.

• Decision Date: 13 February 1981
• Docket Number: Civ. No. 79-4068.
• Citation: 507 F. Supp. 873
• Parties: CANTON LUTHERAN CHURCH, a South Dakota Corporation, Plaintiff, v. SOVIK, MATHRE, SATHRUM & QUANBECK, a Minnesota Corporation, and W. A. Kepp & Sons, a Company, Defendants.
• Court: U.S. District Court — District of South Dakota

507 F. Supp. 873

CANTON LUTHERAN CHURCH, a South Dakota Corporation, Plaintiff, v. SOVIK, MATHRE, SATHRUM & QUANBECK, a Minnesota Corporation, and W. A. Kepp & Sons, a Company, Defendants.

Civ. No. 79-4068.

United States District Court, D. South Dakota, S. D.

February 13, 1981.

Jeffrey P. Masten, of Masten, Myrabo & Irons, Canton, S. D., for plaintiff; William D. Kunstle, Canton, S. D., on the brief.

Clyde F. Anderson, of Meagher, Geer, Markham, Anderson, Adamson, Flaskamp & Brennan, Minneapolis, Minn., for defendant Sovik, Mathre, Sathrum & Quanbeck.

Deming Smith, of Davenport, Evans, Hurwitz & Smith, Sioux Falls, S. D., for defendant W. A. Kepp & Sons.

MEMORANDUM DECISION AND ORDER

NICHOL, Senior Judge.

PROCEDURAL HISTORY

This action was originally filed by the plaintiff, Canton Lutheran Church, in First Judicial Circuit Court, Lincoln County, South Dakota. It was removed to federal court by the defendant W. A. Kepp & Sons. Subsequent to the removal, defendants W. A. Kepp & Sons and Sovik, Mathre, Sathrum & Quanbeck each filed a motion for summary judgment on the basis that "the statute of limitations provided by South Dakota law in SDCL 15-2-9 for action for deficiencies in construction of a building has expired."

Plaintiff countered with the argument that the statute is unconstitutional and maintains that even if it is constitutional the statute was tolled by the fraudulent concealment of the defendants or because the defendants were without the jurisdiction of the state pursuant to SDCL 15-2-20.

Plaintiff then moved for partial summary judgment "dismissing and striking out that part of the answer of each of the defendants which is based upon a defense of the bar of statute of limitations for building deficiencies or a purported `General Statute of Limitations.'"

FACTS

Prior to June 3, 1960, plaintiff, Canton Lutheran Church, made plans to construct an educational building addition to its principal structure.

On June 3, 1960, plaintiff and defendant Sovik, Mathre, Sathrum & Quanbeck (hereinafter referred to as defendant architect) entered into a contract for professional architectural services for the educational building addition.

On August 18, 1961, plaintiff and defendant W.A. Kepp & Sons (hereinafter referred to as defendant contractor) entered into a contract for the construction of the educational building addition. Defendant contractor agreed to furnish all materials and construct the educational building in accordance with certain specifications drawn by defendant architect.

Pursuant to the above contracts, plans were drawn and construction commenced. Defendant architect gave its certificate of substantial completion on or about October 8, 1963.

In the spring of 1977, plaintiff observed cracks in the exterior structural concrete of the education building addition. After the defects were first noticed in the spring of 1977, tests of the structural concrete in the educational building were made at plaintiff's request. The results of the tests, conducted by Twin City Testing and Engineering Laboratory, Inc., indicated the presence of calcium chloride in the educational building addition concrete. Calcium chloride, when added to concrete, will cause the concrete to set up faster in cold weather.

The architectural specifications for the concrete in the educational building addition set forth in detail the mixing, pouring, and curing criteria for the concrete and did not call for, or authorize, the use of calcium chloride.

In a report on the cracks in the concrete to Maynard Lintvedt, President of the Canton Lutheran Church Congregation, by defendant architect it was their conclusion that the cracking condition was unusual and severe and:

due to corrosion of the corner reinforcing bars, causing residue or by-product which creates internal pressure in the surrounding concrete resulting in splitting of the concrete. Moisture by itself in the concrete would not have caused this extensive corrosion. However, the additional presence of calcium chloride would create the chemical environment which would allow corrosion of the steel to take place.

As a result, plaintiff commenced this action in the spring of 1979, alleging breach of warranty, negligent supervision by defendant architect, breach of contract and fraud.

Both defendants have raised SDCL 15-2-9, "Limitation of action for deficiencies in construction of building" as a defense.

STATUTORY BACKGROUND

SDCL 15-2-9 through 15-2-12 are patterned after the Model Code proposed by various associations of design professionals and contractors. These statutes were a response by the associations to major extensions in the sixties of their members' potential liability. Watts v. Putnam County, 525 S.W.2d 488 (Tenn.1975). Similar statutes have been adopted in at least 42 states. Phillips v. ABC Builders, Inc., 611 P.2d 821 (Wyo.1980).

The statute bars any action for personal injury or death or for any injury to real or personal property "arising out of any deficiency in the design, planning, supervision, inspection and observation of construction, or construction of an improvement to real property" not brought within six years after the date the owner can occupy or use the improvement.¹ SDCL 15-2-9. There is, however, a one year grace period in which an action may be brought for those injuries occurring in the sixth year after completion. SDCL 15-2-11. The statute is not a conventional limitation provision. Unlike other statutes of limitations, it is entirely unrelated to the accrual of any cause of action; the period beginning to run on the date of substantial completion, rather than the date of injury, damage, or discovery. SDCL 15-2-9. Cf. Generally SDCL Ch. 15-2. In fact, it has been said that the statute "does not bar a cause of action; its effect, rather, is to prevent what might otherwise be a cause of action from ever arising." Rosenberg v. Town of North Bergen, 61 N.J. 190, 293 A.2d 662 (1972). If this, in fact, is the effect of the statute, it would be inconsistent with existing case law of the United States Supreme Court², the Eighth Circuit Court of Appeals³, and the South Dakota Supreme Court⁴.

The statute is obviously strong medicine, and as one would expect, has been the subject of considerable discussion⁵ and litigation. At least 28 courts have ruled on the constitutionality of statutes similar to SDCL 15-2-9.

In 12 cases the statutes have been upheld. Arkansas, Carter v. Hartenstein, 248 Ark. 1172, 455 S.W.2d 918 (1970); Louisiana, Burnmaster v. Gravity Drainage District No. 2 of Parish of St. Charles, La., 366 So.2d 1381 (La.1978); Montana, Reeves v. Ille Electric Co., 170 Mont. 104, 551 P.2d 647 (1976); New Jersey, Rosenburg v. Town of North Bergen, 61 N.J. 190, 293 A.2d 662 (1972); O'Connor v. Altus, 67 N.J. 106, 335 A.2d 545 (1975); New Mexico, Howell v. Burk, 90 N.M. 688, 568 P.2d 217 (1977), cert. den. 91 N.M. 3, 569 P.2d 413; Oregon, Joseph v. Burns, 260 Or. 493, 491 P.2d 203 (1971); Pennsylvania, Freezer Storage, Inc. v. Armstrong Cork Co., 234 Pa.Super. 441, 341 A.2d 184 (1975); Tennessee, Agus v. Future Chattanooga Development Corp., 358 F.Supp. 246 (E.D.Tenn.1973), cited with approval, Watts v. Putnam Co., 525 S.W.2d 488 (Tenn.1975); Texas, Hill v. Forrest & Cotton, Inc., 555 S.W.2d 145 (Tex.Civ.App. 1977); Utah, Good v. Christensen, 527 P.2d 223 (Utah 1974); Virginia, Smith v. Allen-Bradley Co., 371 F.Supp. 698 (W.D.Va. 1974); Washington, Yakima Fruit & Cold Storage Co. v. Central Heating & Plumbing Co., 81 Wash.2d 528, 503 P.2d 108 (1972).

In 11 states similar statutes have been held unconstitutional. Alabama, Bagby Elev. & Elec. Co., Inc. v. McBride, 292 Ala. 191, 291 So.2d 306 (1974); Plant v. R. L. Reid, Inc., 294 Ala. 155, 313 So.2d 518 (1975); Florida, Overland Construction Co., Inc. v. Sirmons, Fla., 369 So.2d 572 (1979); Hawaii, Fujioka v. Kam, 55 Haw. 7, 514 P.2d 568 (1973); Illinois, Skinner v. Anderson, 38 Ill.2d 455, 231 N.E.2d 588 (1967); Kentucky, Saylor v. Hall, 497 S.W.2d 218 (Ky.1973); Michigan, Muzar v. Metro Town Houses, Inc., 82 Mich.App. 368, 266 N.W.2d 850 (1978); but see, Bouser v. City of Lincoln Park, 83 Mich.App. 167, 268 N.W.2d 332 (1978); O'Brien v. Hazelet & Erdal Consulting Engineers, 84 Mich.App. 764, 270 N.W.2d 690 (1978); Minnesota, Pacific Indemnity Co. v. Thompson-Yaeger, Inc., 260 N.W.2d 548 (Minn.1977); Oklahoma, Loyal Order of Moose Lodge 1785 v. Cavaness, 563 P.2d 143 (Okl.1977); South Carolina, Broome v. Truluck, 270 S.D. 227, 241 S.E.2d 739 (1978); Wisconsin, Kallas Millwork Corp. v. Square D. Co., 66 Wis.2d 382, 225 N.W.2d 454 (1975); Wyoming, Phillips v. ABC Builders, Inc., Wyo., 611 P.2d 821 (1980).

In five states the statute has been interpreted without any discussion of its constitutionality or has been decided on other grounds. California, Regents of University of California v. Hartford Accident & Indemnity Co., 21 Cal.3d 624, 147 Cal.Rptr. 486, 581 P.2d 197 (1978), vacating an intermediate appellate court decision which had held the statute constitutional, Regents of University of California v. Hartford Accident & Indemnity Co., 131 Cal.Rptr. 112, 59 Cal.App.3d 675; Colorado, Duncan v. Schuster-Graham Homes, Inc., 194 Colo. 441, 578 P.2d 637 (1978), but see, City of Aurora, Colorado v. Bechtel Corp., 599 F.2d 382 (10th Cir. 1979); Maryland, Allentown Plaza Associates v. Suburban Propane Gas Corp., 43 Md.App. 337, 405 A.2d 326 (1979); Nevada, Nevada Lakeshore Co., Inc. v. Diamond Electric, Inc., 89 Nev. 293, 511 P.2d 113 (1973); New Hampshire, Deschamps v. Camp Dresser & McKee, Inc., 113 N.H. 344, 306 A.2d 771 (1973).

The cases that have held the statute unconstitutional have found, generally, that individuals excluded from the protected class, e. g. owners and materialmen, are similarly situated with design professionals and contractors. Under this analysis the classifications have been determined to be unreasonable and thus a denial of equal protection.⁶

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