Com. v. Owens-Corning Fiberglas Corp., OWENS-CORNING

• Decision Date: 10 November 1989
• Docket Number: OWENS-CORNING,No. 880533,880533
• Citation: 385 S.E.2d 865,238 Va. 595
• Parties: , 58 USLW 2360 COMMONWEALTH of Virginia v.FIBERGLAS CORPORATION, et al. Record
• Court: Virginia Supreme Court

Page 865

385 S.E.2d 865

238 Va. 595, 58 USLW 2360

COMMONWEALTH of Virginia v. OWENS-CORNING FIBERGLAS CORPORATION, et al.

Record No. 880533.

Supreme Court of Virginia.

Nov. 10, 1989.

[238 Va. 597] William H. Hauser, Sr. Asst. Atty. Gen. (Mary Sue Terry, Atty. Gen., Stephen D. Rosenthal, Deputy Atty. Gen., Calvin F. Tiller, and Fred R. Kozak, Asst. Atty. Gen., on briefs), for appellant.

Keith D. Boyette (Charles F. Witthoefft, Paul A. Simpson, Hirschler, Fleischer, Weinberg, Cox & Allen, Richmond, on brief), for appellees.

Present CARRICO, C.J., COMPTON, STEPHENSON, RUSSELL, and WHITING, JJ., POFF, Senior Justice, and COCHRAN, Retired Justice.

RUSSELL, Justice.

In this appeal, we consider whether, as the trial court ruled, Code § 8.01-250, ¹ a statute of repose, operates against the Commonwealth. The facts relevant to that question are not in dispute.

The Commonwealth filed suit on February 26, 1985, seeking to recover the costs of abating the hazard of building materials containing asbestos that were installed in 1,016 public buildings and facilities located throughout the Commonwealth. Claiming compensatory damages of $24,752,274, and punitive damages of $25,000,000, the Commonwealth named Owens-Corning Fiberglas Corporation and 34 others as defendants.

The defendants filed responsive pleadings and certain special pleas. Included was a motion for summary judgment invoking the provisions of Code § 8.01-250. In order to facilitate determination of that motion, the parties stipulated that all the asbestos materials had been installed in the buildings during construction that had been completed more than five years before the Commonwealth filed its suit.

In a letter opinion, the trial court ruled that "since the statute in question is one of repose and not limitations, ... the plaintiff is barred from maintaining the suit," that the defendants' motion was "well taken," and that the defendants were entitled to summary judgment. In a motion to reconsider, the Commonwealth complained that the trial court had not determined whether the sovereign is exempt from the statute of repose and, if not, whether the statute offends constitutional guarantees. Denying the motion for reconsideration, the trial court entered final judgment dismissing the motion for judgment, and we granted the Commonwealth an appeal. ²

The trial court rested its rulings on our decision in School Bd. of the City of Norfolk v. U.S. Gypsum, 234 Va. 32, 360 S.E.2d 325 (1987). There, we held that Code § 8.01-250 is a statute of repose and that, unlike a "pure" statute of limitations that merely bars the maintenance of a remedy, the statute of repose bars the remedy and extinguishes the underlying cause of action. The exemption from suit accorded those named in the statute is a substantive right protected by the due process clause of the Constitution of Virginia, Article I, Section 11.

In overruling the motion to reconsider, the trial court necessarily rejected the contention that the Commonwealth is exempt from the operation of Code § 8.01-250. That question was not raised in U.S. Gypsum, and we consider it now as a matter of first impression.

We begin with an analysis of the three distinct types of statutory enactments aimed at precluding litigation of stale claims. First, and most familiar, are procedural or "pure" statutes of limitation. These serve merely to time-restrict the assertion of a remedy. They furnish an affirmative defense and are waived if not pleaded. Second are substantive or "special" statutes of limitation. They are ordinarily contained in statutes which create a new right and become elements of that newly-created right, restricting its availability. Compliance with such a statute is a condition precedent to maintenance of a claim. Barksdale v. H.O. Engen, Inc., 218 Va. 496, 498, 237 S.E.2d 794, 796 (1977). Third, and particularly pertinent here, are statutes of repose. The time limitations of such statutes begin to run from some legislatively selected point in time which is unrelated to the accrual of any cause of action or right of action, whether accrued or yet to accrue. Such statutes reflect a legislative policy determination that a time should come beyond which a potential defendant will be immune from liability for his past acts and omissions. U.S. Gypsum, 234 Va. at 37, 360 S.E.2d at 327-28.

With respect to the first category, it has been a part of the common law from time immemorial that the statute of limitations does not run against the sovereign. Nullum tempus occurrit regi is a rule that applies to the Commonwealth as it did to the Crown. Taylor & als' Case, 70 Va. (29 Gratt.) 780, 794 (1878). Further, the General Assembly has codified the rule in Code § 8.01-231, which provides:

No statute of limitations which shall not in express terms apply to the Commonwealth shall be deemed a bar to any proceeding by or on behalf of the same. This section shall not, however, apply to agencies of the Commonwealth incorporated for charitable or educational purposes. ³

In Commonwealth v. Spotsylvania, 225 Va. 492, 495, 303 S.E.2d 887, 889-90 (1983), we held that Code § 8.01-231, which makes no distinction between "pure" and "special" statutes of limitation, applies to the second category, above, as well as to the first. The Commonwealth now argues that Code § 8.01-231, or the principle it codifies, should also apply to the third category, for the same public policy reasons as those which support the common-law rule.

We do not agree. Ours is a government whose powers are limited by the Constitution. Where statutory enactments and common-law rules come into conflict with constitutional principles, the latter must prevail. We decided, in U.S. Gypsum, that after the statute of repose, Code § 8.01-250, had run, the potential defendants in that case had acquired substantive rights which the legislature could not constitutionally impair. More recently, in Roller v. Basic Construction Co., 238 Va. 321, 384 S.E.2d 323 (1989), we noted that when a statute of repose has run on a tort claim, all causes of action are extinguished, "creating a substantive right of repose in the potential defendants" which the legislature may not abridge. Id. at 330, 384 S.E.2d at 327 (emphasis added).

The Commonwealth argues that although rights of repose might accrue to potential defendants if sued by another plaintiff, such rights could never accrue against the Commonwealth because it was a potential plaintiff which had always been immune from any limitation bars. Thus, the argument runs, a potential defendant is always exposed to suit at the hands of the sovereign and any constitutionally protected rights of repose which may attach because of the lapse of time are always limited by, and subject to, that risk.

We do not agree. The Commonwealth's argument treats this classic collision between a constitutionally protected right and a statutory power as one in which the statute, or the common-law maxim it codifies, must prevail. That result is repugnant to the bedrock principles of constitutional government.

The ancient common-law rule nullum tempus occurrit regi remains generally accepted as to traditional procedural statutes of limitations. Authorities in other jurisdictions are divided upon the question whether the rule applies also to substantive, or special limitations, but, as noted above, we held, in Spotsylvania, that its statutory counterpart does so apply. Nevertheless, the effect of Code § 8.01-231, by its own terms, is limited to "statute[s] of limitations." As we held in U.S. Gypsum, Code § 8.01-250 is not a statute of limitations, but a statute of repose, something "in fact, different in concept, definition, and function." 234 Va. at 37, 360 S.E.2d at 327. For both of the foregoing reasons, we hold that constitutionally protected "substantive rights of repose" accrued to the potential defendants in this case when the five-year period prescribed by Code § 8.01-250 had run.

In an alternative argument, the Commonwealth asserts that if it is not exempt from the operation of Code § 8.01-250, that section is unconstitutional as applied under the facts of this case. The argument is premised upon the assertion that asbestos is an inherently dangerous material and that the General Assembly, in enacting the statute of repose, had no rational basis for extending its protection to manufacturers of such materials; thus, the classification made by the statute is not rationally related to its legislative purpose.

We held, in Cape Henry v. Natl. Gypsum, 229 Va. 596, 602, 331 S.E.2d 476, 480 (1985), that the legislature intended that Code § 8.01-250 benefit manufacturers of ordinary building materials, as opposed to manufacturers of machinery and equipment. It is beyond dispute that during the years asbestos was being installed in the buildings involved in this case, it was, unfortunately, an ordinary building material. The Commonwealth's argument in this regard amounts only to an assertion of legislative unwisdom.

The Commonwealth finally argues that its rights of action had accrued and were fully vested before Code § 8.01-250 was enacted in its original form in 1964 ⁴ and that the statute cannot be "applied retroactively" to cut off those vested rights. When the statute was enacted in 1964, the Commonwealth's rights of action were of necessity divided into two categories: those pertaining to buildings completed less than five years prior to the July 1, 1964 effective date of the statute, and those completed earlier. With respect to the first category, the Commonwealth had an ongoing opportunity to file suit which did not expire until five years after completion of the work. With respect to the second category, the Commonwealth was under the necessity of bringing its suit between the time of legislative enactment and the date the legislation became effective. Such a "window of opportunity," even one as brief as 30 days, is...