Concordia College Corp. v. W.R. Grace & Co.

• Decision Date: 02 September 1993
• Docket Number: No. 92-1307,92-1307
• Citation: 999 F.2d 326
• Parties: Prod.Liab.Rep. (CCH) P 13,644 CONCORDIA COLLEGE CORPORATION, a non-profit organization, Appellant, v. W.R. GRACE & CO., individually and as successor-in-interest to the Zonolite Companies and Western Mineral Products Company; W.R. Grace & Co.--Conn., individually and as successor-in-interest to the Zonolite Companies and Western Mineral Products Company; Carey-Canada, Inc.; Basic, Inc.; The Celotex Corp., individually and as successor-in-interest to Philip Carey Manufacturing Company, Philip Carey Corporation, Briggs Manufacturing Company and Panacon Corporation; Keene Corporation, individually and as successor-in-interest to the Ehret Magnesia Manufacturing Company, Baldwin-Hill Company, Baldwin-Ehret-Hill, Inc., Mundet Company, and Keene Building Products Corporation; National Gypsum Company, individually and as successor-in-interest to Gold Bond Building Products Corporation; Pfizer, Inc., individually and as successor-in-interest to Charles Pfizer & Company, Kelley Island Lime & Transport Company, Gibsonburg Lime Products Company and Basic, Inc.; United States Gypsum Company, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 326

999 F.2d 326

Prod.Liab.Rep. (CCH) P 13,644

CONCORDIA COLLEGE CORPORATION, a non-profit organization, Appellant, v. W.R. GRACE & CO., individually and as successor-in-interest

to the Zonolite Companies and Western Mineral Products

Company; W.R. Grace & Co.--Conn., individually and as

successor-in-interest to the Zonolite Companies and Western

Mineral Products Company; Carey-Canada, Inc.; Basic, Inc.;

The Celotex Corp., individually and as

successor-in-interest to Philip Carey Manufacturing Company,

Philip Carey Corporation, Briggs Manufacturing Company and

Panacon Corporation; Keene Corporation, individually and as

successor-in-interest to the Ehret Magnesia Manufacturing

Company, Baldwin-Hill Company, Baldwin-Ehret-Hill, Inc.,

Mundet Company, and Keene Building Products Corporation;

National Gypsum Company, individually and as

successor-in-interest to Gold Bond Building Products

Corporation; Pfizer, Inc., individually and as

successor-in-interest to Charles Pfizer & Company, Kelley

Island Lime & Transport Company, Gibsonburg Lime Products

Company and Basic, Inc.; United States Gypsum Company, Appellees.

No. 92-1307.

United States Court of Appeals,

Eighth Circuit.

Submitted Feb. 19, 1993.

Decided July 14, 1993.

Rehearing and Suggestion for Rehearing En Banc Denied Sept. 2, 1993.

Daniel A. Speights, Hampton, SC, argued (Steven C. Lian, Minot, ND, and Jon M. Arntson, Fargo, ND, on the brief), for appellant.

Allen W. Hinderaker, Minneapolis, MN, argued (David F. Herr and Mary R. Vasaly, Minneapolis, MN, C. Todd Koebele and Thomas M. Conlin, St. Paul, MN, Thomas H. Shiah, Sandra Wallace Napolitano, Thomas Caswell and Brooks F. Poley of Minneapolis, MN, Kell M. Damsgaard and Dennis J. Valenza of Philadelphia, PA, and Hugh V Plunkett, III, and William D. Hittler, Minneapolis, MN, on the brief), for appellees.

Before BOWMAN, WOLLMAN, and HANSEN, Circuit Judges.

BOWMAN, Circuit Judge.

This is an appeal from summary judgment in favor of W.R. Grace & Company; W.R. Grace & Company--Connecticut; Carey-Canada, Inc.; Basic, Inc.; Celotex Corporation; Keene Corporation; National Gypsum Company; Pfizer, Inc.; and United States Gypsum Company (collectively W.R. Grace ¹), all manufacturers of asbestos-containing building materials, on the claim of Concordia College Corporation for recovery of its abatement costs in removing asbestos from its buildings. We affirm.

Two Minnesota statutes are especially relevant here, and we begin by identifying them and their applicability to this case. The first is the statute of limitations and repose for actions arising out of construction to improve real property, and reads in pertinent part as follows:

Except where fraud is involved, no action by any person in contract, tort, or otherwise 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, ... shall be brought against any person ... furnishing the ... materials ... more than two years after discovery of the injury ... nor, in any event shall such a cause of action accrue more than ten years after substantial completion of the construction.

Minn.Stat. § 541.051(1)(a) (1992). The "repose" aspect of the statute prohibits accrual of any cause of action after ten years. Thus regardless of when the injury is discovered, that is, when the cause accrues, see id. § 541.051(1)(b), the cause will be deemed accrued no later than ten years after substantial completion of the construction (absent a showing of fraud).

The other statute that is critical to the resolution of this case is a "revival" statute for asbestos cases, enacted in 1987. Under the statute, an asbestos abatement recovery action "that would otherwise be barred before July 1, 1990, as a result of expiration of the applicable period of limitation, is revived or extended. An asbestos action revived or extended under this subdivision may be begun before July 1, 1990." Id. § 541.22(2) (1992).

Concordia filed suit under the District Court's ² diversity jurisdiction on June 29, 1990, but the defendants in the suit were not served until July 24, 1990. The District Court granted summary judgment for the defendants, holding that Concordia's suit was barred by the statute of repose, and was not revived under section 541.22 because it was not "begun before July 1, 1990." Concordia contends that the statute of repose did not operate to bar its claim in this case and, should this Court find otherwise, that the revival statute operated to restore the action. We disagree with both propositions and affirm the judgment of the District Court.

All the buildings at issue here were "substantially completed" between 1957 and 1970, and the District Court held that Concordia's claims were barred by operation of the ten-year repose provision of section 541.051. Concordia argues that the District Court improperly applied the statute of repose retroactively to bar its suit. We review the District Court's application and interpretation of state law de novo. See Salve Regina College v. Russell, 499 U.S. 225, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991).

Section 541.051 was enacted in 1980 in substantially its present form, but with a fifteen-year accrual period for the repose provision. ³ The Minnesota Supreme Court held in 1986 that the two-year limitations period in section 541.051 had been applied retroactively--and improperly--to bar a "claim[ ] existing when it was enacted in 1980." Lovgren v. Peoples Elec. Co., 380 N.W.2d 791, 795 (Minn.1986); see also Minn.Stat. § 645.21 (1992) ("No law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature."). The court did not address retroactive application of the repose provision, however, and so Lovgren is not determinative of the outcome in this case.

The exact date when Concordia discovered (or reasonably should have discovered) the injury alleged in this case is not clear from the record before us, although the District Court indicated that the need for abatement was apparent to Concordia no later than 1984. It may be that Concordia's cause of action is barred by the general six-year tort statute of limitations in effect before enactment of section 541.051 in 1980. See supra n. 3. It also is entirely possible that the cause of action is barred by the two-year statute of limitations found in the reenacted version of section 541.051, an issue the District Court specifically declined to decide. We need not remand for decision of these issues, however, as we conclude that the ten-year repose provision of section 541.051 was properly applied to this action.

In 1988, the Minnesota legislature enacted the following law (which was never codified, apparently because it was effective for only a very limited period of time after enactment):

An action originally governed by Minnesota Statutes 1976, section 541.051, based on construction that was substantially completed between September 15, 1977, and January 1, 1978, may be brought according to Minnesota Statutes 1986, section 541.051 until January 1, 1989, notwithstanding that the action would otherwise be barred by Minnesota Statutes 1986, section 541.051.

1988 Minn.Laws ch. 547, § 1 (emphasis added). The legislative note accompanying the law indicated that the law was intended to "provid[e] relief for certain individuals denied a remedy due to the unconstitutionality of a statute of limitation relating to real property improvement." Id. ch. 547. There is no reason that construction substantially completed between September 15, 1977, and January 1, 1978, would be barred by new section 541.051 before January 1, 1989, if the repose period (ten years by 1986) did not begin running until enactment of section 541.051 in 1980. See Calder v. City of Crystal, 318 N.W.2d 838 (Minn.1982) (applying section 541.051 to bar third-party action for contribution or indemnity where suit was filed in 1978 when no construction statute of limitations was in effect, and third parties were sought to be impleaded within weeks after the statute's effective date in 1980 but twenty-two years after substantial completion of the construction at issue). We believe the Minnesota legislature intended that the repose portion of section 541.051 would apply to bar actions such as this one. ⁴

Concordia also argues that the statute, which applies "[e]xcept where fraud is involved," was tolled as to at least some of the defendants because they committed fraud. The District Court did not consider this argument, however, because Concordia failed to raise the issue in response to defendants' motion for summary judgment. The District Court declined to hear Concordia's evidence of alleged fraud offered after summary judgment had been granted and denied Concordia's motion, made pursuant to Federal Rule of Civil Procedure 59(e), to alter or amend the judgment.

Concordia now contends that it was lulled into inaction because W.R. Grace allegedly had neither taken the position in its briefs in support of its motion for summary judgment that class action tolling was per se inapplicable, see discussion infra, at 331-32, nor had it relied upon the two-year statute of limitations in its argument. We fail to see how W.R. Grace's alleged actions excuse Concordia's failure to raise the fraud issue. The summary judgment motion sought to throw out Concordia's suit based on operation of section 541.051. Concordia cannot now claim that it was not on notice that evidence of fraud, which might toll the statute, would be relevant in response to a motion for judgment based on operation of this statute of limitations and repose.

We review the District Court's denial of Concordia's motion to alter or amend for abuse of discretion. Hagerman v. Yukon Energy Corp., 839 F.2d 407, 413 (8th Cir.), cert. denied, 488 U.S. 820, 109 S.Ct. 63, 102 L.Ed.2d 40 (1988). Finding none, we affirm.

"A motion to alter or amend judgment...