First United Methodist Church of Hyattsville v. U.S. Gypsum Co.

• Decision Date: 10 August 1989
• Docket Number: No. 88-1612,88-1612
• Citation: First United Methodist Church of Hyattsville v. U.S. Gypsum Co., 882 F.2d 862 (4th Cir. 1989)
• Parties: , 58 USLW 2122, 19 Envtl. L. Rep. 21,451 FIRST UNITED METHODIST CHURCH OF HYATTSVILLE, Plaintiff-Appellant, v. UNITED STATES GYPSUM COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 862

882 F.2d 862

30 ERC 1111, 58 USLW 2122, 19 Envtl.

L. Rep. 21,451

FIRST UNITED METHODIST CHURCH OF HYATTSVILLE, Plaintiff-Appellant, v.UNITED STATES GYPSUM COMPANY, Defendant-Appellee.

No. 88-1612.

United States Court of Appeals Fourth Circuit.

Argued June 9, 1989.

Decided Aug. 10, 1989.

Peter Tyler Enslein(Michelle A. Parfitt, James M. Hanny, Ashcraft & Gerel, Landover, Md., on brief), for plaintiff-appellant.

George Albert Nilson(John E. Griffith, Jr., John A. Singer, Piper & Marbury, Baltimore, Md., Thomas B. Kenworthy, Morgan, Lewis & Bockius, Philadelphia, Pa., on brief), for defendant-appellee.

Before RUSSELL and HALL, Circuit Judges, and BUTZNER, Senior Circuit judge.

K.K. HALL, Circuit Judge:

The First United Methodist Church of Hyattsville, Maryland ("First United") appeals the district court's grant of partial summary judgment in favor of United States Gypsum Company("USG") based on a Maryland statute of repose, Sec. 5-108 Md.Cts. & Jud.Proc.Code Ann.Specifically, the district court held that the repose period of Sec. 5-108(a) was not preempted by the Comprehensive Environmental Response and Compensation Act of 1980 ("CERCLA"), 42 U.S.C. Sec. 9658.Finding no error, we affirm.

I.

In 1961, First United undertook construction of a new church building.At the direction of the building's architect, an asbestos-containing acoustical plaster, manufactured by USG, was applied to the building's ceilings.The church was consecrated on May 20, 1962, and has been in continuous use ever since.In 1969, a portion of the ceiling was replaced and asbestos-laden plaster was again used.

In July, 1985, First United became concerned over the possibility that asbestos materials may have been used in the construction of the church.In August, the presence of danger from the acoustical plaster was discovered and First United's Board of Trustees directed its removal from the building.

On June 15, 1988, First United brought suit against USG in Maryland state court alleging that the plaster posed a health hazard to those who frequently occupied the building.The Church sought to recover the cost of the removal of the plaster, an amount in excess of $225,000.00.USG removed the case to federal court without opposition.

First United's complaint advanced the state law theories of strict liability, negligence, breach of express and implied warranties, and fraud.On July 26, USG filed a motion for partial summary judgment on all claims arising from installation of the plaster which occurred before June 17, 1966, interposing Maryland's 20-year statute of repose as a complete defense.Sec. 5-108(a) Md.Cts. & Jud.Proc.Code Ann.On October 13, the district court granted the motion and, finding no reason for just delays, entered a final judgment pursuant to Fed.R.Civ.P. 54(b) as to all pre-1966 claims.This appeal followed.

II.

First United makes several arguments against the application of the statute of repose to its claims.The church's primary contention is that manufacturers are not in the class of persons protected by the statute.Alternatively, First United argues that even if the statute applies, USG's fraudulent concealment of the hazards of its plaster serve to toll the statute's running.Finally, the church argues that the time limits of Sec. 5-108, as applied to its claims, have been preempted by CERCLA's Sec. 9658, which establishes a uniform statute of limitations for all state law property damage actions based on the release of any hazardous substance into the environment.We address these arguments in turn.

The statute of repose reads in pertinent part:

Sec. 5-108.Injury to person or property occurring after completion of improvement to realty.

(a) Injury occurring more than 20 years later.--Except as provided by this section, no cause of action for damages accrues and a person may not seek contribution or indemnity for damages incurred when wrongful death, personal injury, or injury to real or personal property resulting from the defective and unsafe condition of an improvement to real property occurs more than 20 years after the date the entire improvement first becomes available for its intended use.

First United bases its narrow reading of this broad grant of immunity on a passage from the statute's legislative history that characterizes the statute as protecting "builders, contractors, landlords, and realtors."SeeAllentown Plaza Associates v. Suburban Propane Gas Corp., 43 Md.App. 337, 342-44, 405 A.2d 326(1979)(discussing the Revisor's Note to Sec. 5-108).According to First United's argument, because USG as manufacturer of the plaster does not fit into one of these categories, it cannot have benefit of the statute.We do not agree.

While a statute's legislative history is often helpful in resolving ambiguity, one of the time-honored maxims of statutory construction is that when the language of a statute is clear, there is no need to rely on its legislative history.Ex Parte Collett, 337 U.S. 55, 61, 69 S.Ct. 944, 947, 93 L.Ed. 1207(1949).Such is the case here.This statute unequivocally states that "no cause of action for damages accrues" after the 20-year time limit.And, it is completely silent as to any limitation on the class of persons it protects.To remove manufacturers from the ambit of Sec. 5-108(a) as First United suggests, would be flatly inconsistent with this language's plain mandate.We are not alone in reaching this result.

In J.H. Westerman Co. v. Fireman's Fund Ins. Co., 499 A.2d 116(D.C.App.1985), the District of Columbia court was forced to construe its nearly-identical statute of repose.In concluding that manufacturers were covered by the statute, the court reasoned that this language creates an immunity which turns on the defendant's connection to the improvement rather than on the type of service the defendant rendered or product it provided.Id. at 120.We find this reasoning persuasive and hold that Sec. 5-108(a) works to insulate from liability manufacturers of products used in improvements made to real property.¹

III.

First United next contends that even if Sec. 5-108(a) applies, USG's fraudulent concealment of the hazards of its plaster tolls the time limits of the statute.²We disagree.

The common law principle of equitable tolling of limitations periods has been codified in Maryland:

If a party is kept in ignorance of a cause of action by the fraud of an adverse party, the cause of action shall be deemed to accrue at the time when the party discovered, or by the exercise of ordinary diligence should have discovered the fraud.(An.Code 1957, art. 57, Sec. 14;1973, 1st Sp.Sess., Ch. 2, Sec. 1)

Sec. 5-203 Md.Cts. & Jud.Proc.Ann.³As the language of this provision indicates, it is intended to give relief to victims of fraud by tolling the time of accrual of a cause of action for purposes of an applicable statute of limitations.E.g., Butcher v. Robertshaw Controls Co., 550 F.Supp. 692, 703(D.Md.1981).However, as the Maryland courts have repeatedly recognized, Sec. 5-108 is a statute of repose, not a statute of limitations, and the time of accrual has been set by the Maryland General Assembly.Hilliard & Bartko Joint Venture v. Fedco Systems, Inc., 309 Md. 147, 159, 522 A.2d 961(1987);Whiting-Turner, 304 Md. at 350, 499 A.2d 178;Allentown Plaza, 43 Md.App. at 338 n. 2, 405 A.2d 326; see also President and Directors, of Georgetown College v. Madden, 505 F.Supp. 557, 571(D.Md.1980).These are meaningful distinctions.

A statute of limitations is a procedural device that operates as a defense to limit the remedy available from an existing cause of action.Goad v. Celotex Corp., 831 F.2d 508, 511(4th Cir.1987), cert. denied, --- U.S. ----, 108 S.Ct. 2871, 101 L.Ed.2d 906(1988).A statute of repose creates a substantive right in those protected to be free from liability after a legislatively-determined period of time.Id. Statutes of limitations are motivated by considerations of fairness to defendants and are intended to encourage prompt resolution of disputes by providing a simple procedural mechanism to dispose of stale claims.Harig v. Johns-Manville Products Corp., 284 Md. 70, 75, 394 A.2d 299(1978).Statutes of repose are based on considerations of the economic best interests of the public as a whole and are substantive grants of immunity based on a legislative balance of the respective rights of potential plaintiffs and defendants struck by determining a time limit beyond which liability no longer exists.Whiting-Turner, 304 Md. at 349-50, 499 A.2d 178.Thus, as a general rule, a statute of limitations is tolled by a defendant's fraudulent concealment of a plaintiff's injury because it would be inequitable to allow a defendant to use a statute intended as a device of fairness to perpetrate a fraud.Conversely, a statute of repose is typically an absolute time limit beyond which liability no longer exists and is not tolled for any reason because to do so would upset the economic balance struck by the legislative body.Knox v. AC & S, Inc., 690 F.Supp. 752, 759(S.D.Ind.1988).

These general principles counsel that we should not lightly disturb the Maryland General Assembly's judgment on the time limit set by Sec. 5-108(a).We recognize, as the Maryland court has recognized, the unique public policy concerns embodied in the 20-year repose period:

[The statute is] a response to the problems arising from the expansion of liability based on the defective and unsafe condition of an improvement to real property....If a legislative body concludes that it will address the problem of expanded liability ... it must balance the interests of those potentially subject to liability, of those directly suffering injury, and of the public in having improvements built safely and at a reasonable cost.

Whiting-Turner, 304 Md. at 349-50, 499 A.2d 178.

Further, it appears that a purpose of the statute was to inextricably tie the accrual of a...