Freezer Storage, Inc. v. Armstrong Cork Co.

• Decision Date: 26 January 1978
• Citation: 476 Pa. 270,382 A.2d 715
• Parties: FREEZER STORAGE, INC., a corporation, Appellant, v. ARMSTRONG CORK COMPANY, a corporation, and Acands, Inc., a corporation.
• Court: Pennsylvania Supreme Court

382 A.2d 715

476 Pa. 270

FREEZER STORAGE, INC., a corporation, Appellant, v. ARMSTRONG CORK COMPANY, a corporation, and Acands, Inc., a

corporation.

Supreme Court of Pennsylvania.

January 26, 1978

Argued May 3, 1976.

John E. Evans, Jr., Evans, Ivory & Evans Pittsburgh, for appellant.

Buchanan Ingersoll, Rodewald, Kyle & Buerger, Ronald W. Frank, Robert J. Pfaff, Egler & Reinstadtler, Pittsburgh, for appellees.

Before JONES C. J., and EAGEN, O'BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.

OPINION OF THE COURT

ROBERTS Justice.

Appellant Freezer Storage, Inc. (Freezer Storage) challenges the constitutionality of a statute limiting the liability of all persons "lawfully performing or furnishing the design, planning, supervision or observation of construction, or construction of (an improvement to real property)." ^[1] Act of December 22, 1965, P.L. 1183, § 1, 12 P.S. § 65.1 (Supp.1977). ^[2] The Act of 1965 provides that, except in specified circumstances, all actions against such persons for deficiencies in their work must be brought within twelve years after the completion of the improvement. Appellant argues that this statute conflicts with the Constitution of Pennsylvania because (1) it is special legislation violating Article III, Section 32 of the Constitution; (2) it closes the courts to one who has suffered an injury, in violation of Article I, Section 11 of the Constitution; and (3) it limits the amount which may be collected for an injury, in violation of Article III, Section 18 of the Constitution. We find that none of these grounds support appellant's claim of unconstitutionality.

I

The court of common pleas decided this case upon preliminary objections, and therefore we must treat as true all well-pleaded allegations made by Freezer Storage in its complaint as amended. Allstate Insurance Co. v. Fioravanti, 451 Pa. 108, 299 A.2d 585 (1973).

Freezer Storage alleges that appellee Armstrong Cork Company (Armstrong), negligently planned, designed and installed insulation material in the ceiling of Room No. 1 of a low-temperature warehouse owned and operated by Freezer Storage. About August, 1970, Freezer Storage discovered that the ceiling was about to collapse, and paid Acands, Inc. (Acands) over $21,000 for repairs.

On April 18, 1973, the ceiling collapsed. Repairs cost nearly $60,000 and damage to merchandise stored in the room was about $20,000. After the collapse, Freezer Storage discovered that both the original construction by Armstrong and the repairs by Acands had been done negligently.

In March of 1974, Freezer Storage brought an action for damages against both Armstrong and Acands in the Court of Common Pleas of Allegheny County. Armstrong filed preliminary objections to the complaint, contending that the Act of 1965 barred the action because it was instituted more than twelve years after Armstrong had completed work on the warehouse ceiling. Freezer Storage responded that the statute is unconstitutional. The trial court held the statute constitutional and dismissed the action against Armstrong. The Superior Court affirmed. We granted allocator and now affirm.

II

Article III Section 32 of the Pennsylvania Constitution reads in pertinent part:

"The General Assembly shall pass no local or special law in any case which has been or can be provided for by general law and specifically the General Assembly shall not pass any local or special law: . . .

7. Regulating labor, trade, mining or manufacturing: . . . ."

Appellant contends that the limitation of liability on which appellee relies, the Act of 1965, is a "special law" because it creates an irrational distinction between engineers, architects, builders and building contractors (hereinafter collectively called "builders"), to whom it applies, and others who are involved in improving real estate, such as landowners and suppliers, to whom it does not apply.

The general rule for determining whether an act is a "special law" violating the Pennsylvania Constitution is this:

"Legislation for a class distinguished from a general subject is not special, but general; and classification is a legislative question, subject to judicial revision only so far as to see that it is founded on real distinctions in the subjects classified, and not on artificial or irrelevant ones, used for the purpose of evading the constitutional prohibition. If the distinctions are genuine, the courts cannot declare the classification void, though they may not consider it to be on a sound basis. The test is not wisdom, but good faith in the classification."

DuFour v. Maize, 358 Pa. 309, 313, 56 A.2d 675, 677 (1948), quoting from Seabolt v. Commissioners, 187 Pa. 318, 41 A. 22 (1898). Thus, our only inquiry is whether there are "real distinctions" between builders and landowners, and between builders and suppliers.

It is manifestly rational to adjust time periods for liability for acts performed according to the substantive scope of the liability involved. The scope of liability of the class of builders differs significantly from that of the class of owners. First, the class of persons to whom builders may be liable is larger than the class to which owners may be liable. Landowners may be liable to others who come onto their land. Builders, however, may be liable both to the landowners and to others who use the land. Second, a builder may be liable for construction defects under various legal theories contract, warranty, negligence, and perhaps strict liability in tort. ^[3] Landowner liability for such defects, on the other hand, typically lies only in tort, unless the landowner is a lessor, in which case he is liable only for events occurring while the tenant is in possession. See generally, Restatement (Second) of Property, Landlord & Tenant, Chapters 10 & 17-19 (1977). Third, landowners can ordinarily avoid liability by taking adequate care of their land and structures and by regulating the number and type of persons entering the land and regulating the conditions of entry. The builder has no such control over his product after relinquishing it to the landowner. Landowner's liability is also controlled by the myriad of common law rules limiting liability to such classes as "undiscovered trespassers," "mere licensees" and so forth. Builder's insurance and owner's insurance structures and pricing are also different. For any of these reasons the Legislature might rationally conclude that builders should remain liable for their mistakes for only 12 years after they complete construction, but that a landowner should remain liable for injuries caused on his land for as long as he is in possession. See 12 P.S. § 65.1.

Appellant also suggests that this statute is invalid because it exempts builders but not suppliers from liability twelve years after a building is completed. As amicus points out, there are no cases on whether suppliers are ever to be classed as persons "lawfully performing . . . the design, planning . . . or construction of (improvements to real property)." However, assuming arguendo that suppliers are not within the class of builders, the distinction drawn between the two classes is rational. Suppliers, who typically produce items by the thousands, can easily maintain high quality-control standards in the controlled environment of the factory. A builder, on the other hand, can pre-test his designs and construction only in limited ways actual use in the years following construction is their only real test. Further, every building is unique and far more complex than any of its component parts. Even in the most uniform-looking suburban subdivision, each house stands on a separate plot of land; each lot may have slightly different soil conditions; one may be near an underground stream; and so forth. The Legislature can rationally conclude that the conditions under which builders work are sufficiently difficult that limitations should be placed on their liabilities, but not on the liabilities of suppliers.

This Act of 1965 draws the sort of rational distinction, based on real differences in the business world, which our cases have consistently upheld. In Goodman v. Kennedy, 459 Pa. 313, 329 A.2d 224 (1974), this Court sustained a statute allowing retail food stores employing fewer than ten people to open on Sunday, while forcing other food stores to remain closed. We held that this distinction was rationally related to the statutory purpose of guaranteeing a day of rest for most workers, while allowing necessaries to be available to the public. However, we struck down and severed another exemption for stores where fresh meat, produce, and groceries were sold by the store's proprietor or his immediate family. We held that this gave business benefits to certain individuals solely on the basis of family status. We did not see that this distinction had any basis in the business situation to which the statute applied.

In DuFour v. Maize, 358 Pa. 309, 56 A.2d 675 (1948), we upheld an act requiring operators of bituminous open-pit coal mines to implement certain conservation measures not required of other miners. We held the Legislature could nationally conclude that this form of mining posed environmental problems different from those posed by other forms of mining. In Tosto v. Pennsylvania Nursing Home Loan Agency, 460 Pa. 1, 331 A.2d 198 (1975), we held that an act allowing a state agency to make loans only to those nursing homes which met certain safety and other standards was rationally related to encouraging nursing homes to meet these standards, and so to promoting a condition in the business world which it was manifestly proper for the state to promote. Finally, in Commonwealth v. Life Assurance Co., 419 Pa. 370, 214 A.2d 209 (1965), appeal...