Garrison v. Gould, Inc.

• Decision Date: 21 September 1994
• Docket Number: 93-2697 and 93-2799,Nos. 93-2696,s. 93-2696
• Citation: 36 F.3d 588
• Parties: Prod.Liab.Rep. (CCH) P 14,073 Cheryl GARRISON, Special Administrator of the Estate of William Tab Garrison, Deceased, Plaintiff-Appellant, v. GOULD, INCORPORATED, ABB Power T & D Company, Incorporated and ABB Asea Brown Boveri, Incorporated, Defendants-Appellees, and OIL TECHNOLOGY GROUP, Defendant-Third/Party Plaintiff-Appellant, v. SHELL OIL COMPANY, Third/Party-Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 588

36 F.3d 588

Prod.Liab.Rep. (CCH) P 14,073

Cheryl GARRISON, Special Administrator of the Estate of William Tab Garrison, Deceased, Plaintiff-Appellant, v. GOULD, INCORPORATED, ABB Power T & D Company, Incorporated and ABB Asea Brown Boveri, Incorporated, Defendants-Appellees, and OIL TECHNOLOGY GROUP, Defendant-Third/Party Plaintiff-Appellant, v. SHELL OIL COMPANY, Third/Party-Defendant-Appellee.

Nos. 93-2696, 93-2697 and 93-2799.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 11, 1994.

Decided Sept. 21, 1994.

Gary W. Finch, Endicott & Finch, Carmi, IL, Robert H. Howerton, Harris, Lambert, Howerton & Dorris, Marion, IL (argued), for Cheryl Garrison.

Edwina Warner, Troutt, Alexander, Popit & Warner, Benton, IL (argued), for Gould, Inc., ABB Power T & D Co., Inc., and ABB Asea Brown Boveri.

Ronald A. Roth (argued), David Wayne Vandeburgt, Bernard & Davidson, Granite City, IL, for Oil Technology Group.

Al J. Pranaitis (argued), C. Raymond Bell, Hoagland, Fitzgerald, Smith & Pranaitis, Alton, IL, for Shell Oil Co.

Before CUDAHY and FLAUM, Circuit Judges, and SHARP, District Judge. ^*

CUDAHY, Circuit Judge.

Tab Garrison, Cheryl Garrison's husband, was killed in June 1990 while working on electrical equipment in an oil field owned by Oil Technology Group ("OTG"). Cheryl Garrison sued to recover damages from OTG and from the successors in interest of the electrical switch maker (referred to collectively as "Gould") whose product purportedly caused the injury. ¹ OTG then sought contribution from Shell Oil Company ("Shell"), the original owner of the oil field. The district court entered summary judgment in favor of the successors to the switch maker on the ground that the Illinois statute of repose, 735 ILCS 5/13-214(b), barred Garrison's claim. The court also entered summary judgment in favor of Shell, holding that OTG failed to show that Shell owed a duty to the deceased. ² We reverse the judgment with respect to Gould and affirm the judgment in favor of Shell.

I.

In the late 1950's, Shell arranged to have an electrical supply system built to provide power for pumps and other extraction equipment in an oil field, known as the Rural Hill Flood Unit. Shell did not itself participate in the construction of the electrical system. Rather, the switch allegedly causing the injury passed by purchase through the hands of at least two intermediary supply companies before it was installed in Shell's system by an outside contractor. Further, there is testimony that Shell did not itself perform maintenance on the switch in question or other switches when it owned the oil field. In 1982, Shell sold the oil field to Oil Technology Group.

The electrical system of the oil field included a four-pole distribution or switching station. The switches at the switching station were manufactured and sold by ITE Circuit Breaker Company in the 1950's. In 1968, ITE Circuit Breaker merged with Imperial Eastman Corporation to form ITE Imperial Corporation. In 1976, Gould, Inc. acquired ITE Imperial as a wholly-owned subsidiary. About four years later, Gould's high-voltage products division changed hands and its assets were eventually purchased by ABB Power T & D Company, Inc., a wholly-owned subsidiary of Asea Brown Boveri, Inc. Neither the maker of the indicated switch nor its successors in interest came to the oil field to install the switches. Indeed, testimony revealed that the switches' components were shipped to the oil field unassembled, where the installer put them together. Def. Ex. 4 at 106-07.

On June 19, 1990, Tab Garrison, an electrician and plaintiff's husband, threw one of the switches located at the switching station to turn off the power so that he could work on an electrical pole. Apparently because the switch he threw malfunctioned, he came in contact with a power supply line and was fatally electrocuted. Cheryl Garrison brought this action.

II.

We review the grant of summary judgment de novo. We, of course, affirm the district court's decision only if, viewing the record and all inferences drawn from it in the light most favorable to the non-movant, there is no genuine issue of material fact, such that the movant is entitled to judgment as a matter of law. Kralman v. Illinois Dept. of Veterans' Affairs, 23 F.3d 150, 152 (7th Cir.1994).

A. Summary Judgment in Favor of Gould

The Illinois statute of repose provides in relevant part:

No action based upon tort, contract or otherwise may be brought against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property after 10 years have elapsed from the time of such act or omission.

735 ILCS 5/13-214(b). There is no dispute that ten years have elapsed since the conduct upon which Gould bases its statute of repose defense occurred. Garrison acknowledges that the switch in question was installed when the oil field switching station was constructed in the late-1950's--decades before the deceased was accidentally electrocuted. Consequently, the only issue with respect to the summary judgment in favor of Gould is whether Gould is otherwise entitled to take advantage of the statute. In particular, whether the statute applies turns on whether the switch at issue is an "improvement to real property" and whether Gould engaged in activities that fall within the ambit of Sec. 13-214(b). ³

1. Improvement to Real Property

Whether an item is an "improvement to real property" is a question of law, though its resolution involves numerous questions of fact. Herriott, 998 F.2d at 489 (citing St. Louis v. Rockwell Graphic Sys., 153 Ill.2d 1, 178 Ill.Dec. 761, 762, 605 N.E.2d 555, 556 (1992)). In St. Louis v. Rockwell Graphic Systems, the Illinois Supreme Court attempted to define the term "improvement to real property," looking first to the Black's Law Dictionary definition of "improvement":

A valuable addition made to property (usually real estate) or an amelioration in its condition, amounting to more than mere repairs or replacement, costing labor or capital, and intended to enhance its value, beauty or utility or to adapt it for new or further purposes.

178 Ill.Dec. at 762, 605 N.E.2d at 556. The court then specified certain criteria for determining what constitutes an improvement to real property: (1) whether the addition was intended to be permanent or temporary; (2) whether it became an integral component of the over-all system; and (3) whether the value and use of the property was enhanced. Id. This circuit and the Illinois appellate courts have also noted that the application of Sec. 13-214(b) should focus on the entire construction project and not merely on a single component of the system. Herriott, 998 F.2d at 490; see also Hilliard v. Lummus Co., Inc., 834 F.2d 1352, 1356 (7th Cir.1987) ("[I]f a component is an essential or integral part of the improvement to which it belongs, then it is itself an improvement to real property."); Kleist, 156 Ill.Dec. at 841-42, 571 N.E.2d at 821-22 (same).

The switch in question here was installed along with the rest of the electrical switching station and the installation of this equipment amounts to more than a mere repair or replacement. The purpose of the switching station--to help provide power for the oil field extraction equipment--indicates that its installation was meant to be permanent, and there is no evidence to the contrary. Further, the switch itself controlled the flow of current through the system and it was thus integral to that system. Finally, Shell installed the switch and electrical system so that it could extract oil to be refined or sold. Thus, the system added value to the property. On these facts, we conclude that the switch in question was an improvement to real property within the meaning of Sec. 13-214(b).

2. Class Protected by the Statute

The second aspect of the inquiry concerns whether Gould participated in any of the activities protected under Sec. 13-214(b). ⁴ The first clause of the section recites those protected activities and places them in a certain context: "No action based upon tort ... may be brought against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction." Sec. 13-214(b) (emphasis added). The concluding phrase, "of construction," modifies each of the enumerated activities and not merely the final one. ⁵ Hence, the statute should be construed to mean, inter alia, that it protects the activities of persons engaged in the "design of construction." When, as in the case before us, the defendant-manufacturer has not participated directly in construction courts have focused on whether the manufacturer's product is custom-made or standardized. "To be included within the statute, a manufacturer must perform some role related to the construction site beyond provision of standard products generally available to the public and not custom designed for the project. Were this not so, a manufacturer's exposure to liability for a defective product would rest solely on the fortuity of its incorporation in an 'improvement to real property'...." People v. Asbestospray Corp., 247 Ill.App.3d 258, 186 Ill.Dec. 462, 467-68, 616 N.E.2d 652, 657-58 (1993); see also Witham, 975 F.2d at 1346 (citing Blaske v. Smith & Entzeroth, Inc., 821 S.W.2d 822, 837 (Mo.1991)). It generally follows that, if Gould's switch is found to be a standard product, Gould did not engage in activities protected by the statute.

Gould claims that it "specially custom made" the switch according to specifications provided by the builders of the switching station. Br.Appellees at 36. But the switch was designed about 1955--approximately three to four years before the one in question was purchased and installed. Also about 1955, the switch in question was patented and issued a serial number, further suggesting that the...