Hanson v. Williams County, 11066

Decision Date06 June 1986
Docket NumberNo. 11066,11066
Citation389 N.W.2d 319
Parties, Prod.Liab.Rep. (CCH) P 11,000 Bonny HANSON, Plaintiff and Appellant, v. WILLIAMS COUNTY, North Dakota; and Ingram Manufacturing Company, Inc., Defendants and Appellees. Civ.
CourtNorth Dakota Supreme Court

Rolfstad, Winkjer, McKennett & Stenehjem, Williston, for plaintiff and appellant; argued by Dean Winkjer; appearance by Donna M. Murphy.

Bjella, Neff, Rathert, Wahl & Eiken, Williston, for defendant and appellee Williams County.

Nilles, Hansen, Magill & Davies, Fargo, for defendant and appellee Ingram Mfg. Co.; argued by Stephen W. Plambeck; appearance by Richard Henderson.

GIERKE, Justice.

Bonny Hanson, plaintiff, appeals from a district court judgment dismissing her products liability action on the basis that the claims against the manufacturer were barred by Sec. 28-01.1-02 of the North Dakota Century Code. Hanson challenges the constitutionality of Sec. 28-01.1-02. We conclude that Sec. 28-01.1-02 violates Article I, Sec. 21, of the North Dakota Constitution, and, accordingly, reverse and remand for trial.

Ingram Manufacturing Company, Inc., manufactured a multi-ton earth packer on November 13, 1963. This earth packer was sold to Krider Equipment Company of Fargo in April of 1964. Krider sold the earth packer to the State of North Dakota, which in turn sold it to Williams County on July 9, 1980.

Todd Hefta, the 22-year-old son of Hanson, was an employee of the city of Williston at the time the earth packer was borrowed by the city from Williams County. Hefta was assigned to do various tasks with fellow city employee Wayne Courchene. Their tasks included operating the earth packer.

On August 24, 1983, as Courchene mounted the packer to start it, Hefta walked behind the packer to get a drink of water from a cooler that was sitting on the back of the machine. Before starting the machine, Courchene allegedly checked the clutch to make sure it was out of gear. As Hefta was getting a drink of water, Courchene touched the starter button and the earth packer "jumped backwards", running over Hefta and killing him.

On April 19, 1984, Hanson filed an action for wrongful death pursuant to Chapter 32-21, N.D.C.C., alleging negligence, breach of implied warranty, and strict liability in tort. 1 Ingram moved for summary judgment of dismissal of Hanson's complaint on the basis of Sec. 28-01.1-02(1), N.D.C.C., which provides:

"28-01.1-02. Statute of limitation.

"1. There shall be no recovery of damages for personal injury, death, or damage to property caused by a defective product, except as provided in subsections 4 and 5, unless the injury, death, or damage occurred within ten years of the date of initial purchase for use or consumption, or within eleven years of the date of manufacture of a product, where that action is based upon, or arises out of, any of the following:

a. Breach of any implied warranties.

b. Defects in design, inspection, testing, or manufacture.

c. Failure to warn.

d. Failure to properly instruct in the use of a product." [Emphasis added.]

The district court granted Ingram's motion for summary judgment and dismissed Hanson's claim against Ingram.

The basic issue on appeal is whether Sec. 28-01.1-02, N.D.C.C., the "statute of limitation" of the North Dakota Products Liability Act, violates our Federal or State Constitution.

In 1977 the Legislature adopted Senate Concurrent Resolution 4030, which directed the Legislative Council to study the availability and affordability of products liability insurance and related insurance problems in North Dakota.

After receiving considerable testimony, a majority of the committee members recommended that the Legislative Assembly pass two bills, i.e., House Bills Nos. 1075 and 1589. Together, these two bills form the North Dakota Products Liability Act. After some minor amendments, these bills were passed by the 46th Legislative Assembly and are now codified in Chapter 28-01.1, N.D.C.C. 2

During discussions on the North Dakota Products Liability Act, much of the testimony received by the legislative committees concerned the "statute of limitation" [p 2 of H.B. No. 1075, and now codified as Sec. 28-01.1-02(1), N.D.C.C.]. Proponents of the Products Liability Act argued that the cost of products liability insurance had become unaffordable to many North Dakota manufacturers and that the statute of limitation was essential in order to carry out the intent of the bill, i.e., to reduce the cost of products liability insurance in North Dakota. Opponents argued that the bill was unfair and it could not accomplish its intended purpose because products liability insurance rates were set on a national basis, not by individual state policies. 3

While the Products Liability Act was supported by a majority of the members of the Interim Committee on Products Liability, a minority of the committee members strongly opposed the new "statute of limitation". The minority members of the committee believed this part of the Act would unfairly limit the compensation available to innocent victims and questioned the constitutionality of such a provision. Governor Link, in his veto message, also questioned the fairness of this "statute of limitation". 4

Statute of Repose

While Sec. 28-01.1-02, N.D.C.C., is captioned "Statute of limitation", this section is, in effect, a statute of repose. Statutes of repose are different from statutes of limitation, although they have comparable effects. See Berry v. Beech Aircraft Corp., 717 P.2d 670 (Utah 1985); McGovern, The Variety, Policy and Constitutionality of Product Liability Statutes of Repose, 30 Am.U.L.Rev. 579, 582-587 (1981). A statute of limitation bars a right of action unless it is filed within a specified period of time after an injury occurs. The purpose of a statute of limitation is to prevent "plaintiffs from sleeping on their legal rights to the detriment of defendants". Dickson, The Statute of Limitations in North Dakota's Products Liability Act: An Exercise in Futility?, 59 N.D.L.Rev. 551, 556 (1983); State v. Halverson, 69 N.D. 225, 226, 285 N.W. 292, 293 (1939). A statute of limitation period commences either upon the occurrence of an injury, or when the injury is discovered. A statute of limitation must allow a reasonable time after a cause of action arises for the filing of a lawsuit. Wilson v. Iseminger, 185 U.S. 55, 62, 22 S.Ct 573, 575, 46 L.Ed. 804, 807 (1902); Berry, supra.

A statute of repose terminates any right of action after a specific time has elapsed, regardless of whether or not there has as yet been an injury. Frumer and Friedman, Products Liability, Sec. 16C(2)(i) (1985). A statute of repose period begins to run from the occurrence of some event other than the event of an injury that gives rise to a cause of action and, therefore, bars a cause of action before the injury occurs. A person injured after the statutory period of repose is left without a remedy for the injury. Because of this harsh result, many courts have found statutes of repose to be unconstitutional. Berry, supra; Kennedy v. Cumberland Engineering Co., Inc., 471 A.2d 195 (R.I.1984); Heath v. Sears, Roebuck & Co., 123 N.H. 512, 464 A.2d 288 (1983); Lankford v. Sullivan, Long & Hagerty, 416 So.2d 996 (Ala.1982); Phillips v. ABC Builders, Inc., 611 P.2d 821 (Wyo.1980); Saylor v. Hall, 497 S.W.2d 218 (Ky.1973).

Courts which have declared statutes of repose unconstitutional have done so on the basis of different constitutional rights. Some courts have relied at least in part on "open courts" provisions in State constitutions. Berry, supra; Daugaard v. Baltic Co-op. Bldg. Supply Assoc., 349 N.W.2d 419 (S.D.1984); Lankford, supra 416 So.2d 996. 5 Courts have also relied in part on the due process clauses of State constitutions. Berry, supra. Statutes of repose have also been declared violative of equal protection provisions of Federal and State constitutions. Heath, supra 464 A.2d 288. Some courts have used a combination of these constitutional provisions along with state wrongful death constitutional provisions to invalidate statutes of repose. Berry, supra; Kennedy, supra 471 A.2d 195; Saylor, supra 497 S.W.2d 218. 6 Contrarily, a number of courts have held statutes of repose to be constitutional under these same constitutional provisions. 7

Constitutional Question

In challenging the constitutionality of Sec. 28-01.1-02, N.D.C.C., Hanson relies upon Article I, Sec. 9, of the North Dakota Constitution which provides, in pertinent part, the following:

"Section 9. All courts shall be open, and every man for any injury done him in his lands, goods, person or reputation shall have remedy by due process of law, and right and justice administered without sale, denial or delay...."

Hanson also invokes the following part of the Fifth Amendment to the United States Constitution:

"No person shall ... be deprived of life, liberty, or property, without due process of law; ....,

and Sec. 1 of the Fourteenth Amendment to the United States Constitution which, in pertinent part, provides:

"Sec. 1. ... No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States, nor shall any state deprive any person of life, liberty or property, without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws."

Hanson's arguments marshal the "open courts" provision of the North Dakota Constitution along with due process and equal protection challenges. 8

We apply an equal protection analysis to Sec. 28-01.1-02. Essential to our analysis of the constitutionality of this statute is a focus on the application of the appropriate standard of review.

Standard of Review

We discussed the three standards of review applicable when a statute is challenged on equal protection grounds in Johnson v. Hasset, 217 N.W.2d 771 (N.D.1974). We noted that there is a group of cases involving "inherently...

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