Harris v. Clinton Corn Processing Co.

• Decision Date: 16 January 1985
• Docket Number: No. 84-406,84-406
• Citation: 360 N.W.2d 812
• Parties: Carol Ann Moore HARRIS, Administratrix of the Estate of Clyde Horton Harris, Plaintiff-Movant, v. CLINTON CORN PROCESSING COMPANY, Defendant.
• Court: Iowa Supreme Court

Page 812

360 N.W.2d 812

Carol Ann Moore HARRIS, Administratrix of the Estate of Clyde Horton Harris, Plaintiff-Movant, v. CLINTON CORN PROCESSING COMPANY, Defendant.

No. 84-406.

Supreme Court of Iowa.

Jan. 16, 1985.

Charles D. Williams, Robert J. Walker, and E. Clifton Knowles, Nashville, Tenn., and Gary M. Lane of Berger & Lane, Davenport, for plaintiff-movant.

Larry L. Shepler and Vicki L. Seeck of Betty, Neuman, McMahon, Hellstrom & Bittner, Davenport, for defendant.

Considered by UHLENHOPP, P.J., and HARRIS, McCORMICK, McGIVERIN, and SCHULTZ, JJ.

McCORMICK, Justice.

In this case we answer a question certified to us pursuant to Iowa Code chapter 684A (1983) by Chief Judge W.C. Stuart of the United States District Court, Southern District of Iowa. The question is as follows:

Is a wrongful death action brought in Iowa governed by Iowa Code § 614.1(2) or by Tenn.Code Ann. § 28-3-202, where:

(1) the action would be time-barred under the Tennessee provision but not under the Iowa provision;

(2) Iowa's "borrowing statute," Iowa Code § 614.7, is inapplicable; and

(3) Tennessee substantive law governs the merits of the case?

We respond that in the certified facts the action is governed by the Tennessee statute of limitations.

Iowa Code section 614.1 (1983) provides in material part:

Actions may be brought within the times herein limited, respectively, after their causes accrue, and not afterwards, except when otherwise specially declared:

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2. ... Those founded on injuries to the person or reputation, including injuries to relative rights, whether based on contract or tort, or for a statute penalty, within two years.

Tennessee Code Annotated section 28-3-202 (1980) provides in material part:

All actions to recover damages for any deficiency in the design, planning, supervision, observation of construction, or construction of an improvement to real property, ... for injury to the person or for wrongful death arising out of any such deficiency, shall be brought against any person performing or furnishing the design, planning, supervision, observation of construction, construction of, ... in connection with such an improvement [to real property] within four (4) years after substantial completion of such an [improvement].

The certified facts are as follows:

Claude Harris, a Tennessee resident, was fatally injured in an explosion that occurred in Tennessee on December 22, 1980, while he was repairing a leak in a supply line used by his employer to transport corn syrup from a railroad tank line to a storage tank. Clinton Corn Processing Company (Clinton) had designed and constructed the corn syrup supply system in 1975. Plaintiff brought a wrongful death action against Clinton and several other defendants in a Tennessee federal district court, alleging negligence and strict liability. Defendant Clinton moved for summary judgment on the basis of Tenn.Code Ann. § 28-3-202.... The Tennessee federal court granted Clinton's motion, holding: (1) that the corn syrup supply system was an "improvement to real property" within the meaning of the statute; (2) that the statute barred plaintiff's action against Clinton; and (3) that the statute was not unconstitutional. The court subsequently amended its ruling to reflect that the dismissal of Clinton was based on application of the specific statute of limitation set forth in Tenn.Code Ann. § 28-3-202 and was not an adjudication on the merits within the contemplation of Fed.R.Civ.P. 41.

Thereafter, on December 14, 1982, plaintiff brought this action in United States District Court for the Southern District of Iowa against defendant Clinton, which again moved for summary judgment on the basis of Tenn.Code Ann. § 28-3-202. That motion is presently pending before this Court. The parties agree that under Iowa choice of law rules, the substantive law of Tennessee would apply to the merits of plaintiff's claims if the action is not time-barred. It is also undisputed that this action would not be time-barred under Iowa Code § 614.1(2). The question before the Court is whether, under Iowa choice of law rules, the Court should apply Tenn Code Ann. § 28-3-202 or Iowa Code § 614.1(2) to this action.

Judge Stuart provided a helpful analysis of the question:

Because this is a diversity case, this Court must apply the conflict of law rules of the forum state, Iowa. Klaxon v. Stentor Electrical Mfg. Co., 313 U.S. 487, [61 S.Ct. 1020, 85 L.Ed. 1477] (1941). Iowa follows the rule that

where the incident giving rise to a cause of action occurs in a foreign state, the rights and liabilities of the parties must be determined by the foreign state's laws in whatever court the action is brought, but that procedural matters and matters pertaining to the remedy to be applied must be determined by the law of the forum.

Brooks v. Engel, 207 N.W.2d 110, 113 (Iowa 1973); see also Fabricius v. Horgen, 257 Iowa 268, 132 N.W.2d 410 (1965). In this case, the incident which gave rise to defendant's alleged liability occurred in Tennessee, and the parties agree that the substantive law of Tennessee would therefore apply.

Because statutes of limitation are usually viewed as being procedural rather than substantive, Iowa courts generally apply the Iowa statutes of limitation regardless of which state's substantive law will govern the case. Sedco International, S.A. v. Cory, 522 F.Supp. 254, 315 (S.D.Iowa 1981), aff'd, 683 F.2d 1201 (8th Cir.1982), cert. denied U.S. [1017], 103 S.Ct. 379 (1982); Williams v. Burnside, 207 Iowa 239, [243-44], 222 N.W. 413, 415 (1928). This approach is consistent with the general rule set forth in Restatement (Second) of Conflict of Laws § 142 (1971), which provides:

(1) An action will not be maintained if it is barred by the statute of limitations of the forum, including a provision borrowing the statute of limitations of another state.

(2) An action will be maintained if it is not barred by the statute of limitations of the forum, even though it would be barred by the statute of limitations of another state, except as stated in § 143.

In the present case, it is undisputed that this action would be barred under Tenn.Code Ann. § 28-3-202, but would not be barred under Iowa Code § 614.1(2). Thus the rule stated in subdivision (2) of Restatement § 142 is the one which would normally apply here. It is noted, however, that this subdivision refers to an exception which is set forth at § 143 of the Restatement, as follows: "An action will not be entertained in another state if it is barred in the state of [the] otherwise applicable law by a statute of limitations which bars the right and not merely the remedy." Restatement, supra, § 143. This exception has been widely recognized in other jurisdictions. E.g., Bournias v. Atlantic Maritime Co., 220 F.2d 152, 155 (2d Cir.1955) ("where the foreign statute of limitations is regarded as barring the foreign right sued upon, and not merely the remedy, it will be treated as conditioning that right and will be enforced by our courts as part of the foreign 'substantive' law."); Cummings v. Cowan, 390 F.Supp. 1251, 1255 (N.D.Miss.1975) (Mississippi law). No Iowa case has been found, however, in which the foregoing exception has been applied, rejected or even discussed. Nevertheless, given the widespread acceptance of the exception and the Iowa Supreme Court's favorable reference of Restatement principles on other choice of law issues, see, e.g., Brooks, supra, 207 N.W.2d at 113; Fabricius, supra, 257 Iowa at , 132 N.W.2d at 414, it seems likely that the Iowa court would adopt the exception set forth in § 143.

Assuming that Iowa would adopt the § 143 exception, the question becomes whether the Iowa Supreme Court would characterize Tenn.Code Ann. § 28-3-202 as barring the right upon which plaintiff seeks to sue, or merely the remedy. As noted in Comment (b) to Restatement § 143, "the forum will determine in accordance with its own conceptions whether a statute of limitations of a second state bars the right and not merely the remedy." (Emphasis added.)

The Tennessee statue in question here provides that all actions to recover damages against certain persons for certain deficiencies in improvements to real property must be brought within four years after substantial completion of the improvement; thus, its time limitation does not begin to run when the plaintiff's cause of action accrues, as does an ordinary statute of limitation. To this Court's knowledge, the only similar statute which has existed in Iowa is the present Iowa Code § 614.1(9), which provides that, with one exception, no medical malpractice action shall be brought more than six years after the date of the alleged causative act or omission of the defendant. The Court is aware of no Iowa case which has construed this relatively recent statute. Nor is the Court aware of any case in which the Iowa court has discussed such a statute from another jurisdiction in a manner that would have any bearing on the right/remedy distinction.

Because there appears to be no Iowa case law to aid in determining how the Iowa courts would characterize Tenn.Code Ann. § 28-3-202, the case law of other jurisdictions may be helpful in predicting how the Iowa Supreme Court would rule if faced with the issue. Probably the most useful case in this regard is President and Directors of Georgetown College v. Madden, 505 F.Supp. 557 (D.Md.1980), aff'd in pertinent part, 660 F.2d 91 (4th Cir.1981). In Madden, District of Columbia plaintiffs brought suit in Maryland to recover damages in connection with the allegedly improper construction of a building in the District of Columbia. Both Maryland and the District of Columbia had statutes similar to Tenn.Code Ann. § 28-3-202, which barred such actions if they did not accrue within a set period of time running from the date of completion of the improvement;...