Hartford Fire Ins. Co. v. Lawrence, Dykes, Goodenberger, Bower & Clancy

• Decision Date: 31 July 1984
• Docket Number: Nos. 82-3404,82-3419,s. 82-3404
• Citation: 740 F.2d 1362
• Parties: HARTFORD FIRE INSURANCE CO., Plaintiff-Appellant, Cross-Appellee, v. LAWRENCE, DYKES, GOODENBERGER, BOWER & CLANCY, Defendant, Cross-Appellee, Gensert Bretnall Bobel, Inc., A.A. Knoch & Sons, Inc., Defendants- Appellees, Cross-Appellees, Schneider Lumber Co., Third-Party Plaintiff, Defendant, Cross-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1362

740 F.2d 1362

HARTFORD FIRE INSURANCE CO., Plaintiff-Appellant, Cross-Appellee, v. LAWRENCE, DYKES, GOODENBERGER, BOWER & CLANCY, Defendant,

Cross-Appellee,

Gensert Bretnall Bobel, Inc., A.A. Knoch & Sons, Inc.,

Defendants- Appellees, Cross-Appellees,

Schneider Lumber Co., Third-Party Plaintiff, Defendant,

Cross-Appellant.

Nos. 82-3404, 82-3419.

United States Court of Appeals, Sixth Circuit.

Argued March 29, 1984.

Decided July 31, 1984.

Marvin L. Karp (argued), Bruce D. Celebrezze, Ulmer, Berne, Laronge, Glickman & Curtis, Cleveland, Ohio, for plaintiff-appellant, cross-appellee.

Fredric E. Kramer, Cleveland, Ohio, Robert F. Hesser, Cleveland, Ohio, Thomas L. McDonald, Jr., Cleveland, Ohio, for defendants-appellees, cross-appellees.

Thomas P. Curran, John J. Horrigan, Weston, Hurd, Fallon, Paisley & Howley, Cleveland, Ohio, for third-party plaintiffs, defendants, cross-appellant.

Frank Bolmeyer, Gallagher, Sharp, Fulton & Norman, James G. Gowan, (Lead Counsel) Joseph W. Pappalardo (argued) Cleveland, Ohio, for defendants, cross-appellee.

Before: KENNEDY and JONES, Circuit Judges, and CHURCHILL, District Judge. ^*

CORNELIA G. KENNEDY, Circuit Judge.

Appellant challenges the constitutionality of Ohio's "no-action" statute for designers and builders of improvements to property, Ohio Rev.Code Sec. 2305.131, and its application to damages suffered by the improvement itself. We affirm the holdings of the court below that the statute applies to the facts of this case and that the statute is constitutional.

The facts before us are not in dispute. The Hartford Fire Insurance Co. (Hartford) is the subrogated insurer of the Canton Country Day School. As such, Hartford is seeking compensation for the damages caused when the trusses in the roof of the school's gymnasium collapsed, in September 1979. On December 30, 1980, Hartford brought this action, naming as defendants Gensert Bretnall Bobel, Inc., the structural engineer for the design and construction of the school building; A.A. Knoch & Sons, Inc., the general contractor who installed the trusses, and Schneider Lumber Co., the manufacturer and seller of the trusses. Schneider Lumber Co. then filed a third-party complaint against the architects who designed the trusses, Lawrence, Dykes, Goodenberger, Bower & Clancy (Lawrence, Dykes).

All four defendants filed motions for summary judgment. The defendants had completed their services with regard to the roof trusses by September 1969, more than ten years before their collapse. Accordingly, they argue, Ohio law bars claims against them. Ohio Rev.Code Sec. 2305.131 states:

No action to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained as a result of said injury, shall be brought against any person performing services for or furnishing the design, planning, supervision of construction, or construction of such improvement to real property, more than ten years after the performance or furnishing of such services and construction. This limitation does not apply to actions against any person in actual possession and control as owner, tenant, or otherwise of the improvement at the time the defective and unsafe condition of such improvement constitutes the proximate cause of the injury or damage for which the action is brought.

Hartford opposed the motions on the grounds that, first, section 2305.131 did not apply to actions seeking damages for defects in the improvement itself; and, second, the statute is unconstitutional. Hartford also argued that the statute did not apply to Schneider Lumber Co., which acted as a materialman in manufacturing and selling the trusses. The District Court granted the motions for summary judgment against Hartford filed by Gensert Bretnall Bobel, Inc. and A.A. Knoch & Sons, Inc., but denied the motion by Schneider Lumber Co. The court also granted the motion for summary judgment filed by Lawrence, Dykes against Schneider Lumber Co. Hartford appealed the grant of summary judgment to this Court. Schneider Lumber Co. later cross-appealed.

I.

Hartford contends that section 2305.131 bars only claims for consequential damages, not actions for damages to the defective improvement itself. To support this argument, Hartford points out that section 2305.131, by its terms, applies to "damages for any injury to property, real or personal, ... arising out of the defective and unsafe condition of an improvement to real property." In contrast, a model statute proposed by the American Institute of Architects, the National Society of Professional Engineers, and the Associated General Contractors would expressly bar actions to recover damages "for any deficiency in the design, planning, supervision or observation of construction or construction of an improvement to real property," as well as for resulting injuries to property or person. See Comment, Limitation of Action Statutes for Architects and Builders-Blueprints for Non-action, 18 Cath.U.L.Rev. 361, 365 n. 31 (1969). Since the model statute was in circulation at least prior to the amendment of section 2305.131 in 1971, Hartford finds it significant that no language in the Ohio statute specifically includes defects in the improvement and suggests that the statute thus impliedly does not cover damages for deficiencies in an improvement itself.

Failure to include language like that used in the model statute has been held in Colorado to limit the scope of its statute, similar to section 2305.131, to consequential damages, and not to include damages to the defective improvements themselves. See Cudahy Co. v. Ragnar Benson, Inc., 514 F.Supp. 1212 (D.Colo.1981); Tamblyn v. Mickey and Fox, Inc., 195 Colo. 354, 578 P.2d 641 (1978); Duncan v. Schuster-Graham Homes, Inc., 194 Colo. 441, 578 P.2d 637 (1978). The Colorado Supreme Court found that the statute's reference to "injury to person or property" preserved the traditional distinction in tort law between defects in a structure and consequential damages arising from those defects, and concluded that "this special statute of limitations does not apply to claims for damages for deficiencies in a structure itself, i.e., where the plaintiff seeks only to receive what the builder promised to deliver, or damages to compensate him for deficiencies in the final product." Duncan, 578 P.2d at 640.

Although many states in addition to Colorado have statutes similar to section 2305.131, ¹ no other state has adopted or rejected Colorado's interpretation of the scope of its statute. ² Apparently, no Ohio court has defined the scope of the damage actions barred by section 2305.131. A federal court sitting in diversity is bound to apply the substantive law of the forum state; if the state's highest court has not spoken to the question in controversy, the federal court must discern how the state courts would respond if confronted with the question. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); see Clutter v. Johns-Manville Sales Corp., 646 F.2d 1151, 1153 (6th Cir.1981).

Under Ohio law,

[i]t is a cardinal rule that a court must first look to the language of the statute itself to determine the legislative intent.... If that inquiry reveals that the statute conveys a meaning which is clear, unequivocal and definite, at that point the interpretative effort is at an end, and the statute must be applied accordingly.

Provident Bank v. Wood, 36 Ohio St.2d 101, 105-06, 304 N.E.2d 378 (1973). Courts are directed to give effect to the words of a statute, and not to modify an unambiguous statute by deleting words used or inserting words not used. Bernardini v. Board of Education, 58 Ohio St.2d 1, 4, 387 N.E.2d 1222 (1979); see Gulf Oil Corp. v. Kosydar, 44 Ohio St.2d 208, 215-16, 339 N.E.2d 820 (1975).

Section 2305.131 states that, ten years after the completion of an improvement, "[n]o action to recover damages for any injury to property, real or personal" may be brought. This broad language unambiguously includes all types of damages. Under Ohio's rules of interpretation, this Court must apply the "clear, unequivocal and definite" meaning of the statute as barring suits for all types of damages, rather than create a limitation on the statute by considering more explicit language that could have been included but was not. Accordingly, we affirm the District Court's holding that section 2305.131 applies to bar actions for damages for defects in the improvement itself as well as consequential damages.

II.

Hartford also contends that section 2305.131 should not be applied in this case because it violates the United States and Ohio Constitutions. Although Ohio courts have not confronted this issue, statutes similar to section 2305.131 have been challenged on federal and state constitutional grounds in many jurisdictions. A majority of courts have upheld the statutes, ³ but a sizable minority have struck them down. ⁴

As a starting point for considering the constitutionality of Section 2305.131, we note a few general factors favoring upholding the statute. First, state legislatures are presumed by federal courts to have acted constitutionally in making laws. See McDonald v. Board of Election Commissioners, 394 U.S. 802, 809, 89 S.Ct. 1404, 1408, 22 L.Ed.2d 739 (1969); Wilson v. Robinson, 668 F.2d 380, 383 (8th Cir.1981); Alabama State Federation of Teachers v. James, 656 F.2d 193, 195 (5th Cir.1981). Similarly, acts of the General Assembly are presumed valid under Ohio law, and in cases of doubt should be held constitutional. See State v. Dorso, 4 Ohio St.3d 60, 446 N.E.2d 449, 450 (1983); Peebles v. Clement, 63 Ohio St.2d 314, 321, 408 N.E.2d 689 (1980); State ex rel. Taft v. Campanella, 50 Ohio St.2d 242, 246, 364 N.E.2d 21 (1977).

Moreover, the United States Supreme Court has...