Hartford Fire Ins. Co. v. Osborn Plumbing & Heating, Inc.

• Decision Date: 04 February 1975
• Docket Number: No. 350,350
• Citation: 66 Wis.2d 454,225 N.W.2d 628
• Court: Wisconsin Supreme Court
• Parties: HARTFORD FIRE INS. CO., Plaintiff, v. OSBORN PLUMBING & HEATING, INC., Defendant and Third-Party Plaintiff-Appellant, Donald Knodle et al., Defendants-Respondents, Edward Filkins, Inc., Third-Party Defendant-Appellant.

Page 628

225 N.W.2d 628

66 Wis.2d 454

HARTFORD FIRE INS. CO., Plaintiff, v. OSBORN PLUMBING & HEATING, INC., Defendant and Third-Party Plaintiff-Appellant Donald Knodle et al., Defendants-Respondents Edward Filkins, Inc., Third-Party Defendant-Appellant.

No. 350.

Supreme Court of Wisconsin.

Feb. 4, 1975.

Campbell, Brennan, Steil & Ryan, S.C., Mark L. Korb, Janesville, for defendant-appellant.

Korf, Pfeil & Graves, John P. Graves, Jr., Elkhorn, for third-party defendant-appellant.

Eli Block Law Offices, Eli Block, Janesville, for defendants-respondents.

Action commenced by plaintiff, Hartford Fire Insurance Company, on January 18, 1971. The action stems from a fire in a building in Beloit, Wisconsin, on April 15, 1970. Hartford had issued a policy of fire insurance to the owner of the building and, in accordance with the terms of the policy, has paid the owner of the building over $175,000.00 under the policy. Hartford, being subrogated to the rights of the owner, brought this action to recover this amount.

The fire is alleged to have been caused by an overheating of a heater which resulted in a large hole being burned in the outside wall of the heat exchanger of the unit and because of this ceiling joists and wood lathing in the area of the heater were ignited. The heating unit had been installed in the building in 1962 during the remodeling of the building. The unit is alleged to have been manufactured by Lear-Siegler, Inc. and selected by Osborn Plumbing and Heating, Inc. (hereinafter Osborn), the heating contractor, and approved by Knodle, Rose & Associates (hereinafter Knodle), a partnership which had been engaged to provide architect's services in connection with the remodeling of the building. The complaint alleges that in approximately January, 1968, the 'heater exchanger' was replaced by Osborn when it was discovered to be 'burned out' or that a crack had developed in a welded seam.

In the complaint, Hartford alleges that the fire and resulting damage were caused and contributed to by Knodle's negligence (1) in approving the installation of the heater notwithstanding the improper location in it of a fan control and limit thermostat by Osborn which Knodle knew of or should have discovered; (2) in failing to notify the building's owner of the condition although Knodle knew or should have known it was unsafe and dangerous; (3) in failing, after being apprised of the difficulties with the heater, to warn of the danger; and (4) in failing to require the installation of protective material around the heater to prevent the ignition of combustible materials around it. Negligence is also alleged as to Osborn, Lear-Siegler and Bull, who had serviced the heater.

Lear-Siegler, Bull, Knodle and Osborn all answered the complaint denying the allegations as to each of them and cross-complained seeking contribution from the others if they were found liable to Hartford. Affirmative defenses were also set forth including one by Knodle that the cause of action did not accrue within six years before the commencement of the action as set forth in Sec. 893.155, Stats. Knodle also answered the cross-complaints of the other defendants denying negligence on its part and denying that the cross-complainants will be entitled to contribution.

The supplier of the original heater, Mott Brothers Co., and the supplier of the replacement part, Edward Filkins, Inc., were made party defendants to this action. Mott Brothers answered the third party complaint. Edward Filkins, Inc. demurred to the third party complaint. The demurrer was overruled and Filkins answered.

Knodle moved for summary judgment seeking dismissal of Hartford's complaint and the other defendants' cross-complaints against it. In an affidavit in support of the motion for summary judgment, Donald Knodle, one of the partners, stated that its final inspection of the remodeling project occurred in August or early November, 1962, and that after the final inspection, Knodle performed no other services or work for the building owner. The affidavit also states that the action was not commenced within 6 years after Knodle had performed and furnished the design, planning, supervision and construction in and to the building as required by Sec. 893.155, Stats., and within 6 years as required by Sec. 893.14 and 893.19(5), Stats.

The trial court hold that Sec. 893.155, Stats., was unconstitutional as a denial of equal protection of the law. ¹ However, the court found that Sec. 893.19(5), Stats., applied. Under this statute, the court determined that the motion for summary judgment by Knodle should be granted because the statute of limitations began to run when an injury, however slight, was sustained. As to the cross-complaints, the court determined that Knodle's motion for summary judgment should be granted as to them also.

Following a motion for rehearing, the court again found that the statute of limitations, Sec. 893.19(5), Stats., barred the plaintiff's action. A more detailed discussion was given to the question of contribution. The court found that because the statute of limitations had run prior to the fire, there was no common liability at that time and, therefore, the co-defendants were not entitled to contribution from Knodle. On March 28, 1973 summary judgment was signed dismissing the complaint and cross-complaints against Knodle. An order, dated April 30, 1973 denied the motion to reconsider the Memorandum Decision of October 5, 1972.

Osborn has appealed from both the 'summary judgment' and the order denying its motion to reverse the summary judgment. Edward Filkins, Inc. also appealed from both but subsequent to the appeal, it has settled with all parties and upon stipulation of the parties the portion of the appeal by it was ordered dismissed on December 10, 1974.

HANLEY, Justice.

Two issues are presented upon this appeal:

1. Did the trial court err in determining that the appellant was not entitled to contribution from the respondents because the statute of limitations had run?

2. Did the respondents waive the defense of the statute of limitations as an affirmative defense to the claim for contribution?

Question of Contribution

Osborn cross-complained for contribution from the respondents if it was found to be liable to the plaintiff. In discussing the doctrine of contribution, this court has said:

'The doctrine of contribution rests on the principle that when parties stand in equal right the law requires equality, and one party should not be obliged to bear the whole of a common burden. The doctrine is founded on principles of equity and natural justice. Wait v. Pierce (1926), 191 Wis. 202, 209 N.W. 475, 210 N.W. 822. The basic elements of contribution as applied to negligence cases are: 1. Both parties must be joint negligent wrongdoers; 2. they must have common liability because of such negligence to the same person; 3. one such party must have borne an unequal proportion of the common burden. Farmers Mutual Automobile Ins. Co. v. Milwaukee Automobile Ins. Co. (1959), 8 Wis.2d 512, 515, 99 N.W.2d 746.

The right to contribution arises from common liabiliity and ripens into a cause of action upon payment by reason of a judgment or pursuant to a reasonable settlement by a joint tort-feasor. State Farm Mutual Automobile Insurance Co. v. Continental Casualty Co. (1953), 264 Wis. 493, 59 N.W.2d 425. However, one alleged to be a joint tort-feasor may, by cross-complaint, have the issue of contribution settled in the same action which determines the liability to the plaintiffs. Gies v. Nissen Corp. (1973), 57 Wis.2d 371, 204 N.W.2d 519.

In State Farm Mutual Automobile Insurance Co. v. Schara (1972), 56 Wis.2d 262, 201 N.W.2d 758, it was held that a cause of action for contribution is separate and distinct from the underlying cause of action and, therefore, the period in which an injured party must commence his action is irrelevant when a joint tort-feasor who has paid more than his share seeks contribution from another with whom he shares joint liability. The cause of action for contribution is based on a contract implied by law and an action on it must be brought within six years after the one joint tort-feasor has paid more than his share under Sec. 893.19(3), Stats., which provides the period of limitations for actions on contracts, express or implied.

The trial court granted the motions for summary judgment as to both the complaint and cross-complaints after determining that the statute of limitations had run prior to the fire. The basis for dismissing the cross-complaints was that there was no common liability for the damages caused by the fire because the statute of limitations had already run.

Common liability is an essential element of a cause of action for contribution.

'. . . (T)he common liability necessary to support a cause of action for contribution . . . is determined as of the time the accident occurs, and not as of the time the cause of action for contribution is later asserted. The fact, that the existing common liability has later been extinguished as to one of the joint tort-feasors, is immaterial in so far as effecting the right to have contribution from such joint tort-feasor is conterned.' State Farm Mut. Auto. Ins. Co. v. Continental Cas. Co., supra, 264 Wis. pp. 503, 504, 59 N.W.2d p. 430.

If the period of limitations did in fact run out prior to the fire causing the damages complained of here, there was no common liability so that Osborn was not entitled to contribution from the respondents. The pertinent question, therefore, is when did the cause of action accrue so as to start the running of the statute against the building's owner.

A statute of limitations begins to run against a cause of action at the time when the cause of action accrues. In Holifield v. Setco Industries, Inc. (1969), 42 Wis.2d 750, 756, 168 N.W.2d 177, 180, it was said:

'It is the fact and date of injury that sets in force and...