Herriott v. Allied Signal, Inc.

• Decision Date: 02 July 1993
• Docket Number: No. 92-2953,92-2953
• Citation: 998 F.2d 487
• Parties: Prod.Liab.Rep. (CCH) P 13,653 Sarah HERRIOTT, Individually and as Special Administrator of the Estate of Brutus Herriott, Deceased, Plaintiff-Appellant, v. ALLIED SIGNAL, INCORPORATED, a foreign corporation, Engineering Materials, a foreign corporation, Allied Chemical Corporation, a foreign corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 487

998 F.2d 487

Prod.Liab.Rep. (CCH) P 13,653

Sarah HERRIOTT, Individually and as Special Administrator of the Estate of Brutus Herriott, Deceased, Plaintiff-Appellant, v. ALLIED SIGNAL, INCORPORATED, a foreign corporation Engineering Materials, a foreign corporation Allied Chemical Corporation, a foreign corporation, Defendants-Appellees.

No. 92-2953.

United States Court of Appeals Seventh Circuit.

Argued Jan. 25, 1993.

Decided July 2, 1993.

Randall F. Peters (argued), Chicago, IL, for plaintiff-appellant.

Thomas H. Fegan, John W. Bell, Mindy Kallus (argued), Robert J. Comfort, Johnson & Bell, Chicago, IL, for defendants-appellees.

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

CUDAHY, Circuit Judge.

The plaintiff's husband was killed in February 1989 while working around equipment designed by one of the defendants. The plaintiff filed a wrongful death action contending that the defendant's design and manufacturing errors caused her husband's death. The district court granted the defendant's motion for judgment on the ground that the Illinois ten-year statute of repose, Ill.Rev.Stat. ch. 110, para. 13-214(b), barred the plaintiff's action. We affirm.

I.

Between 1953 and 1957, Interlake Steel (which later became ACME Steel) hired Allied Signal, Inc. (Allied) to design, manufacture and construct two batteries of coke ovens--each consisting of a row of fifty ovens--at Interlake's facilities. Allied also sold Interlake two pieces of ancillary equipment called larry-cars, ¹ which receive coal from the plant's charging bins and carry it along the 490 feet of rail to a coke oven. Allied assembled and constructed the larry-cars on top of the batteries during construction of the batteries.

ACME employee Brutus Herriott operated the larry-cars. On February 1, 1989, Mr. Herriott was killed while working on a larry-car. His wife, Sarah Herriott, subsequently brought a six-count complaint, individually and as administrator of Mr. Herriott's estate, in state court against Allied-Signal, Inc., Engineering Materials, Allied Chemical Corp. and the Wilputte Coke Oven division of Allied Chemical & Dye Corp.--collectively "Allied." The complaint contended that Allied's errors in its design and manufacture of the larry-car rendered the equipment unreasonably dangerous and defective and that this condition proximately caused her husband's death. The action was removed to federal court, where Allied moved for summary judgment on the grounds that the statute of repose relevant to improvements to real property, Ill.Rev.Stat. ch. 110, para. 13-214, barred the plaintiff's action. The district court agreed and granted the motion, 801 F.Supp. 52. Mrs. Herriott appeals.

II.

We review the district court's grant of summary judgment de novo.

The only issue in this case is whether the Illinois statute of repose relating to design and construction of improvements to real property applies to the circumstances before us. That statute provides that

[n]o 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.

Ill.Rev.Stat. ch. 110, para. 13-214(b). The plaintiff contends the statute is inapplicable on two grounds--namely, that the construction project Allied took part in did not constitute "an improvement to real property" and that Allied did not participate in the "design, planning, supervision, observation or management of construction, or construction" of the project. An underlying theme that punctuates the plaintiff's statute-based arguments also forms the basis of a third, policy-based argument involving the interplay between the respective statutes of repose for improvements to real property and for products liability. We address each argument in turn.

We first consider whether Allied's work for Interlake was an improvement to real property. Although this court and the Illinois appellate courts have developed a framework for analyzing what constitutes an improvement to real property, ² it was not until recently that the Illinois Supreme Court addressed what was for it an issue of first impression. In St. Louis v. Rockwell Graphic Systems, Inc., 153 Ill.2d 1, 178 Ill.Dec. 761, 605 N.E.2d 555 (1992), the court vacated a dismissal based on the instant statute of repose, stating that it had an insufficient factual record concerning the printing press at issue and the construction modifications necessary to install it. 153 Ill.2d at 5-6, 178 Ill.Dec. at 763, 605 N.E.2d at 557. Nevertheless, the court did elaborate upon its understanding of "an improvement to real property," citing the Black's Law Dictionary definition ³ and setting out relevant criteria, including

whether the addition was meant to be permanent or temporary, whether it became an integral component of the overall system, whether the value of the property was increased, and whether the use of the property was enhanced.

153 Ill.2d at 4-5, 178 Ill.Dec. at 762, 605 N.E.2d at 556 (citations omitted).

The St. Louis court confirmed that whether an item constitutes an improvement to real property is a question of law, though resolution of the question is grounded in fact. 153 Ill.2d at 3, 178 Ill.Dec. at 762, 605 N.E.2d at 556; see also Zimmer v. Village of Willowbrook, 242 Ill.App.3d 437, 182 Ill.Dec. 840, 610 N.E.2d 709 (2d Dist.1993). The record in the case before us--unlike that in St. Louis--is adequate to permit a determination of whether Allied's project was an improvement to real property.

Case law in this circuit and in the Illinois state courts supports the view that courts must contemplate the entire system that the defendant helped to design or construct, not just the component that may have caused the injury or death. See, e.g., Hilliard, 834 F.2d at 1356 (stating that "if a component is an essential or integral part of the improvement to which it belongs, then it is itself an improvement to real property") (citing Mullis v. Southern Co. Servs., Inc., 250 Ga. 90, 94, 296 S.E.2d 579, 584); Kleist v. Metrick Electric Co., 212 Ill.App.3d 738, 156 Ill.Dec. 839, 841-42, 571 N.E.2d 819, 821-22 (1st Dist.1991). The larry-car is an integral part of the coke processing system that Allied was primarily responsible for constructing. Moreover, since the larry-car's construction was concomitant with the overall construction of Interlake's coke processing plant, neither the system nor the larry-car is fairly characterized as a mere repair or replacement. Finally, the system indisputably increased the value of the property and enhanced its use. The battery project was designed to process coke, and the larry-car was assembled as an integral component of that process. See Hilliard, 834 F.2d at 1355-56. Bolstering this conclusion is the undisputed testimony that coke cannot be processed without the use of a larry-car. See Adair v. Koppers Co., Inc., 541 F.Supp. 1120, 1125 (N.D.Ohio 1982), aff'd, 741 F.2d 111 (6th Cir.1984) (emphasizing that the function of the conveyor at issue, namely the transportation of coal, was essential to the operation of the plant). Under the ordinary terms of the statute and informed by courts' interpretation of that language, we conclude that Allied's work for Interlake resulted in an improvement to real property.

Our second inquiry, whether Allied participated in the "design, planning, supervision, observation or management of construction, or construction" of the improvement, is more straightforward. As we noted in Hausman v. Monarch Machine Tool Co., 997 F.2d 351 (7th Cir.1993), which was argued the same day as the instant case, the list of included activities is notably disjunctive and the defendant falls within the protected class if it engaged in any one of the listed activities. Moreover, "[m]ere labels are not dispositive" ...