Hilliard v. Lummus Co., Inc.

• Decision Date: 03 December 1987
• Docket Number: No. 86-2556,86-2556
• Citation: 834 F.2d 1352
• Parties: Thedward HILLIARD, Plaintiff-Appellant, v. LUMMUS COMPANY, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1352

834 F.2d 1352

Thedward HILLIARD, Plaintiff-Appellant, v. LUMMUS COMPANY, INC., Defendant-Appellee.

No. 86-2556.

United States Court of Appeals Seventh Circuit.

Argued April 14, 1987.

Decided Dec. 3, 1987.

Larry Karchmar, Larry Karchmar, Ltd., Chicago, Ill., for plaintiff-appellant.

Denise L. Jarrard, Isham, Lincoln & Beale, Chicago, Ill., for defendant-appellee.

Before COFFEY, RIPPLE and MANION, Circuit Judges.

COFFEY, Circuit Judge.

The plaintiff, Thedward Hilliard, brought this action against the defendant, Lummus Company, Inc. ("Lummus"), in the Circuit Court of Cook County, seeking damages for an injury sustained in an industrial accident. Lummus then removed the suit to the United States District Court for the Northern District of Illinois, pursuant to the court's diversity jurisdiction. The dispute before the court requires us to interpret section 13-214(b) of the Illinois Code of Civil Procedure--the statute of limitations applicable to lawsuits brought against persons who have designed, planned, supervised, observed, or managed the construction of improvements to real property. See Ill.Rev.Stat. ch. 110, Sec. 13-214(b) (1984). The district judge granted summary judgment in favor of Lummus, holding that Hilliard's suit was time-barred under section 13-214(b). The court held that the Lummus Co. had improved real property and was thus protected by the statute of limitations. Hilliard v. U.S. Electrical Motors, No. 85 C 7076, slip op. (N.D.Ill., Aug. 25, 1986). Hilliard appeals. We affirm.

FACTS

In 1965, World's Finest Chocolates ("WFC") entered into a contract with Lummus to modernize the WFC cocoa-processing plant to prevent bacterial problems WFC had experienced with its existing equipment. The contract between WFC and Lummus required Lummus to provide "engineering and technical services ... in connection with a program of modifications to [WFC's] plant." Specifically, the contract directed that:

LUMMUS shall in accordance with the provisions of this Agreement perform or provide the following:

2.1 Engineering services including process, development, mechanical and structural design.

2.2 Drafting including layout and installation drawings.

2.3 Preparation of specifications and/or requisitions for subcontract and equipment.

2.4 Review all quotations received by OWNER and recommend supplier.

2.5 Check all vendors drawings and approve same for fabrication.

2.6 Prepare estimates of work to be performed as directed by OWNER.

2.7 Prepare progress reports on all phases of work.

2.8 Prepare schedules for engineering, procurement and construction.

2.9 Advise on installation and inspect all work.

2.10 Assist in plant start up and evaluation of process.

2.11 Furnish copies of all documents obtained in performance of the work from third parties.

Appendix 2-3, "Agreement Between Cook Chocolate Company and the Lummus Company for Engineering Services." ¹ Lummus did not design, build, modify, or purchase any of the machinery in the WFC plant. Supp. Rec., Exh. E p 6. Lummus characterizes its role as "the architect of the modernization of WFC's cocoa plant." Defendant's Brief at 4.

Hilliard was an employee of WFC. In 1981, Hilliard's right arm was severed above the elbow after he opened the cover of a screw conveyor that carried ground cocoa from a sterilizer to a pulverizing mill in WFC's plant. The screw conveyor that injured Hilliard was originally installed in about 1950 by someone other than Lummus. Supp. Rec., Exh. D at 38. During the modernization project, Lummus provided specifications to subcontractors and equipment vendors for modifying WFC's cocoa-processing equipment. Lummus's specifications were limited to describing the general requirements of each piece of equipment, leaving the specific equipment design in the hands of the subcontractors and vendors. Supp. Rec., "Deposition of Alfred Baum," 25-26. Among the equipment on which Lummus consulted with WFC were the screw conveyors that moved the cocoa through the WFC plant. The only change that Lummus suggested in the screw conveyors was the replacement of their carbon steel components (except the drive mechanisms and supports) with stainless steel components. Lummus did not do the work itself. Appellee's Supp. Appendix at 5-6.

In his complaint, Hilliard alleges that Lummus is liable for his injuries, grounding his allegations both in strict tort liability and in negligence. Following discovery, Lummus moved for summary judgment on the respective theories, pursuant to Fed.R.Civ.P. 56.

THE TRIAL COURT'S DECISION

The district court granted summary judgment in favor of Lummus on both the strict liability count and the negligence count. In granting summary judgment, the district court held that Hilliard's negligence claim was time-barred under section 13-214(b) of the Illinois Code of Civil Procedure. Section 13-214(b) provided that:

No action based on 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 12 years have elapsed from the time of such act or omission. However, any person who discovers such act or omission prior to expiration of 12 years from the time of such act or omission shall in no event have less than 2 years to bring an action as provided in subsection (a) of this Section.

Ill.Rev.Stat. ch. 110, Sec. 13-214(b) (1984). ² Hilliard argued that the statute was inapplicable because Lummus had not participated in an improvement to real property, but had merely provided a product that was installed in real property. The court rejected that argument, holding that the screw conveyor substantially enhanced the value of WFC's property and, therefore, constituted an "improvement to real property." Thus, the Lummus Co. fell within the bounds of the statute's protection. Hilliard, No. 85 C 7076, slip op. at 7-9. We find that Lummus improved real property when it performed its services for WFC; therefore, we agree that section 13-214(b) applies to the Lummus Co. and we affirm the judgment of the district court.

DISCUSSION

The question whether Lummus's work on the screw conveyor constituted "an improvement to real property" within the meaning of section 13-214(b) is an issue of law for the court. See Adair v. Koppers Co., 541 F.Supp. 1120, 1126 (N.D. Ohio 1982), aff'd, 741 F.2d 111, 114 (6th Cir.1984) (construing similar Ohio statute). To date, the Illinois Supreme Court has not interpreted the phrase "improvement to real property" in the statute, but the Illinois Appellate Court has recently interpreted the phrase in Calumet Country Club v. Roberts Environmental Control Corp., 136 Ill.App.3d 610, 91 Ill.Dec. 267, 483 N.E.2d 613 (1985). In Calumet Country Club, the court observed that a court interpreting a statute "primarily looks to the statute's actual words, which are given their commonly accepted meanings, unless otherwise defined by the legislature." Id. at 612-13, 91 Ill.Dec. at 269-70, 483 N.E.2d at 615-16 (citations omitted). Applying that principle to section 13-214(b), the court reasoned that "[a]n 'improvement' is an addition to real property amounting to more than a mere repair or replacement, and which substantially enhances the value of the property.... Improvements include buildings and substantial additions or changes to existing buildings." Id. at 613, 91 Ill.Dec. at 270, 483 N.E.2d at 616 (citations omitted). ³

The approach of the court in Calumet Country Club resembles those taken by other courts in interpreting similar statutes of repose. See, e.g., Adair, 741 F.2d at 113-14; Allentown Plaza Associates v. Suburban Propane Gas Corp., 43 Md.App. 337, 344-46, 405 A.2d 326, 331-32 (1979); Jones v. Ohio Building Co., 4 Ohio Misc.2d 10, 11-12, 447 N.E.2d 776, 778-79 (1982); Kallas Millwork Corp. v. Square D Co., 66 Wis.2d 382, 386, 225 N.W.2d 454, 456-57 (1975). This "commonsense" approach, focusing on the ordinary meaning of the statutory language, has been applied by a majority of the courts that have interpreted the phrase "improvement to real property." Allentown Plaza Associates, 43 Md.App. at 345, 405 A.2d at 331. But cf. Smith v. Allen-Bradley Co., 371 F.Supp. 698 (W.D.Va.1974) (minority approach, applying common law of fixtures). We agree with the district court's reasoning that the Illinois Supreme Court might very well adopt the Illinois Appellate Court's approach in the Calumet Country Club decision. See Hilliard, No. 85 C 7076, slip op. at 7 (predicting "that the Illinois Supreme Court would adopt the Calumet Country Club court's interpretation of 'improvement' under Sec. 13-214"). Thus, the question is whether Lummus designed, planned, managed, or supervised an addition to real property that was "more than a mere repair or replacement" of WFC's previously existing facilities, and thus substantially enhanced the value of the property when it advised WFC on the modernization of the WFC plant. See Calumet Country Club, 136 Ill.App.3d at 613, 91 Ill.Dec. at 270, 483 N.E.2d at 616.

Hilliard accepts this approach to the issue, but maintains that the screw conveyor is not an improvement to real property, but "is merely a piece of machinery." Plaintiff's Brief at 10. Hilliard emphasizes that the screw conveyor is an ordinary piece of equipment which is not particularly large and could easily be removed from the WFC plant premises without causing significant damage or loss of value to the plant itself. Id. at 11-14. The district court disposed of Hilliard's similar argument below as follows:

That the conveyor is more than a mere repair or replacement is beyond dispute. The uncontested deposition testimony establishes that the conveyor was installed in about 1950 along with the construction of the building and has remained there ever since. The conveyor was not a repair to or a replacement of anything that previously existed....