In re Barto Technical Services, Inc.
| Decision Date | 27 April 1995 |
| Docket Number | Bankruptcy No. 93-22540-JKF. Motion No. DZ-13. |
| Parties | In re BARTO TECHNICAL SERVICES, INC., f/k/a Wean Incorporated, Debtor. BARTO TECHNICAL SERVICES, INC., f/k/a Wean Incorporated, Movant, v. Christine LAWRENCE, Respondent. |
| Court | U.S. Bankruptcy Court — Western District of Pennsylvania |
David Ziegler, Reed, Smith, Shaw & McClay, Pittsburgh, PA, for movant.
Ronald L. Wolf, Litvin, Blumberg, Matusow & Young, Philadelphia, PA, for respondent.
Mark S. Seewald, Sable, Makoroff & Gusky, Pittsburgh, PA, for Official Committee of Unsecured Creditors.
The matter before the court is Debtor's objection to the claim of Christine Lawrence (hereafter "Respondent").1 The Official Committee of Unsecured Creditors joined in Debtor's objection.
Before the bankruptcy was filed, a motion for summary judgment was pending in Respondent's wrongful death action in state court. The state suit included a products liability claim against various defendants, including Debtor and its subsidiary, Berkeley-Davis, Inc., with respect to a piece of equipment which crushed Respondent's husband, Donald Lawrence, causing his death. We will address the matters raised in the bankruptcy court.
The facts underlying this dispute are essentially undisputed. Mr. Lawrence was a millwright at the Steelton, Pennsylvania, plant of Bethlehem Steel Corporation. The accident occurred while Mr. Lawrence was attempting to perform maintenance or repairs on a break-off arm which is part of a continuous longitudinal inside seam pipe welding machine and conveyor system. The machine had been turned off at an electrical control panel in preparation for repairs, but this action did not cut off the hydraulic pumping system that operates the arm.2 While Mr. Lawrence was in the pit performing his task, the break-off arm rose and hit him in the head. In order to reset the arm and have it retract after the electricity was cut off, power to the line had to be restored. See Claimant Christine Lawrence's Memorandum of Law in Support of Response to Objection of Barto Technical Services, Inc. to Claim of Christine Lawrence (hereafter Claimant's Memorandum). See also id. at Exhibit J, letter from Consulting Engineers, Inc., Exhibit I, Deposition of Patrick J. Midile at 94-99, 104. Under the circumstances, once the break-off arm was activated, the only way to retract it was to restore power at a switch that was 30 feet away from the site of the accident.3 Although the retraction was accomplished, Mr. Lawrence's injuries were fatal.
The pleadings do not clearly explain the basis for assertion of a claim against Debtor. Respondent's state court complaint avers that, in 1959, Bethlehem Steel Corporation purchased the equipment which had been manufactured by Berkeley Company. In 1960 the assets and liabilities of Berkeley Company were transferred to the Berkeley-Davis Company which continued operation as Berkeley-Davis, Inc. Claimant's Memorandum at Exhibit A at 2, ¶¶ 6A, 6B. At the time the equipment at issue was designed and produced, Berkeley-Davis, Inc., was in the business of designing and manufacturing the type of equipment involved in this case including the type of device represented by the break-off arm. Declaration of John M. Sant, P.E., (hereafter "Sant Declaration") at ¶¶ 6, 14. The break-off arm functioned as part of the inside welding system.4 At the time of Mr. Lawrence's accident, Berkeley-Davis, Inc., was a wholly owned subsidiary of Debtor.
In the state court complaint Respondent also alleged that, as of the date of Mr. Lawrence's accident (January 25, 1991), Debtor "may have assumed all relevant liabilities arising from the design, manufacture . . ." of the equipment. See Claimant's Memorandum at Exhibit A at 2-3, ¶¶ 3, 4, 7. Debtor does not contest the issue of its liability except on the basis of the Pennsylvania statute of repose, 42 Pa.Cons.Stat.Ann. § 5536. For purposes of this opinion, therefore, we assume, without deciding, that Debtor assumed the relevant liabilities before Donald Lawrence's accident.
With this hypothesis utilized as the basis for the claim against Debtor, if a cause of action no longer exists with respect to Berkeley and Berkeley-Davis, it no longer exists as to Debtor because the Pennsylvania statute of repose abolishes the cause of action, not merely the right to a remedy. This difference distinguishes the statute of repose from a statute of limitations. See Catanzaro v. Wasco Products, Inc., 339 Pa.Super. 481, 489 A.2d 262, 264 (1985), citing Mitchell v. United Elevator Co., Inc., 290 Pa.Super. 476, 434 A.2d 1243, 1248 (1981) (relying on Freezer Storage, Inc. v. Armstrong Cork Co., 476 Pa. 270, 382 A.2d 715 (1978); Misitis v. Steel City Piping Co., 441 Pa. 339, 272 A.2d 883 (1971) (). Even if Debtor assumed all liabilities of its subsidiary Berkeley-Davis, Inc., and Berkeley-Davis's predecessor, there is no cognizable cause of action and, therefore, no liability can be imposed, if the statute of repose applies.
42 Pa.Cons.Stat.Ann. § 5536.
The statute of repose applies to abrogate a cause of action when three elements are satisfied: (1) the equipment is an improvement to real estate; (2) more than 12 years have elapsed between the completion of the improvement and the injury; and (3) the activity complained of is within the class which the statute was intended to protect. Schmoyer v. Mexico Forge, Inc., 423 Pa.Super. 593, 621 A.2d 692, 694 (1993), rev'd on other grounds, 538 Pa. 1, 645 A.2d 811 (1994); McConnaughey v. Building Components, Inc., 401 Pa.Super. 329, 585 A.2d 485, 487 (1990), rev'd on other grounds, 536 Pa. 95, 637 A.2d 1331 (1994). The second element is not disputed insofar as the parties agree that the equipment at issue was installed in 1959 or 1960 and that more than 12 years have elapsed between installation of the welding machine and conveyor system and Mr. Lawrence's accident. The first and third elements are disputed.
Respondent contends (1) that the equipment is not an improvement to real estate but is personalty; (2) that Debtor is a manufacturer and, therefore, not within the class protected by the statute; and (3) that the statute of repose does not bar her claim because the statute does not apply to causes of action based on a theory of failure to warn of the risk. We find that there are no material facts in dispute relevant to a determination of whether the statute of repose applies, and that this issue may be determined as a matter of law.
Whether equipment is an improvement to real estate is a question of law. Bioni v. Canon-McMillan School District, 521 Pa. 299, 555 A.2d 901 (1989). See also Wilson v. Ridgeway Area School Dist., 141 Pa.Cmwlth. 617, 596 A.2d 1166, 1168 (1991), allocatur denied, 530 Pa. 650, 607 A.2d 258 (1992). What constitutes an improvement to real estate is a determination which must be made on a case-by-case basis. Noll v. Paddock Pool Builders, Inc., 416 Pa.Super. 284, 611 A.2d 219, 222 (1992), rev'd on other grounds sub nom. Noll v. Harrisburg Area YMCA, 537 Pa. 274, 643 A.2d 81, (1994); Beaver v. Dansk Industri Syndicat A/S (DISA), 838 F.Supp. 206, 211 (E.D.Pa.1993).
Respondent contends that the break-off arm, which functioned as part of the inside welding system, was removable and, therefore, could not constitute an improvement to real estate. Pennsylvania law, however, recognizes that removability, in and of itself, is not controlling as to whether machinery and equipment are part of the realty or freehold. Central Lithograph Co. v. Eatmor Chocolate Co., 316 Pa. 300, 175 A. 697, 698-99 (1934).
Recently, in a case involving the statute of repose, the Pennsylvania Supreme Court expounded on the definition of "improvement to real property". In Noll v. Harrisburg Area YMCA, 537 Pa. 274, 643 A.2d 81 (1994), the court referred to the law of fixtures in this regard. It recited general factors to be used in determining when an article of personalty is to be considered a fixture:
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