Lietz v. Northern States Power Co.

• Decision Date: 27 July 2006
• Docket Number: No. A04-901.,A04-901.
• Citation: Lietz v. Northern States Power Co., 718 N.W.2d 865 (Minn. 2006)
• Parties: Gerald LIETZ, et al., Plaintiffs, Jaenty, Inc., d/b/a Taco John's Restaurant, Appellant, v. NORTHERN STATES POWER COMPANY, Respondent, Seren Innovations, Inc., Respondent, Cable Constructors, Inc., Respondent, Sirti, Ltd., Respondent.
• Court: Minnesota Supreme Court

718 N.W.2d 865

Gerald LIETZ, et al., Plaintiffs Jaenty, Inc., d/b/a Taco John's Restaurant, Appellant, v. NORTHERN STATES POWER COMPANY, Respondent Seren Innovations, Inc., Respondent Cable Constructors, Inc., Respondent Sirti, Ltd., Respondent.

No. A04-901.

Supreme Court of Minnesota.

July 27, 2006.

COPYRIGHT MATERIAL OMITTED

Steven L. Theesfeld, Yost, & Baill, LLP, Minneapolis, MN, for Appellant.

Timothy R. Thornton, Matthew D. Forsgren, James R. Asmus, Briggs & Morgan, P.A., Minneapolis, MN, for Respondent NSP.

Michael T. Feichtinger, Kenneth H. Bayliss, Quinlivan & Hughes, St. Cloud, MN, for Respondent Cable Constructor.

Cooper S. Ashley, Julian C. Zebot, David Herr, Maslon Edelman Borman & Brand, LLP, Minneapolis, MN, for Respondent Seren Innovations.

Stephen A. Melcher, Fabyanske, Westra, Hart & Thomson, P.A., Minneapolis, MN, for Respondent Sirti, Ltd.

Heard, considered, and decided by the court en banc.

OPINION

ANDERSON, G. BARRY, Justice.

In late 2001 and early 2002, appellant Jaenty, Inc. (Jaenty) brought an action against respondents Northern States Power Co. (NSP), Seren Innovations, Inc. (Seren), Cable Constructors, Inc. (CCI) and Sirti, Ltd. (Sirti) to recover for damages sustained in a gas explosion in December of 1998. The district court granted respondents' motions for summary judgment based on the two-year statute of limitations found in Minn.Stat. § 541.051, subd. 1(a) (2004). The court of appeals, in a split decision, affirmed the district court. Lietz v. N. States Power Co., No. A04-901, 2005 WL 44905, at *4 (Minn.App. Jan.11, 2005). We agree that Jaenty's suit is barred by section 541.051 and therefore affirm.

On December 11, 1998, while installing a utility pole support anchor (the anchor) in St. Cloud, Minnesota, employees of CCI pierced a gas line owned by NSP, causing a natural gas leak. The installation of the anchor was part of a project by Seren to construct a fiber-optic communication system in the area. Seren had hired Sirti to plan the project, and CCI was hired to do the actual installation. The anchor was a steel rod, five feet six inches in length, with a helix at the bottom that acted as a bit during installation. The anchor was intended to support the utility pole via a guy line. The anchor and guy line were intended to balance the weight of the fiber-optic cable and keep the pole upright. On the date of the explosion, CCI was installing anchors in St. Cloud in preparation for the installation of fiber-optic cable.

After breaking a hole in the sidewalk with a jackhammer, the CCI workers placed an auger, or "anchor cranker," on top of the anchor and began to auger the anchor into the ground. After the anchor had bored to a depth of approximately one and one-half to two feet, it hit a hard object, later determined to be a large slab of granite. In an attempt to break through the obstruction, the workers removed the auger and struck the top of the anchor with a sledgehammer. They then placed the auger on top of the anchor and resumed boring. Everything appeared normal until the top of the anchor was roughly 12 to 18 inches above the surface of the ground. At that time, the workers smelled gas and noticed dirt blowing from the anchor hole. Realizing they had pierced a gas line, the workers stopped the auger, and the crew foreman telephoned his supervisor.

Less than an hour after the anchor struck the gas line, an explosion occurred. Four people were killed in the explosion, a number of others suffered injuries, and the surrounding buildings sustained damage. In late 2001 and early 2002, Jaenty commenced this action against CCI, Seren, Sirti, and NSP for damages to its restaurant. The district court granted the defendants' motions for summary judgment, finding that, because Jaenty's injuries were caused by an improvement to real property (the anchor), Jaenty's claim was barred by the two-year statute of limitations in Minn.Stat. § 541.051, subd. 1(a). The relevant part of the statute provides:

[N]o action by any person in contract, tort, or otherwise to recover damages for any injury to property * * * arising out of the defective and unsafe condition of an improvement to real property, * * * shall be brought against any person performing or furnishing the design, planning, supervision, materials, or observation of construction or construction of the improvement to real property or against the owner of the real property more than two years after discovery of the injury.

Minn.Stat. § 541.051, subd. 1(a). The court of appeals, in an unpublished split decision, affirmed the district court's grant of summary judgment. Lietz, 2005 WL 44905, at *4.

Jaenty argues that the lower courts' determination that section 541.051 barred its action is erroneous in two respects: (1) the anchor was not an "improvement to real property" because it was not completely installed at the time of the accident, and (2) Jaenty's damages arose out of negligent construction activities, not the defective and unsafe condition of an improvement to real property. We address each of these arguments in turn.

I.

On appeal from summary judgment, this court determines "whether there are any genuine issues of material fact, and whether the lower court erred in its application of the law." Olmanson v. LeSueur County, 693 N.W.2d 876, 879 (Minn.2005). Evidence is viewed in a light most favorable to the nonmoving party. Ruud v. Great Plains Supply, Inc., 526 N.W.2d 369, 371 (Minn.1995). The construction of a statute is reviewed de novo. Olmanson, 693 N.W.2d at 879.

When defining an "improvement to real property" for the purposes of section 541.051, this court has said that a "common-sense interpretation" should be used. Pac. Indem. Co. v. Thompson-Yaeger, Inc., 260 N.W.2d 548, 554 (Minn.1977). This court has defined such an improvement as

"[a] permanent addition to or betterment of real property that enhances its capital value and that involves the expenditure of labor or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs."

Sartori v. Harnischfeger Corp., 432 N.W.2d 448, 451 (Minn.1988) (quoting Pac. Indem. Co., 260 N.W.2d at 554). Jaenty claims that the anchor does not meet this definition in one respect, namely, the anchor was not a permanent addition to the real property at the time of the explosion because the explosion occurred during the installation of the anchor.¹

Whether the installation of an object (that otherwise meets the definition of an "improvement to real property") must be complete at the time the injury occurs for the object to be an "improvement to real property" for purposes of section 541.051 is a question that has not been previously decided by this court. While, under Pacific Indemnity Co., an improvement to real property must be a "permanent addition to or betterment of real property," this court has never interpreted "permanence" to require complete installation. When interpreting the meaning of a statute, this court's primary goal is to "interpret and construct laws so as to ascertain and effectuate the intention of the legislature." Olmanson, 693 N.W.2d at 879; see Minn.Stat. § 645.16 (2004). This court will not look beyond the plain language of the statute if the words of the statute are "clear and free from all ambiguity." Olmanson, 693 N.W.2d at 879; see Minn.Stat. § 645.16. A statute is considered ambiguous "if it is reasonably susceptible to more than one interpretation." Current Tech. Concepts, Inc. v. Irie Enters., Inc., 530 N.W.2d 539, 543 (Minn. 1995). Having examined the statute at issue, we conclude that the plain language of section 541.051 can reasonably be read either to apply to or not to apply to damages caused by an object (otherwise meeting the definition of an improvement) during its installation.

If a statute is ambiguous, this court may look to other factors, such as the occasion and necessity for the law, to determine legislative intent. Minn.Stat. § 645.16. In a decision interpreting a prior version of section 541.051, this court presumed, based on the timing of the enactment of section 541.051 and similar statutes enacted in other states, that section 541.051 was enacted because of the recent erosion of the privity of contract doctrine and the "resulting exposure of architects and builders to potential liability of indefinite duration from third-party tort claims." Kittson County v. Wells, Denbrook & Assocs., Inc., 308 Minn. 237, 241-42, 241 N.W.2d 799, 802 (1976). Before the erosion of this doctrine, the general rule was that building and construction contractors ceased to be liable to third parties when the contractors' work was completed and accepted by the owner. See Pac. Indem. Co., 260 N.W.2d at 554.² If limiting the liability exposure which resulted from the erosion of the privity of contract doctrine is the purpose of section 541.051, damages caused before the work was completed and accepted by the owner—damages during the installation process—appear to be outside the scope of the statute.

The legislature has already indicated, however, that section 541.051 is intended to bar a broader range of claims than those prohibited before the erosion of the privity of contract doctrine. The original version of section 541.051 did not specify the types of actions barred. See Minn. Stat. § 541.051, subd. 1 (1965) ("[N]o action to recover damages for any injury to property * * * arising out of the defective and unsafe condition of an improvement to real property * * * shall be brought * * * more than two years after discovery thereof * * *."). This court limited the statute's coverage to tort actions in which the defendant asserting section 541.051 as a defense was not in privity with the plaintiff. Kittson County, 308 Minn. at 242, 241 N.W.2d at 802. The legislature specifically broadened the statute's scope in 1980 by amending it to state that it covered "action[s] by any person in...