Metropolitan Life Ins. Co. v. M.A. Mortenson Companies, Inc.
| Decision Date | 02 April 1996 |
| Docket Number | No. C9-95-2060,C9-95-2060 |
| Citation | 545 N.W.2d 394 |
| Parties | 29 UCC Rep.Serv.2d 490 METROPOLITAN LIFE INSURANCE COMPANY, Appellant, v. M.A. MORTENSON COMPANIES, INC., Benson Industries, Inc., PPG Industries, Inc., Kohn Pedersen Fox Associates, P.C., CDC, Inc., Atlantic Richfield Company, Respondents, Gateway Glass Company, Defendant, Carciofini Caulking Company, Respondent. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
Minn.Stat. § 541.051 bars actions for building defects brought more than two years after discovery of the injury or, where there is an express warranty of future performance, after discovery of the breach.
Appeal from District Court, Hennepin County; Bruce Hartigan, Judge.
Eric J. Magnuson, John M. Bjorkman, John B. Lunseth II, Rider, Bennett, Egan & Arundel, P.L.L.P. Minneapolis, MN, for Metropolitan Life Ins. Co.
James Duffy O'Connor, James F. Killian, Maslon, Edelman, Borman & Brand, P.L.L.P. Minneapolis, MN, for M.A. Mortenson Companies, Inc.
Dale B. Lindman, Mary W. Watson, Victor E. Lund, Mahoney, Dougherty, Mahoney, P.A., Minneapolis, MN, for Benson Industries, Inc.
Brian N. Johnson, Gary Parish, Popham, Haik, Schnobrich & Kaufman, Ltd. Minneapolis, MN, for PPG Industries, Inc.
Michael G. Taylor, Dwight A. Larson, Leonard, Street and Deinard, Minneapolis, MN, for Kohn Pedersen Fox Associates, P.C.
C. Todd Koebele, Thomas A. Gilligan, Jr., Murnane, Conlin, White & Brandt, P.A., St. Paul, MN, Ronald E. Martell, Moore, Costello & Hart, Minneapolis, MN, for CDC, Inc.
Russell A. Blanck, Larry D. Espel, Greene, Espel, Minneapolis, MN, for Atlantic Richfield Co.
Dan T. Ryerson, John E. Varpness, Gislason, Martin & Varpness, P.A., Minneapolis, MN, for Carciofini Caulking Co.
Considered and decided by HUSPENI, P.J., and PETERSON and HARTEN, JJ.
Respondents moved for and were granted summary judgment on the grounds that Minn.Stat. § 541.051, subd. 1(a), providing a two-year statute of limitations for improvements to real property, precluded appellant's claims. Because both the injury and the breach of contract were discovered more than two years before the action was brought, we affirm.
Appellant Metropolitan Life Insurance Company (Met Life) is now the sole owner of the Metropolitan Centre (Centre), a 31-story office building whose defects are the subject of this action, which was commenced on April 19, 1994. There are seven respondents: M.A. Mortenson Companies, Inc. (Mortenson), the building's general contractor; Benson Industries, Inc. (Benson), installer of window and curtain wall systems; Kohn Pedersen Fox Associates (KPF), architect; PPG Industries, Inc. (PPG), manufacturer and supplier of windows; CDC, Inc. (CDC), consultant on curtain walls; Atlantic Richfield Company (ARCO), supplier of the window framing system; and Carciofini Caulking Company (Carciofini), supplier and installer of exterior caulking. 1
The water retention defect
The chief engineer, an employee of the building's then-owner, first observed and reported water coming down the insides of the windows of the Centre in late 1987 or early 1988. He observed this problem "more or less continuously" thereafter. The building's architect, respondent KPF, became aware of water penetration problems on the upper six floors of the Centre in 1988 and consulted respondent CDC to investigate. Ralph Ellerbrock of CDC issued a report attributing the water damage to condensation and stating that the problem would resolve itself as the concrete in the building dried out and occupancy increased. When Met Life received a copy of Ellerbrock's 1988 report, it decided to withhold part of the payments it owed Mortenson, the general contractor. Ellerbrock was again retained to inspect the building in 1991 and again reported condensation. Met Life received his 1991 report.
Because the problem continued, Met Life hired its own consultants to inspect the building in 1992. Their April 1992 report showed defects in the installation of the building's vapor barrier. In 1994 they issued another report, finding that because the drainage slots were too small, water leaving the building froze, plugged the slots, and prevented further drainage.
The spandrel window defect
The building's spandrel windows were designed to be opaque; they are composed of an exterior glass layer, then a metallic reflective layer laminated to the glass, and finally an opacifier film. As the opacifier layer chipped and peeled away from the windows, they ceased to be opaque and revealed unsightly construction.
Early in 1990, a window-washing crew informed Met Life representatives about defects in the spandrel windows. The 1991 Ellerbrock report also stated that the opacifier was delaminating or losing its adhesion, and a consultant hired by Met Life recommended in March 1992 that all the spandrel units be replaced. When respondent PPG, which manufactured and supplied the windows, was informed of the problem in late March or early April 1992, it first denied there was a problem, then claimed it had no information; it did not promise to repair or replace the windows.
Does Minn.Stat. § 541.051 bar an action brought more than two years after the discovery of an injury?
On appeal from summary judgment, this court asks whether there are any issues of material fact and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990).
The relevant statute in this case is Minn.Stat. § 541.051, subd. 1 (1990), providing that:
(a) * * * [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 * * * more than two years after discovery of the injury * * *.
(b) * * *[A] cause of action accrues upon discovery of the injury * * *. 3
Because Met Life makes different arguments with respect to the application of the statute to each defect, we will consider the defects separately.
Met Life asserts that its April 19, 1994, action is not barred because it did not discover the design and installation defects responsible for this problem until April 20, 1992, when it received the report of its own expert. Met Life raises three arguments: first, that the "discovery of the injury" language does not apply when an injury could have more than one cause; second, that summary judgment is not appropriate because the record does not clearly show that Met Life discovered the injury more than two years before commencing the action; and third, that summary judgment is precluded because the determination of when a statute of limitations begins to run is a fact issue. We find no basis for relief in any of these three arguments.
Met Life agrees that it is generally true that discovery of the injury begins the running of the statute, but cites Hyland Hill N. Condominium Ass'n, Inc. v. Hyland Hill Co., 538 N.W.2d 479 (Minn.App.1995), review granted (Minn. Nov. 30, 1995), to argue that if an injury could have more than one cause, it is discovery not of the injury but of the cause that begins the statutory period. While Hyland Hill is not precisely on point, since a different statute of limitations applied there, id. at 483, dicta in that case observed that the limitation period on an action to replace a roof did not begin to run until the plaintiff was aware of the need for replacement; discovery of sporadic leaks did not give rise to a cause of action because the plaintiff did not know the "true nature of its injury." Id. at 484. Met Life argues that it did not know the true nature of its injury until 1992.
Hyland Hill is distinguishable from this case. The roof leakage in Hyland Hill was initially only sporadic and was handled by minor repairs. Id. at 482. The plaintiff took reasonable steps to remedy the problem and, when the leak became extensive and irreparable, brought an action within a year. Id. Here, the water damage was frequent and continual from 1987 on; Met Life was informed in 1988 and again in 1991 that the problem was condensation in the vapor barrier. Met Life considered the water drainage problem to be very significant: it used the problem as a basis for denying retainage payments to the general contractor in 1988; its own architect was aware of the problem in 1989; and its own engineer attempted to resolve it by altering the heating, ventilation, and air conditioning system in 1990. Met Life's reliance on Hyland Hill is misplaced.
Met Life next cites City of Willmar v. Short-Elliott-Hendrickson, Inc., 475 N.W.2d 73, 78 (Minn.1991), to argue that summary judgment under Minn.Stat. § 541.051 is not appropriate because the record does not clearly demonstrate that the discovery of the grounds for the cause of action occurred more than two years prior to commencing suit. In City of Willmar, a city sued the designer of waste disposal units because of odors emanating from the units. Many facts obscured the discovery of the cause of action: the designer consistently maintained that the problem was not a design defect but excessive industrial waste; a consultant assured the city that the system was properly designed and constructed and could be adjusted to control the odor; the city's engineer reported that there were not sufficient facts to attribute the problem to the designer; the city's engineering department finally identified the disposal units as the source of the odors but did not identify flaws in their design or operation; and the city brought its action within eight months of retaining a consultant to determine whether the design of the disposal plant was adequate. City of Willmar, ...
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