Mt. Lebanon School Dist. v. W.R. Grace and Co.

• Decision Date: 29 April 1992
• Citation: 414 Pa.Super. 455,607 A.2d 756
• Parties: , 75 Ed. Law Rep. 323 MT. LEBANON SCHOOL DISTRICT and Mt. Lebanon High Authority, Appellees, v. W.R. GRACE AND COMPANY, a Corporation, Appellant.
• Court: Pennsylvania Superior Court

Page 756

607 A.2d 756

414 Pa.Super. 455, 75 Ed. Law Rep. 323

MT. LEBANON SCHOOL DISTRICT and Mt. Lebanon High Authority, Appellees, v. W.R. GRACE AND COMPANY, a Corporation, Appellant.

Superior Court of Pennsylvania.

Argued Sept. 11, 1991.

Filed April 29, 1992.

Lawrence E. Flatley, Pittsburgh, for appellant.

John F. Perry, Pittsburgh, for appellees.

Before CAVANAUGH, BECK and KELLY, JJ.

KELLY, Judge:

In this opinion we are called upon to determine, inter alia, whether a school district may assert the doctrine of nullum tempus occurrit reqi to defeat the applicable statute of limitations in an action against a third party based upon that party's sale to the school district of a product containing asbestos for use in the construction of additions to a school building within the district. Following a three week trial, a jury returned a verdict in favor of appellant, W.R. Grace and Company (hereinafter "Grace") and against the appellee, Mt. Lebanon School District (hereinafter "School District"). Subsequent to the filing of post-verdict motions, the trial court awarded the School District a new trial. The court found that it had erred in charging the jury on the applicable statute of limitations, concluding that "the doctrine of nullum tempus was applicable." Trial Court Opinion at 3. We agree with the trial court that the doctrine of nullum tempus was applicable in the instant case and that the granting of a new trial was proper. Hence, we affirm.

The relevant facts and procedural history are as follows. In 1970, the School District formed the Mt. Lebanon High School Authority to finance the construction of several additions to Mt. Lebanon High School. During construction, Grace supplied the Authority with fireproofing material it had manufactured known as Monokote. The Monokote was used as fireproofing mainly in the floors, ceilings and beams in the additions. Subsequent to the completion of the additions and as a result of several reports suggesting guidelines for the testing for asbestos in schools, the district commenced inspection of the high school. The inspection uncovered asbestos in the Monokote used as fireproofing in the additions. Consequently, on August 19, 1983, the School District filed this lawsuit seeking recovery for the costs of removing Grace's product from the high school additions.

On September 21, 1989, the trial court granted the School District's motion in limine to exclude evidence on the statute of limitations. The order granted the motion, "... without prejudice to defendants' [Grace's] right to offer the same evidence as to other issues." Order, 9/12/89. Throughout the entire litigation it was the School District's position that the doctrine of nullum tempus applied, negating the statute of limitations. The trial court was well aware of this when it granted the District's motion in limine and denied Grace's motions for a directed verdict. See N.T. 9/29/89 at 161. At the conclusion of testimony, however, Grace requested a charge on the applicable statute of limitations. At the charge conference, the court granted Grace's charge on the statute of limitations and the School District noted an exception, again informing the court of its position as to the applicability of nullum tempus. N.T. 10/11/89 at 226(b). At trial and very near the close of its instructions, the court instructed the jury as follows:

There is sort of a legal matter in here, I'm not quite sure it belongs to the jury, but they have asked for it and I'm going to give it to you.

W.R. Grace contends the plaintiff's claims are barred by a defense called the statute of limitations. The statute of limitations is the time period within which a plaintiff is required by law to commence a lawsuit. If plaintiff does not bring his lawsuit within that required time, he forfeits his right to sue.

In this case the statute of limitations period is two years. The two-year period begins to run when the plaintiff first knew, or by the exercise of reasonable care or diligence should have known, that its claim that asbestos-containing products in its building were potentially hazardous.

With regard to plaintiff's knowledge, you are instructed that plaintiff had knowledge if it actually knew that asbestos-containing fireproofing could be potentially hazardous or that plaintiff had information which would normally have led a reasonably careful person of the same intelligence, training and experience to make inquiry through which the plaintiff would have learned and discovered that asbestos-containing fireproofing could be potentially hazardous.

W.R. Grace has the burden to prove the plaintiff's knowledge by a preponderance of the evidence. If W.R. Grace proves by that preponderance of the evidence that plaintiff knew, or by the exercise of reasonable care or inquiry should have known on or before August 19, 1981 that the asbestos-containing fireproofing applied to the additions of plaintiff's high school had contaminated the building, then this lawsuit was untimely filed and your verdict must be for the defendant.

N.T. 10/12/89 at 345-347. The jury deliberated nearly four hours before returning a verdict for Grace.

The School District filed timely post-verdict motions alleging several trial errors. Most significantly, the School District contended that the court had erred in charging the jury on the applicable statute of limitations. The School District argued that the court had effectively reversed its order granting the District's motion in limine precluding evidence regarding the statute of limitations. Moreover, the School District alleged, as it had at the charge conference, that the doctrine of nullum tempus applied, thus defeating the statute of limitations defense. Having more fully researched the issue, the trial court concluded that the School District was correct and that it had erred when it charged the jury on the applicable statute of limitations. The court further found that a new trial was warranted because it was unclear on what grounds the jury had based their verdict. Trial Court Opinion at 5-6. ¹ Following the court's order awarding the School District a new trial, Grace perfected this timely appeal.

On appeal, Grace contends that: 1) the trial court erred in granting the School District a new trial under the doctrine of nullum tempus; 2) the School District may not now claim prejudice when it failed to do so below; 3) the court's charge on the statute of limitations, if error, was harmless error, and; 4) the trial court erred in failing to direct a verdict for Grace when the School District is seeking purely economic recovery which is not recoverable in tort. We address these issues seriatim.

We begin by noting that our standard of review from a trial court's decision to grant a new trial is, "whether the trial court palpably and clearly abused its discretion or committed an error of law which controlled the outcome of the case." Westinghouse Elevator Co. v. Herron, 514 Pa. 252, 256, 523 A.2d 723, 725 (1987). Where as here, however, the court gives a single reason for the granting of a new trial, the court's discretion is not at issue, but rather the validity of its legal justification is subject to review. Id. With the foregoing in mind, we turn to Grace's challenges on appeal.

The doctrine of nullum tempus occurrit reqi ("time does not run against the king") has long been accepted in this Commonwealth. Commonwealth Department of Transportation v. J.W. Bishop & Co., 497 Pa. 58, 62, 439 A.2d 101, 103 (1981); School District of the Borough of Aliquippa v. Maryland Casualty Company, 402 Pa.Super. 569, 580-82, 587 A.2d 765, 771 (1991). As this Court recently noted [w]henever the Commonwealth invokes the doctrine of nullum tempus, it is seeking as a plaintiff to vindicate public rights and protect public property. Thus, since its adoption in this country, the rationale for the doctrine of nullum tempus has been "the great public policy of preserving public rights, revenues and property from injury and loss." United States v. Hoar, 26 Fed.Cas. 329, 330 (C.C.D.Mass.1821) (No. 15,373) (Story, J.). See [Commonwealth v.] Musser Forests [394 Pa. 205, 146 A.2d 714 (1958) ], supra (nullum tempus "matter of important public policy"). Moreover, the benefits and advantages of the doctrine of nullum tempus extend "to every citizen, including the defendant whose plea of ... limitations it precludes." Guaranty Trust [Co. of New York v. United States], supra, 304 U.S. at 132, 58 S.Ct. at 789 [82 L.Ed. 1224 (1938) ].

School District of Aliquippa, supra, 402 Pa.Super. at 581, 587 A.2d at 771, quoting Bishop, supra, 497 Pa. at 62, 439 A.2d at 104. In City of Philadelphia v. Holmes Protective Co., 335 Pa. 273, 6 A.2d 884 (1939), our Supreme Court held that,

[i]t is true that, unless otherwise provided, statutes of limitations cannot be pleaded against such political subdivisions when they are seeking to enforce strictly public rights, that is, when the cause of action accrues to them in their governmental capacity and the suit is brought to enforce an obligation imposed by law as distinguished from one arising out of an agreement voluntarily entered into by the defendant.

Id., 335 Pa. at 278, 6 A.2d at 887; see also Pocono Township v. Hall, 127 Pa.Cmwlth. 116, 121, 561 A.2d 53, 55 (1989) (same); Borough of West Fairview v. Hess, 130 Pa.Cmwlth. 385, 391-393, 568 A.2d 709, 713 (1989) ("unless a municipality is exercising a governmental function or there is an express provision to the contrary, a statute of limitation will apply to the government unit."); but see Northampton County Area Community College v. Dow Chemical, U.S.A., 389 Pa.Super. 11, 19, 566 A.2d 591, 595 (1989) (statute and case law have rejected a "governmental v. proprietary function" test), affirmed Northampton County Area Community College v. Dow Chemical U.S.A., 528 Pa. 502, 598 A.2d 1288 (1991) (per curiam ) (Papadakos, J., dissented and filed an...