Pacific Indem. Co. v. Thompson-Yaeger, Inc.

Decision Date16 September 1977
Docket NumberINC,45811,46427,Nos. 45761,45929,46018,45822,THOMPSON-YAEGE,46470 and 46494,46345,s. 45761
Citation260 N.W.2d 548
CourtMinnesota Supreme Court
PartiesPACIFIC INDEMNITY COMPANY, et al., Respondents, v., Respondent-Appellant, Frerichs Our Own Hardware, Inc., Respondent-Appellant, Tjernlund Manufacturing Company, Respondent, Yale Engineering, Inc., Appellant-Respondent, (and thirteen other cases). and Helder B. MUNSON and Lois M. Munson, d. b. a. The Toy Box, Respondents, v., Respondent-Appellant, Frerichs Our Own Hardware, Inc., Respondent-Appellant, Yale Engineering, Inc., Appellant-Respondent, and YALE, INC., defendant and third-party plaintiff, Appellant-Respondent, v. CORRIGAN PROPERTIES, INC., third-party defendant, Respondent, Draper & Kramer, Inc., Respondent, Tjernlund Manufacturing Company, third-party defendant, Respondent.

Syllabus by the Court

1. Minn.St. 541.051, which places an absolute time limit upon damage claims against certain persons who cause improvements to real property to be defective or unsafe, violates constitutional provisions which forbid immunity from suit to a limited class of defendants without there being a reasonable basis for such classification.

2. In an action for damages caused by fire brought by multiple plaintiffs against multiple defendants where cross-claims for contribution and indemnification were asserted, two of the defendants paid sums certain to the plaintiffs in exchange for an agreement by the plaintiffs to dismiss their claims as against the paying defendants and to return the sums certain paid should the jury ultimately determine that either or both of the paying defendants were not responsible for the damage-causing occurrence, held, that under the circumstances of this case the agreement did not have a prejudicial impact on the trial, where its essential terms were disclosed and evaluated by the jury which assessed the evidence and decided the case.

3. Claims of prejudicial misconduct on the part of court and counsel held to be without merit.

4. Jury findings of causative negligence for damages resulting from fire held sustained by the evidence.

5. Where a judgment has been entered against several defendants based upon a finding that their negligence caused damage to tenants in a building as a result of fire, defendants are estopped to deny liability in a subsequent action by another tenant in the building who sustained damage caused by the same fire.

Murnane, Murnane, Conlin & White, Thomas M. Conlin, Michael I. Fahey, St. Paul, for appellant, Yale Engineering Co.

Dunlap, Keith, Collins, Towey & Finseth, Rochester, R. W. Towey, for Insurance Co. of North America, Dr. Dale E. Chambers, D. C. and Dr. Wayne Boisen d/b/a Chiropractic Health Center, Centennial Insurance Company, St. Paul Insurance Company and Weichselbaum & Associates, Inc., and Joseph J. Weichselbaum, individually, Implement Dealers Mutual Insurance Company, and The Travelers Insurance Company.

Meagher, Geer, Markham, Anderson, Adamson, Flaskamp & Brennan, William D. Flaskamp and James F. Roegge, Minneapolis, for Firemen's Fund American Insurance Companies and Westchester Fire Insurance Company.

West, Gowan & DeBoer, Rochester, John S. Gowan and James F. Roegge, Minneapolis, for Helder B. Munson and Lois M. Munson d/b/a/ The Toy Box.

Robert F. DeVinny, Rochester, for Weichselbaum & Associates, Inc., and Joseph J. Weichselbaum, individually.

Clarance E. Hagglund and Robert Pearson, Minneapolis, for appellant Thompson-Yaeger, Inc.

O'Brien, Ehrick, Wolf, Deaner & Downing, Thomas E. Wolf and Steven S. Fuller, Rochester, for Pacific Indemnity Company, Royal Indemnity Company, Aetna Casualty and Surety Company, Birmingham Fire Insurance Company, Home Insurance Company of New York and State Farm Insurance.

Thomas E. Wolf, Rochester, for Pacific Indemnity Company, Aetna Life & Casualty Company, Royal Indemnity Company, Corrigan Properties, Inc., Royal Shoe Repair, Inc., Snyder's Drug Store, Inc., State Farm Fire and Casualty Co., and Joseph Suchomel d/b/a The Pub.

Patterson & Restovich, and George Restovich, Rochester, for Earl B. Hoglund.

Van Eps & Gilmore and Chantry, Duane E. Arndt and Donald Chantry, Minneapolis, for Tjernlund Manufacturing Company.

Robert M. Wattson, Lawrence Zelle and Judith Rogosheske, Robins, Davis & Lyons, Minneapolis, David T. Bishop, Michaels, Bishop, Seeger & Rosenblad, Rochester, for Frerichs Our Own Hardware, Inc.

William C. Schacht, Schacht, Kerr & Steimer, Rochester, for Draper & Kramer, Inc.

Richard B. Allyn, Sol. Gen., St. Paul, for State.

Considered and decided by the court en banc.

SHERAN, Chief Justice.

This litigation arises out of a 1971 fire that destroyed a portion of a shopping center in Rochester, Minnesota. Plaintiffs are either tenants or the insurers of tenants; all seek recovery from four principal defendants for damages suffered by reason of that fire. Defendants are Yale Engineering, Inc., Thompson-Yaeger, Inc., Tjernlund Manufacturing Co., and Frerichs Our Own Hardware, Inc. Thirteen actions were commenced in the district court, and all were consolidated for trial. The issues were bifurcated, and the matters came on for trial before the court and a jury of six on the issue of liability. The case was submitted upon a special verdict. The jury found all three of the appealing defendants negligent. Judgment was entered accordingly.

Yale and Frerichs appeal from the judgment and from the denial by the trial court of their respective motions for amended findings of fact, conclusions of law, and order for judgment, judgment n. o. v., or a new trial. Thompson-Yaeger has filed a notice of review in each of these cases. By order of this court the various appeals were consolidated for hearing and argument. Additionally, we ordered consolidated with these cases an appeal in a separate action for damages initiated by another of the tenants of the shopping center not a party to the original actions. In light of the verdict in the first cases, that tenant moved for summary judgment, arguing that the defendants were collaterally estopped from denying their liability. The trial court granted summary judgment, and defendants Yale and Frerichs appealed from that judgment.

Viewing the evidence, as we must, in a light most favorable to the verdict, the facts appear to be as follows:

On February 21, 1971, a fire destroyed the south end of the Miracle Mile Shopping Center in Rochester, Minnesota. This was a strip-type shopping center, with all of the stores located in a row. The Rochester Fire Department arrived in response to an alarm. The first engine to reach the center reported light smoke coming from the area of the Camera Center, located adjacent to Frerichs' hardware store. Upon further investigation, a small area of flame was observed in the rear of Frerichs' sporting goods department, near a duct coming from the furnace room. The fire spread quickly, ultimately destroying all of the stores to the south of Frerichs, and some located to the north. Other establishments suffered smoke and water damage.

The exact point of origin of the fire was determined by Chief Smith of the Rochester Fire Department to have been in the furnace room of Frerichs, on the north wall, in the east corner, behind the furnace. This point was directly opposite the "clean-out door" on the rear of the furnace. Smith's opinion was concurred in by two other expert witnesses, Dennis Michaelson, a consulting chemist employed regularly as a fire investigator, and Phillip Anderson, a consulting engineer.

Three theories, none exclusive of the others, were advanced as to why the fire began. The principal theory was that because the furnace was installed within a few inches of the wall where the fire started, the heat generated caused the formation of pyrophoric carbon 1 on the studs immediately behind the sheetrock of the wall. Eventually this "charcoal" ignited, causing the fire, which then spread to the interior of the wall and beyond. Another theory postulated was that this process of carbonization was accelerated by an increased temperature of the rear access door, which was in turn caused by intermittent ignition of the furnace resulting in incomplete combustion of the oil blown into the furnace. This oil landed on the hot access door and ignited, raising the temperature of the door further. The final theory presented was that "combustible materials" (consisting primarily of paper and cardboard boxes) stored near the furnace ignited, with the flames finding their way into the wall studs. The boxes also purportedly blocked the cold air return, further raising the operating temperature of the furnace and contributing to the carbon formation.

Several parties were named as defendants. Yale Engineering installed the furnace which allegedly caused the fire. The installation was completed in 1953. As installed (within inches of the wall) the furnace violated applicable building codes and the manufacturer's instructions. The trial court ruled that Yale was negligent as a matter of law; the jury found that this negligence accounted for 80 percent of the causation of the fire.

Thompson-Yaeger, Inc., serviced the furnace from approximately 1968 to January 8, 1971. On this last date, an employee of Thompson-Yaeger installed a new oil pump and adjusted the nozzle assembly and the electrical ignition system. Allegedly he made the adjustments improperly, causing the intermittent ignition which resulted in surface combustion on the rear access plate of the furnace, and causing an increase in temperature. The jury found Thompson-Yaeger negligent, and apportioned 10 percent of the causation to this negligence.

Frerichs Our Own Hardware, Inc., was the tenant occupying the premises where the furnace was located. Frerichs had entered into a 10-year lease for the premises with the owner of the center, Corrigan Properties, Inc. As a part of that...

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