Riley v. Brown & Root, Inc.

• Decision Date: 20 February 1990
• Docket Number: No. 86-1935,86-1935
• Parties: Prod.Liab.Rep.(CCH)P 12,402 Ronna RILEY, personal representative of Ira Bob Harry Riley, Deceased, Plaintiff-Appellant, v. BROWN & ROOT, INC., a corporation; Stebbins Engineering and Manufacturing Company, a corporation; Defendants, and Rust Engineering Company, a corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 474

896 F.2d 474

Prod.Liab.Rep.(CCH)P 12,402

Ronna RILEY, personal representative of Ira Bob Harry Riley, Deceased, Plaintiff-Appellant, v. BROWN & ROOT, INC., a corporation; Stebbins Engineering and Manufacturing Company, a corporation; Defendants, and Rust Engineering Company, a corporation, Defendant-Appellee.

No. 86-1935.

United States Court of Appeals, Tenth Circuit.

Feb. 20, 1990.

Rehearing Denied March 26, 1990.

Ed Abel, Abel, Musser, Sokolosky & Clark, Oklahoma City, Okl. (Lynn B. Mares, Abel, Musser, Sokolosky & Clark, Oklahoma City, Okl., was also on the brief), for plaintiff-appellant.

Page Dobson, Holloway, Dobson, Hudson and Bachman, Oklahoma City, Okl. (Terry A. Hall, Holloway, Dobson, Hudson and Bachman, Oklahoma City, Okl., was also on the brief), for defendant-appellee.

Before HOLLOWAY, Chief Judge, TIMBERS ^* and BALDOCK, Circuit Judges.

HOLLOWAY, Chief Judge.

In this diversity action, plaintiff appeals an order granting defendant Rust Engineering Company's motion for summary judgment, and denying her request to certify a question of state law to the Oklahoma Supreme Court. We vacate the district court's judgment and remand for further consideration in light of an intervening state court opinion.

I. Procedural and Factual Background

Plaintiff, as the personal representative of Ira Riley, deceased, originally brought this manufacturer's products liability action against several defendants, ¹ including Rust Engineering Co. ("Rust"), alleging that the defendant defectively designed the "base machine chest" ² in which Ira Riley died. The district court granted defendant Rust's motion for summary judgment, holding, as a matter of law, that plaintiff's cause of action was barred by a special statute of repose, Okla.Stat. tit. 12, Sec. 109 (1981). ³ That statute provides, in relevant part, that no action in tort to recover damages for deficiency in the design, planning, supervision, or observation of construction of an "improvement to real property" shall be brought more than ten years after substantial completion of the improvement.

Although the district court had before it no authority directly on point, the court concluded that the base machine chest involved in this case constituted an "improvement to real property" within the meaning of Sec. 109 and therefore that the statute applied. The district court also ruled that Sec. 109 did not violate Article 23, Sec. 7 of the Oklahoma Constitution which forbids the abrogation of a right of action to recover damages for wrongful death. ⁴ Plaintiff challenges both of these rulings. She does not dispute that her cause of action arose more than ten years after completion of the paper mill, but argues that the base machine chest is not an "improvement to real property" within the meaning of the statute. Further, plaintiff argues that even if the machine chest is an improvement to real property, such that her suit would be barred by the statute, then Sec. 109 is unconstitutional because it abrogates the right of action to recover for injuries resulting in death in violation of Article 23, Sec. 7 of the Oklahoma Constitution.

II. Discussion

A.

We review the district court's order granting summary judgment under the same standard employed by the district court under Rule 56(c) of the Federal Rules of Civil Procedure. Osgood v. State Farm Mut. Auto Ins. Co., 848 F.2d 141, 143 (10th Cir.1988). Summary judgment is proper only if there is no genuine issue of material fact for determination, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Contrary to Rust's assertion in its brief, we do not examine the trial court's rulings under the "clearly erroneous" standard, despite the fact that the trial court conducted a rather extensive evidentiary hearing in this case. See Luckett v. Bethlehem Steel Corp., 618 F.2d 1373, 1377 (10th Cir.1980). Although the district court made detailed statements of its views on the evidence, those determinations are not entitled to the deference due findings of fact made by a trial court after an evidentiary trial on disputed issues of fact. Williams v. Eaton, 443 F.2d 422, 433 (10th Cir.1971). ⁵ We review the entire record on summary judgment de novo in the light most favorable to the party opposing summary judgment. Weir v. Anaconda Co., 773 F.2d 1073, 1079 (10th Cir.1985). We must consider factual inferences tending to show triable issues in the light most favorable to the existence of those issues. Luckett v. Bethlehem Steel, 618 F.2d at 1377 (quoting Mustang Fuel Corp. v. Youngstown Sheet & Tube Co., 516 F.2d 33, 36 (10th Cir.1975)). "Where different ultimate inferences may properly be drawn, the case is not one for a summary judgment." Luckett, 618 F.2d at 1377 (citations omitted).

Assuming for the moment that summary judgment was appropriate in this case, a point we do not and need not decide in light of our conclusions below, we believe this case must be remanded to the district court for reconsideration in light of a change in the governing state law. After the district court granted summary judgment for Rust and during pendency of this appeal, the Oklahoma Supreme Court decided Smith v. Westinghouse Electric Corp., 732 P.2d 466 (Okla.1987). In Smith, the Oklahoma Supreme Court announced that the test for determining whether the electrical equipment in question was an improvement to real property within the meaning of Sec. 109 would be "derived from our [ad valorem] taxing scheme." 732 P.2d at 470. The court held that because the electrical transformer retained its character as the personalty of the public utility supplying the electrical power, and ad valorem taxes for it were assessed solely against the utility using it, the transformers were not improvements to real property under Sec. 109. Id. at 467-68, 470. Since that test was not part of the law in Oklahoma when the district court granted summary judgment for Rust, the court did not consider or base its analysis on Oklahoma's ad valorem taxing scheme or the Smith analysis. Instead, acknowledging that the meaning of "improvement to real property" under Sec. 109 was a question of first impression in Oklahoma, the district court examined analogous Oklahoma real property law and decisions from other jurisdictions applying similar statutes. Ultimately, the court rested its decision on seven factors which it felt demonstrated that the base machine chest "is an integral part of the paper mill, and [is] required for the mill to function as intended," ⁶ and therefore that it constitutes an improvement to real property within the meaning of Sec. 109. (Order entered March 12, 1986, at p. 7.)

It appears to us that Smith is controlling with respect to this question of statutory interpretation. Although Smith involved an electrical transformer owned by a public utility whose ad valorem taxes were governed by a special statute, see Okla.Stat. tit. 68, Sec. 2449 (1981), the principle announced in Smith would appear to be applicable to this case. Cf., e.g., Okla.Stat. tit 68, Sec. 2419 (1981) ("Real property, for the purpose of ad valorem taxation, shall be construed to mean ..., and all buildings, structures and improvements or other fixtures of whatsoever kind thereon, exclusive of such machinery and fixtures on the same as are, for the purpose of ad valorem taxation, defined as personal property."); see also Akers v. Hintergardt, 201 Okl. 213, 203 P.2d 883 (1949) (real property, for the purpose of taxation, includes the land itself and any buildings or structures thereon). Since the record here does not cover the probable tax treatment of the base machine chest, as realty or personalty, or the ownership factor as discussed in Smith, the record is not sufficient in its present form to decide whether the machine chest is, under Oklahoma law, an improvement to real property within the meaning of Okla.Stat. tit. 12, Sec. 109. ⁷

It is therefore incumbent on us to remand the case for reconsideration in light of Smith. "It is the duty of the federal appellate courts, as well as the trial court to ascertain and apply the state law where, as in this case, it controls decision." Huddleston v. Dwyer, 322 U.S. 232, 236, 64 S.Ct. 1015, 1018, 88 L.Ed. 1246 (1943); Patty Precision v. Brown & Sharpe Mfg. Co., 742 F.2d 1260, 1262 (10th Cir.1984) ("In a diversity case we are obligated to overturn a trial court decision, correct when rendered, if an intervening decision of the highest court of a state changes the applicable law. This rule applies as long as the case is sub judice."); see also Whalley v. Sakura, 804 F.2d 580, 586 n. 3 (10th Cir.1986); Kinnison v. Houghton, 432 F.2d 1274, 1277 (10th Cir.1970); Versluis v. Town of Haskell, 154 F.2d 935, 937 (10th Cir.1946). Although the district court attempted to apply the controlling state law when it entered its judgment, that judgment must be reversed on appellate review if in the meantime the state courts have adopted a different rule of law. See Huddleston, 322 U.S. at 236, 64 S.Ct. at 1017. That is clearly the case here. We therefore vacate the order granting summary judgment to Rust and remand so that the district court may decide this question under the controlling state law.

B.

After holding that the statute of repose, Sec. 109, applied to this case, the district court also upheld the constitutionality of that statute, relying primarily on Loyal Order of Moose Lodge 1785 v. Cavaness, 563 P.2d 143 (Okla.1977). Of course, the question concerning the application and interpretation of Sec. 109, now governed by Smith, must be decided before reaching the constitutional question raised in this case. The constitutionality of Sec. 109 should not be decided if the case can be resolved on narrower grounds. See, e.g., Ashwander v. TVA, 297 U.S. 288, 346-47, 56 S.Ct. 466, 482-83, 80 L.Ed. 688 (1936) (Brandeis, J., concurring); see also Oklahoma City Mun. Improvement Auth. v. HTB Inc., 769 P.2d...