STATE FARM FIRE AND CAS. v. Aquila Inc.
| Citation | 697 N.W.2d 636 |
| Decision Date | 14 June 2005 |
| Docket Number | No. A04-1816.,A04-1816. |
| Parties | STATE FARM FIRE AND CASUALTY, et al., Appellants, v. AQUILA INC. d/b/a People's Natural Gas, f/k/a UtiliCorp United Inc., d/b/a People's Natural Gas/Energy One, Respondent, Northern Pipeline Construction Company, Respondent, Robert Sauer, et al., Defendants, George Rucker, et al., Nominal Defendants. |
| Court | Minnesota Court of Appeals |
Bradley J. Ayers, David A. Wikoff, Robert W. Vaccaro, Flynn, Gaskins & Bennett, L.L.P., Minneapolis, MN, for appellants State Farm Fire and Casualty and Auto Owners Insurance Company.
Jeremy R. Stevens, Bird & Jacobsen, Rochester, MN, for appellant Joan Hernlem.
Dale M. Wagner, Bassford Remele, Minneapolis, MN, for respondent Aquila Inc. Scott P. Drawe, Drawe & Heisick, Minneapolis, MN, for respondent Northern Pipeline Construction Company.
Appellants, owners and insurers of property damaged by the explosion of a natural-gas pipeline, brought suit against respondents, one of which is the owner of the pipeline, and the other is the firm that installed it. The district court granted summary judgment in favor of respondents on the ground that appellants' suits were barred by Minn.Stat. § 541.051 (2004), the statute of repose for improvements to real property. Appellants contend that the district court erred (1) in determining that the natural-gas pipeline at issue constituted an "improvement to real property" for the purposes of Minn. Stat. § 541.051; (2) in granting summary judgment for respondents where appellants alleged negligence and negligence per se, not merely as to the installation of the natural-gas pipeline, but also as to the inspection, maintenance, and/or repair of the natural-gas system; and (3) in determining that no negligence existed even though a prima facie showing by appellants was all that was required, discovery had only just begun, and substantive negligence issues were not briefed by the parties.
In November 1990, respondent Aquila Inc., owner of a natural-gas pipeline at Hallmark Terrace Trailer Park, contracted with respondent Northern Pipeline Construction Company to replace the existing pipeline. The existing main lines and service lines (i.e., the lines that run from the main lines to the customers' homes) were made of steel. That pipeline was to be abandoned and Northern Pipeline was to install a new pipeline made of polyethylene. According to the work order, the old pipeline was replaced because of the hazardous location of the steel main and service lines. Appellants allege that the polyethylene pipeline was installed under driveways and roads using a pneumatic boring tool, and further allege that during the installation process, Northern Pipeline installed the new pipeline through an existing clay tile sewer line. The parties do no dispute the district court's finding that Aquila owned, and still owns, the polyethylene pipeline system. Northern Pipeline completed its work in December 1990. Thereafter, Aquila maintained ownership and control over the pipeline system. No further maintenance or repairs were performed on the pipeline until 2002.
In early 2002, Hallmark Terrace hired Robert Sauer, doing business as Drain-Rite, to repair sewer drains that were blocked by tree roots. On February 13, 2002, Drain-Rite used a trap-and-drain auger to unclog the sewer pipes. Appellants claim that in doing so, Drain-Rite's auger struck and ruptured the intersecting gas line, causing natural gas to migrate through the sewer pipes and into several of the manufactured homes at Hallmark Terrace. The gas built up and ignited, resulting in an explosion that destroyed property either owned or insured by appellants.
In November 2002, appellants brought suit against respondents and Drain-Rite, but eventually settled with Drain-Rite. Appellants claim that respondents were negligent in the "inspection, maintenance, repair and/or installation of the natural gas system." Appellants also claim that respondents were negligent per se for violating "applicable codes and standards regarding the inspection, maintenance, repair and/or installation of the natural gas system." Respondents brought motions for summary judgment, arguing that the suit was time-barred by the ten-year statute of repose for improvements to real property under Minn.Stat. § 541.051 (2004).
Appellants brought a cross-motion for summary judgment, seeking an order that the statute of repose was inapplicable because the pipeline was not an improvement to real property for the purposes of Minn. Stat. § 541.051, but was instead merely an addition to Aquila's natural-gas distribution system. Relying on Johnson v. Steele-Waseca Coop. Elec., 469 N.W.2d 517, 519 (Minn.App.1991), review denied (Minn. July 24, 1991), appellants argued that "even if the newly installed polyethylene gas pipes constitute an `improvement,' which [appellants] dispute, this improvement is an addition to Aquila's distribution system." Appellants further argued, quoting Johnson, 469 N.W.2d at 520, that even if the pipeline is an improvement to real property, "Minn.Stat. § 541.051 does not protect the installer/owner from its own... negligence."
The district court held that appellants' suit was time-barred as to both respondents by Minn.Stat. § 541.051, and granted respondents' motions for summary judgment. In doing so, the district court first ruled that Aquila's pipeline constituted an improvement to real property. The court then determined that appellants' injuries arose out of the defective and unsafe condition of the pipeline. Finally, the district court considered section 541.051, subd. 1(c), which creates an exception for suits based on the negligence of owners or persons in possession of an improvement to real property. The court ruled that because Aquila did not have any notice of an unsafe condition, appellants failed to present evidence that Aquila was negligent in the maintenance, operation, or inspection of the pipeline, and therefore the exception did not apply. As to Northern Pipeline, the court ruled that the exception did not apply, because Northern Pipeline relinquished all control over the pipeline system after installation in 1990 and never owned or possessed it. This appeal follows.
I. Did the district court err in deciding that the natural-gas pipeline constituted an improvement to real property under Minn. Stat. § 541.051 (2004)?
II. Did the district court err in determining that no negligence existed?
On appeal from summary judgment, this court asks whether there are any genuine 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). In doing so, this court views the evidence in the light most favorable to the party against whom judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn.1993). The construction and applicability of a statute of limitations is a question of law subject to de novo review. Benigni v. County of St. Louis, 585 N.W.2d 51, 54 (Minn.1998).
Appellants contend that the district court erred in holding that the natural-gas pipeline owned by Aquila was an improvement to real property under Minnesota's ten-year statute of repose for injuries arising out of improvements to real property. See Minn.Stat. § 541.051 (2004).2 This statute provides in relevant part:
The Minnesota Supreme Court has adopted a common-sense interpretation of the phrase "improvement to real property" as used in Minn.Stat. § 541.051. Pac. Indem. Co. v. Thompson-Yaeger, Inc., 260 N.W.2d 548, 554 (Minn.1977). In doing so, the supreme court has defined an "improvement to real property" 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." Id. (quotation omitted). Under this common-sense analysis, we have applied the phrase "improvement to real property" broadly. See Nolan & Nolan v. City of Eagan, 673 N.W.2d 487, 496 (Minn.App.2003) (), review denied (Minn. Mar. 16, 2004); Patton v. Yarrington, 472 N.W.2d 157, 160 (Minn.App.1991) (), review denied (Minn. Aug. 29, 1991); O'Connor v. M.A. Mortenson Co., 424 N.W.2d 92, 94 (Minn. App.1988) (), review denied (Minn. July 28, 1988).
Appellants contend that their suit is not time-barred by Minn.Stat. § 541.051 because the gas pipeline in question was not an improvement to real property; instead, they argue, it was part of Aquila's natural-gas distribution system. Appellants cite our decision in Johnson v. Steele-Waseca Coop. Elec., 469 N.W.2d 517 (Minn.App.1991),review denied (Minn. July 24, 1991), as controlling. In Johnson, the plaintiffs built a barn on their dairy farm and contracted with the local power distributor to install new electrical...
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State Farm Fire and Cas. v. Aquila Inc., No. A04-1816.
...for Northern Pipeline, reversed summary judgment for Aquila, and remanded the matter to the district court. State Farm Fire & Casualty v. Aquila Inc., 697 N.W.2d 636 (Minn. App.2005). We reverse and reinstate summary judgment for Aquila owns and operates natural gas pipelines in the United ......