Stroh Die Casting Co., Inc. v. Monsanto Co., 91-2240
| Decision Date | 25 November 1992 |
| Docket Number | No. 91-2240,91-2240 |
| Citation | 502 N.W.2d 132,177 Wis.2d 91 |
| Parties | STROH DIE CASTING COMPANY, INC., Plaintiff-Respondent-Cross Appellant, d v. MONSANTO COMPANY, Defendant-Appellant-Cross Respondent. . Oral Argument |
| Court | Wisconsin Court of Appeals |
Before WEDEMEYER, P.J., and FINE and SCHUDSON, JJ.
Monsanto Company (Monsanto) appeals from a final judgment entered on August 9, 1991, following a jury trial in the circuit court for Milwaukee County, awarding Stroh Die Casting Company, Inc. (Stroh) $6,081,014.69 in damages for negligence and strict product liability. Monsanto asserts four claims of error: (1) Stroh's entire cause of action is time-barred; (2) the trial court erroneously exercised its discretion by allowing inadmissible and prejudicial evidence; (3) there is insufficient evidence to support the punitive damages verdict; and (4) Stroh is not entitled to prejudgment interest and taxable costs under sec. 807.01, Stats.
Stroh cross-appeals asserting the following two claims of error: (1) the trial court erred in concluding that a portion of its cause of action was time-barred by the applicable statute of limitations; and (2) the trial court erred by granting partial summary judgment in favor of Monsanto dismissing a claim for intentional misrepresentation.
Regarding Monsanto's appeal, we conclude that Stroh's cause of action was time-barred because Stroh should have discovered its negligence and strict product liability claims prior to May 18, 1978, and, therefore, we reverse that part of the judgment awarding Stroh $6,081,014.69 in damages. Because of this conclusion, we need not address Monsanto's second, third and fourth claims of error. Regarding Stroh's cross-appeal, we conclude that the trial court, based on the applicable statutes of limitation, properly dismissed all of Stroh's claims relating to the testing and disposal of waste oil, as well as Stroh's claim for intentional misrepresentation, and, therefore, we affirm those parts of the judgment.
Stroh is a family-owned company located in Milwaukee. The company custom produces zinc and aluminum die castings. As part of its castings operations, Stroh utilizes many hydraulic systems which require hydraulic fluid sufficient to withstand the high temperatures involved in such work.
From approximately 1962 to mid-1972, Stroh purchased a fire-resistant hydraulic fluid from Monsanto called Pydraul. During this period Pydraul was formulated with either polychlorinated biphenyls (PCBs) or polychlorinated terphenyls (PCTs). 1 These chlorinated components were utilized because of their effectiveness and resistance to high temperatures. Unfortunately, both PCBs and PCTs are toxic, persist in the environment, and tend to accumulate in the food chains of both human beings and animals. 2
The Pydraul purchased by Stroh was utilized either to replace losses of fluid from the various die casting apparatus or to fill a new piece of equipment requiring hydraulic fluid. Although many of the machines involved in the die casting operation are technically "closed systems," there is no dispute that there were leaks in various pieces of Stroh equipment that necessitated "topping off" with hydraulic fluid. "Lost" hydraulic fluid at the Stroh plant was typically collected in floor sumps, drainage trenches, or vacuumed off the floor and then stored for off-site disposal in a 3,000-gallon holding tank. In 1980, Stroh installed a filtration system which would separate the water from Stroh's waste oil; the water would be discharged into the sanitary sewer, and the waste oil would be sold. The waste oil holding tank would accumulate sludge, which had to be removed approximately every five years.
In April of 1981, waste sludge from Stroh's 3,000-gallon waste oil holding tank was tested for PCBs by the potential hauler of the waste--Waste Management of Germantown, Wisconsin. That testing, as well as subsequent testing, revealed unacceptable levels of PCBs in Stroh's waste oil, die casting machines, and at an outfall where water was discharged--outfall 001. 3 The EPA and the DNR were contacted. As a result, the DNR and Stroh devised a remediation program which required the removal of contaminated soil from the Stroh plant grounds, and the removal of PCBs from Stroh's die casting machines and trim presses.
On May 18, 1984, Stroh brought suit against Monsanto alleging: (1) Monsanto manufactured and sold a defective and unreasonably dangerous product; and (2) Monsanto was negligent in manufacturing and marketing a hydraulic fluid containing PCBs which it knew or should have known constituted a health hazard. Stroh sought compensation for property damage, economic loss, and related expenses in the amount of $250,000. Stroh later amended its pleadings to state a claim for punitive damages and intentional misrepresentation based on Monsanto's representations that Pydraul was safe for use as a hydraulic fluid, and on Monsanto's failure to warn Stroh regarding the presence of PCBs in the fluid.
After a lengthy discovery process, Stroh moved for summary judgment requesting that the question of Monsanto's liability be decided as a matter of law. Monsanto countered by filing its own motion for summary judgment requesting that the court dismiss the case on the merits. The summary judgment motions were argued together and both were rejected by Judge Clarence Parrish on May 18, 1988.
Subsequently, the case was transferred to Judge Leah M. Lampone. On July 11, 1989, Monsanto moved for summary judgment on the ground that the undisputed facts established that Stroh's cause of action was time-barred by the six-year statute of limitations set forth in sec. 893.52, Stats. 4 Judge Lampone ruled: "In conclusion, this Court will grant the defense motion for summary judgment as to all claims for injury relating to the testing and disposal of waste oil, but deny the motion as to claims for cleaning the machines and soil outside the Stroh plant."
The case proceeded to trial before Judge Michael J. Barron. After five weeks of testimony, the jury concluded that Monsanto was negligent and that its hydraulic fluid, Pydraul, was defective and unreasonably dangerous. The jury found Monsanto liable for $117,316 in compensatory damages and $4,600,000 in punitive damages. The trial court also awarded prejudgment interest from the date of Stroh's settlement offer in the amount of $1,271,736.69, and double Stroh's taxable costs in the amount of $91,962. Judgment was entered against Monsanto in the amount of $6,081,014.69 on August 9, 1991.
Monsanto filed notice with this court that it intended to appeal the jury verdict. Subsequently, Stroh filed a petition for by-pass with the supreme court. See 809.60, Stats. The petition was denied by written order of May 6, 1992. The case was then briefed and argued in this court.
Monsanto argues that the trial court erred by not dismissing Stroh's entire cause of action at the summary judgment phase of the proceedings. Monsanto posits that if Stroh did not discover its injuries prior to May 18, 1978, as Stroh contends, it was because Stroh failed to comply with state and federal regulations regarding PCBs. Stroh disagrees, arguing that any failure to comply with state and federal regulations was unrelated to its discovery of damages, and that its claim accrued sometime after May 18, 1978. Alternatively, Stroh contends that there are questions of material fact which preclude summary judgment in favor of Monsanto.
In reviewing the grant or denial of a summary judgment motion, we are required to apply the standards set forth in sec. 802.08, Stats., just as the trial court was to apply those standards. Voss v. City of Middleton, 162 Wis.2d 737, 748, 470 N.W.2d 625, 629 (1991). Section 802.08(2), Stats., states in relevant part: "[Summary judgment] shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."
In considering whether the statute of limitations precludes Stroh from bringing suit against Monsanto, we agree with both Stroh and Monsanto that the "discovery rule" is the proper framework on which to build our analysis. Thus, a consideration of the rule and its application is appropriate.
In Hansen v. A.H. Robins, Inc., 113 Wis.2d 550, 560, 335 N.W.2d 578, 583 (1983), the supreme court adopted the "discovery rule" for determining when causes of action in tort accrue: "tort claims shall accrue on the date the injury is discovered or with reasonable diligence should be discovered, whichever occurs first." 5 Hansen a products liability suit arising out of injuries allegedly caused by the defendant's "Dalkon Shield" intrauterine device, reversed a long line of cases that established the accrual date for tort claims as the date of the tort causing injury. See id. at 557-60, 335 N.W.2d at 581-83. In holding that claims accrue on the date the injury is discovered, or in the exercise of reasonable diligence should have been discovered, the supreme court balanced the conflicting policy issues raised by statutes of limitations and concluded that "the injustice of barring meritorious claims before the claimant knows of the injury outweighs the threat of stale or fraudulent actions." Id. at 559, 335 N.W.2d at 582 (emphasis added).
The general rule of Hansen was amplified in Borello v. U.S. Oil Co., 130 Wis.2d 397, 388 N.W.2d 140 (1986). In Borello, Mary Borello had a furnace installed in her home during December 1977, by U.S. Oil. Id. at 400, 388 N.W.2d at 141. Shortly thereafter, Borello complained of a bad odor from the furnace. Id. Borello wrote to...
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