University of Vermont v. W.R. Grace & Co.

• Decision Date: 04 August 1989
• Docket Number: No. 88-181,88-181
• Citation: 152 Vt. 287,565 A.2d 1354
• Court: Vermont Supreme Court
• Parties: , 57 Ed. Law Rep. 163, Prod.Liab.Rep. (CCH) P 12,300 The UNIVERSITY OF VERMONT and State Agricultural College v. W.R. GRACE & COMPANY.

Page 1354

565 A.2d 1354

152 Vt. 287, 57 Ed. Law Rep. 163,

Prod.Liab.Rep. (CCH) P 12,300

The UNIVERSITY OF VERMONT and State Agricultural College v. W.R. GRACE & COMPANY.

No. 88-181.

Supreme Court of Vermont.

Aug. 4, 1989.

Stephen J. Soule and John T. Sartore of Paul, Frank & Collins, Inc., Burlington, for plaintiff-appellant.

John M. Dinse and Karen McAndrew of Dinse, Erdmann & Clapp, Burlington, and Kenneth A. Cohen, James J. Dillon and Lon F. Povich of Goodwin, Procter & Hoar, Boston, Mass., for defendant-appellee.

Jeffrey L. Amestoy, Atty. Gen., Geoffrey A. Yudien, Asst. Atty. Gen., and Michele Traboscia, law clerk, on the brief, Montpelier, for amicus curiae.

Before PECK, DOOLEY and MORSE, JJ., and BARNEY, C.J. (Ret.) and MARTIN, Superior Judge, Specially Assigned.

MORSE, Justice.

The issue presented by this case is whether the statute of limitations, in a product liability action alleging property damage due to asbestos contamination, begins to run from the time the product was purchased and installed or from the moment the damage was or should have been discovered. The trial court, measuring from the former, entered summary judgment for defendant on the ground that plaintiff's claims were barred by the six-year statute of limitations as provided in 12 V.S.A. § 511. ¹ We reverse and remand.

Defendant manufactured Mono-Kote 3 (MK 3), which is sprayed on surfaces to make them fireproof. The University of Vermont (UVM) used MK 3 sold by defendant from August 1971 to February 1972 in the process of converting an old athletic fieldhouse into a central heating plant. The product was shipped to the job site in a dry powder, mixed with water, and sprayed against the surfaces to be fireproofed. At the time, plaintiff did not know MK 3 contained asbestos. It was not until 1985, according to UVM, that it discovered the presence of asbestos in the fireproofing in the heating plant.

In May of 1986, UVM filed this lawsuit, seeking to recover, under a variety of theories, actual and punitive damages. Plaintiff also sought restitution and a declaratory judgment that defendant is liable to UVM for indemnification in all claims that may be brought by persons injured by exposure to the asbestos. ²

I.

12 V.S.A. § 512(4) provides that actions for personal injury shall be commenced within three years after the cause of action accrues "provided that the cause of action shall be deemed to accrue as of the date of the discovery of the injury." ³ See also 12 V.S.A. § 518(a) (similar discovery-driven statute of limitations for "radiation injury or injury from other noxious agents medically recognized as having a prolonged latent development"); 12 V.S.A. § 521 (discovery-driven statute of limitations for medical malpractice actions); Lillicrap v. Martin, No. 86-443, slip op. at 11-12 ( H. July 14, 1989.) (statute of limitations in medical malpractice case "does not commence to run until the plaintiff has discovered his 'legal injury,' such that the statute begins to run only when the plaintiff has or should have discovered both the injury and the fact that it may have been caused by the defendant's negligence or other breach of duty").

Since the claims in this case do not fall under the categories listed in § 512, the trial court found that the applicable statute of limitations is the six-year period for "civil actions" provided in 12 V.S.A. § 511. ⁴ Unlike § 512(4), § 511 does not define "accrual." The question before us, therefore, is whether the discovery rule, defining the point at which the cause of action accrues as the time of discovery of the injury, applies in cases under § 511. Past decisions of this Court have held it did not. See, e.g., South Burlington School District v. Goodrich, 135 Vt. 601, 604-05, 382 A.2d 220, 222 (1977) (Court declined to adopt "discovery rule" in actions where 12 V.S.A. § 511 provided the applicable limitations period). The law has since changed, however.

In Cavanaugh v. Abbott Laboratories, 145 Vt. 516, 521-26, 496 A.2d 154, 160-61 (1985), we held that the discovery rules of §§ 512(4) and 518 may be applied retroactively, that is, to causes of action arising before the enactment of the statutes. The holding in Cavanaugh is not limited to personal injury actions, however. The Court wrote broadly:

We hold that the rule of Murray v. Allen [103 Vt. 373, 154 A. 678 (1931) (statute of limitations begins to run at time of last negligent act attributable to defendant) ] is of no further effect in determining the date when a statute of limitations, such as 12 V.S.A. §§ 512 and 513, commences to run....

Id. at 520, 496 A.2d at 157 (emphasis added). Section 513 provides a special one-year limit on actions to recover for skiing injuries, and, unlike § 512(4), does not contain language explaining that the cause of action accrues only when the injury is discovered. Thus it is clear that the discovery rule in Cavanaugh applies even where the statute is silent on the matter. The Court continued:

We are ... convinced that adopting a rule of discovery, which coincides with those rules of discovery adopted by the legislature in 12 V.S.A. §§ 512(4) (Supp.1984) and 518(a), allows for a uniform means for determining the time of accrual, regardless of the actual date of accrual in any specific case.

Id. at 526, 496 A.2d at 160-61 (emphasis added). See also Heath v. Sears, Roebuck & Co., 123 N.H. 512, 523-24, 464 A.2d 288, 294 (1983) ("[A] cause of action does not accrue until the plaintiff discovers or, in the exercise of reasonable diligence, should have discovered both the fact of his injury and the cause thereof.") and cases cited.

We now reaffirm the "uniform rule" established in Cavanaugh, and hold specifically that the discovery rule should be read into § 511. As then Justice Billings stated:

To say that a cause of action accrues to a person or legal entity when the person or entity may maintain an action thereon and, at the same time, that it accrues before the person or entity has or can reasonably be expected to have knowledge of any wrong inflicted is patently inconsistent and unrealistic. One cannot maintain an action before one knows there is one. To say to one who has been wronged, "You had a remedy, but before the wrong was ascertainable to you, the law stripped you of your remedy," makes a mockery of the law. In the absence of an express statutory direction to that effect, to ascribe this meaning to the word "accrue" is unreasonable.

South Burlington School District, 135 Vt. at 609, 382 A.2d at 225 (Billings, J., dissenting).

These views are especially persuasive in suits to recover the costs of removing asbestos, a material used extensively in construction before its dangers fully came to light--or at least before manufacturers warned purchasers of its hazards. The federal Environmental Protection Agency first regulated the spray-on application of asbestos products in building construction in 1973. See 43 Fed.Reg. 26,372 (1978) (amending ban on spray application of materials containing more than one percent asbestos). Running the six-year statute of limitations from the time of application of the asbestos product, as did the trial court here, would thus bar as untimely all efforts in the courts after 1979 to seek recovery for the costs of abatement, even where the presence of asbestos was discovered by the property owner only years later. We are unwilling to turn the statute of limitations into such an unjust and inflexible tool.

We note that our decision today is consistent with the law in a large number of other jurisdictions, see South Burlington School District, 135 Vt. at 608-09, 382 A.2d at 224-25 (Billings, J., dissenting) (citing cases); indeed, in 1977, this Court noted (but did not agree wigh) the "well-reasoned authority in the statutory and decisional law of sister states demonstrating this trend in the law." Id. at 605, 382 A.2d at 222 (majority opinion).

II.

Precisely when plaintiff's cause of action accrued will require factual development at trial. Summary judgment at this stage is inappropriate. Levy v. Town of St. Albans Zoning Board of Adjustment, 152 Vt. 139, ----, 564 A.2d 1361, 1364 (1989). On remand, the trial court must determine when plaintiff knew or reasonably ought to have known of the damage allegedly caused by defendant's product. We...