UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY
March 17, 1999
AMELIA WOESSNER, PLAINTIFF,
AIR LIQUIDE, INC., CARDOX, INC., GENERAL ELECTRIC COMPANY, INTERNATIONAL SWITCHBOARD CORP., OLSEN ENGINEERING CORP., ET. AL., DEFENDANTS.
The opinion of the court was delivered by: Irenas, District Judge
HONORABLE JOSEPH E. IRENAS
This matter appears before the Court upon the motion for summary judgment filed by defendants, Olsen Engineering Corporation ("Olsen Engineering") and International Switchboard Corporation ("International Switchboard"). Defendants seek summary judgment on the claims of plaintiff, Amelia Woessner ("Woessner"), arising out of a personal injury sustained while the plaintiff performed electrical maintenance and repair on a motor control center located on Wrangle Hill Road in Delaware City, Delaware. For the reasons set forth below, this Court finds that plaintiff's claim is barred by Delaware's statute of repose. Accordingly, defendants' motion for summary judgment is granted.
The material facts in this case are undisputed. In 1972, Cardox, Inc. ("Cardox") *fn1 was in the process of planning the construction of a carbon dioxide recovery plant adjacent to its existing facilities on its Delaware City, Delaware location. The purpose of the plant was to convert impure carbon dioxide, being produced as a byproduct of other Cardox processes on the facility, into a purified usable form of liquid carbon dioxide. During this planning stage, Cardox negotiated and entered into a contract with Olsen Engineering for the engineering, design, and procurement of the project. Specifically, Olsen Engineering agreed to provide complete design engineering for structural, electrical, and instrumentation, in addition to detailed construction drawings, based on Cardox's process design and the Cardox approved specifications, mechanical flow diagrams and plot plan. (See Letters from Olsen to Cardox dated 12/15/72 and 3/26/73.)
Pursuant to this agreement, Olsen Engineering drafted specifications for a 2300 volt switchgear, also referred to as the "C-2 motor control unit" and "motor control center" (herein "motor control unit"), which were to be approved by Cardox by March 14, 1973. These specifications were mailed to four companies, including International Switchboard, accompanied by a cover letter seeking bids for the cost of supplying one 2300 Volt Switchgear according to the attached specifications using Westinghouse or General Electric parts. International Switchboard submitted a bid which was accepted by Olsen Engineering. The final agreement called for an outline by March 23, 1973, and a completed product by April 6, 1973. The unit was produced accordingly and delivered to the Cardox site where it was installed in 1973. The motor control unit consists of two sections: a top section housing controls with a separate door and a bottom section.
The power that energizes the motor control center comes from a transformer which is located adjacent to the building. A cable brings electricity from the transformer to a busbar which distributes the power to three lugs. These lugs feed power to the motor control center. After receiving electricity from the lugs, the motor control unit in turn energizes the C-2 motor which activates and energizes the compressor. This compressor cools the carbon dioxide in order to convert it to its liquid stage. The compressor works along with other production equipment to purify the Carbon dioxide. Absent this control motor unit, the compressor motor could not run and the compressor would not function.
There is some disagreement over the permanency of the machine. It is settled that some of the machines were built on "skids" in order that they could be assembled outside of the plant and ultimately set up in the plant. However, it is unclear if the motor controller unit was built on skids and simply placed in the plant later. The motor controller unit was "removable" in the sense that it was later replaced with another unit following the explosion. However, it is clear that the motor controller unit was bolted to the floor, affixed to the concrete and had underground wires running from the unit to the compressor motor.
The plaintiff, Amelia Woessner, worked as a field technician for "D" Electric Motors from July, 1992, through July, 29, 1994, the day she was injured during the events which form the basis of this litigation. As a field technician, Woessner was responsible for troubleshooting motors located on a customer's facilities. Air Liquide, Inc. ("Air Liquide"), the acquirer of Cardox, requested the services of "D" Electric. "D" Electric sent Woessner to Air Liquide's Delaware facility in Delaware City on two occasions: first on June 6, 1994, and again on July 29, 1994. The purpose of her second trip, on July 29, 1994, was to trouble shoot a motor which was not functioning. Upon arrival to the Delaware campus, Woessner met with Ted Salazar ("Salazar"), Air Liquide's highest ranking employee in Delaware who explained the trouble with the motor.
After inspecting the 2,300 volt motor, Woessner determined that it could not be repaired at the Delaware facility and that it would need to be removed and taken to "D" Electric's facility in New Jersey. Before the motor was removed, Salazar asked Woessner to test the motor control unit to assure that it was working properly and was not also in need of repair. Woessner believed the power to the motor control center had been disconnected.
While Woessner was checking the motor control unit, Woessner's 600 volt tester contacted with the live 2,300 volt power supply and caused an explosion. Woessner suffered burn injuries in this accident and was rushed to Crozier Burn Center in Chester County, Pennsylvania for extensive treatment. Plaintiff alleges that Olsen Engineering failed to provide a safety device with the motor control unit which would have shielded anyone from touching the power supply and avoiding any part which remained energized after the machine was turned off.
Plaintiff filed a Second complaint naming Air Liquide, Cardox, General Electric, Olsen Engineering, and International Switchboard as defendants. Subsequently, Air Liquide named "D" Electric as a third party defendant and counter-claimed against Woessner for damage to its facility. Presently all claims between the plaintiff, Air Liquide, Cardox, and General Electric have been resolved. In addition, this Court, in a written opinion granted Air Liquide's motion for summary judgment against International Switchboard and Olsen Engineering and dismissed their cross-claims for indemnification and contribution. The only remaining parties to the litigation before this Court are the plaintiff, International Switchboard, and Olsen Engineering. *fn2
On January 7, 1999, this Court granted International Switchboard's motion that the law of Delaware should govern the determination of liability issues in this matter. At that time the Court declined to rule on the issue presently before the Court to allow the parties further time to brief the issues. Olsen Engineering and International Switchboard filed the instant motion for summary judgment, claiming that Delaware's statute of repose, 10 Del. C. § 8127, bars recovery in the present suit since the motor control unit was designed and installed more than six years prior to the cause of action. The plaintiff claims that the motor controller unit installation is not covered by the Delaware statute of repose since it is not an "improvement to realty" as required by 10 Del. C. § 8127. This Court agrees with the defendants that the statute of repose is applicable to the case at bar. For the reasons set fourth below, the motion of the defendants is therefore granted and the plaintiff's case is dismissed.
II. SUMMARY JUDGMENT STANDARD
"[S]ummary judgment is proper `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.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed. R. Civ. P. 56(c)). Although the moving party bears the initial burden of informing the district court of the basis for its motion, there is no requirement that the moving party support its motion with affidavits or other similar materials negating the opponent's claim. Id. at 323. The non-moving party may not simply rest on its pleadings to oppose a summary judgment motion but must affirmatively come forward with admissible specific evidence establishing a genuine issue of fact. See id. at 324. Where the moving party has carried its initial burden of demonstrating the absence of a genuine issue of material fact, "its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Idus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
In deciding a motion for summary judgment, the Court must construe the facts and inferences in a light most favorable to the non-moving party. Pollock v. American Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986). The role of the court is not "to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The substantive law governing the dispute will determine which facts are material, and only disputes over those facts "that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248. Thus, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Idus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotes omitted); see also J.E. Mamiye & Sons, Inc. v. Fidelity Bank, 813 F.2d 610, 618 (3d Cir. 1987) (Becker, J., concurring).
Delaware has a "builders statute" which provides a six year statute of repose to limit an action for recovery of damages, based on contract, tort or otherwise, resulting from a deficiency in the planning, supervision, construction or design of an improvement to real property. See 10 Del. C. § 8127. As a statute of repose, as opposed to a statute of limitations, the limitations period begins to run at a specific time notwithstanding the actual date of injury. See Dover v. International Telephone and Telegraph Corp., 514 A.2d 1086, 1089 (Del. Supr. 1986). It is undisputed that if this statute of repose is applicable to the construction and installation of the motor control unit in question, the six years would have expired and the current claim would be barred.
The statute of repose will be applied to bar the claims for personal injury arising from the construction and design of the motor control unit if a two part test is satisfied. First, there must be an improvement to "real property." This question determines if the statute is applicable to the project in question. Second, there must be the performing or furnishing of "construction of such improvement." This latter question controls to whom the protection will be extended. The defendants claim that the construction of the motor control unit was an improvement to real property and that they are protected by the statute since they furnished construction. The plaintiffs maintain that the statute is not applicable because the installation of the motor control unit was not an improvement to real property.
C. Furnishing Construction
The Delaware statute of repose protects parties "performing or furnishing any construction of an improvement to real property" Becker v. Hamada, Inc., 455 A.2d 353, 354 (Del. Supr. 1982). While it is clear that the statute protects builders who incorporate products into the real property, the more difficult question is deciding the statute's application to suppliers. Some statutes specifically protect suppliers as well as builders. See Becker at 355. The Delaware statute does not. Id. The Delaware Supreme Court has interpreted the statute to protect suppliers only if they fabricate the item supplied specifically for the relevant project. The mere supply of a stock item is not covered by the statute.
Olsen Engineering and International Switchboard clearly furnished construction within the meaning of the statute. Although the motor control unit was manufactured off the site of the plant in question, the Delaware case law is clear in holding that the supplier of both raw materials and finished products ready for installation can still be furnishing construction, if the products are made according to the specifications of the buyer.
In City of Dover v. International Telephone and Telegraph Corp., 514 A.2d 1086 (Del. Supr. 1986), the Delaware Supreme Court noted that while some states similar statutes protect builders and suppliers, Delaware's statue does not: "the Delaware statute does not protect suppliers even if they design, supervise, plan, or construct the product as part of the improvement." Id. at 1089 (citing Becker at 355). However, the Court went on to hold that if a supplier manufactures the product according to the specifications supplied by one of the parties involved in the construction, the supplier is furnishing construction and falls within the protection of the statute. See City of Dover, 514 A.2d at 1089. See also Kirkwood Dodge, Inc. v. Frederic G. Krapf Jr., Inc., C.A. No. 84C-DE-81, May 9, 1989, 1989 WL 48639 (Del. Super.) (holding that the supplier of a pre-made circuit breaker panel box was not protected by the statute because, while a sophisticated finished product, the item was not fabricated for the specific project.); Schmerhorn v. Anchor Electric Co., C.A. No. 90C-NO-2, Oct. 5, 1993, 1992 WL 301636, at *2 (Del. Super.) (holding that the installation of a kilowatt meter did not fall within the coverage of the statute because the "public policy behind the statute of repose does not apply to items manufactured by a general supplier not designed for specific application to a particular construction project."); Federal Insurance Co, v, Signtactics, Inc., C.A. No. 97-343-SLR, 97-647-SLR, 1998 WL 715882 (D. Del. 1998); Hiab Cranes and Loaders Inc. v. Service Unlimited Inc., C.A. No. 82C-F-98, Oct. 4, 1983 (Del Super.).
It is clear that the defendants furnished construction within the meaning of the statute because the motor control unit was manufactured according to the specifications of Cardox. Furthermore, Olsen Engineering was contractually required to submit specifications for the approval of Cardox prior to beginning construction. It is equally clear that International Switchboard furnished construction. Olsen Engineering requested bids for the production of the motor control unit, requiring that certain specifications be met, including a limitation to General Electric and Westinghouse parts. This was not the case of a finished product waiting on the shelf for a random unknown customer. Rather, this product was manufactured specifically for the project at hand and satisfies the requirement of furnishing construction.
D. Improvement to Real Property
The second requirement of the statute of repose is that the item in question qualify as an "improvement to real property." 10 Del. C. § 8127(b)(1). This is a question of law and appropriate for summary judgment review. See Hiab at *3. The builders' statute of repose does not specifically define the term "improvement to real property." However, two Delaware cases lend guidance and suggest that construction will be considered an improvement if it is either a fixture or if it fits within the common sense definition of the word "improvement."
The Delaware Supreme Court first considered this question in City of Dover where the Court questioned the status of a utility pole as an improvement to real property. 514 A.2d at 1089-90. The Court began with an inquiry into the language of the statute itself: "improvement shall include buildings, highways, roads, streets, bridges, entrances and walkways of any type constructed thereon, and other structures affixed to and on land, as well as the land itself . . . ." 10 Del. C. § 8127(a)(2). The Court rejected the plaintiff's argument that the list of structures was exclusive. The Court held that as a matter "of statutory construction" the list was not exhaustive. The Court relied on the word "include" to infer the obvious implication that the list merely provided examples.
The plaintiff's also argued that the Court should apply a "value added" test, which requires that the structure "enhance the value of the property and/or make the property more useful," as the exclusive test for determining if there has been an improvement to real property. The Court rejected this assertion and held that this test is only one possibility of "determining the parameters of the statute" and not required to be included within the statute's protection. Id. at 1090. The Court did not reach the application of this test because the Court applied a fixture analysis and held that since the utility pole in question was "unquestionably affixed to the land" it is an improvement within the meaning of the statute. The obvious implication of this case is that if the construction is a fixture it is an improvement, but if it is not a fixture it could still be an improvement if it otherwise fits within the parameters of the statute.
The other instructive Delaware case on this issue is Hiab Cranes and Loaders Inc., et al. v. Service Unlimited Inc. et al., C.A. No. 82C-FE-98, Aug. 16, 1983 (Del. Super.), modified, C.A. 82C-FE-98, Oct. 4, 1983 (Del. Super.). In Hiab, the Court determined that an oil furnace was an improvement to real property within the meaning of the statute. As Hiab arose prior to City of Dover, the Court felt that the Delaware Supreme Court had not set down any helpful standard for making the determination of what constitutes an "improvement." Accordingly, the court analyzed the methods used by other jurisdictions to approach the same issue in similar builder's statutes. The court found that the jurisdictions which had approached this question indicated that the term was susceptible to either of two basic approaches. See Hiab at 3.
1. Common Law Fixture Analysis
The first is a common law fixture analysis. In Delaware, this approach focuses on the "intention of the annexor as to whether or not a chattel was affixed to realty for a temporary or permanent purpose." Hiab at 6, n. 10 (citing Del-Tan Corporation v. Wilmington Housing Authority,269 A.2d 209, 210 (Del. Supr. 1970). This requires the consideration of the following: "the nature of the chattel, the mode of its annexation to the real estate, the purpose or use for which the annexation has been made, and the relation of the person annexing the chattel to the property." Del-Tan Corp., 269 A.2d at 210.
In City of Dover, the Supreme Court rested their decision on the application of a fixture analysis, but did not undergo a detailed analysis because they found it self evident that the electricity pole was fixture. Although the Hiab court focused on the second approach, the Court noted that the under the fixture analysis the oil furnace was an improvement to real property. Hiab at 6, n. 10. The court simply concluded, without elaboration, that "the oil furnace was intended as a permanent structure and that plaintiff did not contemplate its removal prior to the expiration of its useful life." Id.
Application of the fixture analysis to the case at bar results in the conclusion that the motor control unit is a fixture and protected by the statute. The plaintiffs argue that since the motor control unit could be removed it is not a fixture. This Court disagrees. While it is true that the motor control unit was removable, and was actually removed for later replacement, this is not dispositive. More importantly is that the motor control unit was intended to remain affixed to the property for the duration of its useful life.
In Del-Tan Corp., the Court explained that "the mere fact that the chattel may be removed from the real estate by detaching whatever affixes it, while significant, is nevertheless not controlling. Since the basic question to be determined is the intention of the annexor, the true test is whether or not the chattel was affixed to the realty for a temporary or a permanent purpose." Id. at 210.
The evidence suggests that the motor control unit was intended to be a fixture. The plant was built specifically for the purpose of converting impure Carbon Dioxide into a pure liquid form. (See deposition of James Edward Stevens at 131-32). The motor control unit operates the compressor motor which is an essential element for the purification and production of the liquid carbon dioxide: without the compressor the liquid carbon dioxide would be not be made. The motor control unit was a freestanding item which was part of the plant and bolted to the ground through concrete piers. (See deposition of Steven R. Thomas at 16-18). The motor control unit was connected by underground cables to the compressor motor. (See deposition of Theodore Salazar at 53). This evidence indicates that it was intended to be a fixture of the plant and remain in place for its useful life.
2. Common Sense Approach
The second method of defining "improvement" is a "common sense" approach which defines "improvement" according to its everyday meaning. In Hiab, the Court understood the definition as "a permanent addition to or betterment of real property that enhances its capital value and that involves the expenditure of labor and money and is designed to make the property more useful or valuable as distinguished from ordinary repairs." Hiab at 4.
Additionally, the Hiab court relied on the New Jersey case, Brown v. Central Jersey Power & Light Co., 394 A.2d 397 (N.J. Super. 1978), where the court held a transfer switch assembly to be an improvement protected by the statute because it "constituted a permanent part of one of the mechanical systems necessary to the normal function of the particular improvement to real estate. . . ." The Court contrasted this with "equipment or chattels brought into a structure after it is architecturally and mechanically suitable for occupancy for the purpose intended" which "should be exempted from the statute, e.g., furniture, production machinery, appliances, etc." Hiab at 5 (citing Brown, 394 A.2d at 405-406).
Since the beginning of this century, the electrical system of any building, commercial and residential, has become integral to its structure and necessary for its function. Yet, many of the components of the electrical system remain easily removable and interchangeable. For instance, fuse boxes are easily replaced while they clearly constitute an essential component of the electrical system of a building. Courts have recognized the indispensable nature of electrical systems in a commercial building. For instance, in Brown the court looked to the language of the New Jersey statute and noted:
[T]he intent of the language of the statute was to protect those who contribute to the design, planning, supervision or construction of a structural improvement to real estate and those systems . . . such as heating, electrical, plumbing and air conditioning, which are integrally a normal part of that kind of improvement, and which are required for the structure to actually function as intended. 394 A.2d at 405 (emphasis added).
In Hiab the Delaware Superior Court noted that "[w]ithout the heating system, plaintiff's plant would have been neither functional nor architecturally and mechanically suitable for occupancy." Hiab at 5.
The Hiab court relied on the Brown analysis and held that the oil furnace was an improvement because it "comprised the permanent entirety of one of the mechanical systems vital to the normal function of the" building. Hiab at 5. Here, the plaintiff's argue that the motor control unit is not an improvement under this test because the unit could be easily removed from the Carbon Dioxide plant and leave the plant suitable for other use. *fn3 Accepting this assertion as true, this Court does not agree that this means that the motor control unit is not an improvement to real property. The building's "normal function" is dependant upon the existence of the motor control unit. The evidence unequivocally demonstrates that this motor control unit was an integral part of the electrical system necessary to run the compressor motor which in turn was a vital component of the liquidation and purification process.
The plaintiff also argues that because the building could be used without the motor control unit, it is not an improvement under Hiab or Brown. This argument is unavailing because the plaintiffs ignore the language of Brown which stated that the legislature intended to "protect those who contribute to the . . . construction of a structural improvement to real estate and those systems . . . which are required for the structure to function as intended." Brown, at 195 (emphasis added). Because a building is usable without a particular improvement does not mean that a later addition of such improvement is not part of the real estate. There is undoubtedly some use for a building with no electrical system or no furnace. It does not follow that the installation of these items would not be an improvement to the realty.
Another case which suggests that the motor control unit is an improvement is Davis v. Catalytic Inc. 1985 WL 189329 (Del. Super. 1985). In Davis, the court held that a slurry cooler, a large free standing structure engineered from metal piping encased in a steel structure cemented into the ground and bolted to it, was an improvement to real property. Id. at 4. The court used the common sense approach, relying on Hiab, and found that the physical structure indicated a permanent addition and enhanced the capital value of the property by increasing production.
In Kirkwood Dodge, the court held that a circuit breaker panel box, installed when the building was originally constructed, qualified as an improvement under the common sense definition. 1989 Lexis 201 at 3-4. Again, the court did not provide a detailed analysis, stating only that the box was "a permanent fixture to the building which is certainly designed to make the property more useful than it otherwise would be." Id.
All of the evidence suggests that the motor control unit was more than simply production equipment. It was an integral component of the electrical system necessary to run the equipment used in the liquidization and purification of carbon dioxide process. This Court is satisfied that the motor control unit was an improvement to real property either under the fixture analysis or the common sense analysis. Accordingly production and design of the motor control unit is protected by the builder's statute of repose.
For the reasons set forth in this opinion, this Court finds that the instant motor control unit qualifies as an improvement to real estate under the Delaware statute of repose. Furthermore this court holds that both Olsen Engineering and International Switchboard furnished construction and are protected by the statute of repose. As the statute of repose bars actions for personal injuries after six years from the completion of the construction, defendants' motion for summary judgment is granted and the Plaintiff's claims are dismissed. An appropriate order will issue on an even date herewith.
Date: March 17, 1999
JOSEPH E. IRENAS, U.S.D.J.