NEW HOLES IN THE STATUTE OF REPOSE FOR IMPROVEMENTS TO REAL PROPERTY
The Minnesota Court of Appeals began 2004 by issuing two decisions that erode more of the protection afforded to building professionals by Minnesota Statute § 541.051's ten-year statute of repose. As readers may recall from earlier editions of the Commercial Litigation Update, Minn. Stat. § 541.051 protects builders by providing that any action other than a fraud action seeking property or personal injury damages relating to an improvement to real property must be filed within "ten years after substantial completion of the construction." The two new Court of Appeals decisions, Olmanson v. Le Sueur County, A03-629 (Minn. Ct. App., January 13, 2004), and Taney v. ISD 624, A03-370 (Minn. Ct. App., January 13, 2004), reduce the effect of the statute of repose in two markedly different ways: Olmanson by expanding one of the statutory exceptions to the rule, and Taney by altering the date on which the ten-year time period begins to run.
In Olmanson, the plaintiff was snowmobiling in the east ditch of County Road 21 in Le Sueur County when he crossed the road to enter the west ditch and collided with the side of a cement culvert running under the road. The culvert, which was unmarked from the road, connected two sections of the Shoreland Country Club, and was big enough for a golf cart. The culvert was constructed prior to 1989 and the accident occurred more than ten years later, in February 2000. The plaintiff sued both the country club and Le Sueur County, owner of a roadway easement, for damages arising from his injuries. He appealed after the trial court granted summary judgment to both defendants, holding that because the culvert was constructed prior to 1989, the ten-year statute of repose in Minn. Stat. § 541.051 barred recovery.
The Court of Appeals reversed, reasoning that the accident was potentially caused by the defendants' failure to post a sign warning about the culvert. According to the Court, this "failure to warn" fell within the statutory exception to the ten-year statute of repose created by Minn. Stat. § 541.051(c), which provides that: "Nothing in this section shall apply to actions for damages resulting from negligence in the maintenance...of the real property improvement." The Court held that a "failure to warn" is equivalent to negligence in maintenance.
What the ultimate scope of the principle set out in Olmanson will be is an interesting question. Theoretically, any number of construction defects that are barred by the statute of repose could be reinvigorated if clever plaintiffs recast their allegations not as defect claims dating from the original construction, but as "failures to warn" dating from the present negligent maintenance.
As potentially troubling as the scope of the "failure to warn" exception in Olmanson is, it is not as disturbing as the ambiguity created by the Court's decision in Taney. Eunice Taney traveled to Defendant ISD 624's Sunrise Park Middle School to attend her granddaughter's choir concert. Taney had trouble finding the concert and took a detour through a courtyard. While entering the courtyard, Taney did not notice the nine-inch drop between the doorway and the courtyard itself, causing her to fall and suffer a broken hip. ISD 624 moved for judgment notwithstanding the verdict after a jury found that it was negligent. The district argued in part that Minn. Stat. § 541.051's ten-year statute of repose barred Taney's claim because the accident occurred in 1998 and the school was completed over 40 years earlier. The plaintiff responded that the statute of repose ran not from the date of the school's completion, but from the date of completion of a remodeling project in 1992. The only part of the remodeling project that involved the doorway where Taney fell, however, was the installation of a "panic bar" on the door to bring it up to code. The level of the courtyard was not adjusted, the level of the doorway was not adjusted, and the level of the step was not adjusted. The dimensions of those locations were exactly the same as they were when the school was built in 1958.
Disregarding the lack of change to the step, the Court of Appeals adopted the plaintiff's argument and held that a remodeling project qualifies as an "improvement to real property" that restarts the statute of repose. The Court went beyond that fairly narrow holding, however, and held that "the substantial remodeling of real property in the direct vicinity of an accident constitutes an improvement, not a repair, to that property." Apparently in Taney, adding a panic bar is "substantial remodeling", and an unaltered step at the base of the door with the panic bar added is "in the direct vicinity."
This holding creates far more questions than it answers. What is "substantial remodeling" as compared to plain old "remodeling"? What is the direct vicinity of an accident? Even more puzzling, why didn't the Taney court simply hold that ISD 624 failed to warn the plaintiff - the nine-inch drop was unposted - and apply the same exception set out in Olmanson? It will take a long line of clarifying appellate cases before these terms and principles can be placed within a meaningful context. Rest assured that the attorneys of Arthur, Chapman, will keep you informed of the result.
About the Author: Doug is an associate in Arthur, Chapman, Kettering, Smetak & Pikala's Commercial, Appellate, and Coverage Groups. His practice emphasizes professional liability, construction law, and auto and commercial coverage matters. He was named a "Rising Star" by Minnesota Law & Politics magazine in 2002 and 2003. Before joining the firm, Doug served as a law clerk to Magistrate Judge Franklin Noel, of the United States District Court for the District of Minnesota, and Judge Thomas Wexler, of the Hennepin County District Court. During law school, Doug was a Student Articles Editor on Law & Inequality: A Journal of Theory & Practice, and was Editor-in-Chief of The Source, the law school newspaper.
© 2004 Arthur, Chapman, Kettering, Smetak & Pikala, P.A.
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