Case Title: Covington v. W.R. Grace-Conn., Inc.

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1998-01-16T00:00:00Z

Document:
Covington v. W.R. Grace-Conn., Inc.1998 WY 5952 P.2d 1105Case Number: 96-325Decided: 01/16/1998Supreme Court of Wyoming

Lyle 
COVINGTON, Appellant (Plaintiff),

v.

W.R. GRACE-CONN., INC., Appellee 
(Defendant).

 

Appeal from the District Court, 
Natrona County, Dan Spangler, J.

 

David A. Drell of Brooks, 
Henley & Drell P.C., Casper; and J. Conard Metcalf of Williams & Trine, 
P.C., Boulder, for Appellant.

Kathleen B. Dixon and 
Michele L. Lorenzen of Murane & Bostwick, LLC, Casper; and Greg Greenlee of 
Murane & Bostwick, LLC, Cheyenne, for Appellee.

 

Before TAYLOR, C.J., and THOMAS, MACY, GOLDEN and 
LEHMAN, JJ.

 

MACY, 
Justice.

 [¶1] The appellant appeals 
from the summary judgment which was granted in favor of the 
appellee.

 

[¶2] We reverse and 
remand.

 

ISSUES

 

[¶3] The appellant presents 
two issues for our analysis:

 

Did the court below err as a matter of law when it 
determined, in a product liability case, that the Wyoming real estate Statute of 
Repose, W.S. 1-3-111, applied to insulation products that were never intended to 
be improvements to real estate because they were routinely and on a continuing 
basis removed and replaced as part of routine maintenance 
operations?

 

Did the court below err as a matter of law when it 
determined, in a product liability case, that there were no genuine issues of 
material fact regarding application of the Wyoming real estate Statute of 
Repose, W.S. 1-3-111[,] to insulation products that were routinely and on a 
continuing basis removed and replaced?

 

FACTS

 

[¶4] Lyle Covington worked 
in various positions for a refinery from 1952 until he retired in 1990. During 
this time, the equipment in the various units of the refinery had to be 
constantly repaired and renovated. The renovation process was called a "turn 
around." A unit of the refinery was turned around as often as every two or three 
years during which time that particular unit was shut down for a complete 
overhaul. All the insulation which covered the piping and other processing 
equipment was stripped off so that the underlying equipment could be accessed. 
After the repair, replacement, and renovation had been completed, the insulation 
was reapplied.

 

[¶5] In August of 1994, 
Covington was diagnosed with having a form of cancer known as mesothelioma.1 He alleged that, during his 
employment, he was exposed to asbestos insulation and that his malignant 
mesothelioma was proximately caused by his exposure to the asbestos. Covington 
contended that a Zonolite insulation product, which was manufactured by W.R. 
Grace-Conn., Inc., had been applied to flare stacks, piping, and other 
processing equipment for insulation and fireproofing 
purposes.

 

[¶6] Covington brought a 
product liability case against the appellee and various other manufacturers and 
suppliers of the asbestos insulation products. The appellee filed a motion for a 
summary judgment, relying on the improvements to real property statute of 
repose, WYO. STAT. § 1-3-111 (1997). The district court granted the appellee's 
motion, finding that the Zonolite product had been used in connection with an 
improvement to real property and that, therefore, the real estate statute of 
repose barred Covington's claim

against the appellee. The 
appellant appeals to this Court.

 

STANDARD OF 
REVIEW

 

[¶7] Summary judgment is 
appropriate when no genuine issue as to any material fact exists and when the 
prevailing party is entitled to have a judgment as a matter of law. M & A 
Construction Corp. v. Akzo Nobel Coatings, Inc., 936 P.2d 451, 455-56 (Wyo. 
1997); see also W.R.C.P. 56(c). We examine the record from the vantage point 
most favorable to the party who opposed the motion, and we give that party the 
benefit of all favorable inferences which may fairly be drawn from the record. 
Davis v. Wyoming Medical Center, Inc., 934 P.2d 1246, 1250 (Wyo. 1997). We 
evaluate the propriety of a summary judgment by employing the same standards and 
by using the same materials as were employed and used by the lower court. 
Kirkwood v. CUNA Mutual Insurance Society, 937 P.2d 206, 208 (Wyo. 1997). We do 
not accord any deference to the district court's decisions on issues of law. 
Kanzler v. Renner, 937 P.2d 1337, 1341 (Wyo. 1997).

 

DISCUSSION

 

[¶8] The appellant asserts 
that the insulation materials which were used at the refinery, including the 
Zonolite product, were not used to improve real property and that, therefore, 
the statute of repose did not bar the claim against the appellee. The appellee 
counters that it was exempted from the appellant's claim under § 1-3-111 because 
it manufactured and/or furnished materials which were incorporated into an 
improvement.

 

[¶9] The relevant statute of 
repose provides in pertinent part:

 

(a) Unless the parties to the contract agree 
otherwise, no action to recover damages, whether in tort, contract, indemnity or 
otherwise, shall be brought more than ten (10) years after substantial 
completion of an improvement to real property, against any person constructing, 
altering or repairing the improvement, manufacturing or furnishing materials 
incorporated in the improvement, or performing or furnishing services in the 
design, planning, surveying, supervision, observation or management of 
construction, or administration of construction contracts 
for:

 

(i) 
Any deficiency in the design, planning, supervision, construction, surveying, 
manufacturing or supplying of materials or observation or management of 
construction;

 

(ii) Injury to any property arising out of any 
deficiency listed in paragraph (i) of this subsection; or

 

(iii) Injury to the person or wrongful death arising 
out of any deficiency listed in paragraph (i) of this 
subsection.

 

(b) Notwithstanding the provisions of subsection (a) 
of this section, if an injury to property or person or an injury causing 
wrongful death occurs during the ninth year after substantial completion of the 
improvement to real property, an action to recover damages for the injury or 
wrongful death may be brought within one (1) year after the date on which the 
injury occurs.

 

Section 1-3-111. Whether a 
product constitutes an improvement to real property is a question of law. St. 
Louis v. Rockwell Graphic Systems, Inc., 153 Ill. 2d 1, 178 Ill. Dec. 761, 762, 
605 N.E.2d 555, 556 (1992). "Its resolution, however, is grounded in fact."  Id. Although neither this Court nor the 
legislature has specifically defined the phrase "improvement to real property," 
the legislature defined the term "improvement" in the statutes which pertain to 
liens:

 

          
(iii) "Improve or improvement" means:

 

(A) Demolition, erection, alteration or repair of any 
property for its permanent benefit;

 

(B) Any work performed or material furnished for the 
permanent change of any real property; and

 

          
  (C) Materials manufactured 
pursuant to contract.

 

WYO. STAT. § 
29-1-201(a)(iii) (1997). BLACK'S LAW DICTIONARY defines "improvement" in 
relevant part as follows:

 

Improvement. A valuable addition made to property (usually real 
estate) or an amelioration in its condition, amounting to more than mere repairs 
or replacement, costing labor or capital, and intended to enhance its value, 
beauty or utility or to adapt it for new or further purposes. Generally has 
reference to buildings, but may also include any permanent structure or other 
development, such as a street, sidewalks, sewers, utilities, etc. An expenditure 
to extend the useful life of an asset or to improve its performance over that of 
the original asset. Such expenditures are capitalized as part of the asset's 
cost. Contrast with Maintenance and Repair. See also Betterment; Internal 
improvements; Leasehold

          
improvements.

 

[¶10] BLACK'S LAW DICTIONARY 
757 (6th ed. 1990). BLACK'S LAW DICTIONARY defines the term "maintenance" in 
pertinent part as follows:

 

Maintenance. The upkeep or preservation of condition of 
property, including cost of ordinary repairs necessary and proper from time to 
time for that purpose.

 

          
. . . .

 

Assets. Expenditures undertaken to preserve an 
asset's service potential for its originally-intended life; these expenditures 
are treated as periodic expenses or product costs. Contrast with Improvement. 
See also Maintain; Repair.

 

Id. at 953-54 (citation 
omitted). We have said the following with regard to whether "maintaining" 
property falls within the statute of repose:

 

In 
1981, when the statute of repose was amended, the legislature included the 
following language:

 

          
"(a) The purpose of this law is to recognize that:

 

          
. . .

 

"(ii) It is in the public interest to set a period of 
time following the substantial completion of the project after which no action 
may be brought for errors and omissions in the design, planning, supervision, 
construction, surveying, manufacturing or supplying of materials or observations 
or management of improvements to real estate, whether or not these errors and 
omissions have resulted or may result in injury[.]"

 

1981 Wyo. Sess. Laws ch. 166 
§ 2 (emphasis added). The emphasized language demonstrates that the legislature 
intended that the statute of repose apply as a bar to actions alleging "errors 
and omissions" occurring during the process of completing the improvement and 
not to actions which allege "errors and omissions" which occur in the 
maintenance of the improvement after it is completed.

 

Goodrich v. Seamands, 870 P.2d 1061, 1063-64 (Wyo. 1994) (some emphasis added).

 

[¶11] Before the summary 
judgment was granted in this case, depositions were taken of Covington and two 
men who worked with Covington at the refinery. The testimony, however, did not 
focus on whether the application of the Zonolite product met the requirements to 
place it within the definition of an "improvement to real property." The 
testimony did, nevertheless, demonstrate that, depending on which witnesses are 
believed, a jury could conclude either that the Zonolite product was used as an 
improvement to real property or that it was used in a way which did not 
constitute an improvement.

 

[¶12] During his testimony, 
Covington described the turn-around process. He explained that, during a turn 
around, all the insulation had to be removed from the equipment so that the 
engineers could get to the equipment to inspect it.

 

[¶13] One of Covington's 
co-workers, who had worked at the refinery from 1946 through 1981, testified 
that he remembered using a product called Zonolite. He said that the Zonolite 
product was only used for fireproofing two flare stacks and that it was an 
essential component of the flare stacks. He indicated that the Zonolite product 
was mixed with other products in a cement mixer and applied as mud to the forms 
built around the metal stacks. He also said that he had never removed the 
Zonolite product from the stacks and that they intended for the Zonolite product 
to permanently stay on the stacks.

 

[¶14] The second co-worker, 
who had worked at the refinery from 1947 through 1983, remembered using the 
Zonolite product a little differently. He indicated that they only used the 
Zonolite product for exceptionally hot lines and that the Zonolite product was 
not one of their regular insulations. He estimated that the Zonolite product was 
used approximately a half a dozen or a dozen times at the 
refinery.

 

[¶15] Given the insufficient 
factual record regarding the use and permanency of the Zonolite product, a 
question of fact exists as to whether the Zonolite product constituted an 
"improvement to real property" which would afford the appellee the protection of 
the statute of repose. We must, therefore, reverse and remand for a 
determination of whether the Zonolite product was an improvement to real 
property or whether it was merely a product used in maintaining the equipment. 
If a jury decides that the Zonolite product was not an improvement, the 
protection of the statute will not exist, and the jury will have to resolve the 
issue of causation.

 

[¶16] Reversed and 
remanded.

        

 

FOOTNOTES

1Covington ultimately died from the 
mesothelioma.