Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-86-01935/USCOURTS-ca10-86-01935-0/pdf.json

Nature of Suit Code: 365
Nature of Suit: Personal Injury - Product Liability
Cause of Action: 

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P U B L I S H 

IN THE UNITED STATES COURT OF 

FOR THE TENTH CIRCUIT 

RONNA RILEY, personal 

representative of IRA BOB 

HARRY RILEY, Deceased, 

) 

) 

) 

) 

Plaintiff-Appellant,) 

v. ) 

. PI L D 

Umted S!e.tllf CJurr of Appeals 

APPEALS f emh Cir~it 

F£8 2 0 1990 

~OBERT L. HOEC~;=-

Clerk 

BROWN & ROOT, INC., a 

corporation; STEBBINS 

ENGINEERING AND MANUFACTURING 

COMPANY, a corporation; 

) 

) 

) 

) 

) 

) 

) 

) 

No. 86-1935 

Defendants, 

and ) 

RUST ENGINEERING COMPANY , 

a corporati on , 

) 

) 

) 

) 

Defendant-Appellee. ) 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. CIV-85-427-W) 

Ed Abel, Abel, Musser, Sokolosky & Clark, Oklahoma City, Oklahoma 

(Lynn B. Mares, Abel, Musser, Sokolosky & Clark, Oklahoma City, 

Oklahoma, was also on the brief) for Plaintiff-Appellant 

Page Dobson, Holloway, Dobson, Hudson and Bachman, Oklahoma City, 

Oklahoma (Terry A. Hall, Holloway, Dobson, Hudson and Bachman, 

Oklahoma City, Oklahoma, was also on the brief) for DefendantAppellee 

Before HOLLOWAY, Chief Judge, TIMBERS* and BALDOCK, Circuit Judges 

HOLLOWAY, Chief Judge 

* The Honorable William H. Timbers, United States Circuit 

Judge for the Second Circuit, sitting by designation. 

Appellate Case: 86-1935 Document: 01019964413 Date Filed: 02/20/1990 Page: 1 
In this diversity action, plaintiff appeals an order granting 

defendant Rust Engineering Company's motion for summary judgment, 

and denying her request to certify a question of state law to the 

~ ··- Oklahoma· Supreme Court. We vacate the district -court's judgment 

and remand for further consideration in light of an intervening 

state court opinion. 

I. Procedural and Factual Background 

Plaintiff, as the personal representative of Ira Riley, 

deceased, originally brought this manufacturer's products 

liability action against several defendants, 1 including Rust 

Engineering Co. ("Rust"), alleging that the defendant defectively 

designed the ''base machine chest 112 in which Ira Riley died. The 

district court granted defendant Rust's motion for summary 

judgment, holding, as a matter of law, that plaintiff's cause of 

action was barred by a special statute of repose, Okla. Stat. tit. 

12, § 109 (1981). 3 That statute provides, in relevant part, that 

1 

Only the engineering company remains as a defendant, as 

plaintiff has settled with the remaining defendants. 

2 

The base machine chest is a component of a "linerboard 

machine" located at the Weyerhaeuser Company paper mill in 

Valliant, Oklahoma. The base machine chest holds liquified wood 

pulp or "sludge" which is used to make the linerboard. 

3 

The statute provides as follows: 

No action in tort to recover damages 

(i) for any deficiency in the design, 

planning, supervision or observation of 

construction or construction of an 

real property, 

improvement to 

(ii) for 

personal, arising 

injury to property, real or 

out of any such deficiency, or, 

(Footnote continued on next page) 

2 

Appellate Case: 86-1935 Document: 01019964413 Date Filed: 02/20/1990 Page: 2 
no action in tort to recover damages for deficiency in the design, 

planning, supervision, or observation of construction of an 

"improvement to real property" shall be brought more than ten 

· years after substantial completion of the improvement~ 

Although the district court had before it no authority 

directly on point, the court concluded that the base machine chest 

involved in this case constituted an "improvement to real 

property" within the meaning of § 109 and therefore that the 

statute applied. The district court also ruled that§ 109 did not 

violate Article 23, § 7 of the Oklahoma Constitution which forbids 

the abrogation of a right of action to recover damages for 

wrongful death. 4 Plaintiff challenges both of these rulings. She 

does not dispute that her cause of action arose more than ten 

years after completion of the paper mill, but argues that the base 

machine chest is not an "improvement to real property'' within the 

(Footnote continued): 

(iii) for injury to the person or for 

wrongful death arising out of any such deficiency, 

shall be brought against any person owning, 

leasing, or in possession of such an improvement or 

performing or furnishing the design, planning, 

supervision or observation of construction or 

construction of such an improvement more than ten 

(10) years after substantial completion of such an 

improvement. 

Okla. Stat. tit. 12, § 109 (1981) (emphasis added). 

4 

The Oklahoma constitutional provision reads in relevant part 

as follows: 

The right of action to recover damages for injuries 

resulting in death shall never be abrogated, and the 

amount recoverable shall not be subject to any statutory 

limitation ...• 

Okla. Const. art. 23, § 7. 

3 

Appellate Case: 86-1935 Document: 01019964413 Date Filed: 02/20/1990 Page: 3 
meaning of the statute. Further, plaintiff argues that even if 

the machine chest is an improvement to real property, such that 

her suit would be barred by the statute, then § 109 is 

-unconstitutional · ·because it abrogates the · right of action to 

recover for injuries resulting in death in violation of Article 

23, § 7 of the Oklahoma Constitution. 

II. Discussion 

A. 

We review the district court's order granting summary 

judgment under the same standard employed by the district court 

under Rule 56(c) of the Federal Rules of Civil Procedure. Osgood 

v. State Farm Mut. Auto Ins. Co., 848 F.2d 141, 143 (10th Cir. 

1988). Summary judgment is proper only if there is no genuine 

issue of material fact for determination, and the moving party is 

entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). 

Contrary to Rust's assertion in its brief, we do not examine the 

trial court's rulings under the "clearly erroneous" standard, 

despite the fact that the trial court conducted a rather extensive 

evidentiary hearing in this case. See Luckett v. Bethlehem Steel 

Corp., 618 F.2d 1373, 1377 (10th Cir. 1980). Although the 

district court made detailed statements of its views on the 

evidence, those determinations are not entitled to the deference 

due findings of fact made by a trial court after an evidentiary 

trial on disputed issues of fact. Williams v. Eaton, 443 F.2d 

422, 433 (10th Cir. 1971). 5 We review the entire record on 

5 

Here the district court considered extensive evidentiary 

materials and conducted a hearing to determine whether the base 

machine chest was an "improvement to real property" within the 

(Footnote continued on next page) 

4 

Appellate Case: 86-1935 Document: 01019964413 Date Filed: 02/20/1990 Page: 4 
summary judgment de novo in the light most favorable to the party 

opposing summary judgment. Weir v. Anaconda Co., 773 F.2d 1073, 

1079 (10th Cir. 1985). We must consider factual inferences 

' ·-" - tendi·ng to show triable · t ·ssoes in" the light ·mo-st favo-ra-ble to the 

existence of those issues. Luckett v. Bethlehem Steel, 618 F.2d 

at 1377 (quoting Mustang Fuel Corp. v. Youngstown Sheet & Tube 

Co., 516 F.2d 33, 36 (10th Cir. 1975)). "Where different ultimate 

inferences may properly be drawn, the case is not one for a 

summary judgment." Luckett, 618 F.2d at 1377 (citations omitted). 

Assuming for the moment that summary judgment was appropriate 

in this case, a point we do not and need not decide in light of 

our conclusions below, we believe this case must be remanded to 

the district court for reconsideration in light of a change in the 

governing state law. After the district court granted summary 

judgment for Rust and during pendency of this appeal, the Oklahoma 

Supreme Court decided Smith v. Westinghouse Electric Corp., 732 

P.2d 466 (Okla. 1987). In Smith, the Oklahoma Supreme Court 

announced that the test for determining whether the electrical 

equipment in question was an improvement to real property within 

the meaning of§ 109 would be "derived from our [ad valorem] 

taxing scheme." 732 P.2d at 470. The court held that because the 

electrical transformer retained its character as the personalty of 

(Footnote continued): 

meaning of Okla. Stat. tit. 12, § 109. While the use of oral 

testimony on summary judgment motions is not improper, see l0A C. 

Wright, A. Miller & M. Kane, Federal Practice and Procedure§ 2723 

(1983) (collecting cases), the determinations made in ruling on 

summary judgment materials and such testimony are not findings 

reviewable on the clearly erroneous standard of Rule 52(a), but 

are reviewed under Rule 56(c) to ascertain whether there is an 

absence of any genuine issue as to any material fact and whether 

the movant was entitled to judgment as a matter of law. 

5 

Appellate Case: 86-1935 Document: 01019964413 Date Filed: 02/20/1990 Page: 5 
the public utility supplying the electrical power, and ad valorem 

taxes for it were assessed solely against the utility using it, 

the transformers were not improvements to real property under 

§ -109 .: ·· Id. ,at - 467-68, 470. Since that test was--not part of the 

law in Oklahoma when the district court granted summary judgment 

for Rust, the court did not consider or base its analysis on 

Oklahoma's ad valorem taxing scheme or the Smith analysis. 

Instead, acknowledging that the meaning of "improvement to real 

property" under § 109 was a question of first impression in 

Oklahoma, the district court examined analogous Oklahoma real 

property law and decisions from other jurisdictions applying 

similar statutes. Ultimately, the court rested its decision on 

seven factors which it felt demonstrated that the base machine 

chest "is an integral part of the paper mill, and [is] required 

for the mill to funtion as intended, 116 and therefore that it 

constitutes an improvement to real property within the meaning of 

§ 109. (Order entered March 12, 1986, at p. 7.) 

It appears to us that Smith is controlling with respect to 

this question of statutory interpretation. Although Smith 

involved an electrical transformer owned by a public utility whose 

ad valorem taxes were governed by a special statute, see Okla . 

6 

The court found that the base machine chest (1) was 

constructed wholly on site; (2) was not portable; (3) could not be 

dismantled without substantial destruction and economic costs; (4) 

consisted of a floor, roof and walls which were indivisible from 

the building; (5) was made of the same or substantially the same 

materials as the building; (6) was constructed contemporaneously 

with the building; and, (7) aids in stiffening the building 

structure where stressed by the processing of raw materials. 

Plaintiff strenuously argues that the court's reliance on two 

of those factors was erroneous because they represent findings 

based on disputed facts. In light of our resolution of this case, 

we need not decide that question. 

6 

Appellate Case: 86-1935 Document: 01019964413 Date Filed: 02/20/1990 Page: 6 
Stat. tit. 68, § 2449 (1981), the principle announced in Smith 

would appear to be applicable to this case. Cf., ~' Okla. 

Stat. tit 68, § 2419 (1981) ("Real property, for the purpose of ad 

·valorem taxation, shall -be construed to mean . ' and all 

buildings, structures and improvements or other fixtures of 

whatsoever kind thereon, exclusive of such machinery and fixtures 

on the same as are, for the purpose of ad valorem taxation, 

defined as personal property."); see also Akers v. Hintergardt, 

203 P.2d 883 (Okla. 1949) (real property, for the purpose of 

taxation, includes the land itself and any buildings or structures 

thereon). Since the record here does not cover the probable tax 

treatment of the base machine chest, as realty or personalty, or 

the ownership factor as discussed in Smith, the record is not 

sufficient in its present form to decide whether the machine chest 

is, under Oklahoma law, an improvement to real property within the 

meaning of Okla. Stat. tit. 12, § 109. 7 

It is therefore incumbent on us to remand the case for 

reconsideration in light of Smith. "It is the duty of the federal 

appellate courts, as well as the trial court, to ascertain and 

apply the state law where, as in this case, it controls decision." 

Huddleston v. Dwyer, 322 U.S. 232, 236 (1943); Patty Precision v. 

Brown & Sharpe Mfg. Co., 742 F.2d 1260, 1262 (10th Cir. 1984) (''In 

a diversity case we are obligated to overturn a trial court 

decision, correct when rendered, if an intervening decision of the 

7 

The parties did not present any evidence or argument to the 

district court relevant to an analysis under Smith. Nor have the 

parties addressed the effect of that decision in their briefs on 

appeal or in oral argument before this court. On remand the 

district court should conduct whatever procedings are necessary to 

determine the applicability of Smith to the facts of this case. 

7 

Appellate Case: 86-1935 Document: 01019964413 Date Filed: 02/20/1990 Page: 7 
highest court of a state changes the applicable law. This rule 

applies as long as the case is sub judice."); see also Whalley v. 

Sakura, 804 F.2d 580, 586 n.3 (10th Cir. 1986); Kinnison v. 

Houghton, 432 ·p.-2d 1274 ; 1277- (10th Cir. ·1970) ;- -Versluis v. Town 

of Haskell, 154 F.2d 935, 937 (10th Cir. 1946). Although the 

district court attempted to apply the controlling state law when 

it entered its judgment, that judgment must be reversed on 

appellate review if in the meantime the state courts have adopted 

a different rule of law. See Huddleston, 322 U.S. at 236. That 

i s clearly the case here. We therefore vacate the order granting 

summary judgment to Rust and remand so that the district court may 

decide this question under the controlling state law. 

B. 

After holding that the statute of repose, § 109, applied to 

this case, the district court also upheld the constitutionality of 

that statute, relying primarily on Loyal Order of Moose Lodge 1785 

v. Cavaness, 563 P.2d 143 (Okla. 1977). Of course, the question 

concerning the application and interpretation of § 109, now 

governed by Smith, must be decided before reaching the 

constitutional question raised in this case. The 

constitutionality of§ 109 should not be decided if the case can 

be resolved on narrower grounds. See,~, Ashwander v. TVA, 297 

U.S. 288, 346-47 (1936) (Brandeis, J., concurring); see also 

Oklahoma City Mun. Improvement Auth. v. HTB Inc., 769 P.2d 131, 

132 n.2 (Okla. 1988); Smith v. Westinghouse, 732 P.2d at 467. 

In the event the district court should again hold that the 

base machine chest is an improvement to real property within the 

meaning of§ 109, then the constitutionality of§ 109, in light of 

8 

. "' 

Appellate Case: 86-1935 Document: 01019964413 Date Filed: 02/20/1990 Page: 8 
• 

Article 23, § 7 of the Oklahoma Constitution, will again be at 

issue. In the district court's order granting summary judgment to 

Rust, the court stated that it appeared from Loyal Order of Moose 

· that the Oklahoma Supreme -Court ·would uphold § 109. We do not 

reach the constitutional issue, but would observe that we do not 

read the Loyal Order of Moose opinion as the district court did. 

The Oklahoma Court there said that the Oklahoma Constitution 

"appears to preclude the portion of § 109 barring actions for 

wrongful death. However, this is not an issue in this case." 563 

P.2d at 146 n.15 (emphasis added). This serious issue of Oklahoma 

constitutional law was thus noted but not decided by the Oklahoma 

Court in that opinion. Recently, in St. Paul Fire & Marine Ins. 

Co. v. Getty Oil Co., 782 P.2d 915, 917 (Okla. 1989), the Oklahoma 

Supreme Court again noted this question, which was raised by one 

party, but did not decide it. Under the circumstances, 

certification of this important and unsettled question of state 

constitutional law to the Supreme Court of Oklahoma would appear 

to be particularly appropriate, see Lehman Bros. v. Schein, 416 

U.S. 386, 391 (1974) (noting that the certification procedure in 

the long run saves time, energy, and resources and helps build a 

cooperative judicial federalism, and that it would be appropriate 

''in view of the novelty of the question" of state law); Clay v. 

Sun Ins. Co., 363 U.S. 207, 212 (1960), although the determination 

at that point will be for the district court on remand of this 

case. 

9 

Appellate Case: 86-1935 Document: 01019964413 Date Filed: 02/20/1990 Page: 9 
. . 

Accordingly, we vacate the order of the district court 

granting summary judgment in favor of defendant Rust Engineering 

Company and remand the cause for further proceedings in accord 

· -·with· this opinion. 

IT IS SO ORDERED. 

10 

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