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. e du/thir dc ir c uit_2001/43Filed March 7, 2001

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 99-5237

AMELIA WOESSNER,

Appellant

v.

AIR LIQUIDE. INC., a Delaware Corporation; CARDOX INC, a California Corporation;
GEN ELEC CO; D ELEC MOTORS INC; INTL SWITCHBOARD; OLSEN ENG CORP

Appeal from the United States District Court for the District of New Jersey (D.C. Civil Action No. 96-cv-552) District Judge: Honorable Joseph E. Irenas

Submitted Under Third Circuit LAR 34.1(a) December 11, 2000

Before: SCIRICA, AMBRO, Circuit Judges and POLLAK, District Judge.**

(Opinion filed: March 7, 2001)

Kevin P. McCann

Walter H. Iacovone

Chance & McCann
201 West Commerce Street

P.O. Box 278 Bridgeton, New Jersey 08302 Counsel for Appellant

___________________________________________________ ______________

**Honorable Louis H. Pollak, Senior United States D istrict Judge for the Eastern District of Pennsylvania, sitting by design ation.Richard T. Smith

Margolis Edelstein

216 Haddon Avenue
Suite 200 Westmont, New Jersey 08108 Counsel for Appellee International Switchboard Corp.

Richard P. Maggi

McDermott & McGee
75 Main Street

P.O. Box 192 Millburn, New Jersey 07041 Counsel for Appellee Olsen Engineering Corp.

OPINION OF THE COURT

AMBRO, Circuit Judge

Amelia Woessner ("Woessner") appeals from the grant of summary judgment in favor of the two remaining defendants in this diversity action -- Inter nation al Switchboard Corporation ("International Switchboard ") and Olsen Engineering Corporation ("Olsen"). She conten ds that the District Court erred in its analysis of New Jer sey's choice of law doctrine by applying Delaware's build er's statute, 10 Del. Code S 8127, to bar her pr oducts liability claims. Furthermore, Woessner ar gues that neither the builder's statute of Delaware nor New Jersey should preclude her action because her injuries wer e the result of alleged defects in production machinery and therefo re were not covered by the scope of either builder's statut e. We affirm the grant of summary judgment of the Distric t Court because it properly applied Delaware law in this ca se and correctly found that Delaware's builder's statute p recluded
Woessner's cause of action.

I. Factual and Procedural History

In 1972, Cardox, Inc. ("Cardox") planned the constr uction of a carbon dioxide recovery plant adjacent to its existing facilities in Delaware City, Delaware. Car dox cont racted

2with Olsen to provide design and engineering servic es for

that construction. One component of the constructio n was a 2,300 volt motor control center, also known as a switchgear. That motor control center was manufactu red by International Switchboard to the specifications dem anded by Olsen and was integrated into the production pro cess of the facility in 1973. Cardox was later acquir ed by Air Liquide, Inc. ("Air Liquide"), a Delawar e corporat ion, which continued to operate the facility.

Woessner was employed as a field technician by "D" Electric Motors (" `D' Electric") on July 29, 1994, the day of her injury. "D" Electric is located in V ineland, N ew Jersey and Woessner is a New Jersey resident. In her capac ity as a field technician, Woessner visited Air Liquide at its request on that day to provide an evaluation of a m otor that was not functioning. Unable to make repairs to the motor on site, Woessner sought to remove it for repair at the "D" Electric facility in New Jersey. Before r emoving t he motor, Air Liquide officials asked Woessner to evaluate th e attached motor control center. While examining the motor control center with an electrical tester , Woessner was severely burned by an explosion.

This products liability action was brought by Woess ner in 1996, alleging that the motor control center was de fective in that it contained exposed electrical components. Jurisdiction was based on the diversity of the part ies. 28
U.S.C. S 1332. The District Court made two determin ations relevant to this appeal. On January 7, 1999, the Co urt granted the motion of International Switchboar d to establish that the law of Delaware will gover n the determination of liability. On March 17, 1999, the Court then granted summary judgment in favor of Olsen and International Switchboard, predicting that Delaware 's builder's statute would bar Woessner's claims again st them. All of the defendants not involved in this appeal, including "D" Electric, General Electric Co. and Car dox, hav e either settled or been dismissed from this action, and thu s the entry of summary judgment was a final order which i s ripe for appeal to this Court. 28 U.S.C. S 1291.

II. Standard of Review

The District Court's grant of summary judgment is subject to plenary review in this Court. Hurley v. Atlantic

3City Police Dept., 174 F.3d 95, 128 n.29 (3d Cir. 1 999), cert.

denied, 528 U.S. 1074 (2000). Similarly, W oessner is entitled to plenary review of the District Court's prediction, interpretation and application of the gover ning st ate
substantive law. Nationwide Mut. Ins. Co. v. Buf fe tta, 230 F.3d 634, 637 (3d Cir. 2000). W e are required to a pply the same test that should have been used initially by t he
District Court -- whether the movant can demonstrat e that there is no genuine issue as to any material fact a nd it is entitled to judgment as a matter of law. Fed. R. Ci v. P. 56(c); Omnipoint Communications Enters., L.P . v. N ewtown Township, 219 F.3d 240, 242 (3d Cir .), cert. denie d, 121 S. Ct. 441 (2000). In doing so, we view the evidence a nd draw all inferences in the light most favorable to the n on-movant. Whiteland Woods, L.P. v. Township of West Whiteland , 193 F.3d 177, 180 (3d Cir. 1999).

III. Analysis

As an initial matter, we note that the District Cou rt was required to apply the law of the forum state, inclu ding its choice of law provisions. Klaxon Co. v. Stentor Ele c. Mfg. Co., 313 U.S. 487, 496 (1941); Robertson v. Central Jersey Bank & Trust Co., 47 F.3d 1268, 1273 (3d Cir. 1995) . New Jersey has rejected the strict lex loci delicti ("p lace of the wrong") rule for determining the choice of law base d on the place where the tort occurred. V eazey v. Doremus, 510 A.2d 1187, 1189 (N.J. 1986). In its place, the New Jerse y courts have substituted "the more flexible gover nmental-i nterest analysis in choice-of-law decisions." Id.[citations omitted]. It is the District Court's application of this gove r nmentalinterest analysis to which Woessner objects on appe al.

Before discussing the governmental-inter est analys is, we observe that the scope of our review of the choice of law question will not be as broad as the District Court 's
determination. The District Court found that Delawa re law applied with respect to all issues of liability. We need not delve that far, for we note that the application of New Jersey's choice of law test proceeds on "an issue-b y-issue basis." Veazey, 510 A.2d at 1189."Conflicts princip les do not dictate that all legal issues presented by a si ngle case should be decided under the laws of a single state. The evaluation of significant relationships and governm ental

4interests takes place issue by issue and can lead t o the

application of different bodies of law." Johnson Ma tthey Inc. v. Pennsylvania Mfrs. Ass'n Ins. Co., 593 A.2d 367, 374 (N.J. Super. Ct. App. Div. 1991). We are convinced, at least as to the question of which builder's statute appli es in this case, that the District Court properly applied the law of

Delaware.

New Jersey's governmental-interest test r equires a twostep inquiry. "The first step in the analysis is to determine
whether a conflict exists between the law of the in terested states. . . . If an actual conflict exists, the nex t step is to identify the governmental policies underlying the l aw of each state and how those policies are af fected by each state's contacts to the litigation and to the parti es." Veazey, 510 A.2d at 1189. Thus, we begin with whether a con flict exists between the builder's statutes of New Jersey and

Delaware.

"The Delaware `Builder's Statute' pr ovides a six y ear limitations1 period on actions for damages, indemni fication,

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1. The builder's statutes of both New Jersey and De laware are technically statutes of repose and not statutes of limitation. Though both work to extinguish claims after the running of a given peri od, a statute of repose differs in two respects from a statute of limitatio n. First, the time period of a statute of repose does not run from the accrua l of a cause of action,
as does a statute of limitations. "With the above b ackdrop it is safe to assert that our statute is not at all a typical sta tute of limitations,

for the time within which suit may be brought commences wit h the completion of services and construction and is thus `entir ely unrelated to the accrual of any cause of action.' " O'Connor v. Altu s, 335 A.2d 545, 553 (N.J. 1975) (citation omitted); see City of Dover v . International Telephone & Telegraph Corp., 514 A.2d 1086, 1089 (Del. 1986) ("The statute in question is truly a statute of repose. It pr events a claim from arising,
whereas a statute of limitations bars an accrued ca use of action."). Secondly, statutes of repose serve a dif ferent pur pose than traditional
statutes of limitation. "Statutes of limitations ar e designed to stimulate litigants to prosecute their suits diligently and t o avoid burdening our courts with stale claims....[T]he statute of r epos e does not serve to
limit stale claims as such. Rather, the statute literally confers immunity ten years after the performance of services or construc tion when an injury occurs due to a defect or unsafe condition, r egard less of any intended useful life of a product." Van Slyke v. Worthington , 628 A.2d 386, 388 (N.J. Super. Ct. Law Div. 1992) (citations omitted)

.

5or contribution for damages resulting fr om persona l

injuries arising out of any deficiency in the const ruction or improvement to any real property or the design, pla nning, supervision, or observation of any such constructio n." City of Dover v. International Telephone & T elegraph Co rp., 514 A.2d 1086, 1088-89 (Del. 1986); see 10 Del. Code S 8127. The six year period runs from the earliest of any o f a variety of dates signaling the completion of construction. 10 Del. Code S 8127(b). There is a governmental interest in such laws. The Delaware Supreme Court has noted that bui lder's statutes have been enacted in as many as 47 states and that "[t]hey are prophylactic measures taken by the Legislatures to lessen the construction pr ofession als' exposure to the almost unlimited liability which ha s resulted from the demise of the privity doctrine an d the imposition of a discovery rule in tort cases." Beck er v. Hamada, Inc., 455 A.2d 353, 355 (Del. 1982).

The New Jersey builder's statute, N.J. Stat. Ann. 2 A:14- 1.1, does not differ from that of Delawar e in any respect material to this litigation. "N.J.S.A. 2A:14-1.1 wa s adopted, effective May 18, 1967, as a legislative r esponse to the then expanding liability concepts in this jurisdiction c oncerning the legal responsibility of contractors, ar chitect s, engineers, and others involved in creating improvements to rea l estate." Brown v. Jersey Cent. Power & Light Co., 3 94 A.2d 397, 404 (N.J. Super. Ct. App. Div. 1978). The prim ary distinction between the two is that Delaware's stat ute provides that no actions may be brought against the builder after six years, while New Jersey has chose n to do similarly after ten years. Compare 10 Del. Code S 8 127(b) with N.J. Stat. Ann. 2A:14-1.1. Of course, because the current action was brought almost twenty-three year s after the construction of the Cardox facility, the action would be time-barred by either statute, assuming either appl ied in this case. Indeed, Woessner has made no ef fort to distinguish between New Jersey's and Delawar e's bu ilder's
statutes and has "submitted that the outcome is the same regardless of which statute of repose is applied." Br. of

Woessner at 15.

Even assuming, arguendo, that the builder's statute s of New Jersey and Delaware differed other than as note d, an

6evaluation of the relative governmental interests c an lead

only to the conclusion that the District Court pr o perly applied Delaware law. Woessner notes the following considerations favoring the employ of New Jersey la w: Woessner was a New Jersey resident, was employed by a New Jersey company, sought medical assistance in Ne w Jersey and was the beneficiary of public aid in New Jersey.2 "New Jersey has a clearly recognized gover nmental interest in the compensation of its domiciliaries." Pine v. Eli Lilly & Co., 492 A.2d 1079, 1082 (N.J. Super. Ct. App. Div. 1985). Indeed, this consideration is closely related to Ne w Jersey's interest in assuring that its residents ar e produc tive and do not become the beneficiaries of public assistance. Schum v. Bailey, 578 F.2d 493, 501 (3d Cir .1978) (Gibbons, J., concurring).

These domicile-related considerations ar e not, how ever, so important under the governmental-inter est analy sis to be dispositive of our inquiry. Moreover , the compe nsation of Woessner is only tangentially related to the releva nt governmental interests that underlie the builder's statutes. This point was made in Fantis Foods, Inc. v. North River Ins. Co., 753 A.2d 176, 180 (N.J. Super. Ct. App. Div. 2 000). Though Fantis Foods involved the application of the governmental-interest test to an action for propert y insurance coverage between two companies whose prin cipal offices were in New Jersey, the Court concluded tha t New York law should apply because the insur ed building was located in New York. Id. at 177.

Notwithstanding New Jersey's undeniable inte r est in protecting the rights of its insureds and in promoting responsiveness on the part of its insur ers, those "wholly domestic" concerns [citation omitted ] --the only such factors in the case pertaining to New J ersey--

___________________________________________________ ______________

2. Woessner's argument assumes that this Court must make a choice of law determination with respect to all issues of lia bility, and as such its focus is on considerations relevant to the question of which state's products liability law applies. We find this argume nt unhelpful to the resolution of the choice of law determination, as N ew Jersey courts have unambiguously held that they must proceed on an"iss ue-by-issue" basis. See Veazey, 510 A.2d at 1189; Johnson Matthe y, 593 A.2d 367 at

374.

7have considerably less weight than the inter ests of New

York in the condition, maintenance and r epa ir of structures within its borders; the r especti ve responsibilities, financial and otherwise, o f property owners and insurers with respect ther eto; a nd relevant considerations of hazard, sequence and causa tion when collapse occurs or is threatened.

Fantis Foods, 753 A.2d at 180. We believe the choic e of law analysis for this tort claim to be no differ ent.

At root here is each state government's interest in the premises liability concerns of its contractors and related builders. It is the location of the building, not t he individuals who might have been tortiously har med, 3 that is
relevant to the choice of which builder's statute t o apply. Indeed, at least one New Jersey court has recognize d that the state governmental interest inher ent in each b uilder's
statute cannot be divorced from the situs of that construction. In Van Slyke v. Worthington, 628 A.2d 386 (N.J. Super. Ct. Law Div. 1992), the Superior Court , Law Division, held that New Jersey's builder's statute did not apply because all of the alleged injuries occurr ed in New York buildings, and thus New York law should apply. The

court stated:

I find that New York's contacts and inter es t in this case are more significant than that of New Jersey 's. New Jersey's only interest in this suit lies in ensuring the compensation of its domiciliary--plaintiffs. Clearly, this interest would not be furthered thr ough the operation of New Jersey's substantive law and therefor e the operation of N.J.S.A. 2A:14-1.1. . . . Addit ionally, New York has a far more compelling inter est in regulating dangers inherent in construction activity co nducted on its soil. The forgoing [sic] inter nal state needs would not be advanced by application of the [New J ersey builder's] statute to New York realty. Clear ly New York

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3. It is for this reason that we find W oessner's a rgument that she was only fortuitously located in Delaware and thus New Jersey law should thus apply to her, see Blakesley v. Wolford, 789 F. 2d 236, 243 (3d Cir. 1986), to be unpersuasive.

8State has the paramount interest in this lit igation and

therefor its substantive law should gover n this case.

Van Slyke, 628 A.2d at 391-92. W e find Van Slyke a nd Fantis Foods to be compelling, and thus we pr edict that a New Jersey court applying New Jersey's choice of la w analysis would find that Delaware's inter est in th e conduct of construction activities in that State outweigh N ew Jersey's interest in the compensation of its r esid ents.

We turn to the District Court's analysis of Delawar e's
builder's statute and determine whether the Court appropriately awarded Olsen and Inter national Swit chboard the benefits of that statute. The statute bars, aft er six years from the earliest of certain defined dates marking the termination of construction, any claim arising"[f]r om any alleged deficiency in the construction or manner of construction of an improvement to real pr operty an d/or in the designing, planning, supervision and/or observa tion of any such construction or manner of construction." 1 0 Del. Code S 8127(b)(1). Woessner argues that this statut e should not bar her action against International Switchboar d and

Olsen because the motor control center was not an "improvement to real property" covered by the statu te.4 Whether the motor control center is an "impr ovemen t" under the statute is a question of law and thus appropriately resolved on a motion for summary judg ment. Hiab Cranes & Loaders, Inc. v. Service Unlimited, I nc., C.A. No. 82C-FE-98, at 3 (Del. Super. Ct. Aug. 16, 1983)

.

"Improvement" is defined in the statute to "include buildings, highways, roads, streets, bridges, entra nces and walkways of any type constructed thereon, and other structures affixed to and on land, as well as the l and itself." 10 Del. Code S 8127(a)(2). This list, however , is intended to be exemplary and not exhaustive. "As a matter of st atutory construction, the words `shall include' ar e proper ly interpreted to indicate that the term`structure' encompasses items not expressly enumerated in the

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4. Woessner appears not to challenge on appeal the District Court's
conclusion that both Olsen and International Switch board performed or
furnished construction services and wer e not merel y suppliers of construction equipment.

9statute." City of Dover, 514 A.2d at 1089 (finding that a

utility pole can be a "structure" within the meanin g of the statute because "it is unquestionably affixed to la nd").

Delaware courts have employed various means to determine whether a particular construction is an "improvement" to land. The first case addressing th e issue, Hiab Cranes & Loaders, Inc. v. Service Unlimited, I nc., C.A. No. 82C-FE-98 (Del. Super. Ct. Aug. 16, 1983), look ed to the definition of improvement in other states and f ound that two approaches were widely employed-- a common law fixture analysis and a "common sense" interpret ation defining the term according to common usage. Hiab a t 3-4. On the first approach, the Hiab court cited Pennsyl vania law for the proposition that "while a fixture is, b y definition, an improvement to real property, the converse is no t true; an improvement to real property[,] in the ordinary sense of the term, need not be a fixture." Hiab at 4 (citing Keeler v. Commonwealth Dep't of Transp., 424 A.2d 614, 616 ( Pa. Commw. Ct. 1981)). Of the second approach, the Hiab court cited with approval Brown v. Central Jersey P ower & Light Co., 394 A.2d 397, 405-06 (N.J. Super . Ct. A pp. Div. 1978), which contrasted permanent parts of the mech anical systems necessary to the normal function of a build ing from those "chattels brought into a structure after it is architecturally and mechanically suitable for occup ancy for the purpose intended, . . . e.g., furnitur e, produ ction machinery, appliances, etc."-- the former being improvements, the latter not. Id. at 405-06. The Hi ab court went on to find that a building's furnace was an improvement covered by the statute. Hiab at 5.

Woessner argues that the motor contr ol center is n ot an improvement to real property because it is "product ion machinery" as noted in Brown, and her claims theref ore are not barred by Delaware's builder's statute. This ar gument is unpersuasive for several reasons. First, the onl y reference in Delaware case law to the fact that "pr oduction machinery" is not covered is the citation of Brown contained in the Hiab decision of the Delaware Supe rior
Court.5 Yet because the furnace in Hiab was not

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5. The genesis of the "production machinery" commen t in Brown further demonstrates why the motor control center should be covered by

10"production machinery," this refer ence is, at best , dicta.

More importantly, a subsequent Delaware case found production machinery to be an improvement to real property. Davis v. Catalytic, Inc., Nos. 82C-AU-39, 82C-OC84, 1985 WL 189329 (Del. Super. Ct. 1985). In Davis , the Superior Court analyzed the Hiab decision's use of a "common sense" approach and found that, under that approach, a "slurry cooler" was an impr ovement to real property and its builder was entitled to pr otectio n under 10 Del. Code S 8127. Davis, 1985 WL 189329, at * 5. Th e "slurry cooler" was a sizable free-standing structu re bolted to the concrete floor and affixed to the adjacent p ieces of the production process. Id. It is similar to the mo tor control center here, which was also bolted to the concr ete floor and affixed to the other elements of the production pro cess. See Standard Chlorine of Delaware, Inc. v. Dover Steel Co., 1988 WL 32044, *2 (Del. Super. Ct. March 31, 1988) (hold ing that a liquid storage tank "attached to the r ealty through a system of pipes, valves, manifolds, wires, scaf fol ds, catwalks and a foundation" was an improvement to property). Furthermore, both the motor control cent er and "slurry cooler" were an integral part of the respec tive purposes of the buildings. See Windley v. Potts Wel ding & Boiler Repair Co., 888 F. Supp. 610, 613 (D. Del. 1 995) (finding a preheater that was "central to the plant 's function" to be an improvement). Thus, we pr edict that a
Delaware court would find the motor contr ol center to be an improvement under the "common sense" approach employed in Hiab and Davis.

___________________________________________________ ______________

Delaware's builder's statute. The Brown decision re lied heavily uponIlich v. John E. Smith Sons Co., 367 A.2d 1216 (N.J. Supe r. Ct. Law Div. 1976), which held that a defendant who wired a meat grinding machine during the conversion of a building from a theater to a butcher shop
could not claim the benefit of the builder's statut e in New Jersey. Brown,
394 A.2d at 405. There was no evidence that the mea t grinding machine was in any way affixed to the building and the cour t expressly stated that it was not a fixture. Ilich, 367 A.2d at 1217- 18. The court in Brown, however, described Ilich as involving a "meat grind ing production machine," and seems to have extrapolated ther efrom the general comment that production machines were not covered b y the builder's statute. Brown, 394 A.2d at 405. Obviously, product ion machines that are fixtures, as the motor contr ol center was, can be covered by the builder's statute. Davis, 1985 WL 189329, at *5.

11We caution, however, that the "common sense" approa ch

advocated by Woessner was not adopted by the Delawa re Supreme Court in its only statement on the matter. In City of Dover, that Court seemed to employ a fixtur es a nalysis by relying on the "other structures affixed to and on land" clause in the definition of "improvement." City of Dover, 514 A.2d at 1089-90 (citing 10 Del. Code S 8127(a)(2)). The Court stated that a "utility pole can be consider e d a `structure' within the meaning of the statute. Sinc e it is unquestionably affixed to land, it can be consider ed an `improvement' covered by that statute." Id. at 1090

. Employing a strict fixtures analysis lends even str onger support to the conclusion that the motor contr ol c enter was an improvement, as it had been installed in 1973, w as affixed to the concrete floor by bolts for the enti re lifetime of the structure leading up to the accident and was an integral part of the production process. Seen in th is light, the motor control center is indistinguishable from a circuit breaker box,6 which was also held to be a "permanen t fixture" in Kirkwood Dodge, Inc. v. Fr ederic G. Kr apf, Jr., Inc., C.A. No. 84C-DE-81, slip. op. at 3-4 (Del. Su per. Ct. May 9, 1989).7

We are convinced that the motor contr ol center was intended to be a permanent fixture for the lifetime of the Air Liquide facility and that it was covered by the Delaware builder's statute. Alternatively, were we to employ the "common sense" approach to improvements, we are
convinced that the motor control center was an improvement, indeed an indispensible one, to the Ai r Liquide facility.

For the reasons noted, we conclude that the Distric t Court properly granted summary judgment in favor of both
Olsen and International Switchboard.

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6. Indeed, one of Woessner's expert witnesses liken ed the motor control
center to a "circuit breaker box in the home."

7. The Court in Kirkwood Dodge went on to hold, how ever, that a supplier of a standard circuit breaker box did not "furnish construction" under the builder's statute. Kirkwood Dodge, Inc., at 4-5.

12A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

13