Title: CONSOLIDATED GRAIN & BARGE CO. v. STRUCTURAL SYSTEMS, INC.
Citation: 2009 OK 14, 212 P.3d 1168
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: March 3, 2009

CONSOLIDATED GRAIN & BARGE CO. v. STRUCTURAL SYSTEMS, INC. Annotate this Case CONSOLIDATED GRAIN & BARGE CO. v. STRUCTURAL SYSTEMS, INC. 2009 OK 14 212 P.3d 1168 Case Number: 105918 Decided: 03/03/2009 THE SUPREME COURT OF THE STATE OF OKLAHOMA Consolidated Grain & Barge Company, Plaintiff, v. Structural Systems, Inc., Defendant. FEDERAL CERTIFIED QUESTION ¶0 Pursuant to Oklahoma's Revised Uniform Certification of Questions of Law Act, 20 O.S.2001, §§ 1601-1611, the United States Court of Appeals for the Tenth Circuit asks this Court whether the phrase "period of limitation" as used in CERTIFIED QUESTION ANSWERED. William D. Mahoney, Irving, Texas, and Marc L. Bovos, Poteau, Oklahoma, for plaintiff. Gerald P. Green, Andrea D.W. Moates, Larry G. Cassil, Jr., Oklahoma City, Oklahoma, for defendant. TAYLOR, V.C.J. ¶1 Pursuant to the Revised Uniform Certification of Questions of Law Act, 20 O.S.2001, §§ 1601-1611, the United States Court of Appeals for the Tenth Circuit certified the following question of law to this Court: Oklahoma's borrowing statute provides that "[t]he period of limitation applicable to a claim accruing outside of this state shall be that prescribed either by the law of the place where the claim accrued or by the law of this state, whichever last bars the claim." Okla. Stat. tit. 12, § 105. Should "period of limitation" in Okla. Stat. tit. 12, § 105 be interpreted to include statutes of repose, including Oklahoma's statute of repose for construction tort claims, id. § 109? We answer the question narrowly. We hold that the phrase "period of limitation" as used in I. Facts and Procedural Background ¶2 The following basic facts in this case are gleaned from the summary judgment record submitted with the certification order, the summary judgment order of the United States District Court for the Eastern District of Oklahoma dated July 30, 2007, as corrected July 31, 2007, and the certification order. Consolidated Grain & Barge Co.(CGB), a Missouri corporation with its principle place of business in Wayne City, Illinois, contracted with Structural Systems, Inc. (SSI), a corporation ¶3 On October 31, 2005, CGB's insurer, Nationwide Agribusiness Insurance Company, ¶4 On October 26, 2006, CGB's insurer filed a subrogation action ¶5 SSI removed the action to the federal district court for the eastern district of Oklahoma on the basis of diversity in citizenship. SSI moved for summary judgment, asserting the suit is barred by Arkansas' five-year statute of repose. ¶6 The federal district court determined that Oklahoma's borrowing statute did not apply "as the question was one of whether to apply Arkansas' or Oklahoma's substantive statute of repose." It also determined that under Oklahoma's common-law choice-of-law rules, Arkansas' substantive five-year statute of repose on construction claims governs the action. Accordingly, the federal district court found the action is time-barred and dismissed the petition. ¶7 On appeal, the United States Court of Appeals for the Tenth Circuit found no controlling Oklahoma authority on the question of whether Oklahoma's borrowing statute applies to statutes of repose. In certifying the question, the federal appellate court noted that Wisconsin has interpreted the phrase "period of limitation" in the Wisconsin borrowing statute to include both procedural statutes of limitations and substantive statutes of repose, citing Wenke v. Gehl Co., 682 N.W.2d 405 (Wis. 2004). II. Statutory Time Bars ¶8 Oklahoma recognizes two categories of statutory time bars. If the time period operates to bar the right to a cause of action, the statute falls into the substantive-law category and is referred to as a statute of repose. Reynolds v. Porter, ¶9 A statute of limitation prescribes a time period within which an action may be initiated, and that time period begins to run when the cause of action accrues. ¶10 On the other hand, a statute of repose prescribes a time period within which an action may be initiated and that time period begins to run from a specific act or event, such as substantial completion of construction. Reynolds, ¶11 In practical terms, a statute of repose marks the boundary of a substantive right, while a statute of limitation operates procedurally to bar the remedy after a substantive right has vested. Reynolds, Before the contemporary concept of "statutes of repose" became popular, the term "statute of repose" was commonly used to refer to general limitations periods that simply provided peace, or "repose," to potential litigants, taking away the remedy for an otherwise valid claim. A modern court has aptly explained how this understanding evolved: Early treatise writers and judges considered time bars created by statutes of limitations, escheat and adverse possession as periods of repose. Reynolds v. Porter Id The Wisconsin Supreme Court proceeded to reject the procedural/substantive law dichotomy: This explanation is helpful. To repeat, in most states, "a statute of limitation merely extinguishes the plaintiff's remedy." Id. This, however, was not and is not the law in Wisconsin. In Wisconsin, we adopted the minority proposition that "the limitation of actions is a right as well as a remedy, extinguishing the right on one side and creating a right on the other." . . . Under Wisconsin law, "statutes of limitation [are viewed as] substantive statutes because they create and destroy rights." . . . . Id ¶12 As to the procedural/substantive law dichotomy of statutory time limits, Oklahoma subscribes to the majority view as explained in Reynolds, while Wisconsin takes the minority view as explained in Wenke. Accordingly, Wenke is not persuasive authority that guides our answer to the certified question. III. Time Bars on Construction Torts ¶13 Oklahoma's statute prescribing a time limit on a construction tort, No action in tort to recover damages (i) for any deficiency in the design, planning, supervision or observation of construction or construction of an improvement to real property, (ii) for injury to property, real or personal, arising out of any such deficiency, or (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. Section 109 has long been categorized as a statute of repose, St. Paul Fire & Marine Ins. Co. v. Getty Oil Co., ¶14 The Arkansas statutory time limitation relied upon by the federal district court is codified at Ark. Code Ann. § 16-56-112(a) and reads: No action in contract, whether oral or written, sealed or unsealed, to recover damages caused by any deficiency in the design, planning, supervision, or observation of construction or the construction and repair of any improvement to real property or for injury to real or personal property caused by such deficiency, shall be brought against any person performing or furnishing the design, planning, supervision, or observation of construction or the construction or repair of the improvement more than five (5) years after substantial completion of the improvement. Section 16-56-112(a) is a statute of repose that operates to entirely cut off the right of action even if it does not accrue within five years after substantial completion. Rogers v. Mallory, 941 S.W.2d 421, 423 (Ark.1997). Fraud will toll the running of the five-year time period in § 16-56-112(a), Curry v. Thornsberry, 128 S.W.3d 438, 441 (Ark.2003), but fraud and tolling are not involved in this case. ¶15 In addition to the different limitation periods, two other differences in the above-quoted statutes are pertinent. First, Oklahoma's § 109 expressly relates to an "action in tort " while Arkansas' § 16-56-112(a) relates to an "action in contract." The federal district court order notes that the Arkansas statute applies to contracts and that none of CGB's claims sound in contract but proceeded to apply the Arkansas statute of repose rather than a statutory limitation on torts, citing Rogers v. Mallory, supra. ¶16 The second difference is that Oklahoma's § 109 applies to deficiency in construction while Arkansas' § 16-56-112(a) applies to deficiency in construction and repair. The petition alleged that CGB hired SSI to replace parts of the grain conveyor system, while the federal district court stated the work consisted "solely of construction and repair," and the Tenth Circuit stated that CGB alleged "negligence in repairing the conveyor belt system." It appears that the damages in this case arose out of "repair" to an existing system rather than out of "construction" of an improvement to real property. Although the Arkansas statute expressly applies to deficient repair to an improvement to real property, Oklahoma's § 109 does not mention repair to an improvement to real property. In answering the certified question, we do not consider nor do we decide that the work performed on the conveyor belt in this case constitutes construction of an improvement to real property that would trigger § 109, with or without the aid of the borrowing statute. IV. The Uniform Statute of Limitation on Foreign Claims Act ¶17 As pointed out in Wenke, 682 N.W.2d at 423-424, a majority of states catagorize statutes of limitations as procedural law. As a general rule, the forum state applies its procedural law to a foreign claim. Stephens v. Household Fin. Corp., ¶18 In 1965, Oklahoma adopted the Uniform Statute of Limitations on Foreign Claims Act of 1957. 1965 Okla. Sess. Laws, ch. 98 (codified at 12 O.S.Supp.1965, §§ 104-108). The Act defined a claim arising out of the state: "As used in this act, 'claim' means any right of action which may be asserted in a civil action or proceeding and includes, but is not limited to, a right of action created by statute." ¶19 Apparently, borrowing the shorter limitation period was not acceptable. In 1970, the Legislature amended Oklahoma's borrowing statute to apply the period of limitation to a claim accruing outside this state that last bars the claim. 1970 Okla. Sess. Laws, ch.31 (codified at ¶20 Plaintiff contends that the phrase "period of time" in § 105 is not ambiguous, that it is not subject to interpretation, and that it cannot be construed to apply only to procedural statutes of limitations and to exclude substantive statutes of repose. Plaintiff argues that § 105 is a choice of law rule to be followed; that the 1970 amendment to § 105 intended to provide expansive access to Oklahoma courts; and that § 105 unambiguously includes all periods of limitations, substantive or otherwise. ¶21 Defendant also contends that § 105 is unambiguous but that "period of limitation" connotes only the procedural limitation on the remedy. Defendant takes the position that there is no legislative history to support plaintiff's legislative intent argument. Defendant argues that plaintiff would have this Court construe the phrase "period of limitation" to open Oklahoma courts to stale claims from other jurisdictions that may be contrary to public policy. ¶22 We consider the meaning of the phrase "period of limitation" in § 105 under of our established rules of statutory construction. The primary goal in reviewing a statute is to ascertain legislative intent, if possible, from a reading of the statutory language in its plain and ordinary meaning. State ex rel. Oklahoma State Dept. of Health v. Robertson, ¶23 Here, the word "limitation" in the phrase "period of limitation" in § 105 is not questioned. At issue is the meaning of the word "period." The ordinary meaning of "period" is an interval of time characterized by the occurrence of certain conditions or events, The American Heritage Dictionary 975 (1969), The American Heritage Dictionary 922 (2d College Ed. 1991), or a period of time in which something is completed. Webster's Third New International Dictionary 1680 (2002). In turn, the ordinary meaning of "period of limitation" is "time of limitation." ¶24 Section 105 expressly relates to the "period of limitation applicable to a claim accruing outside this state." (Bold added.) Accrual is a condition that triggers an ordinary statute of limitation, affecting the remedy and not the right to a cause of action. ¶25 The use of the word "period" in other statutes related to limitations on remedies supports a reading of "period of limitation" in § 105 as procedural law and not substantive law. ¶26 Reading § 105 to affect remedies and not substantive rights to actions for damages is also consistent with the language in the titles to the legislative measures enacting the borrowing statute, § 105, and the construction-tort time limitation, § 109. Both the titles to the 1965 legislative measure enacting § 105 and the 1970 measure amending § 105 indicated the bills were "PROVIDING FOR APPLICATION OF STATUTES OF LIMITATION IN ACTIONS ON CLAIMS ARISING OUTSIDE THE STATE." 1965 Okla. Sess. Laws, ch. 98 (title to Senate Bill 124, originally enacting § 105); 1970 Okla. Sess. Laws, ch.31 (title to House Bill 1507, amending the § 105). On the other hand, the title to the legislative measure enacting § 109 indicated intent to limit the right to recover damages. The title to the 1967 legislative measure enacting § 109 read, "PROVIDING FOR THE LIMITATION OF ACTION TO RECOVER DAMAGES ARISING FROM DESIGN, PLANNING OR CONSTRUCTION OF AN IMPROVEMENT TO REAL PROPERTY." 1967 Okla. Sess. Laws, ch. 360 (title to Senate Bill 232, originally enacting § 109). ¶27 While the title to the measure enacting the construction tort statute indicates intent to enact a time limitation on the right to recover damages, we find the titles to the measures enacting and amending the borrowing statute indicate intent that they relate to time limitations on remedies that may be available in this state to enforce claims accruing in another state. Accordingly, Oklahoma's borrowing statute, V. Summary ¶28 When CGB's insurer filed this subrogation action in the Oklahoma district court on October 26, 2006, CGB's right to a damages action under Arkansas law had been extinguished for more than a year and CGB no longer had a claim under Arkansas law. CERTIFIED QUESTION ANSWERED Edmondson, C.J., Taylor, V.C.J., and Hargrave, Watt, Winchester, Colbert, and Reif, JJ., concur. Opala, J., concurs by separate writing. Kauger, J., concurs in result. FOOT