Opinion ID: 1800389
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Heading Rank: 1

Heading: The Retroactive Application Argument

Text: Minn.Stat. § 541.051 (1980) provides: Subdivision 1. Except where fraud is involved, no action by any person in contract, tort, or otherwise to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained on account of the injury, shall be brought against any person performing or furnishing the design, planning, supervision, materials, or observation of construction or construction of the improvement to real property or against the owner of the real property more than two years after discovery thereof, nor, in any event shall such a cause of action accrue more than 15 years after substantial completion of the construction. Date of substantial completion shall be determined by the date when construction is sufficiently completed so that the owner or his representative can occupy or use the improvement for the intended purpose. Nothing in this section shall apply to actions for damages resulting from negligence in the maintenance, operation or inspection of the real property improvement against the owner or other person in possession. Subd. 2. Notwithstanding the provisions of subdivision 1, in the case of an action which accrues during the 14th or 15th year after substantial completion of the construction, an action to recover damages may be brought within two years after the date on which the action accrued, but in no event may an action be brought more than 17 years after substantial completion of the construction. Subd. 3. Nothing in this section shall be construed as extending the period prescribed by the laws of this state for the bringing of any action. Subd. 4. This section shall not apply to actions based on breach of the statutory warranties set forth in section 327A.02, or to actions based on breach of an express written warranty, provided such actions shall be brought within two years of the discovery of the breach. The city's position is that when the events giving rise to this lawsuit occurred in June and July of 1978, the city had an inchoate right to contribution or indemnity. It argues that the application of section 541.051, which became effective on August 1, 1980, to its cause of action would give the statute retroactive application, [1] contrary to Minn.Stat. § 645.21 (1980). [2] The keystone to the city's argument is its claim that it had acquired a cause of action prior to the effective date of Minn.Stat. § 541.051 (1980). In Grothe v. Shaffer, 305 Minn. 17, 232 N.W.2d 227 (1975), this court was called upon to determine at what point a cause of action for contribution accrues and the statute of limitations begins to run. After rejecting the argument that a cause of action for contribution accrues when the original action is commenced, we noted: A claim for contribution does not accrue or mature until the person entitled to the contribution has sustained damage by paying more than his fair share of the joint obligation. Gustafson v. Johnson, 235 Minn. 358, 51 N.W.2d 108 (1952). Thus, the statute of limitations does not begin to run on the claim of one joint tortfeasor for contribution from another joint tortfeasor until one of the joint tortfeasors had paid more than his fair share of the damage. State Farm Mutual Auto. Ins. Co. v. Schara, 56 Wis.2d 262, 201 N.W.2d 758, 57 A.L.R.3d 922 (1972). Id. at 23-24, 232 N.W.2d at 232. Indicating that this was also the conclusion reached by virtually every jurisdiction that has considered the question, [3] we then applied these basic rules to a third-party complaint situation and concluded: The third-party claim is thus contingent on the outcome of the original action and upon the payment by one joint tortfeasor of more than his fair share of the common obligation. 1 Hetland & Adamson, Minnesota Practice, Civil Rules Ann., p. 508. When a right is dependent on a contingency, the cause of action accrues and the statute begins to run on the date of the happening of the contingency. Bachertz v. Hayes-Lucas Lumber Co., 201 Minn. 171, 275 N.W. 694 (1937). An action for contribution remains contingent until that time when the obligation of one joint tortfeasor is fixed, and that does not occur until the joint tortfeasor has paid more than his fair share of the damage. Id. at 25-26, 232 N.W.2d at 233. Similarly, a claim for indemnity does not arise generally at the time of the injury, but upon a showing that liability has been incurred. Altermatt v. Arlan's Department Stores, 284 Minn. 537, 169 N.W.2d 231 (1969). The city correctly concedes that a claim for contribution or indemnity is one which generally is not considered to have accrued until payment is made. The city maintains, however, that Cooper v. Watson, 290 Minn. 362, 187 N.W.2d 689 (1971), permits the court to ignore whether an indemnity or contribution claim is liquidated when it considers if a statute has retroactive application. Cooper involved an automobile accident in which the plaintiff-employee was injured by a vehicle owned by defendant. Plaintiff sued defendant, who in turn instituted suit against the employer, seeking indemnity. The employer moved for summary judgment on the ground that the claim against him was barred by Minn.Stat. § 176.061, subd. 10 (1970), a workers' compensation statute requiring a written agreement between an employer and a third person before the third person could recover indemnity from the employer. [4] This motion was granted pursuant to the statute, despite the fact that the statute was not in effect at the time of the accident. In reversing the lower court, we said: Since the protection of a written instrument, as required under subd. 10 on or after its effective date, cannot be provided in the case of antecedent transactions, it is impossible for subd. 10 to be applied to antecedent injuries on an equal basis with injuries occurring after the effective date of the provision. Therefore, since its protections as well as its disabilities cannot be applied to antecedent injury situations, subd. 10 must be construed to concern only claims for indemnity arising from injuries occurring on or after September 1, 1969. Id. at 370, 187 N.W.2d at 693-94. This interpretation avoided the question of whether the cause of action for indemnity had accrued by the statute's effective date. The focus was on the date of the injury, not as to the time when the cause of action for indemnity accrued, but as a means of dividing those indemnity causes of action which were covered by the statute from those which were not. The recent case of Hunter v. School District of Gale-Ettrick-Trempealeau, 97 Wis.2d 435, 293 N.W.2d 515 (1980), is strikingly similar to the instant fact situation. Although plaintiff was injured before the effective date of Wis.Stat. § 893.155 (1980), Wisconsin's equivalent of Minn.Stat. § 541.051 (1980), her complaint against the school district and the builder and the school district's cross-claim against the builder were filed after the statute's effective date. The Wisconsin court, after determining that Wis.Stat. § 893.155 (1980) did not bar plaintiff's claim for damages because her cause of action for negligence accrued at the date of her injury, addressed the issue of the appropriateness of the application of section 893.155 to the school district's cross-claim. The court acknowledged that the claim for indemnification or contribution was a separate and independent cause of action which did not accrue at the date of plaintiff's injury. Nevertheless, the court concluded: [T]he statute only applies to injuries suffered on or after its effective date and thus only to the claims for contribution or indemnification based on those injuries   . Id. at 439, 293 N.W.2d at 521. The interpretation of the Wisconsin court cannot be extended to the instant fact situation, however, because the language of Minn.Stat. § 541.051 (1980) is significantly dissimilar to that used in Wis.Stat. § 893.155 (1980) in at least one important aspect. Unlike the Wisconsin statute, the time provisions of Minn.Stat. § 541.051 (1980) provide that nor, in any event shall such a cause of action accrue more than 15 years after substantial completion of the construction. Minn.Stat. § 541.051, subd. 1 (1980) (emphasis added). Because, as the Wisconsin court in Hunter also acknowledged, a cause of action for contribution or indemnity can accrue at a time different than that of the related injury, the plain wording of our statute prevents us from adopting the Hunter approach. Minn.Stat. § 541.051, subd. 2 (1980). The city complains that the imposition of Minn.Stat. § 541.051 (1980) to bar its claim for contribution or indemnification is unfair. This cry appears a bit hollow when we consider that the city had nearly 14 months to file its third-party complaint before the statute became effective, yet failed to do so. In fact, it took appellant 18 months finally to serve Hipp.