Opinion ID: 2130539
Heading Depth: 1
Heading Rank: 1

Heading: Applicability and Validity of Minn.St. 541.051.

Text: Minn.St. 541.051 provides, in pertinent part: Subdivision 1. Except where fraud is involved, no action 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 such injury, shall be brought against any person performing or furnishing the design, planning, supervision, or observation of construction or construction of such improvement to real property more than two years after discovery thereof, nor, in any event more than ten years after the completion of such construction. This limitation shall not be applied in favor of any person in actual possession and control as owner, tenant, or otherwise, of the improvement at the time the defective and unsafe conditions of such improvement constitutes the proximate cause of the injury for which it is proposed to bring an action. Subd. 2. Notwithstanding the provisions of subdivision 1, in the case of such an injury to property or the person, or such an injury causing wrongful death, which injury occurred during the tenth year after the completion of such construction, an action to recover damages for such an injury or wrongful death may be brought within one year after the date on which such injury occurred, irrespective of the date of death, but in no event may such an action be brought more than 11 years after the completion of such construction. The trial court found that the installation by Yale was not an improvement to real property, and thus the limitation of Minn.St. 541.051 did not apply. The court indicated its feelings, however, that if the statute did apply, it was  not unconstitutional. We address first the issue of the statute's applicability. The furnace in question sat upon a cube-shaped, 5-foot high sheetmetal housing which contained the cooling system for the building. That cabinet was designed and fabricated by Yale (as was the entire heating and cooling system). The furnace itself was a metal cabinet somewhat smaller than the cooling system, with duct work attached, and with a blower motor affixed to the outside. The furnace was connected to numerous electric cables, oil pipes, and ducts. The trial court was of the opinion that the furnace actually [differed] little from an ordinary space heater except for attached duct work, and was not an improvement to real property. The court applied the law of fixtures to conclude that the furnace was not an improvement, since it could be easily removed and thus was not a part of the real property. A review of the cases of other jurisdictions which have considered similar statutes (see discussion, infra ) reveals that in only four of those cases was there an issue as to whether the construction was an improvement to realty. [2] In only one of those cases did the court base its determination on a fixture law analysis. [3] While we have in the past stated that a rule of strict construction is appropriate in interpreting this statute, Kittson County v. Wells, Denbrook & Assoc. Inc., Minn., 241 N.W.2d 799 (1976), we must still strive to give effect to the plain meaning of the words of the statute without resort to technical legal constructions of its terms. This same position has been adopted by our sister state Wisconsin. When faced with the task of interpreting the phrase improvement to real property in a statute substantially similar to Minn.St. 541.051, the Wisconsin Supreme Court avoided the vagaries of fixture law and sought to determine the statute's meaning on the basis of the common usage of language, Kallas Millwork Corp. v. Square D Co., 66 Wis.2d 382, 386, 225 N.W.2d 454, 456 (1975). Recently, faced with the task of deciding the meaning of improvement to realty as used in Minn.St. 514.01 (relating to mechanics liens) in Kloster-Madsen, Inc. v. Tafi's, Inc. 303 Minn. 59, 226 N.W.2d 603 (1975), we adopted a common-sense interpretation as given in Webster's Third New International Dictionary (1971) p. 1138 and found that by definition an improvement is a permanent addition to or betterment of real property that enhances its capital value and that involves the expenditure of labor or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs. 303 Minn. 63, 226 N.W.2d 607. The same common-sense interpretation should be made of the phrase improvement to real property as it is used in the instant statute. Applying that definition to the facts of this case, we hold that the installation of the furnace by Yale constituted, as a matter of law, the construction of an improvement to real property. Having determined that the statute applies to Yale's conduct, we are faced squarely with the question of the constitutional validity of the statute. Statutes similar to Minn.St. 541.051 have been enacted by numerous states. See, Comment, 18 Catholic U.L.Rev. 361. Traditionally courts viewed the potential liability of building and construction contractors to third parties as ending when their work was completed and accepted by the owner. Among the various justifications advanced for such a rule were lack of privity between the contractors and the third parties, foreseeability, and public policy. See, generally, Annotation, 58 A.L.R.2d 865. Such a rule of nonliability was severely criticized and has slowly been abrogated. See, Prosser, Torts (4 ed.) §§ 93, 104. Minnesota expressly adopted a rule of liability to third parties on the part of building contractors in Murphy v. Barlow Realty Co., 206 Minn. 527, 289 N.W. 563 (1939). This rule, coupled with holdings in some cases that the statute of limitations does not begin to run until the wrong giving rise to that action is discovered, resulted in greatly increased exposure of architects, engineers, and contractors over an extended period of time. The legislative response in numerous states was the enactment of statutes similar to Minn.St. 541.051, which in effect nullify any cause of action which is not asserted within the statutory time limit. Kittson County v. Wells, Denbrook & Assoc. Inc., Minn., 241 N.W.2d 799 (1976). In this appeal, plaintiffs attack the constitutionality of the statute, asserting variously that it constitutes a denial of equal protection, is special legislation, and is a denial of due process of law. Fifteen courts have ruled on the constitutionality of statutes similar to Minn.St. 541.051. In ten cases the statutes have been upheld. Arkansas, Carter v. Hartenstein, 248 Ark. 1172, 455 S.W.2d 918 (1970), appeal dismissed, 401 U.S. 901, 91 S.Ct. 868, 27 L.Ed.2d 800 (1971); California, Regents of the U. of Calif. v. Hartford Acc. & Indem. Co., 59 Cal.App.3d 675, 131 Cal.Rptr. 112 (1976), hearing granted by California Supreme Court; New Jersey, Rosenberg v. Town of North Bergen, 61 N.J. 190, 293 A.2d 662 (1972); Oregon, Josephs v. Burns, 260 Ore. 493, 491 P.2d 203 (1971); Pennsylvania, Freezer Storage, Inc. v. Armstrong Cork Co., 234 Pa.Super. 441, 341 A.2d 184 (1975); Tennessee, Agus v. Future Chattanooga Development Corp., 358 F.Supp. 246 (E.D.Tenn.1973), cited with approval, Watts v. Putnam Co., 525 S.W.2d 488 (Tenn.1975); Utah, Good v. Christensen, Utah, 527 P.2d 223 (1974); Virginia, Smith v. Allen-Bradley Co., 371 F.Supp. 698 (W.D.Va.1974); Washington, Yakima Fruit & Cold Storage Co. v. Central Heating & Plumbing Co., 81 Wash.2d 528, 503 P.2d 108 (1972). (In three other states similar statutes have been interpreted without any discussion by the courts of constitutionality: Louisiana, Carr v. Mississippi Valley Elec. Co., 285 So.2d 301 [La.App.1973]; Nevada, Nevada Lakeshore Co. Inc. v. Diamond Electric, Inc., 89 Nev. 293, 511 P.2d 113 [1973]; New Hampshire, Deschamps v. Camp Dresser & McKee, Inc., 113 N.H. 344, 306 A.2d 771 [1973]). In five states similar statutes have been found to be unconstitutional: Alabama, Bagby Elev. & Elec. Co. Inc. v. McBride, 292 Ala. 191, 291 So.2d 306 (1974); Hawaii, Fujioka v. Kam, 55 Haw. 7, 514 P.2d 568 (1973); Illinois, Skinner v. Anderson, 38 Ill.2d 455, 231 N.E.2d 588 (1967); Kentucky, Saylor v. Hall, 497 S.W.2d 218 (Ky.1973); Wisconsin, Kallas Millwork Corp. v. Square D Co., 66 Wis.2d 382, 225 N.W.2d 454 (1975). We have reviewed these cases carefully and are convinced that the better reasoned position is embodied in the decisions which hold such statutes to be unconstitutional because they grant an immunity from suit to a certain class of defendants, without there being a reasonable basis for that classification. We find the discussions in Skinner v. Anderson, supra, Fujioka v. Kam, supra, and Kallas Millwork Corp. v. Square D Co., supra , particularly thorough on this point and do not feel compelled to elaborate further, except to state that we too can see no basis for including within the protection of the statute persons who construct or design improvements to real estate, and excluding other persons against whom third parties might bring claims should they incur injury, such as owners and material suppliers. Legislative classifications must apply uniformly to all persons who are similarly situated, and the distinctions which separate those who are included within a classification from those who are not must be natural and reasonable, not fanciful and arbitrary. Schwartz v. Talmo, 295 Minn. 356, 205 N.W.2d 318, appeal dismissed, 414 U.S. 803, 94 S.Ct. 130, 38 L.Ed.2d 39 (1973); 3B Dunnell, Dig. (3 ed.) § 1700. It appears that the statute contravenes this prohibition in that it grants a special immunity to persons within its terms, without a rational basis for regarding those persons as a distinct and separate class.