Opinion
Case No. C03-2628RSM.
November 30, 2004
MEMORANDUM ORDER GRANTING SUMMARY JUDGMENT
I. INTRODUCTION
This matter comes before the Court on defendant's Motion for Summary Judgment. (Dkt. #19). Defendant argues that plaintiff's claims should be dismissed because they are barred by Washington State's statute of repose. Plaintiff responds that defendant is a manufacturer for purposes of the statute, and therefore, defendant's motion should be denied. (Dkt. #25). For the reasons set forth below, the Court agrees with defendant and GRANTS its motion for summary judgment.
II. DISCUSSION.
A. Background
This action arises from the alleged failure of part of a sprinkler system, which resulted in significant water damage to plaintiff in excess of $240,000. Defendant, doing business at the time as Automatic Sprinkler Corporation of America, designed and installed the sprinkler system at issue during the original construction of the Newmark Building, located at 1415 Second Avenue in Seattle, Washington. In order to construct the sprinkler system, some of the pipes were required to be grooved in order for them to fit into grooved couplings. The pipe that allegedly failed was one such pipe.
Defendant explains that sprinkler systems are custom designed and built for a particular building. Some systems use grooved couplings, such as the system in the Newmark Building, and during installation, the contractor or a third-party fabricator must roll or cut grooves into the pipes to fit the couplings. Although defendant notes that, due to the passage of time and transfer of ownership of Automatic Sprinkler, it is unknown whether Automatic Sprinkler or a third-party fabricator rolled the groove necessary to install the pipe that allegedly failed, for purposes of its motion for summary judgment, defendant concedes that it rolled the groove into a pre-manufactured pipe during installation of the sprinkler system in the Newmark Building.
On July 6, 2002, during a water flow test conducted by Trinity Fire Protection personnel, a failure occurred at the top of a six-inch, Schedule 10, steel sprinkler pipe where it joined a 90degree elbow via mechanical coupling, resulting in a flood of water through the stairwell and into several tenant spaces. One such tenant space was a shoe store operated by plaintiff. Plaintiff alleges that the pipe failed because the rolled groove was improperly fabricated, and forces exerted on the pipe during the test caused the pipe to separate at the seal. Defendant has moved for summary judgment based on Washington State's construction statute of repose, and asks the Court to determine whether that statute now bars plaintiff's claims against it.
B. Summary Judgment Standard
Summary judgment is proper where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The Court must draw all reasonable inferences in favor of the non-moving party. See F.D.I.C. v. O'Melveny Meyers, 969 F.2d 744, 747 (9th Cir. 1992), rev'd on other grounds, 512 U.S. 79 (1994). The moving party has the burden of demonstrating the absence of a genuine issue of material fact for trial. See Anderson, 477 U.S. at 257. Mere disagreement, or the bald assertion that a genuine issue of material fact exists, no longer precludes the use of summary judgment. See California Architectural Bldg. Prods., Inc., v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987).
Genuine factual issues are those for which the evidence is such that "a reasonable jury could return a verdict for the non-moving party." Anderson, 477 U.S. at 248. Material facts are those which might affect the outcome of the suit under governing law. See id. In ruling on summary judgment, a court does not weigh evidence to determine the truth of the matter, but "only determine[s] whether there is a genuine issue for trial." Crane v. Conoco, Inc., 41 F.3d 547, 549 (9th Cir. 1994) (citing O'Melveny Meyers, 969 F.2d at 747).
E. Applicable Law
The instant case was filed in this Court based on diversity of the parties. Accordingly, the issues presented are governed by Washington State law. See Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496 (1941); Insurance Co. N. Am. v. Federal Express Corp., 189 F.3d 914, 919 (9th Cir. 1999) (explaining that in an ordinary diversity case, federal courts apply the substantive law of the forum in which the court is located). The parties agree that whether the Washington State statute of repose bars plaintiff's claims against defendant is a question of substantive state law appropriate for this Court to decide on summary judgment.
D. Premature Motion
As a threshold matter, the Court addresses plaintiff's assertion that defendant's motion for summary judgment is premature. Plaintiff states in conclusory fashion that defendant's motion should be denied because "it is premature." (Dkt. #25 at 1). However, plaintiff fails to present any argument in support of that statement, nor does plaintiff identify why it believes the motion is premature. Plaintiff presents some discussion related to it's concurrent filing of a motion to strike the motion for summary judgment, which this Court has already denied, but it is not clear whether or how that discussion relates to plaintiff's statement that the motion for summary judgment is premature. Accordingly, the Court will not consider that argument in reviewing the instant motion.
E. Washington State's Statute of Repose — RCW § 4.16.300, et seq.
A statute of repose "terminates a right of action after a specific time, even if the injury has not yet occurred." Rice v. Dow Chem. Co., 124 Wn.2d 205, 212 (1994). The Washington construction statute of repose bars certain causes of action not accruing within six years of substantial completion of construction. The statute, as recently amended in March of 2004, states:
RCW 4.16.300 through 4.16.320 shall apply to all claims or causes of action of any kind against any person, arising from such person having constructed, altered or repaired any improvement upon real property, or having performed or furnished any design, planning, surveying, architectural or construction or engineering services, or supervision or observation of construction, or administration of construction contracts for any construction, alteration or repair of any improvement upon real property. This section is specifically intended to benefit persons having performed work for which the persons must be registered or licensed under RCW 18.08.310, 18.27.020, 18.43.040, 18.96.020, or 19.28.041, and shall not apply to claims or causes of action against persons not required to be so registered or licensed.
. . .
All claims or causes of action as set forth in RCW 4.16.300 shall accrue, and the applicable statute of limitation shall begin to run only during the period within six years after substantial completion of construction, or during the period within six years after the termination of the services enumerated in RCW 4.16.300, whichever is later. The phrase "substantial completion of construction" shall mean the state of completion reached when an improvement upon real property may be used or occupied for its intended use. Any cause of action which has not accrued within six years after such substantial completion of construction, or within six years after such termination of services, whichever is later, shall be barred: PROVIDED, That this limitation shall not be asserted as a defense by any owner, tenant or other person in possession and control of the improvement at the time such cause of action accrues. The limitations prescribed in this section apply to all claims or causes of action as set forth in RCW 4.16.300 brought in the name or for the benefit of the state which are made or commenced after June 11, 1986.
RCW §§ 4.16.300 and .310 (amended March 2004) (emphasis added). Thus, the statute is intended to benefit architects, contractors, engineers and surveyors, landscape architects, or electricians. See RCW §§ 4.16.300, 18.08.310, 18.27.020, 18.43.040, 18. 96.020, and 19.28.041; see also House Bill Analysis, SSB 6600 (Dkt. #30, Ex. C).
Prior to the 2004 amendment, the statute read: "[t]his section is intended to benefit only those persons referenced herein and shall not apply to claims or causes of action against manufacturers." RCW § 4.16.300 (2003) (emphasis added). The term "manufacturer" was not defined in the statute.
Defendant initially argued that it was covered by the statute of repose because it was not a manufacturer. However, having since learned that the statute has been amended to omit the "manufacturer" language, defendant now argues that the Washington legislature has clarified that contractors, such as defendant, benefit from the statute of repose, and therefore, plaintiff's claims should be dismissed. ( See Dkt. #30 at 1-2). Plaintiff does not dispute that defendant is a contractor. Instead, plaintiff argues that defendant should be considered a "manufacturer," and should be excepted from the statute. For the reasons explained below, the Court disagrees with plaintiff, and finds that because the statute has been amended, there is no longer a "manufacturer" exception in which defendant could be categorized.
Defendant was licensed as a contractor in the State of Washington from March 18, 1986, through October 1, 1995. (Dkt. #30, Ex. E).
In Barstad v. Stewart Title, 145 Wn.2d 528 (2002), the Washington Supreme Court explained when a statutory amendment should be applied retroactively. The Court stated:
A statutory amendment will be applied retroactively, if constitutionally permissible under the circumstances, when it is (1) intended by the Legislature to apply retroactively, (2) curative in that it clarifies or technically corrects ambiguous statutory language, or (3) remedial in nature. The court may turn to the statute's purpose and language, legislative history, and legislative bill reports to analyze retroactivity. An amendment is curative and remedial if it clarifies or technically corrects an ambiguous statute without changing prior case law constructions of the statute. Thus "`[s]ubsequent enactments that only clarify an earlier statute can be applied retrospectively.'"Barstad, at 536-537 (citations omitted).; see also McGee Guest Home Inc. v. Dep't of Soc. Health Servs., 142 Wn.2d 316, 324-35 (2000) (holding that the amendments at issue were meant to be applied retroactively because they were curative in nature); In re Pers. Restraint of Matteson, 142 Wn.2d 298, 308 (2000) (holding that the amendments at issue were curative).
Defendant argues that like the amendments discussed in Barstad, McGee Guest House, and Matteson, the amendment to the statute of repose is meant to apply retroactively because it was meant to clarify the application of the statute. This Court agrees. As indicated by the legislative history, the amendment was intended to distinguish contractors from manufacturers:
The language excluding "manufacturers" from the statute's protection was added by a 1986 amendment. Before this 1986 amendment, the statute of repose was contrued as applying to parties "who work on structural aspects of a building, but not manufacturers of heavy equipment or nonintegral systems within the building." Condit v. Lewis Refrigeration Co.
After the 1986 amendments excluding "manufacturers," there have been several lawsuits in which plaintiffs have successfully argued that construction contractors are also "manufacturers" and, therefore, not protected by the statute of repose. For example, Washburn v. Beatt Equipment Co.
. . .
Summary of Bill:
Language in the statute of repose excluding "manufacturers" from the statute's protection is deleted. The coverage of the statute is intended specifically to cover persons licensed or registered as contractors, architects, engineers, land surveyors, landscape architects, and electricians.
(Dkt. #30, Ex. C) (SSB 6600 House Bill Report) (emphasis added).
Moreover, a retroactive application of the amendment would not change prior case law constructions of the statute. For example, in Washburn v. Beatt Equipment Co., 120 Wn.2d 246 (1992), the first and only case by the Washington Supreme Court to address the definition of "manufacturer" in the statute of repose, the court emphasized that it's holding was limited to the narrow issue "concerning whether defendant was a `manufacturer' within the proviso in RCW 4.16.300. More particularly, if there was a jury question whether defendant was a manufacturer. . . ." Washburn, 120 Wn.2d at 254. However, the Washington Supreme Court also noted that defendant itself had provided the definition of "manufacturer" in the proposed jury instruction which the trial court had adopted, and made clear that the court was not deciding whether defendant's proposed definition should be the definition always applied to the statute of repose. Id. at 257. Finally, the Supreme Court also clarified that it was not ascertaining the legislative intent in excepting manufacturers from the statute. Id. Thus, the 2004 amendment does not conflict with the narrow issues addressed in the Washburn decision, it merely clarifies who the statute is intended to benefit. As noted above, defendant was a licensed contractor, performing work as such, during the construction of the Newmark Building. Plaintiff presents no evidence to the contrary. Accordingly, the Court finds that the 2004 amendment does apply retroactively to work performed before the amendment became effective, and covers defendant's work on the sprinkler system in the Newmark Building.
Having determined that the statute is specifically meant to benefit contractors such as defendant, the Court turns to the remaining elements of the statute; specifically, whether the sprinkler system was an improvement upon real property, and whether plaintiff's claim accrued more than six years after the substantial completion of the Newmark Building. Defendant provided extensive argument and authority as to why its sprinkler system should be classified as an improvement upon real property. Plaintiff presented no argument in opposition. Defendant also noted that the date of the alleged pipe failure, July 6, 2002, is nearly ten years after the date of substantial completion of the Newmark Building. Again, plaintiff presented no argument in opposition. Thus, by failing to argue otherwise, plaintiff has conceded that those elements of the statute are satisfied.
Based on the analysis above, the Court finds that defendant is protected from plaintiff's claims under the statute of repose. The statute is clearly intended to benefit contractors such as defendant from claims arising from the construction of an improvement upon real property that did not accrue within six years of substantial completion of the project. Defendant has satisfied all of those elements, and summary judgment in its favor is appropriate.
III. CONCLUSION
Having reviewed defendant's motion for summary judgment (Dkt. #19), plaintiff's opposition (Dkt. #25), defendant's reply (Dkt. #29), and the remainder of the record, the Court hereby GRANTS defendant's motion for summary judgment. Plaintiff's claims against defendant are hereby DISMISSED, and this case is closed.
The Clerk shall forward a copy of this Memorandum Order to all counsel of record.