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Weston v. McWilliams & Associates

June 29, 2006

WILLIAM B. WESTON, ET AL., PLAINTIFFS,
v.
MCWILLIAMS & ASSOCIATES, INC., D/B/A TOP VALUE HOMES, RESPONDENT,
v.
TAPPE CONSTRUCTION, APPELLANT, PANELCRAFT OF MINNESOTA, INC., ET AL., APPELLANTS, WINDSOR WINDOW COMPANY, APPELLANT.



SYLLABUS BY THE COURT

1. Minnesota Statutes § 541.051, subd. 1(a) (2002), which prevents the accrual of a cause of action arising out of the defective or unsafe condition of an improvement to real property after 10 years from the completion of construction, bars a contribution and indemnity action by a general contractor against a subcontractor or material supplier that did not accrue and was not brought within the 10-year period.

2. The application of the statute of repose to claims for contribution or indemnity that did not accrue prior to the expiration of the repose period does not violate the Due Process or Remedies Clauses of the Minnesota Constitution.

The opinion of the court was delivered by: Hanson, Justice.

Concurring, Meyer, Page, and Anderson, Paul H., JJ.

Reversed and remanded for reinstatement of the district court's summary judgment orders.

Heard, considered, and decided by the court en banc.

OPINION

This appeal requires us to determine the proper application of the statute of repose to contribution and indemnity claims by a general contractor against subcontractors or material suppliers arising out of an improvement to real property. The statute of repose applicable here is the 2002 version of section 541.051, which provides in part as follows:

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 of the injury or, in the case of an action for contribution or indemnity, accrual of the cause of action, nor, in any event shall such a cause of action accrue more than ten 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 the owner's representative can occupy or use the improvement for the intended purpose.

Minn. Stat. § 541.051, subd. 1(a) (2002).

Respondent McWilliams & Associates, Inc., d/b/a Top Value Homes, a general contractor (hereinafter "Top Value"), was sued in May 2003 for damages when a home it completed in July 1993 developed water-intrusion and mold problems. In March 2004, Top Value brought contribution and indemnity claims against subcontractors and a supplier who had contributed to the construction of the home. The Dakota County District Court held that Top Value's contribution and indemnity claims were extinguished by the statute of repose and granted summary judgment to the subcontractors and supplier. The court of appeals reversed, holding that claims for contribution and indemnity that have not otherwise accrued within 10 years of completion of construction will be deemed to have accrued in the tenth year, thus triggering the extension feature of subdivision 2 of section 541.051 that provides as follows:

Notwithstanding the provisions of subdivision 1, in the case of an action which accrues during the ninth or tenth 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 12 years after substantial completion of the construction.

Weston v. McWilliams & Assocs., 694 N.W.2d 558, 562-64 (Minn. App. 2005). We reverse the court of appeals and reinstate the district court's summary judgment.

The parties do not dispute the underlying facts. William Weston contracted with Top Value to build a home in Eagan. Tappe Construction was the framing, carpentry, and window-installation subcontractor; Panelcraft installed the siding; and Windsor Window Company manufactured the windows. Construction was substantially completed on July 20, 1993, when a certificate of occupancy was issued.

Weston submitted evidence of inspections and testing on the home in the spring and summer of 2002, which revealed water-intrusion problems that had caused the growth of mold in the walls and allegedly consequent health problems for Weston and his family. The testing submitted by Weston indicated that the water problems were the result of construction-related defects.

In May 2003, Weston and his family brought suit against Top Value for damages arising out of the allegedly defective and unsafe condition of the home. This was approximately two months before the end of the 10-year statutory repose period for such claims, which reads: "[N]or, in any event shall such a cause of action accrue more than ten years after substantial completion of the construction." Minn. Stat. §541.051, subd. 1(a). The words "such a cause of action" include Weston's claim because they refer back, in part, to an "action by any person * * * to recover damages for any injury to property * * * or for bodily injury * * * arising out of the defective and unsafe condition of an improvement to real property * * *." Id.

Top Value answered Weston's complaint on January 30, 2004, alleging that its subcontractors and material supplier caused any damages suffered by Weston. In March and April 2004, Top Value served Tappe, Panelcraft, and Windsor (hereinafter referred to collectively as "Tappe") with third-party complaints, seeking contribution and indemnity. Tappe moved for summary judgment on the grounds that Top Value's contribution and indemnity action was extinguished because it was not brought within the 10-year repose period.

The district court granted the motions and dismissed Top Value's claims, noting that:

A statute of repose operates to preclude the existence of an available remedy. * * * Despite the fact that Top Value's cause of action had not yet accrued, its claims for indemnity and contribution were extinguished on July 20, 2003.

The court of appeals reversed, determining that when a contribution or indemnity claim actually accrues within two years after the 10-year statutory repose period, the claim should be deemed as a matter of law to have accrued at the end of the tenth year following completion of construction (i.e., the last day of the repose period). Weston, 694 N.W.2d at 562, 564. The court held that Top Value's contribution and indemnity claims could be timely brought in the eleventh or twelfth year after completion of construction. Id. We granted Tappe's petition for further review.

I.

When the district court grants summary judgment based on the application of a statute to undisputed facts, the result is a legal conclusion that we review de novo. Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn. 1998). The interpretation of a statute is a question of law that this court also reviews de novo. Olmanson v. LeSueur County, 693 N.W.2d 876, 879 (Minn. 2005). Our first task is to determine whether the statute needs interpreting--that is, whether the language of the statute is ambiguous. Molloy v. Meier, 679 N.W.2d 711, 723 (Minn. 2004).

The court of appeals did not state that the repose provision of section 541.051 was ambiguous, but did say that the provision "begs for clarity." Weston, 694 N.W.2d at 562. The court observed that section 541.051 deviates from the standard statute of repose by using accrual to mark the end point of the repose period instead of requiring that an action be brought within a certain number of years. Weston, 694 N.W.2d 561-62. The court concluded that this feature presented the possibility of conflicting inferences: either that "no suit can ever be brought if the claim accrues in fact in year eleven or twelve," or that the "ripening of the cause of action is deemed by law to occur at the end of the tenth year, and that no action on the claim can be brought after the end of year twelve." Id. at 562. The court determined that the second inference is compelling and must be declared as a matter of law. Id.

We conclude that the court of appeals read too much into the word "accrue" because the plain language of the statute is not ambiguous. See Owens v. Water Gremlin Co., 605 N.W.2d 733, 736 (Minn. 2000) ("[I]f the words of the statute are 'clear and free from all ambiguity,' further construction is neither necessary nor permitted" (quoting Minn. Stat. § 645.12 (2004))). We have specifically noted with regard to section 541.051 that "we must * * * strive to give effect to the plain meaning of the words of the statute without resort to technical legal constructions of its terms." Pacific Indem. Co. v. Thompson-Yaeger, Inc., 260 N.W.2d 548, 554 (Minn. 1977).

In effect, the court of appeals' interpretation would convert the negative statement of the statute--that "a cause of action [shall not] accrue more than ten years after substantial completion of the construction"--into a positive statement--that a cause of action for contribution or indemnity shall accrue no later than ten years after completion of ...


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