Associated Electric & Gas Insurance Services v. BendTec, Inc.
822 F.3d 420
8th Cir.2016Background
- PSCNH contracted Siemens to install a new turbine (installed spring 2008) as an upgrade to Unit 2 at Merrimack Station; Siemens subcontracted BendTec to fabricate and grit-blast internal turbine piping per Siemens' specifications.
- BendTec cleaned, visually inspected, capped, and shipped 21 large piping sections to the site on April 8, 2008 and had no further involvement.
- On initial startup May 22, 2008, steel grit was found throughout the turbine; PSCNH's experts attributed the foreign material to BendTec’s abrasive blasting.
- PSCNH and its insurers sued BendTec for negligence on May 21, 2014 (outside two years after the 2008 installation).
- The district court granted summary judgment for BendTec, finding the claim time-barred under Minn. Stat. § 541.051 (two-year limitations for claims arising from improvements to real property); plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the new turbine and BendTec’s piping are an "improvement to real property" under Minn. Stat. § 541.051 | The project was an upgrade but the claim arises from defective cleaning of supplied components, so the long statute should apply | The turbine and piping are permanent additions that increased plant value and are therefore improvements subject to the two-year limit | Court held the turbine and piping are improvements to real property, so § 541.051 applies |
| Whether BendTec qualifies for the § 541.051(1)(e) exception as a "manufacturer or supplier of any equipment or machinery" (which would invoke a six-year limit) | BendTec was a manufacturer/supplier of large piping subject to factory quality control and warranty, so the equipment/machinery exception applies | The piping was designed and installed by Siemens, integrally incorporated into the turbine, and functioned as ordinary materials for the improvement | Court held plaintiffs failed to meet their burden; piping is best characterized as ordinary building materials, not equipment/machinery, so the exception does not apply |
| Whether plaintiffs’ negligence claim is timely | The claim falls under the equipment/machinery exception (six-year period) and so is timely | The claim arises from an improvement and is governed by the two-year period, so it is untimely | Court affirmed summary judgment for BendTec because plaintiffs filed after the two-year limitations period |
Key Cases Cited
- Lietz v. N. States Power Co., 718 N.W.2d 865 (Minn. 2006) (defines "improvement to real property" using a common-sense, Webster's-based test)
- Siewert v. N. States Power Co., 793 N.W.2d 272 (Minn. 2011) (applies factors for determining improvements to real property)
- State Farm Fire & Cas. v. Aquila Inc., 718 N.W.2d 879 (Minn. 2006) (discusses scope of limitations exceptions and their narrow application)
- Integrity Floorcovering, Inc. v. Broan–NuTone, LLC, 521 F.3d 914 (8th Cir. 2008) (analyzes distinction between ordinary building materials and equipment/machinery for § 541.051 exceptions)
- Harder v. ACandS, Inc., 179 F.3d 609 (8th Cir. 1999) (concluded power-plant turbines are improvements to real property)