Great N. Ins. Co. v. Honeywell Int'l, Inc.
911 N.W.2d 510
Minn.2018Background
- Homeowners had Honeywell-branded Nutech HR200 ventilators installed during original construction in 1996; the ventilators contained a motor manufactured by McMillan.
- Sixteen years later (2012) one ventilator caught fire, causing substantial property damage; insurer Great Northern paid the claim and sued McMillan (and others) in subrogation asserting product-liability, negligence, and breach-of-warranty claims, including a post-sale duty-to-warn claim.
- McMillan moved for summary judgment invoking Minn. Stat. § 541.051(1)(a) — a 10-year statute of repose for improvements to real property — arguing the claims were time-barred; Great Northern argued the exception for "equipment or machinery installed upon real property" § 541.051(1)(e) applied.
- The district court granted summary judgment for McMillan (except it denied repose for the post-sale warning claim but dismissed that claim on the merits); the court of appeals reversed and remanded on all claims.
- The Minnesota Supreme Court considered (1) whether the ventilator (including McMillan’s motor) is "equipment or machinery" exempting claims from the 10-year repose, and (2) whether McMillan had a post-sale duty to warn after discovering reports of fires.
Issues
| Issue | Plaintiff's Argument (Great Northern) | Defendant's Argument (McMillan) | Held |
|---|---|---|---|
| Whether the heat-recovery ventilator is "equipment or machinery installed upon real property" under § 541.051(1)(e), thus avoiding the 10-year repose | Ventilator is machinery/equipment and thus falls within the subdivision 1(e) exception, so statutory repose does not bar claims | Exception is overly broad; would swallow the statute by exempting many building components — ordinary building materials incorporated into a structure should remain subject to repose | Held: ventilator is "machinery" under the plain meaning of the statute; subdivision 1(e) applies -> claims not barred by 10-year repose (affirmed in part, remanded) |
| Whether McMillan (motor manufacturer) had a post-sale duty to warn consumers of the motor/ventilator fire risk after sale | Manufacturer had knowledge of fire incidents and thus should have warned end users despite selling only to Nutech | McMillan lacked the ability to identify or contact end users (sold only to Nutech) and therefore owed no post-sale duty to warn | Held: adopting Restatement (Third) §10 conjunctive test, McMillan did not have a post-sale duty to warn as it could not identify or effectively warn end users (reversed as to the warning claim) |
Key Cases Cited
- Pacific Indem. Co. v. Thompson-Yaeger, 260 N.W.2d 548 (Minn. 1977) (defines "improvement to real property" and interprets scope of repose)
- Hodder v. Goodyear Tire & Rubber Co., 426 N.W.2d 826 (Minn. 1988) (recognized limited post-sale duty to warn in special cases)
- Foss v. Kincade, 766 N.W.2d 317 (Minn. 2009) (legal duty is a question of law reviewed de novo)
- Ramstad v. Lear Siegler Diversified Holdings Corp., 836 F. Supp. 1511 (D. Minn. 1993) (federal dist. court distilled multi-factor test from Hodder for post-sale duty issues)
- Sartori v. Harnischfeger Corp., 432 N.W.2d 448 (Minn. 1988) (explains legislative purpose of repose: protect builders and suppliers after completion)