Lead Opinion
[¶ 1.] Sioux Equipment installed a fuel storage and dispensing system on real property owned by Clark County (County). County and the State of South Dakota Petroleum Release Compensation Fund (PRCF) sued Sioux Equipment when the system leaked and released diesel fuel into the environment. Sioux Equipment moved for summary judgment on the ground that a ten-year statute of repose barred County’s and PRCF’s claims. The circuit court granted Sioux Equipment’s motion, concluding that Sioux Equipment’s work was “an improvement” to real property within the meaning of the statute of repose. The circuit court also concluded that the federal Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) preempted state statutes of limitations, but not the statute of repose. We affirm.
I
[¶ 2.] Sioux Equipment is in the business of installing petroleum storage and distribution equipment, including above-ground fuel storage tanks. County is a political subdivision of the State of South Dakota. County owns real property used as a highway shop. PRCF is a state agency that reimburses petroleum tank owners for certain costs of remediating the release of petroleum and petroleum-containing products into the environment.
[¶ 3.] In November 1991, County contracted with Sioux Equipment to install the fuel storage and dispensing system, which included three 10,000 gallon above-ground fuel tanks, piping, and related equipment for the County’s highway department. The scope of the work was described in Sioux Equipment’s permit application, which was submitted to the South Dakota Department of Environment and Natural Resources (DENR). The application described the work as follows:
SCOPE OF WORK
Existing Tanks and pump to be Removed and Disposed of under Separate Contract. ... Tanks shall consistent of 3 — 10,000 gal 11' X 15' New Single Wall Steel Aboveground tanks, 2 tanks shall store Class #2, Diesel Fuel, the other shall store Class # 1, Gasoline_Esti-mated cost of this project (Excluding Excavation) is $15,000.
(Emphasis in original). When Sioux Equipment arrived to begin its work, the site had already been excavated. There is no dispute that Sioux Equipment did not perform the excavation, and that a preexisting fuel system was removed before Sioux Equipment arrived.
[¶ 4.] Sioux Equipment’s installation was substantially completed by January 7, 1992, with Sioux Equipment’s submission of a Certificate of Compliance to DENR. Sioux Equipment did no further work at
[¶ 5.] In February of 2006, County and PRCF sued Sioux Equipment for negligence, breach of implied and express warranties, and breach of implied warranty of fitness for a particular purpose. County sought $139,985.34 in damages and prejudgment interest. PRCF sought $182,113.64 in damages for remediation costs, attorney fees and prejudgment interest.
[¶ 6.] Sioux Equipment moved for summary judgment, asserting the affirmative defense that a ten-year statute of repose had expired.
[¶ 7.] The circuit court concluded that Sioux Equipment’s work was an improvement to property, and therefore, the claim was barred by the statute of repose. Following the most recent authority from federal court interpretations of CERCLA, the circuit court also concluded that CERCLA preempted state statutes of limitations, but not statutes of repose. County and PRCF appeal both conclusions.
II
[¶ 8.] “In reviewing a grant or denial of summary judgment ... we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and [established] entitlement to judgment on the merits as a matter of law.” Behrens v. Wedmore,
III
[¶ 9.] SDCL 15-2A-3 is the applicable statute of repose. It provides a ten-year
No action to recover damages for any injury to real ... property ... arising out of any ... construction, of an improvement to real property ... may be brought against any person performing or furnishing the design, planning, supervision, inspection, and observation of construction, or construction, of such an improvement more than ten years after substantial completion of such construction. The date of substantial completion shall be determined by the date when construction is sufficiently completed!.]
SDCL 15-2A-3.
[¶ 10.] County and PRCF argue that Sioux Equipment’s installation was a mere replacement of the prior underground storage tanks, and therefore, it could not have been an improvement to real property within the meaning of the statute. This argument requires us to first determine the meaning of “an improvement” to real property, a question of law we review de novo. We must then apply that definition to determine whether Sioux Equipment’s work involved an improvement to real property. This second determination is a mixed question of law and fact because the historical facts are established, the rule of law will be established by the court, and the dispositive issue is “whether ... the rule of law as applied to the established facts is or is not [favorably satisfied].” In re Dorsey and Whitney Trust Co., LLC,
[¶ 11.] Although this Court has not defined an “improvement to real property” in the context of SDCL 15-2A-3, most courts considering the issue have adopted what has been described as a “common sense approach.” In Jamagin v. Fisher Controls Int’l, Inc.,
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.
Id. at 36.
[¶ 12.] In State Farm Fire and Cas. v. Aguila Inc., the Minnesota Supreme Court adopted the same definition, concluding that an underground natural gas pipeline system constituted an improvement to real property.
[¶ 13.] In this case, the circuit court cited some but not all of these factors, ultimately concluding that under the undisputed facts, Sioux Equipment’s work was an improvement within the meaning of SDCL 15-2A-3. The circuit court reasoned:
In this case the [County] contracted with [Sioux Equipment] to undertake a substantial project for $15,000. There is no evidence presented that the work performed by [Sioux Equipment] in any way was in the capacity of replacing an existing unit. It is also clear that the system amounted to an improvement of [County]’s existing property. Therefore, it is apparent that in the present case the work completed by [Sioux Equipment] constituted an improvement to [County’s] property as contemplated by SDCL 15-2A-3.
[¶ 14.] We essentially agree. When Sioux Equipment arrived at the site, no fuel dispensing system existed. According to the scope of the work document, whatever system had been previously on site had been removed under a separate contract. The addition of the Sioux Equipment fuel system, for which County paid $15,000, clearly enhanced the use of the property. County and PRCF concede that the addition involved the expenditure of money and labor. Finally, the fuel system added value to County’s property, as a county highway shop with a fuel dispensing system is worth more than one without such a system. See Delgadillo,
[¶ 15.] County and PRCF, however, argue that Sioux Equipment’s installation was a mere replacement of the prior system. To the extent County and PRCF argue this as a matter of law, their argument is misplaced. Courts have rejected the suggestion that a replacement of analogous infrastructure cannot qualify as an improvement. Delgadillo involved the
[¶ 16.] County and PRCF argue, however, that a material issue of disputed fact exists whether this work was an ordinary repair or replacement. They specifically argue that the circuit court erred in granting summary judgment on the ground that County and PRCF presented no evidence that the work performed by Sioux Equipment was more than an ordinary repair or replacement. They contend that: “Sioux Equipment retained] the burden to establish that no genuine issue of material fact exists” on this issue. We disagree.
[¶ 17.] Although defendants bear the initial burden of showing entitlement to affirmative defenses in summary judgment proceedings, the burden of identifying facts in avoidance of the statute of repose shifted to County and PRCF in this case. A statute of repose is an affirmative defense, and the burden of proof to establish an affirmative defense is on the party who seeks to rely on it. Clancy v. Callan,
[¶ 18.] In this case, Sioux Equipment met its initial burden of presumptively showing that the action was brought beyond the statutory period. In support of its motion for summary judgment, Sioux Equipment submitted Dale Peltier’s affidavit. Peltier was an employee of Sioux Equipment who relied on the “Scope of Work” document and established that more than ten years had expired since substantial completion of work. His affidavit farther established that any equipment that existed on the site prior to Sioux Equipment’s work was removed by a third party before Sioux Equipment arrived. Peltier finally stated that Sioux Equipment’s work “was not maintenance or a mere replacement of something that already existed. Our work was to install a completely new fuel storage and dispensing facility.” This was sufficient to presumptively show entitlement to the statute of repose as a defense.
[¶ 19.] Because Sioux Equipment made its presumptive showing that the suit was not timely and that its work was not a mere ordinary repair or replacement, the burden shifted to County and PRCF to set forth specific facts refuting or disputing Sioux Equipment’s showing. In response, however, County and PRCF only submitted Peltier’s “Scope of Work” document that provided existing tanks were to be removed under a separate contract. County and PRCF did not introduce any facts suggesting that Sioux Equipment’s work, even though it involved installation of a new fuel storage and delivery system, was a mere ordinary repair or replacement that did not also constitute an improvement to the real property. Instead, County and PRCF only argued that point. County and PRCF’s argument was insufficient to prevent summary judgment.
[¶ 20.] County’s and PRCF’s argument was insufficient because SDCL 15 — 6—56(e) requires a response setting forth specific facts. “When a motion for summary judgment is made and supported as provided in 15-6-56, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in 15-6-56, must set forth specific facts showing that there is a genuine issue for trial.” SDCL 15-5-56(e) (emphasis added). In Bordeaux, this Court stressed:
We require “those resisting summary judgment [to] show that they will be able to place sufficient evidence in the record at trial to support findings on all the elements on which they have the burden of proof.” In fact, “SDCL 15-6-56(e) requires the opposing party to be diligent in resisting a motion for summary judgment, and mere general allegations and denials which do not set forth specific facts will not prevent the issuance of a judgment.”
IV
[¶21.] In the alternative, County and PRCF argue that CERCLA preempts the statute of repose and imposes a discovery statute of limitations under which they may bring a cause of action. See 42 U.S.C. § 9658. Commonly known as “Su-perfand,” CERCLA was enacted by Congress in 1980. CERCLA imposes liability on persons responsible for the release of
[¶ 22.] Applying CERCLA to the present case, County and PRCF argue that the date the statute of limitations began to run was when the fuel leak was discovered on County’s property, February 20, 2003. The circuit court disagreed, relying on the latest federal court decisions holding that the plain language of CERCLA only applies to statutes of limitations, and because a statute of repose is substantively different than a statute of limitations, CERCLA does not apply to statutes of repose.
[¶ 23.] The highest federal court to consider this issue is the Fifth Circuit Court of Appeals. See Burlington N. & Sanie Fe Ry. Co. v. Poole Chemical Co., Inc.,
[¶ 24.] The Fifth Circuit concluded that CERCLA preempts statutes of limitations, but not statutes of repose. In doing so, it pointed out the substantive difference between a statute of limitations and a statute of repose:
A statute of limitations extinguishes the right to prosecute an accrued cause of action after a period of time. It cuts off the remedy.... A statute of repose limits the time during which a cause of action can arise and usually runs from an act of a defendant. It abolishes the cause of action after the passage of time even though the cause of action may not have yet accrued.
Id. at 363.
[T]he reach of the plain language of § 9658 does not extend to statutes of repose like [the Texas statute]. Literally, § 9658 states that it only preempts state law when the applicable state statute of limitations “provides a commencement date which is earlier than the [federally required commencement date] — [there is] no mention of peremptory statutes or statutes of repose.” The provision defines “commencement date” as the “date specified in a statute of limitations as the beginning of the applicable limitations period.” [The Texas statute of repose,] however, is not a statute of limitations; it is a statute of repose, and the differences between statutes of limitations and statutes of repose are substantive, not merely semantic.
Id. at 362.
[¶ 25.] All recent federal district courts agree. See German v. CSX Transp. Inc.,
[¶ 26.] County and PRCF argue that notwithstanding this authority, two other courts have determined that CERCLA preempts state statutes of repose. Those federal district court and state court of appeals cases were, however, decided in 1994, well before the Fifth Circuit Court of Appeals and all subsequent federal district courts held otherwise. The later decisions have recognized that the earlier decisions like Buggsi v. Chevron U.S.A. Inc.,
[¶ 27.] County and PRCF argue that notwithstanding the federal authority on this subject, the legislative history of CERCLA requires a different result. This argument was considered in Burlington. Burlington acknowledged the apparent legislative intent behind CERCLA, but nevertheless concluded that plain language controlled over purported legislative intent. After first acknowledging Congress’s apparent intent to extend statutes of limitations for long-latent diseases caused by the release of hazardous substances, the Fifth Circuit nevertheless concluded that the plain language of the statute prevailed:
CERCLA’s legislative history indicates Congress intended for § 9658 to preempt a state statute of limitations that deprives a plaintiff who suffers a long-latency disease caused by the release of a hazardous substance of his cause of action, but not to preempt a state statute of repose like [the Texas statute],
Burlington,
Typically, a statute of limitations for an action sounding in tort starts to run on the date of the plaintiffs legal injury. When an injury is inherently undiseoverable, however, states often use the discovery rule to toll the running of the limitations period until the plaintiff “discovers, or in exercising reasonable diligence should have discovered, facts that indicate he has been injured.” In contrast, awareness of injury is not a factor in determining when the time period of a statute of repose starts to run. Unlike a statute of limitations, “a statute of repose creates a substantive right to be free from liability after a legislatively determined period.” In other words, a statute of repose establishes a “right not to be sued,” rather than a “right to sue.” Thus, with the expiration of the period of repose, the putative cause of action evanesces; life cannot thereafter be breathed back into it. In Texas, such statutes “represent a response by the [Texas] legislature to the inadequacy of traditional statutes of limitations and are specifically designed to protect [manufacturers] ... from protracted and extended vulnerability to lawsuits.”
Id. at 363-64.
[¶ 28.] In addition to this substantive distinction, deferring to plain language over purported legislative purpose and intent is a predominant theme in statutory interpretation in federal and state courts. Burlington noted:
In cases involving statutory construction, a court begins with the plain language of the statute. A court assumes that the legislative purpose of a statute is “ ‘expressed by the ordinary meaning of the words used.’ ” A court considers the language used in a statute as conclusive unless Congress has clearly expressed a contrary intent.... Here, the reach of the plain language of § 9658 does not extend to statutes of repose[.]
Id. at 362 (citations omitted). We follow similar rules of statutory construction:
*417 [W]e adhere to two primary rules of statutory construction. The first rule is that the language expressed in the statute is the paramount consideration. The second rule is that if the words and phrases in the statute have plain meaning and effect, we should simply declare their meaning and not resort to statutory construction.
Goetz v. State,
[¶29.] For the foregoing reasons, we affirm the circuit court’s conclusion that Sioux Equipment’s work was an improvement to real property and County’s and PRCF’s claims were barred by the statute of repose.
[¶ 30.] Affirmed.
Notes
. There was an occasion when the Clark Highway Department called Sioux Equipment to the site in May of 1997, complaining that a dispensing pump was not running properly. Sioux Equipment inspected the pump and determined that the storage tank was low of fuel and the pump would run properly when the tank was filled. This visit is not relevant in this litigation.
. Sioux Equipment also brought third-party claims against manufacturers Eaton Corporation and Snap-Tite for breach of warranty, product liability, and indemnity. Both third-party defendants cross-claimed each other.
. In such cases involving mixed questions of law and fact:
Where the analysis turns on the fact finder’s " ‘experience with the mainsprings of human conduct,' ” it is essentially a factual question to which we apply the clearly erroneous standard. If, however, "the question requires us to consider legal concepts in the mix of fact and law and to exercise judgment about the values that animate legal principles ..we apply the de novo standard.
In re Dorsey,
. In Van Den Hul v. Baltic Farmers Elev. Co.,
. CERCLA provides, in pertinent part:
(a)(1) In the case of any action brought under State law for ... property damages, which are caused or contributed to by exposure to any hazardous substance, or pollutant or contaminant, released into the environment from a facility, if the applicable limitations period for such action (as specified in the State statute of limitations or under common law) provides a commencement date which is earlier than the federally required commencement date, such period shall commence at the federally required commencement date in lieu of the date specified in such State statute.
(b)(4)(A) [T]he term "federally required commencement date” means the date the plaintiff knew (or reasonably should have known) that the personal injury or property damages referred to in subsection (a)(1) of this section were caused or contributed to by the hazardous substance or pollutant or contaminant concerned.
42 U.S.C. 9658(a)(1) and (b)(4)(A).
. This Court also recognizes this substantive difference. Because a statute of repose begins to run from a date that is unrelated to the date of an injury:
[The statute of repose] is not designed to allow a reasonable time for the filing of an action once it arises. Therefore, a statute of repose may bar the filing of a lawsuit even though the cause of action did not*415 even arise until after it was barred and even though the injured person was diligent in seeking a judicial remedy.
Peterson, ex rel. Peterson v. Burns,
Dissenting Opinion
(dissenting on Issue 2).
[¶ 33.] I respectfully dissent on Issue 2 as CERCLA preempts SDCL 15-2A-3, the statute of repose. Generally, remedial statutes are construed liberally in favor of a remedy or in favor of those entitled to the benefit of the statute. See Socony-Vacuum Oil Co. v. Smith,
[¶ 34.] CERCLA was enacted to “impose[ ] liability on persons responsible for the release of hazardous waste.... ” Supra ¶ 21. Moreover, CERCLA preempts “the applicable limitations period for such action (as specified in the State statute of limitations or under common law)” and replaces the limitation period with a “federally required commencement date.” 42 U.S.C. § 9658(a)(1). In this case, the statute of repose is a limitation on the action and should be replaced with the federal commencement date. If Congress amended CERCLA because “certain State statutes deprive plaintiffs of their day in court,” see HR Conf Rep No 99-962 at 261, reprinted in 1986 U.S.C.C.A.N. 3276, 3354, then a statute of repose should be interpreted to be “the applicable limitations period for
[¶ 35.] The majority opinion’s strict interpretation of CERCLA thwarts Congressional intent. We should use common sense and hold that CERCLA preempts the statute of repose. Because the majority opinion reaches a decision contrary to the purpose of CERCLA, I dissent.