George McIntyre v. Farrel Corporation

Citation: Not availableDocket: 96-FC-00481-SCT

Court: Mississippi Supreme Court; April 24, 1995; Mississippi; State Supreme Court

Original Court Document: View Document

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The Supreme Court of Mississippi addressed a certified question from the Fifth Circuit Court of Appeals regarding whether the state’s statute of repose (Miss. Code Ann. §15-1-41) protects manufacturers of industrial machinery, specifically in this case, Farrel Corporation, when their products become part of real property. The Court determined that the statute was intended to provide protection primarily to professionals involved in real estate construction, such as architects and contractors, and does not extend to manufacturers of machinery. Consequently, the Court ruled that Farrel Corporation is not afforded repose protection under this statute.

Key facts relevant to the case include that George McIntyre, the plaintiff-appellant, sustained injuries from a calender machine while working at Fidelity Tire Manufacturing Company in January 1993. The calender, a specialized machine used in tire manufacturing, was custom-designed and manufactured by Farrel-Birmingham, Inc. in 1938. It was specifically assembled at the manufacturer’s facility and then transported to the Natchez plant, where it was installed. The weight of the calender exceeds 100 tons, and it was not sold as a standard model but tailored for each buyer.

The calender has a distinct foundation designed by Farrel-Birmingham during the sale, essential for isolating vibrations from other machinery. Its foundation measures seven feet, five inches deep with maintenance pits, and the calender is anchored using bolts of one and one-half to two and one-quarter inches in diameter and five feet, seven inches to six and one-half feet in length, secured through metal plates embedded in the foundation. Installed in 1939, the calender has remained in the same position in the Natchez plant's mill room, integral to the tire manufacturing process. Originally a fabric calender, it was upgraded in 1963 to produce laminated rubber sheets for tubeless tires.

Condere Corporation acquired the Natchez plant from Armstrong in 1987, obtaining a warranty deed for the property and a bill of sale for the equipment, which included the calender. Following this, Condere transferred the property to the City of Natchez to facilitate an industrial bond, leasing it back under a single agreement that also encompasses the equipment. The calender and associated machinery are listed as leased equipment. Despite its stationary position since installation, similar machinery has been relocated by Condere and others, with evidence indicating that the L-calender could be removed without significant structural damage. Additionally, an affidavit notes a market exists for used calenders in the industry.

The case is presented as a certified question from the Fifth Circuit Court of Appeals regarding Mississippi law. Under Mississippi Rules of Appellate Procedure 20(a), federal courts can certify questions of law to the Mississippi Supreme Court when there are no clear precedents. While the Court typically confines itself to legal questions without considering case facts, it has occasionally deviated from this approach. In this instance, the Court chooses to focus solely on legal considerations.

The first certified question asks whether a large piece of industrial machinery, such as the Farrel 4-roll calender, qualifies as an "improvement to real property" under §15-1-41. The Court determines that such machinery can be considered an "improvement to real property" according to Mississippi case law, particularly referencing Smith v. Fluor Corp., which emphasized that the term lacks a statutory definition and must be understood in its plain and ordinary meaning. This case cited various examples, including coal-handling conveyors and surge tanks, as qualifying improvements.

The Court reaffirmed this interpretation in Phipps v. Irby Construction Co., supporting that interconnected machinery, like a heat exchanger, can be deemed an improvement. However, the intent behind §15-1-41 is primarily to protect construction-related parties, suggesting that whether machinery is classified as an improvement may be less relevant in light of the legislative purpose, which will be further explored in the answer to the second certified question.

McIntyre argues against applying the law from Smith and Phipps to manufacturers, suggesting that the legal principles established in those cases do not pertain to them. He concedes that these cases recognized machinery as an "improvement to real property" when a contractor is sued for negligent installation. The core issue is whether original equipment manufacturers, like Farrel-Birmingham, Inc., qualify as entities that perform the "design, planning, supervision of construction, or construction" of such improvements under §15-1-41. While McIntyre claims that the statute was not meant to protect manufacturers, he acknowledges that most Mississippi cases cited did not extend the statute of repose to them. However, the Fifth Circuit indicated in Trust Co. Bank v. U.S. Gypsum Co. that Mississippi’s §15-1-41 offers broader protection than similar statutes in other states, potentially including manufacturers, as the statute provides repose protection to “any person” involved with improvements to real property. 

Although the Mississippi Supreme Court has not directly ruled on this issue, it has effectively granted such protection in previous cases, including Smith, where a manufacturer received summary judgment based on §15-1-41. McIntyre disputes the characterization of the defendant in Smith as a manufacturer, arguing they were a refinery builder. The Phipps case reaffirmed Smith, categorizing machinery added to an oil refinery as an improvement under the statute, though it involved different defendants. The question of whether §15-1-41 was intended to protect manufacturers remains unresolved, as indicated by the Fifth Circuit's certification of the question due to the lack of clear controlling authority. The Fifth Circuit has also suggested that similar statutes might primarily protect architects, engineers, and contractors, rather than manufacturers.

Miss. Code Ann. §15-1-41 states that actions for damages related to property or personal injuries due to deficiencies in the design, planning, supervision, or construction of improvements to real property cannot be brought more than six years after the written acceptance or actual use of such improvements, unless there is a prior written agreement for contribution or indemnity. The statute does not explicitly limit its protections to architects, engineers, or contractors, which could imply that manufacturers of products considered improvements to real property might also be protected. However, a logical interpretation and analysis indicate that the legislature did not intend to include manufacturers within this protected class. It is reasoned that extending the statute's protections to manufacturers would undermine product liability laws and create inconsistent liability standards among manufacturers of different types of products. The document references a case, Luzadder v. Despatch Oven Co., which similarly concluded that manufacturers should not be included under comparable statutes of repose, reinforcing the notion that such inclusion would disrupt established liability frameworks. The reasoning presented by the Third Circuit is noted as compelling and reflects a broader consensus among various jurisdictions.

In Burmaster v. Gravity Drainage Dist. No. 2 of St. Charles Parish, the Louisiana Supreme Court addressed a statute of repose that barred actions for damages against those involved in the design and construction of immovable property. The court did not explicitly exclude manufacturers from this statute but affirmed its constitutionality, noting that manufacturers, due to their ability to maintain high quality control in factory conditions, could be held to a higher liability standard than architects or contractors, who face limitations in standardizing their work. 

In Snow v. Harnischfeger Corp. Elec. Co., the First Circuit interpreted a Massachusetts statute of repose regarding tort actions for deficiencies in real property improvements. The court referenced the Massachusetts Supreme Judicial Court's ruling in Dighton v. Federal Pacific, which clarified that the statute aimed to protect those providing specialized services in design and construction, not suppliers of standardized products. This analysis echoed the reasoning in Burmaster, emphasizing the distinction between individual expertise in construction and the role of manufacturers.

The Fifth Circuit Court of Appeals has shown hesitation in applying statutes of repose to manufacturers, although it has adhered to existing Texas state court rulings. In the case of Dedmon v. Stewart-Warner Corp., the court suggested that the Texas statute of repose was intended to protect specific economic actors in the construction industry, such as architects and contractors, rather than manufacturers of standardized goods. However, the court acknowledged it would be difficult to deviate from established Texas appellate court precedents that have applied the statute to manufacturers of items used in property improvements.

In Rodarte v. Carrier Corp., the Texas appellate court ruled that a wrongful death claim against Carrier, related to an air conditioning unit installed twelve years prior, was barred by the ten-year statute of repose. The court determined that the unit constituted an improvement to real property, despite Carrier's lack of involvement in its installation or servicing.

Similarly, in Ablin v. Morton Southwest Co., the Texas court upheld the dismissal of a claim related to a defective garage door opener that resulted in a child's death, emphasizing its analysis on whether the garage door opener was an improvement to real property, which was the sole focus of their inquiry.

The application of the statute of repose to manufacturers is sharply criticized, particularly in light of Texas case law. If liability were established, families in the Ablin and Rodarte cases could have received substantial compensation if the products had been less permanently affixed to property. The reliance on the permanence of a product's attachment to real estate to determine liability is deemed arbitrary and unjust. Furthermore, legislative motivations appear to favor classifications based on people and professions rather than arbitrary distinctions between types of products. The language of the statute, which uses "construction" instead of "manufacture," further suggests that the Legislature did not intend to create an irrational divide between manufacturers of permanent improvements and those of mobile products. Such a distinction would lead to inconsistent liability standards based on product usage, creating an illogical scenario where identical products receive different legal treatments based solely on their installation. The potential consequences of applying the statute to mass-manufactured products are alarming, as many products exceed the six-year repose period, which may incentivize manufacturers to reduce safety standards for permanently installed items, ultimately endangering public safety by allowing for lesser liability for long-lasting products like gas or water pipes.

The Court concludes that the Legislature aimed to offer enhanced liability protection to specific construction industry professionals, including architects and contractors, due to the nature of their work. While some justices have raised concerns about the constitutionality of this protection, the immediate matter does not require addressing those concerns. The Court clarifies that the protection under §15-1-41 should be confined to the intended professions. In answering the second certified question, the Court determines that an original equipment manufacturer involved in the design, manufacture, and shipping of industrial machinery does not qualify as an entity engaged in the "design, planning, supervision of construction, or construction" of real property improvements under §15-1-41. The certified question is thus answered, with multiple justices concurring, though some only concur in the result. Additionally, despite McIntyre's request to certify the constitutionality of §15-1-41 concerning the open courts provision, the Fifth Circuit declined due to established precedent set in Anderson v. Fred Wagner and Roy Anderson, Jr. Inc., which remains authoritative on the matter.