Woessner v. Air Liquide, Inc. ( 2001 )

Opinions of the United
2001 Decisions States Court of Appeals
for the Third Circuit
3-7-2001
Woessner v. Air Liquide, Inc.
Precedential or Non-Precedential:
Docket 99-5237
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Filed March 7, 2001
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 99-5237
AMELIA WOESSNER,
Appellant
v.
AIR LIQUIDE. INC., a Delaware Corporation;
CARDOX INC, a California Corporation;
GEN ELEC CO; D ELEC MOTORS INC;
INTL SWITCHBOARD; OLSEN ENG CORP
Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil Action No. 96-cv-552)
District Judge: Honorable Joseph E. Irenas
Submitted Under Third Circuit LAR 34.1(a)
December 11, 2000
Before: SCIRICA, AMBRO, Circuit Judges and
POLLAK, District Judge.**
(Opinion filed: March 7, 2001)
Kevin P. McCann
Walter H. Iacovone
Chance & McCann
201 West Commerce Street
P.O. Box 278
Bridgeton, New Jersey 08302
Counsel for Appellant
_________________________________________________________________
**Honorable Louis H. Pollak, Senior United States District Judge for the
Eastern District of Pennsylvania, sitting by designation.
Richard T. Smith
Margolis Edelstein
216 Haddon Avenue
Suite 200
Westmont, New Jersey 08108
Counsel for Appellee International
Switchboard Corp.
Richard P. Maggi
McDermott & McGee
75 Main Street
P.O. Box 192
Millburn, New Jersey 07041
Counsel for Appellee
Olsen Engineering Corp.
OPINION OF THE COURT
AMBRO, Circuit Judge
Amelia Woessner ("Woessner") appeals from the grant of
summary judgment in favor of the two remaining
defendants in this diversity action -- Inter national
Switchboard Corporation ("International Switchboard") and
Olsen Engineering Corporation ("Olsen"). She contends that
the District Court erred in its analysis of New Jersey's
choice of law doctrine by applying Delaware's builder's
statute, 10 Del. Code S 8127, to bar her pr oducts liability
claims. Furthermore, Woessner ar gues that neither the
builder's statute of Delaware nor New Jersey should
preclude her action because her injuries wer e the result of
alleged defects in production machinery and therefore were
not covered by the scope of either builder's statute. We
affirm the grant of summary judgment of the District Court
because it properly applied Delaware law in this case and
correctly found that Delaware's builder's statute precluded
Woessner's cause of action.
I. Factual and Procedural History
In 1972, Cardox, Inc. ("Cardox") planned the construction
of a carbon dioxide recovery plant adjacent to its existing
facilities in Delaware City, Delaware. Car dox contracted
2
with Olsen to provide design and engineering services for
that construction. One component of the construction was
a 2,300 volt motor control center, also known as a
switchgear. That motor control center was manufactured by
International Switchboard to the specifications demanded
by Olsen and was integrated into the production process of
the facility in 1973. Cardox was later acquir ed by Air
Liquide, Inc. ("Air Liquide"), a Delawar e corporation, which
continued to operate the facility.
Woessner was employed as a field technician by "D"
Electric Motors (" ``D' Electric") on July 29, 1994, the day of
her injury. "D" Electric is located in V ineland, New Jersey
and Woessner is a New Jersey resident. In her capacity as
a field technician, Woessner visited Air Liquide at its
request on that day to provide an evaluation of a motor that
was not functioning. Unable to make repairs to the motor
on site, Woessner sought to remove it for repair at the "D"
Electric facility in New Jersey. Before r emoving the motor,
Air Liquide officials asked Woessner to evaluate the
attached motor control center. While examining the motor
control center with an electrical tester , Woessner was
severely burned by an explosion.
This products liability action was brought by Woessner in
1996, alleging that the motor control center was defective in
that it contained exposed electrical components.
Jurisdiction was based on the diversity of the parties. 28
U.S.C. S 1332. The District Court made two determinations
relevant to this appeal. On January 7, 1999, the Court
granted the motion of International Switchboar d to
establish that the law of Delaware will gover n the
determination of liability. On March 17, 1999, the Court
then granted summary judgment in favor of Olsen and
International Switchboard, predicting that Delaware's
builder's statute would bar Woessner's claims against them.
All of the defendants not involved in this appeal, including
"D" Electric, General Electric Co. and Car dox, have either
settled or been dismissed from this action, and thus the
entry of summary judgment was a final order which is ripe
for appeal to this Court. 28 U.S.C. S 1291.
II. Standard of Review
The District Court's grant of summary judgment is
subject to plenary review in this Court. Hurley v. Atlantic
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City Police Dept., 174 F.3d 95, 128 n.29 (3d Cir. 1999), cert.
denied, 528 U.S. 1074 (2000). Similarly, W oessner is
entitled to plenary review of the District Court's prediction,
interpretation and application of the gover ning state
substantive law. Nationwide Mut. Ins. Co. v. Buf fetta, 230
F.3d 634, 637 (3d Cir. 2000). W e are required to apply the
same test that should have been used initially by the
District Court -- whether the movant can demonstrate that
there is no genuine issue as to any material fact and it is
entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Omnipoint Communications Enters., L.P . v. Newtown
Township, 219 F.3d 240, 242 (3d Cir .), cert. denied, 121 S.
Ct. 441 (2000). In doing so, we view the evidence and draw
all inferences in the light most favorable to the non-movant.
Whiteland Woods, L.P. v. Township of West Whiteland, 193
F.3d 177, 180 (3d Cir. 1999).
III. Analysis
As an initial matter, we note that the District Court was
required to apply the law of the forum state, including its
choice of law provisions. Klaxon Co. v. Stentor Elec. Mfg.
Co., 313 U.S. 487, 496 (1941); Robertson v. Central Jersey
Bank & Trust Co., 47 F.3d 1268, 1273 (3d Cir. 1995). New
Jersey has rejected the strict lex loci delicti ("place of the
wrong") rule for determining the choice of law based on the
place where the tort occurred. V eazey v. Doremus, 510 A.2d
1187, 1189 (N.J. 1986). In its place, the New Jersey courts
have substituted "the more flexible gover nmental-interest
analysis in choice-of-law decisions." Id.[citations omitted].
It is the District Court's application of this gover nmental-
interest analysis to which Woessner objects on appeal.
Before discussing the governmental-inter est analysis, we
observe that the scope of our review of the choice of law
question will not be as broad as the District Court's
determination. The District Court found that Delaware law
applied with respect to all issues of liability. We need not
delve that far, for we note that the application of New
Jersey's choice of law test proceeds on "an issue-by-issue
basis." Veazey, 510 A.2d at 1189."Conflicts principles do
not dictate that all legal issues presented by a single case
should be decided under the laws of a single state. The
evaluation of significant relationships and governmental
4
interests takes place issue by issue and can lead to the
application of different bodies of law." Johnson Matthey Inc.
v. Pennsylvania Mfrs. Ass'n Ins. Co., 593 A.2d 367, 374
(N.J. Super. Ct. App. Div. 1991). We are convinced, at least
as to the question of which builder's statute applies in this
case, that the District Court properly applied the law of
Delaware.
New Jersey's governmental-interest test r equires a two-
step inquiry. "The first step in the analysis is to determine
whether a conflict exists between the law of the interested
states. . . . If an actual conflict exists, the next step is to
identify the governmental policies underlying the law of
each state and how those policies are af fected by each
state's contacts to the litigation and to the parties." Veazey,
510 A.2d at 1189. Thus, we begin with whether a conflict
exists between the builder's statutes of New Jersey and
Delaware.
"The Delaware ``Builder's Statute' pr ovides a six year
limitations1 period on actions for damages, indemnification,
_________________________________________________________________
1. The builder's statutes of both New Jersey and Delaware are technically
statutes of repose and not statutes of limitation. Though both work to
extinguish claims after the running of a given period, a statute of repose
differs in two respects from a statute of limitation. First, the time
period
of a statute of repose does not run from the accrual of a cause of action,
as does a statute of limitations. "With the above backdrop it is safe to
assert that our statute is not at all a typical statute of limitations,
for the
time within which suit may be brought commences with the completion
of services and construction and is thus ``entir ely unrelated to the
accrual of any cause of action.' " O'Connor v. Altus, 335 A.2d 545, 553
(N.J. 1975) (citation omitted); see City of Dover v. International
Telephone
& Telegraph Corp., 514 A.2d 1086, 1089 (Del. 1986) ("The statute in
question is truly a statute of repose. It pr events a claim from arising,
whereas a statute of limitations bars an accrued cause of action.").
Secondly, statutes of repose serve a dif ferent purpose than traditional
statutes of limitation. "Statutes of limitations are designed to stimulate
litigants to prosecute their suits diligently and to avoid burdening our
courts with stale claims....[T]he statute of r epose does not serve to
limit
stale claims as such. Rather, the statute literally confers immunity ten
years after the performance of services or construction when an injury
occurs due to a defect or unsafe condition, r egardless of any intended
useful life of a product." Van Slyke v. Worthington, 628 A.2d 386, 388
(N.J. Super. Ct. Law Div. 1992) (citations omitted).
5
or contribution for damages resulting fr om personal
injuries arising out of any deficiency in the construction or
improvement to any real property or the design, planning,
supervision, or observation of any such construction." City
of Dover v. International Telephone & T elegraph Corp., 514
A.2d 1086, 1088-89 (Del. 1986); see 10 Del. Code S 8127.
The six year period runs from the earliest of any of a variety
of dates signaling the completion of construction. 10 Del.
Code S 8127(b). There is a governmental interest in such
laws. The Delaware Supreme Court has noted that builder's
statutes have been enacted in as many as 47 states and
that "[t]hey are prophylactic measures taken by the
Legislatures to lessen the construction pr ofessionals'
exposure to the almost unlimited liability which has
resulted from the demise of the privity doctrine and the
imposition of a discovery rule in tort cases." Becker v.
Hamada, Inc., 455 A.2d 353, 355 (Del. 1982).
The New Jersey builder's statute, N.J. Stat. Ann. 2A:14-
1.1, does not differ from that of Delawar e in any respect
material to this litigation. "N.J.S.A. 2A:14-1.1 was adopted,
effective May 18, 1967, as a legislative r esponse to the then
expanding liability concepts in this jurisdiction concerning
the legal responsibility of contractors, ar chitects, engineers,
and others involved in creating improvements to real
estate." Brown v. Jersey Cent. Power & Light Co., 394 A.2d
397, 404 (N.J. Super. Ct. App. Div. 1978). The primary
distinction between the two is that Delaware's statute
provides that no actions may be brought against the
builder after six years, while New Jersey has chosen to do
similarly after ten years. Compare 10 Del. Code S 8127(b)
with N.J. Stat. Ann. 2A:14-1.1. Of course, because the
current action was brought almost twenty-three years after
the construction of the Cardox facility, the action would be
time-barred by either statute, assuming either applied in
this case. Indeed, Woessner has made no ef fort to
distinguish between New Jersey's and Delawar e's builder's
statutes and has "submitted that the outcome is the same
regardless of which statute of repose is applied." Br. of
Woessner at 15.
Even assuming, arguendo, that the builder's statutes of
New Jersey and Delaware differed other than as noted, an
6
evaluation of the relative governmental interests can lead
only to the conclusion that the District Court pr operly
applied Delaware law. Woessner notes the following
considerations favoring the employ of New Jersey law:
Woessner was a New Jersey resident, was employed by a
New Jersey company, sought medical assistance in New
Jersey and was the beneficiary of public aid in New Jersey.2
"New Jersey has a clearly recognized gover nmental interest
in the compensation of its domiciliaries." Pine v. Eli Lilly &
Co., 492 A.2d 1079, 1082 (N.J. Super. Ct. App. Div. 1985).
Indeed, this consideration is closely related to New Jersey's
interest in assuring that its residents ar e productive and do
not become the beneficiaries of public assistance. Schum v.
Bailey, 578 F.2d 493, 501 (3d Cir .1978) (Gibbons, J.,
concurring).
These domicile-related considerations ar e not, however,
so important under the governmental-inter est analysis to
be dispositive of our inquiry. Moreover , the compensation of
Woessner is only tangentially related to the relevant
governmental interests that underlie the builder's statutes.
This point was made in Fantis Foods, Inc. v. North River Ins.
Co., 753 A.2d 176, 180 (N.J. Super. Ct. App. Div. 2000).
Though Fantis Foods involved the application of the
governmental-interest test to an action for property
insurance coverage between two companies whose principal
offices were in New Jersey, the Court concluded that New
York law should apply because the insur ed building was
located in New York. Id. at 177.
Notwithstanding New Jersey's undeniable inter est in
protecting the rights of its insureds and in promoting
responsiveness on the part of its insur ers, those
"wholly domestic" concerns [citation omitted] --the only
such factors in the case pertaining to New Jersey--
_________________________________________________________________
2. Woessner's argument assumes that this Court must make a choice of
law determination with respect to all issues of liability, and as such its
focus is on considerations relevant to the question of which state's
products liability law applies. We find this argument unhelpful to the
resolution of the choice of law determination, as New Jersey courts have
unambiguously held that they must proceed on an"issue-by-issue"
basis. See Veazey, 510 A.2d at 1189; Johnson Matthey, 593 A.2d 367 at
374.
7
have considerably less weight than the inter ests of New
York in the condition, maintenance and r epair of
structures within its borders; the r espective
responsibilities, financial and otherwise, of property
owners and insurers with respect ther eto; and relevant
considerations of hazard, sequence and causation
when collapse occurs or is threatened.
Fantis Foods, 753 A.2d at 180. We believe the choice of law
analysis for this tort claim to be no differ ent.
At root here is each state government's interest in the
premises liability concerns of its contractors and related
builders. It is the location of the building, not the
individuals who might have been tortiously har med,3 that is
relevant to the choice of which builder's statute to apply.
Indeed, at least one New Jersey court has recognized that
the state governmental interest inher ent in each builder's
statute cannot be divorced from the situs of that
construction. In Van Slyke v. Worthington, 628 A.2d 386
(N.J. Super. Ct. Law Div. 1992), the Superior Court, Law
Division, held that New Jersey's builder's statute did not
apply because all of the alleged injuries occurr ed in New
York buildings, and thus New York law should apply. The
court stated:
I find that New York's contacts and inter est in this case
are more significant than that of New Jersey's. New
Jersey's only interest in this suit lies in ensuring the
compensation of its domiciliary--plaintiffs. Clearly, this
interest would not be furthered thr ough the operation
of New Jersey's substantive law and therefor e the
operation of N.J.S.A. 2A:14-1.1. . . . Additionally, New
York has a far more compelling inter est in regulating
dangers inherent in construction activity conducted on
its soil. The forgoing [sic] inter nal state needs would
not be advanced by application of the [New Jersey
builder's] statute to New York realty. Clearly New York
_________________________________________________________________
3. It is for this reason that we find W oessner's argument that she was
only fortuitously located in Delaware and thus New Jersey law should
thus apply to her, see Blakesley v. Wolford, 789 F.2d 236, 243 (3d Cir.
1986), to be unpersuasive.
8
State has the paramount interest in this litigation and
therefor its substantive law should gover n this case.
Van Slyke, 628 A.2d at 391-92. W e find Van Slyke and
Fantis Foods to be compelling, and thus we pr edict that a
New Jersey court applying New Jersey's choice of law
analysis would find that Delaware's inter est in the conduct
of construction activities in that State outweigh New
Jersey's interest in the compensation of its r esidents.
We turn to the District Court's analysis of Delaware's
builder's statute and determine whether the Court
appropriately awarded Olsen and Inter national Switchboard
the benefits of that statute. The statute bars, after six years
from the earliest of certain defined dates marking the
termination of construction, any claim arising"[f]rom any
alleged deficiency in the construction or manner of
construction of an improvement to real pr operty and/or in
the designing, planning, supervision and/or observation of
any such construction or manner of construction." 10 Del.
Code S 8127(b)(1). Woessner argues that this statute should
not bar her action against International Switchboard and
Olsen because the motor control center was not an
"improvement to real property" covered by the statute.4
Whether the motor control center is an "impr ovement"
under the statute is a question of law and thus
appropriately resolved on a motion for summary judgment.
Hiab Cranes & Loaders, Inc. v. Service Unlimited, Inc., C.A.
No. 82C-FE-98, at 3 (Del. Super. Ct. Aug. 16, 1983).
"Improvement" is defined in the statute to "include
buildings, highways, roads, streets, bridges, entrances and
walkways of any type constructed thereon, and other
structures affixed to and on land, as well as the land itself."
10 Del. Code S 8127(a)(2). This list, however , is intended to
be exemplary and not exhaustive. "As a matter of statutory
construction, the words ``shall include' ar e properly
interpreted to indicate that the term``structure'
encompasses items not expressly enumerated in the
_________________________________________________________________
4. Woessner appears not to challenge on appeal the District Court's
conclusion that both Olsen and International Switchboard performed or
furnished construction services and wer e not merely suppliers of
construction equipment.
9
statute." City of Dover, 514 A.2d at 1089 (finding that a
utility pole can be a "structure" within the meaning of the
statute because "it is unquestionably affixed to land").
Delaware courts have employed various means to
determine whether a particular construction is an
"improvement" to land. The first case addressing the issue,
Hiab Cranes & Loaders, Inc. v. Service Unlimited, Inc., C.A.
No. 82C-FE-98 (Del. Super. Ct. Aug. 16, 1983), looked to
the definition of improvement in other states and found
that two approaches were widely employed-- a common
law fixture analysis and a "common sense" interpretation
defining the term according to common usage. Hiab at 3-4.
On the first approach, the Hiab court cited Pennsylvania
law for the proposition that "while a fixture is, by definition,
an improvement to real property, the converse is not true;
an improvement to real property[,] in the ordinary sense of
the term, need not be a fixture." Hiab at 4 (citing Keeler v.
Commonwealth Dep't of Transp., 424 A.2d 614, 616 ( Pa.
Commw. Ct. 1981)). Of the second approach, the Hiab
court cited with approval Brown v. Central Jersey Power &
Light Co., 394 A.2d 397, 405-06 (N.J. Super . Ct. App. Div.
1978), which contrasted permanent parts of the mechanical
systems necessary to the normal function of a building
from those "chattels brought into a structure after it is
architecturally and mechanically suitable for occupancy for
the purpose intended, . . . e.g., furnitur e, production
machinery, appliances, etc."-- the former being
improvements, the latter not. Id. at 405-06. The Hiab court
went on to find that a building's furnace was an
improvement covered by the statute. Hiab at 5.
Woessner argues that the motor contr ol center is not an
improvement to real property because it is "production
machinery" as noted in Brown, and her claims therefore are
not barred by Delaware's builder's statute. This argument
is unpersuasive for several reasons. First, the only
reference in Delaware case law to the fact that "production
machinery" is not covered is the citation of Brown
contained in the Hiab decision of the Delaware Superior
Court.5 Yet because the furnace in Hiab was not
_________________________________________________________________
5. The genesis of the "production machinery" comment in Brown further
demonstrates why the motor control center should be covered by
10
"production machinery," this refer ence is, at best, dicta.
More importantly, a subsequent Delaware case found
production machinery to be an improvement to real
property. Davis v. Catalytic, Inc., Nos. 82C-AU-39, 82C-OC-
84, 1985 WL 189329 (Del. Super. Ct. 1985). In Davis, the
Superior Court analyzed the Hiab decision's use of a
"common sense" approach and found that, under that
approach, a "slurry cooler" was an impr ovement to real
property and its builder was entitled to pr otection under 10
Del. Code S 8127. Davis, 1985 WL 189329, at * 5. The
"slurry cooler" was a sizable free-standing structure bolted
to the concrete floor and affixed to the adjacent pieces of
the production process. Id. It is similar to the motor control
center here, which was also bolted to the concr ete floor and
affixed to the other elements of the production process. See
Standard Chlorine of Delaware, Inc. v. Dover Steel Co., 1988
WL 32044, *2 (Del. Super. Ct. March 31, 1988) (holding
that a liquid storage tank "attached to the r ealty through a
system of pipes, valves, manifolds, wires, scaf folds,
catwalks and a foundation" was an improvement to
property). Furthermore, both the motor control center and
"slurry cooler" were an integral part of the respective
purposes of the buildings. See Windley v. Potts Welding &
Boiler Repair Co., 888 F. Supp. 610, 613 (D. Del. 1995)
(finding a preheater that was "central to the plant's
function" to be an improvement). Thus, we pr edict that a
Delaware court would find the motor contr ol center to be
an improvement under the "common sense" approach
employed in Hiab and Davis.
_________________________________________________________________
Delaware's builder's statute. The Brown decision relied heavily uponIlich
v. John E. Smith Sons Co., 367 A.2d 1216 (N.J. Super. Ct. Law Div.
1976), which held that a defendant who wired a meat grinding machine
during the conversion of a building from a theater to a butcher shop
could not claim the benefit of the builder's statute in New Jersey. Brown,
394 A.2d at 405. There was no evidence that the meat grinding machine
was in any way affixed to the building and the court expressly stated
that it was not a fixture. Ilich, 367 A.2d at 1217-18. The court in Brown,
however, described Ilich as involving a "meat grinding production
machine," and seems to have extrapolated ther efrom the general
comment that production machines were not covered by the builder's
statute. Brown, 394 A.2d at 405. Obviously, production machines that
are fixtures, as the motor contr ol center was, can be covered by the
builder's statute. Davis, 1985 WL 189329, at *5.
11
We caution, however, that the "common sense" approach
advocated by Woessner was not adopted by the Delaware
Supreme Court in its only statement on the matter. In City
of Dover, that Court seemed to employ a fixtur es analysis
by relying on the "other structures affixed to and on land"
clause in the definition of "improvement." City of Dover, 514
A.2d at 1089-90 (citing 10 Del. Code S 8127(a)(2)). The
Court stated that a "utility pole can be consider ed a
``structure' within the meaning of the statute. Since it is
unquestionably affixed to land, it can be consider ed an
``improvement' covered by that statute." Id. at 1090.
Employing a strict fixtures analysis lends even stronger
support to the conclusion that the motor contr ol center was
an improvement, as it had been installed in 1973, was
affixed to the concrete floor by bolts for the entire lifetime
of the structure leading up to the accident and was an
integral part of the production process. Seen in this light,
the motor control center is indistinguishable from a circuit
breaker box,6 which was also held to be a "permanent
fixture" in Kirkwood Dodge, Inc. v. Fr ederic G. Krapf, Jr.,
Inc., C.A. No. 84C-DE-81, slip. op. at 3-4 (Del. Super. Ct.
May 9, 1989).7
We are convinced that the motor contr ol center was
intended to be a permanent fixture for the lifetime of the
Air Liquide facility and that it was covered by the Delaware
builder's statute. Alternatively, were we to employ the
"common sense" approach to improvements, we are
convinced that the motor control center was an
improvement, indeed an indispensible one, to the Air
Liquide facility.
For the reasons noted, we conclude that the District
Court properly granted summary judgment in favor of both
Olsen and International Switchboard.
_________________________________________________________________
6. Indeed, one of Woessner's expert witnesses likened the motor control
center to a "circuit breaker box in the home."
7. The Court in Kirkwood Dodge went on to hold, however, that a
supplier of a standard circuit breaker box did not "furnish construction"
under the builder's statute. Kirkwood Dodge, Inc., at 4-5.
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A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
13