St. Paul's Evangelical Lutheran Church Vs. City Of Webster City, Iowa ( 2009 )

IN THE SUPREME COURT OF IOWA
No. 07–1752
Filed June 12, 2009
ST. PAUL’S EVANGELICAL
LUTHERAN CHURCH,
Appellant,
vs.
CITY OF WEBSTER CITY, IOWA,
Appellee.
Appeal from the Iowa District Court for Hamilton County,
William J. Pattinson, Judge.
Appellant challenges district court’s judgment notwithstanding the
verdict denying its claim for damages resulting from the negligent
reconnection of its sewer line. REVERSED.
Justin T. Deppe of Deppe Law Office, Jewel, for appellant.
Stephen G. Kersten of Kersten Brownlee Hendricks L.L.P., Fort
Dodge, for appellee.
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STREIT, Justice.
Some mistakes cannot stay buried. In 1978, during Webster City’s
water main installation project, a city contractor severed and then
negligently reconnected St. Paul’s Evangelical Lutheran Church’s gravity-
flow sewer line. Twenty-seven years later, sewage backed up into the
church. St. Paul’s brought a suit against the City to recover damages.
The jury found in favor of St. Paul’s, determining the water main
installation project was not an “improvement to real property” under
Iowa Code section 614.1(11) (2003). The district court granted the City’s
motion for judgment notwithstanding the verdict. St. Paul’s appealed.
Because the negligent reconnection of St. Paul’s sewer line was not an
“improvement to real property,” the statute of repose, Iowa Code section
614.1(11), does not bar St. Paul’s claim. We reverse.
I. Background Facts and Proceedings.
St. Paul’s Evangelical Lutheran Church (St. Paul’s) was built in
1953 in Webster City. The construction included a gravity-flow sewer
connection to the city’s sanitary sewer line. In 1978, the City of Webster
City (the City) began a multi-million dollar project to upgrade its public
water main system. During the installation of a water main on St. Paul’s
property, the City’s contractor severed St. Paul’s sewer line because it
was on the same plane as the water main. In reconnecting the line, the
contractor used a five- or six-foot piece of corrugated tubing (instead of
cast iron pipe or clay tile), which was the wrong material, and re-routed
the line around the water main. The change in material and the way the
line was reconnected interfered with the gravity flow of the sewer line.
Cutting and reconnecting the sewer line was not part of the
improvements being made by the City, i.e., it was not a project to
improve the sewer connection. In June 2005, sewage backed up into St.
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Paul’s as a result of the faulty reconnection. St. Paul’s incurred more
than $30,000 in damages.
In December 2005, St. Paul’s filed a petition, claiming the City
negligently cut and repaired its sewer line during the water main
installation project in 1978. The City filed a motion to dismiss, asserting
Iowa Code section 614.1(11), a fifteen-year statute of repose for
improvements to real property, bars recovery. The motion was denied.
Later, the City filed a motion for summary judgment on the same ground,
which was also denied. The case proceeded to trial in March 2007.
Before the case was submitted to the jury, St. Paul’s objected to special
verdict form question 3, which stated, “Was the City’s water main
installation project, as it pertains to this case, an ‘improvement to real
property,’ ” and requested that the question instead read, “Do you find
. . . that the negligent severing and reconnection of the plaintiff’s . . .
sewer line . . . was an improvement to real property?” The original
question was presented to the jury. The jury found the City negligent,
that the City’s negligence was the proximate cause of St. Paul’s damages,
and that the City’s water main installation project was not an
improvement to real property. The City filed a motion for judgment
notwithstanding the verdict. The district court granted the motion,
stating “the water main installation constitutes an improvement and the
Church’s damages flowed from one defect in that improvement” and thus
the claim was barred by the statute of repose set forth in Iowa Code
section 614.1(11). St. Paul’s appealed.
II. Scope of Review.
We review a district court’s ruling on a motion for judgment
notwithstanding the verdict for correction of errors at law. Jasper v. H.
Nizam, Inc., 764 N.W.2d 751, 761 (Iowa 2009). “We inquire whether
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substantial evidence exists to support each element of the plaintiff's
claim, justifying submission of the case to the jury.” Gibson v. ITT
Hartford Ins. Co., 621 N.W.2d 388, 391 (Iowa 2001). We view the
evidence in a light most favorable to the nonmoving party. Id.III. Merits.
Iowa Code section 614.1(11) is a statute of repose that bars a
claimant from bringing “an action arising out of the unsafe or defective
condition of an improvement to real property . . . more than fifteen years
after the date on which occurred the act . . . [that] cause[d] . . . the injury
. . . .” Thus, regardless of when an injury occurs, this statute of repose
terminates any right of action fifteen years after the date of the
improvement. If the statute applies, St. Paul’s claim is barred since the
reconnection of St. Paul’s sewer line occurred in 1978, twenty-seven
years before sewage backed up into the church and this action was
commenced.
We have defined an improvement to real property to mean “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.” Krull v. Thermogas Co., 522 N.W.2d 607, 611
(Iowa 1994) (quoting Webster’s Third New International Dictionary 1138
(1993)); see also Jarnagin v. Fisher Controls Int’l, Inc., 573 N.W.2d 34, 36
(Iowa 1997).
The parties do not dispute that the water main installation project
was an improvement or that the City’s contractor negligently reconnected
St. Paul’s sewer line. The parties also agree that cutting and
reconnecting St. Paul’s sewer line was not an original part of the
improvement project, but that the damage to, and negligent repair of, the
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sewer line clearly occurred during, and as a consequence of, the water
main project. The City argues that work on St. Paul’s sewer line should
be considered part of the water main improvement project because
cutting St. Paul’s sewer line would have not been done but for the water
main installation project. St. Paul’s argues that the reconnection of its
sewer line was not an improvement, but rather a repair (resulting from
the water main project) that improved neither the function nor the value
of the sewer line. The question is whether we should evaluate the
reconnection of St. Paul’s sewer line as an independent “improvement” or
as a necessary part of the water main improvement project under the
statute of repose.
In the judgment notwithstanding the verdict ruling, the district
court characterized the reconnection of St. Paul’s sewer line as a “defect”
in the water main improvement project. As the district court stated:
The record is clear in the present case that the City’s
contractor bifurcated the Church’s sewer line because it fell
on the same plane as the new water pipe. As such, it would
be a mistake to view the severing and negligent reconnection
of the two ends of the sewer pipe ends as being just an
ordinary repair. Instead, the retrofit of the Church’s sewer
line was a collateral step in and a consequence of the new
water main’s installation. Further, and because of the faulty
retrofit, the water main improvement project was defective at
that time and at that location. It was because of that defect
that the Church eventually incurred its damages.
In its decision, the district court relied on a Minnesota case, State
Farm Fire & Casualty v. Aquila Inc., 718 N.W.2d 879 (Minn. 2006).
Although the district court found the case persuasive, we do not. In
Aquila, during the installation of a new gas pipeline in a mobile home
park, a section of pipe was mistakenly pushed through an existing sewer
line unbeknownst to anyone. Aquila, 718 N.W.2d at 882. Twelve years
later, the mobile home park hired a repair man to unclog sewer drains
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that were blocked by tree roots. Id. The repair man used a trap-and-
drain auger, which struck and ruptured the intersecting gas line,
causing gas to escape through the sewer lines into homes. Id. The gas
accumulated and exploded, damaging several homes in the mobile home
park. Id. The Supreme Court of Minnesota was asked to determine
whether the installation of the gas pipeline was an improvement to real
property. Id. at 884. The plaintiffs were seeking damages from the
ruptured gas line, not the sewer line, and the court did not address
whether the damage to the sewer line resulting from the new gas line was
an improvement to real property. Id. Concluding the installation of the
gas pipeline, in and of itself, was an improvement to real property, the
court determined the Minnesota statute of repose barred the claim. Id.
at 885.
In our case, the key issue is whether we should evaluate the
negligent reconnection of the sewer line as its own independent
improvement to real property or whether it was part of the water main
project. The court in Aquila only addressed the limited issue of whether
the new pipeline was an improvement (and not whether the damage to
the sewer line was an improvement) because the damage arose from the
improper location of the gas pipeline. Id. at 884. In contrast, here, the
water main itself was not related to the sewer backup and resulting
damage. Thus, the only thing connecting these cases is that they both
involve sewer lines.
Granting the City’s motion for judgment notwithstanding the
verdict, the district court determined the faulty reconnection of St. Paul’s
sewer line was a part of the overall improvement project. We disagree.
The record indicates the reconnection of St. Paul’s sewer line was not
part of the project to upgrade the water main system in Webster City and
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that it would have been possible to complete the water main project
without touching St. Paul’s sewer line. Richard Seiser, a building official
and inspector employed by Webster City for over forty-one years and a
licensed plumber, stated there was no need to cut and reconnect the
sewer line because configuring the water main to go up and over or
underneath the existing sewer line would not have interfered with the
water flow. He did admit, however, that cutting the sewer line was easier
than putting a bend in the water main. He also stated that, once cut,
reconnecting the sewer line to go under (and not over) the water main
would have been the proper methodology. The record indicates the
negligent reconnection of St. Paul’s sewer line was not part of the project
to improve the City’s water main. Thus we should evaluate whether the
reconnection of the sewer line (and not the water main project) is an
improvement to real property under the statute of repose and our case
law.
The issue here is whether the changes made to the sewer line as a
result of installation of the new water line qualify as an improvement to
real property under Iowa’s statute of repose. Severing and reconnecting
the sewer line does not meet the definition of “improvement to real
property” as set forth in our case law: “[1] a permanent addition to or
betterment of real property [2] that enhances its capital value and
[3] that involves the expenditure of labor or money and [4] is designed to
make the property more useful or valuable as distinguished from
ordinary repairs.” Krull, 522 N.W.2d at 611. Replacing the original, rigid
clay tile pipe with flexible, corrugated tubing, and re-routing the sewer
line around the water main only satisfies two of the four requirements.
First, to be an improvement, the project or product installed must be
either “a permanent addition to or betterment of real property.” Id. As
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the sewer line was located beneath the ground and covered over by dirt
and concrete after the City reconnected the line, the reconnection was
undeniably “a permanent addition to” real property. In addition,
reconnecting the sewer line did “involve[] the expenditure of labor [and]
money,” as the plumbers employed by the City did spend time (and in all
probability were paid money) reconnecting and re-routing St. Paul’s
sewer line. Id.However, the City’s work on the sewer line does not meet the other
two requirements. The severing and reconnection neither enhances St.
Paul’s capital value nor was it “designed to make the property more
useful or valuable.” Id. The work on the sewer line was not necessary to
improve the function or quality of the sewer line, (but rather so that the
water main could pass on an uninterrupted trajectory). Therefore, these
changes did not enhance the sewer’s value or usefulness and were not
meant to benefit St. Paul’s in any way. Before this change in 1978, St.
Paul’s had a functioning gravity-flow sewer line.
Lastly, an improvement to real property is distinguished from an
ordinary repair. Id. The work on St. Paul’s sewer line is better
characterized as an ordinary repair. A perfectly good, functioning sewer
line was in place before the City began its water main improvement
project. During the course of the project, the sewer line was severed and
had to be repaired. The work on the sewer line was not to improve it, but
rather to repair damage resulting from the water main project.
The severing and reconnecting of St. Paul’s sewer line was not an
improvement to real property and, therefore, the statute of repose, Iowa
Code section 614.1(11), does not bar St. Paul’s claim for damages. We
reverse the district court’s judgment notwithstanding the verdict.
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IV. Conclusion.
Although the water main project was an improvement to real
property, St. Paul’s damages did not arise from an “unsafe or defective
condition” of the water main. St. Paul’s damages were caused by a
defective condition in the sewer line, but the work on St. Paul’s sewer
line was not an “improvement to real property.” Therefore, the statute of
repose, Iowa Code section 614.1(11), does not bar St. Paul’s claim.
REVERSED.