Amelia Woessner v. Air Liquide, Inc., A Delaware Corporation Cardox Inc, A California Corporation Gen Elec Co "D" Elec Motors Inc Intl Switchboard Olsen Eng Corp, 242 F.3d 469, 3rd Cir. (2001)
Amelia Woessner v. Air Liquide, Inc., A Delaware Corporation Cardox Inc, A California Corporation Gen Elec Co "D" Elec Motors Inc Intl Switchboard Olsen Eng Corp, 242 F.3d 469, 3rd Cir. (2001)
2001)
Appeal from the United States District Court for the District of New
Jersey District Judge: Honorable Joseph E. IrenasCounsel for Appellant:
Kevin P. McCann Walter H. Iacovone Chance & McCann 201 West
Commerce Street P.O. Box 278 Bridgeton, New Jersey 08302
Counsel for Appellee International Switchboard Corp.: Richard T. Smith
Margolis Edelstein 216 Haddon Avenue Suite 200 Westmont, New Jersey
08108
Counsel for Appellee Olsen Engineering Corp.: Richard P. Maggi
McDermott & McGee 75 Main Street P.O. Box 192 Millburn, New Jersey
07041
Before: Scirica, Ambro, Circuit Judges and Pollak, District Judge.**
Ambro, Circuit Judge
Amelia Woessner ("Woessner") appeals from the grant of summary
judgment in favor of the two remaining defendants in this diversity action
-- International 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 8127, to bar her
products liability claims. Furthermore, Woessner argues that neither the
builder's statute of Delaware nor New Jersey should preclude her action
because her injuries were 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. Cardox contracted 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
acquired by Air Liquide, Inc. ("Air Liquide"), a Delaware 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 Vineland, 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
removing 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. 1332. The District Court made two determinations
relevant to this appeal. On January 7, 1999, the Court granted the motion
of International Switchboard to establish that the law of Delaware will
govern 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 Cardox, 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 City Police Dept., 174 F.3d 95,
128 n.29 (3d Cir. 1999), cert. denied, 528 U.S. 1074 (2000). Similarly,
Woessner is entitled to plenary review of the District Court's prediction,
interpretation and application of the governing state substantive law.
Nationwide Mut. Ins. Co. v. Buffetta, 230 F.3d 634, 637 (3d Cir. 2000).
We 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.
Veazey v. Doremus, 510 A.2d 1187, 1189 (N.J. 1986). In its place, the
New Jersey courts have substituted "the more flexible governmentalinterest analysis in choice-of-law decisions." Id.[citations omitted]. It is
the District Court's application of this governmental-interest analysis to
which Woessner objects on appeal.
Before discussing the governmental-interest 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
course, because the current action was brought almost twenty-three years
after the construction of the Cardox facility, the action would be timebarred by either statute, assuming either applied in this case. Indeed,
Woessner has made no effort to distinguish between New Jersey's and
Delaware'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 evaluation of the relative
governmental interests can lead only to the conclusion that the District
Court properly 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 governmental 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 are productive and do not become the beneficiaries of public
assistance. Schum v. Bailey, 578 F.2d 493, 501 (3d Cir.1978) (Gibbons,
J., concurring).
Fantis Foods, 753 A.2d at 180. We believe the choice of law analysis for this
tort claim to be no different.
I find that New York's contacts and interest 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 through the operation of New Jersey's substantive law and
therefore the operation of N.J.S.A. 2A:14-1.1.... Additionally, New York has a
far more compelling interest in regulating dangers inherent in construction
activity conducted on its soil. The forgoing [sic] internal state needs would not
be advanced by application of the [New Jersey builder's] statute to New York
realty. Clearly New York State has the paramount interest in this litigation and
therefor its substantive law should govern this case.
Van Slyke, 628 A.2d at 391-92. We find Van Slyke and Fantis Foods to be
compelling, and thus we predict that a New Jersey court applying New Jersey's
choice of law analysis would find that Delaware's interest in the conduct of
construction activities in that State outweigh New Jersey's interest in the
compensation of its residents.
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 "improvement" 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).
8
10
Woessner argues that the motor control 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 "production machinery," this reference 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
improvement to real property and its builder was entitled to protection under 10
Del. Code 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 concrete 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 realty through a system of
pipes, valves, manifolds, wires, scaffolds, 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 predict that a Delaware court would find the motor
control center to be an improvement under the "common sense" approach
employed in Hiab and Davis.
11
12
We are convinced that the motor control 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 indispensable one, to the Air Liquide
facility.
13
For the reasons noted, we conclude that the District Court properly granted
summary judgment in favor of both Olsen and International Switchboard.
NOTES:
**
Honorable Louis H. Pollak, Senior United States District Judge for the Eastern
District of Pennsylvania, sitting by designation.
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
`entirely 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 different 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 repose 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, regardless 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).
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.
3
It is for this reason that we find Woessner'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.
Indeed, one of Woessner's expert witnesses likened the motor control center to
a "circuit breaker box in the home."