IN COURT OF APPEALS
State Farm Fire and Casualty, et al.,
Aquila Inc. d/b/a People's Natural Gas,
f/k/a UtiliCorp United Inc., d/b/a People's Natural Gas/Energy One,
Northern Pipeline Construction Company,
Robert Sauer, et al.,
George Rucker, et al.,
Affirmed in part, reversed in part, and remanded
Concurring in part, dissenting in part, Kalitowski, Judge
Olmsted County District Court
File No. CX030905
Bradley J. Ayers, David A. Wikoff, Robert W. Vaccaro, Flynn, Gaskins & Bennett, LLP, 333 South Seventh Street, Suite 2900, Minneapolis, MN 55402 (for appellants State Farm Fire and Casualty and Auto Owners Insurance Company)
Jeremy R. Stevens, Bird & Jacobsen,
Dale M. Wagner, Bassford Remele,
Scott P. Drawe, Drawe & Heisick, 7650 Edinborough Way, Suite 640, Minneapolis, MN 55435 (for respondent Northern Pipeline Construction Company)
Considered and decided by Kalitowski, Presiding Judge; Klaphake, Judge; and Poritsky, Judge.
2. A prima facie case of negligence exists where an explosion is caused by a natural-gas leak from a line owned by the utility, notwithstanding an absence of notice of the leak.
O P I N I O N
Appellants, owners and insurers of property damaged by the explosion of a natural-gas pipeline, bought suit against respondents, one of which is the owner of the pipeline, and the other is the firm that installed it. The district court granted summary judgment in favor of respondents on the ground that appellants’ suits were barred by Minn. Stat. § 541.051 (2004), the statute of repose for improvements to real property. Appellants contend that the district court erred (1) in determining that the natural-gas pipeline at issue constituted an “improvement to real property” for the purposes of Minn. Stat. § 541.051; (2) in granting summary judgment for respondents where appellants alleged negligence and negligence per se, not merely as to the installation of the natural-gas pipeline, but also as to the inspection, maintenance, and/or repair of the natural-gas system; and (3) in determining that no negligence existed even though a prima facie showing by appellants was all that was required, discovery had only just begun, and substantive negligence issues were not briefed by the parties.
November 1990, respondent Aquila Inc., owner of a natural-gas pipeline at
In early 2002, Hallmark Terrace hired Robert Sauer, doing business as Drain-Rite, to repair sewer drains that were blocked by tree roots. On February 13, 2002, Drain-Rite used a trap-and-drain auger to unclog the sewer pipes. Appellants claim that in doing so, Drain-Rite’s auger struck and ruptured the intersecting gas line, causing natural gas to migrate through the sewer pipes and into several of the manufactured homes at Hallmark Terrace. The gas built up and ignited, resulting in an explosion that destroyed property either owned or insured by appellants.
In November 2002, appellants brought suit against respondents and Drain-Rite, but eventually settled with Drain-Rite. Appellants claim that respondents were negligent in the “inspection, maintenance, repair and/or installation of the natural gas system.” Appellants also claim that respondents were negligent per se for violating “applicable codes and standards regarding the inspection, maintenance, repair and/or installation of the natural gas system.” Respondents brought motions for summary judgment, arguing that the suit was time-barred by the ten-year statute of repose for improvements to real property under Minn. Stat. § 541.051 (2004).
brought a cross-motion for summary judgment, seeking an order that the statute
of repose was inapplicable because the pipeline was not an improvement to real
property for the purposes of Minn. Stat. § 541.051, but was instead
merely an addition to
district court held that appellants’ suit was time-barred as to both
respondents by Minn. Stat. § 541.051, and granted respondents’
motions for summary judgment. In doing
so, the district court first ruled that
I. Did the district court err in deciding that the natural-gas pipeline constituted an improvement to real property under Minn. Stat. § 541.051 (2004)?
II. Did the district court err in determining that no negligence existed?
appeal from summary judgment, this court asks whether there are any genuine
issues of material fact and whether the district court erred in its application
of the law. State by Cooper v. French,
460 N.W.2d 2, 4 (
Appellants contend that the district
court erred in holding that the natural-gas pipeline owned by Aquila was an
improvement to real property under
(a) Except where fraud is involved, no action by any person in contract, tort, or otherwise to recover damages for any injury to property . . . arising out of the defective and unsafe condition of an improvement to real property, nor any action for contribution or indemnity for damages sustained on account of the injury, shall be brought against any person performing or furnishing the design, planning, supervision, materials, or observation of construction or construction of the improvement to real property or against the owner of the real property . . . more than ten years after substantial completion of the construction. . . .
. . . .
(c) Nothing in this section shall apply to actions for damages resulting from negligence in the maintenance, operation or inspection of the real property improvement against the owner or other person in possession.
Supreme Court has adopted a common-sense interpretation of the phrase
“improvement to real property” as used in Minn. Stat. § 541.051.
Appellants contend that their suit
is not time-barred by Minn. Stat. § 541.051 because the gas pipeline
in question was not an improvement to real property; instead, they argue, it
was part of
In Johnson,we drew a distinction
between (1) “the installations added to the barn and other buildings owned by
the [plaintiffs],” and (2) “the pole and pendant equipment, which [the utility]
owns and uses to distribute electrical power.”
installed an electric pole and transformer which stands independently on [plaintiffs’] property and serves the distribution purposes of the cooperative. This equipment enables the utility to increase its electric service to [the] farm. Rather than being an improvement to [plaintiffs’] property, this equipment is an addition to [the utility’s] distribution system.
We further noted, in Johnson,that the plaintiffs were not alleging a defect in the electrical
equipment attached to the barn, but that the electrical service itself was
defective because of the stray voltage.
Minn. Stat. § 541.051 limits the time to bring an action in order to protect from suits those who install or create the improvement and then surrender control of it. We do not interpret Minn. Stat. § 541.051 to shelter from liability an electric power company that installs and maintains control of an electric pole and transformer, especially when the purpose is to distribute power.
Thus, the central facts in Johnson that apply here are that the
transformer and center pole (1) were owned and controlled by the utility, and
(2) were part of the utility’s distribution system. We first consider the district court’s
decision to grant summary judgment in favor of
We recognize that in Kemp v. Allis-Chalmers Corp., we said
that “[a]n electrical transformer is an improvement to real property for the
purposes of the statute.” 390 N.W.2d
848, 850 (Minn. App. 1986) (citing Lovgren
v. Peoples Elec. Co., 380 N.W.2d 791, 794-95 n.5 (
Next, respondents attempt to distinguish
the facts of this case from Johnson. Respondents point out that the pipeline,
unlike the center pole and transformer in Johnson,
was underground and not accessible for routine inspection and maintenance. But respondents cite no authority for the
proposition that a gas company is relieved from a duty of due care merely
because its pipeline is underground
Respondents further state that the plaintiffs in Johnson alleged an ongoing tort of defective electrical service
while the appellants in this case allege defective construction. But as we demonstrate below in section II,
appellants have made a showing that
Appellants contend that the district court erred (1) in dismissing appellants’ claims on summary judgment where appellants alleged negligence and negligence per se against respondents, not merely as to the installation of the natural-gas pipeline, but also as to the inspection, maintenance, and/or repair of the natural-gas system; and (2) in determining that no negligence existed even though a prima facie showing by appellants was all that was required, discovery had only just begun, and substantive negligence issues were not briefed by the parties.
holding that Minn. Stat. § 541.051 applied, the district court
examined the statute’s exception under subdivision 1(c), which states that
“[n]othing in this section shall apply to actions for damages resulting from
the negligence in the maintenance, operation or inspection of the real property
improvement against the owner or other person in possession.” Minn. Stat. § 541.051, subd.
1(c). With respect to Aquila, the
district court held that because appellants failed to provide evidence of
notice, subdivision 1(c) did not apply; specifically, the court said Aquila
“had no reasonable notice of an existing or potential danger nor did it possess
any information that would suggest to a person of ordinary care and prudence
that some part of the polyethylene system was unsafe for the transportation . .
. of gas.” The district court held that
Northern Pipeline could not be held liable under subdivision 1(c) because
Northern Pipeline had no subsequent involvement as owners or controllers of the
pipeline after installation in 1990. We
agree as to Northern Pipeline. With
respect to Aquila, the application of the exception in subdivision 1(c) is
rendered moot by our holding that Minn. Stat. § 541.051 does not bar
appellants’ claims against
the conclusion that section 541.051 does not bar appellants’ claims against
Aquila, there remains the issue of whether appellants have made a showing of
next turn to the merits and argue that they made a showing of negligence
sufficient to withstand respondents’ motions for summary judgment. Summary judgment is appropriate when “the
pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to
any material fact and that either party is entitled to a judgment as a matter
ordinary course of things, gas does not escape if those responsible for its
management use proper care. See Gould v.
district court correctly noted, “
that lack of notice to Aquila precluded a showing of negligence, the district court
relied on Ruberg v. Skelly Oil Co., 297 N.W.2d 746 (Minn. 1980), and Wilson
v. Home Gas Co., 267
The duty to inspect does not require a system of inspection ‘at all times’ but rather a duty to make reasonable inspections, and then, as to appliances not owned or controlled by the [gas company], only after a reasonable notice of the existence of danger. To apply any other rule would make the gas supplier an insurer if anything went wrong with any of the appliances over which it had no control. Recognizing that escaping gas is a dangerous substance, we have consistently held that the supplier of gas is not an insurer of customers for injury or damage resulting therefrom, unless it can be shown that the gas has escaped from a pipe over which the [gas company] was charged with responsibility. . . . In other words, a greater duty arises as to pipes and appliances that are the responsibility of the [gas company], like its gas lines. . . . Thus . . . we applied a strict rule of liability when gas escapes from a pipe over which the [gas company] has control and for which it is responsible, but the same rule does not apply to gas escaping from appliances owned by the customer and maintained by him.
In Ruberg, the supreme court was addressing the notice requirement only in cases where the utility did not own or control the pipeline:
A supplier of gas must exercise a degree of care commensurate with the danger in a situation. With regard to that duty we have said: It may be generally stated that, where a gas company does not install or own the service lines on private property, and exercises no control over them, it is not responsible for the condition in which they are maintained and is not liable for damages caused by a leak therein of which it does not have notice. And a gas company, in the absence of notice of defects in the service lines, is not required to make inspections of the lines on private property when the lines are not owned by it or are under its control.
297 N.W.2d at 750-51 (citation and quotation omitted).
addition to the presumption that gas does not escape from pipelines if those
responsible exercise proper care, there is the undisputed fact that for 11
D E C I S I O N
affirm the district court’s decision to grant summary judgment in favor of
Northern Pipeline. But the district
court erred in ruling as a matter of law that Minn. Stat. § 541.051
bars appellants’ claims against Aquila and that appellants failed to present
Affirmed in part, reversed in part, and remanded.
KALITOWSKI, Judge (concurring in part, dissenting in part)
I concur that the district court
properly granted summary judgment in favor of Northern Pipeline under Minn.
Stat. § 541.051 (2004). But I
respectfully dissent from the determination that the district court erred in
granting summary judgment in favor of
In a well-reasoned opinion, the
district court properly applied Minn. Stat. § 541.051 to appellants’
Contrary to appellants’ argument,
neither Aquila’s ownership and control of the pipeline, nor the fact that
In attempting to graft this
exception on to Minn. Stat. § 541.051, appellants rely on a 1991 decision by
this court, Johnson v. Steele-Waseca
Coop. Elec., 469 N.W.2d 517 (Minn. App. 1991). Appellants argue that Aquila’s pipeline
cannot be an improvement to real property because the pipeline is owned by
On this record I would also affirm
the district court’s determination that Aquila is entitled to summary judgment
on appellants’ claim that
In addition, the presumption that “gas does not escape from pipelines if those responsible exercise proper care” does not apply to establish a prima facie case of Aquila’s negligence here because: (1) it is undisputed that the gas leak at issue was caused when Drain-Rite, another defendant who has entered into a settlement with appellants, operated an auger that struck and ruptured the gas line; and (2) appellants merely alleged negligence but offered no evidence as to the standard of care that was breached and no facts indicating how Aquila was negligent in maintaining, operating or inspecting the pipeline.
I would affirm the district court in all respects.
* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
 “A statute of repose starts the limitation
period for bringing an action from the date of [completion of an improvement],
unlike a statute of limitations which starts from the date of injury. A typical statute of repose will specify a
presumptive number of years after which an action cannot be brought.” Hodder v.
Goodyear Tire & Rubber Co., 426 N.W.2d 826, 830 (
 In its brief, Northern Pipeline states that
it joins in the analysis of Aquila on the issue of whether