IN COURT OF APPEALS
Richard E. Brink,
Smith Companies Construction, Inc.,
defendant and third party plaintiff,
D.A. Distribution, Inc.,
third party defendant,
Northwest Builders, Inc., et al.,
Third Party Defendants,
Station 19 Architects,
third party defendant,
Filed September 27, 2005
Ramsey County District Court
File No. C6-03-1331
Timothy P. Tobin, Kathleen M. Loucks, Timothy J. Crocker, Gislason & Hunter, LLP, 9900 Bren Road East, Suite 215E, P.O. Box 5297, Minnetonka, MN 55343-2297 (for appellant)
Richard M. Schultz, Suite 1B, 9201 Lexington Avenue North, Circle Pines, MN 55014 (for respondent D.A. Distribution, Inc.)
Mark Bloomquist, Kristine A.
Kubes, Jenneane L. Jansen, Meagher & Geer, P.L.L.P.,
Considered and decided by Stoneburner, Presiding Judge; Willis, Judge; and Hudson, Judge.
S Y L L A B U S
When a party is sued for breach of statutory warranty and is completely foreclosed from asserting third-party claims for contribution and indemnity by the statute of repose under Minn. Stat. § 541.051, subd. 1(a) (2002), the statute of repose violates the party’s due-process rights under the federal and state constitutions and its right to a remedy under the state constitution.
O P I N I O N
Appellant, a general contractor, challenges the district court’s grant of summary judgment for respondents, who are subcontractors, which dismissed appellant’s third-party claims for contribution and indemnity asserted against respondents. Appellant brought its third-party claims in February 2003 after it was sued for breach of warranty in December 2002. The district court concluded that the statute of repose in Minn. Stat. § 541.051, subd. 1(a) (2002), barred appellant’s third-party claims. Appellant argues that application of the statute to bar its third-party claims is a violation of its constitutional rights to due process and a remedy. Because we conclude that the statute of repose, as applied to the facts of this case, unconstitutionally violates appellant’s rights to due process and a remedy, we reverse.
facts in this case are undisputed. On
June 2, 1989, the City of
The district court granted respondents’ motions for summary judgment. This appeal follows. Respondents have also made a joint motion to strike portions of Smith’s reply brief.
2. Should respondents’ joint motion to strike portions of Smith’s reply brief be granted?
judgment may be granted if the pleadings,
depositions, interrogatory answers, admissions, and affidavits reveal that
there is no genuine issue of material fact and that a party is entitled
to judgment as a matter of law.
contends that Minn. Stat. § 541.051 (2002) is unconstitutional as applied
to the facts of this case, and specifically that Minn. Stat. § 541.051, subd.
1(a), violates its due-process rights under the
the state and federal due-process clauses provide that no person shall be
deprived of life, liberty, or property without due process of law.
Minn. Stat. § 541.051 applies a
two-year statute of limitations and a ten-year statute of repose on claims
seeking damages based on services or construction to improve real
a cause of action accrues in the ninth or tenth year after substantial
completion of the construction, the action may be brought within two years from
the date the action accrued, “but in no event may an action be brought more
than 12 years after substantial completion of the construction.”
Plaintiff sued Smith for breach of statutory warranties under Minn. Stat. § 327A.02 (2002). At the time of the lawsuit, Minn. Stat. § 541.051, subd. 4, exempted actions brought under section 327A.02 from the 10- to 12-year statute of repose. See Minn. Stat. § 541.051, subd. 4 (“This section shall not apply to actions based on breach of the statutory warranties set forth in section 327A.02 . . . provided such actions shall be brought within two years of the discovery of the breach.”). Therefore, although plaintiff sued Smith under section 327A.02 more than 13 years after the certificate of occupancy was issued, plaintiff’s cause of action was not barred by the statute of repose. See id.; see also Koes v. Advanced Design, Inc., 636 N.W.2d 352, 359 (Minn. App. 2001) (“[T]here is no other reference to any statute of repose that limits the time in which a cause of action must be brought for breach of warranty under § 327A.02.”), review denied (Minn. Feb. 19, 2002). But because Smith’s third-party claims against respondents were for contribution and indemnity, the actions were subject to both the two-year statute of limitations and the 10- to 12-year statute of repose, which served to bar the claims See Minn. Stat. § 541.051, subd. 1(a); Weston, 694 N.W.2d at 564. Accordingly, Smith argues that because the statute of repose as applied foreclosed its third-party claims before they accrued, Minn. Stat. § 541.051, subd. 1(a), violates its due-process rights under the state and federal constitutions and its right to a remedy under the state constitution.
Smith relies on Calder v. City of Crystal, 318 N.W.2d 838 (
Although the Calder court did not find Minn. Stat. § 541.051 to be unconstitutional, it observed that the statute could be invalid under a different fact pattern:
If the city were barred by the statute of limitations from having a reasonable time to join third parties for contribution or indemnity, the statute would not fulfill due process requirements under our constitution. We are not required, in deciding this case, to indicate what such a reasonable time limitation should be, but a statute which does not allow any time whatever is clearly unconstitutional. However, in this case, the city was aware of the injury long before it was sued. It had 14 months after being sued in which to join these third parties. . . . Thus, it cannot be said that the city was denied an effective remedy by a procedural statute.
On the other hand, respondents
contend that: (1) the supreme court’s decision in Sartori—concluding that Minn. Stat. § 541.051 does not violate
the due-process or remedies clauses—is dispositive; and (2) Calder and its progeny uniformly hold
that Minn. Stat. § 541.051 is constitutional and any language to the
contrary is dictum, which is not binding on this court. See
Pecinovsky v. AMCO Ins. Co., 613 N.W.2d 804, 808 (
careful review of the statute and the unique circumstances of this case, we
find appellant’s position to be the more persuasive. We first note that respondents’ reliance on Sartori is misplaced. In Sartori,
two plaintiffs working in a mine facility were seriously injured by the
operation of an overhead rail crane. 432
N.W.2d at 450. The crane was installed
at the mine facility more than 18 years before the plaintiffs were injured.
The supreme court further concluded
that the statute did not violate due process because the legislature pursued
legitimate objectives when it enacted the statute of repose, such as ensuring
that subcontractors will not be sued long after they design and install improvements
to real property and protecting against the unavailability of witnesses and a
lack of adequate records surrounding a stale claim.
Although respondents correctly observe that Sartori interpreted Minn. Stat. § 541.051 in the specific context of a constitutional challenge on due-process and remedies-clause grounds, just as we are called upon to do here, the facts in Sartori are materially different from those presented in this case. Significantly, the supreme court in Sartori only considered a claim for damages by injured plaintiffs against a crane manufacturer; this case additionally involves third-party contribution and indemnity claims. Moreover, Calder makes clear that a statute of limitations or repose that provides no time for a third-party claim for contribution or indemnity would violate the due-process and remedies clauses. 318 N.W.2d at 844.
We further observe that application of the statute of repose to bar Smith’s third-party claims would not fulfill the reasonable legislative objective enunciated in Sartori because the result would be to allow a stale claim to be asserted against Smith, while simultaneously precluding Smith from seeking contribution and indemnity against those it asserts are actually responsible for plaintiff’s damages. Accordingly, we do not read Sartori as precluding a holding that the statute of repose is unconstitutional as applied to Smith.
similarly reject respondent’s position that Calder
is inapplicable here. To the
contrary, we believe that Calder is
entitled to considerable weight because post-Sartori cases, such as Minnesota
Landmarks, have cited Calder
favorably. See Minn. Landmarks, 466 N.W.2d at 416; see also Brua v. Olson, 621 N.W.2d 472, 475 (
Moreover, the Calder language describing fact situations in which § 541.051 would
be unconstitutional, although dictum, is particularly compelling, if not
dispositive, in this case. It is well
settled that “dictum, if it contains an expression of the opinion of the court,
is entitled to considerable weight.” In re Estate of Bush, 302
The supreme court in Calder dealt with two issues: (1) whether
Minn. Stat. § 541.051 applied to bar the City of Crystal’s contribution
and indemnity actions; and (2) if so, whether the statute was
unconstitutional as a denial of equal protection, due process, or remedies. 318 N.W.2d at 840, 843. There can be no dispute that the issue of the
constitutionality of section 541.051 was specifically raised and argued by
counsel in Calder.
Finally, respondents contend that, like the plaintiffs in Sartori, Smith possessed an effective remedy: it could have negotiated express warranties with subcontractors extending or abolishing the statute of repose before commencement of the project. According to respondents, if Smith had negotiated these express warranties, it could have brought its third-party contribution and indemnity claims. But respondents’ argument does not specifically address the application of the remedies clause. We acknowledge that an ounce of prevention may be worth a pound of cure, but there is a difference between a preventative measure and a remedy under the state constitution. While it is true that demanding warranties from the subcontractors may have prevented Smith from being in its current position, the opportunity for such prevention is not a remedy. Additionally, we observe that Smith’s predicament—being unable to enforce its third-party rights despite promptly moving to protect those rights in February 2003, a mere two months after plaintiff’s initial lawsuit in December 2002—violates traditional notions of fairness and equity.
Following the rationale and judicial dictum in Calder and based on the unique facts of this case, we conclude that the statute of repose contained in Minn. Stat. § 541.051, subd. 1(a), as applied to Smith’s third-party claims, unconstitutionally deprives Smith of its due-process rights under the federal and state constitutions and its right to a remedy under the state constitution.
Because of a recent legislative amendment,
the fact scenario presented by this case will likely not be repeated in the
future. In 2004, the legislature amended
Minn. Stat. § 541.051, subd. 4, which previously provided that the 10- to
12-year statute of repose did not apply to actions based on Minn. Stat.
§ 327A.02. See 2004
Smith’s reply brief contains a
section arguing that Minn. Stat. § 541.051 is unconstitutional on equal-protection
grounds. Respondents filed a joint
motion to strike this portion of the brief on the grounds that appellant raised
this argument for the first time on appeal and in a reply brief. Generally, this court will not consider
matters not argued and considered in the district court. Thiele
v. Stich, 425 N.W.2d 580, 582 (
D E C I S I O N
Because application of the statute of repose in Minn. Stat. § 541.051, subd. 1(a) (2002), violates Smith’s due-process rights and its right to a remedy, we reverse the district court’s grant of summary judgment to respondents. We emphasize that the statute of repose found in Minn. Stat. § 541.051, subd. 1(a), is unconstitutional only as applied to Smith’s third-party contribution and indemnity claims. We grant respondents’ joint motion to strike portions of Smith’s reply brief.
Reversed; motion granted.
The supreme court had previously concluded that an earlier version of Minn.
Stat. § 541.051 violated the equal-protection clause.
 At the time of the lawsuit, Minn. Stat. § 541.051 (1980) contained a statute of repose of 15 years. Sartori, 432 N.W.2d at 451.