This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2006).
IN COURT OF APPEALS
Rachel Goetzmann, et al.,
Domestic Development, Inc., et al.,
Domestic Development, Inc.,
defendant and third-party plaintiff,
Bill Ratzlaff, individually and d/b/a Bill’s Stucco Service,
third party defendant,
Scott King, individually and d/b/a L & S Construction,
third party defendant,
C. H. Carpenter Lumber,
third party defendant,
Westurn Cedar Supply & Roofing,
third party defendant,
Schield Brothers, Inc. d/b/a Vetter Windows and Doors,
Third Party Defendant.
Filed February 13, 2007
Dakota County District Court
File No. C3-05-6617
Kay Nord Hunt, Barry A. O’Neil, Valerie Sims, Lommen, Abdo, Cole, King & Stageberg, P.A., 2000 IDS Center, 80 South 8th Street, Minneapolis, MN 55402 (for appellant)
James A. Reding, Jr., James J. Ranheim, Reding & Pilney,
Paul Wocken, Willenbring, Dahl, Wocken & Zimmermann, 318 Main Street, P.O. Box 417, Cold Spring, MN 56320 (for respondent Bill Ratzlaff, individually and d/b/a Bill’s Stucco Service)
R. Glenn Nord, R. Glenn Nord & Associates, P.A., 20686 Holyoke Avenue, P.O. Box 427, Lakeville, MN 55044 (for respondent Scott King, individually and d/b/a L & S Construction)
Jeffrey A. Magnus, Law Offices of Jeffrey A. Magnus, 340 Grandview Square, 5201 Eden Avenue, Edina, MN 55436 (for respondent C. H. Carpenter Lumber)
Timothy R. Murphy, Cara C. Passaro, O’Neill & Murphy, 1050 Degree of Honor Building, 325 Cedar Street, St. Paul, MN 55101 (for respondent Westurn Cedar Supply & Roofing)
Considered and decided by Halbrooks, Presiding Judge; Randall, Judge; and Stoneburner, Judge.
Appellant challenges the district court’s grant of summary judgment to respondents on the grounds that the district court erred in its determination that appellant’s settlement agreement with the Goetzmanns is a Pierringer release that eliminated appellant’s third-party claims against respondents and that appellant’s claims are time-barred by operation of Minn. Stat. § 541.051 (2002). Because we conclude that the district court did not err, we affirm.
underlying facts in this matter are undisputed.
Appellant Domestic Development, Inc., a general contractor, built a home
The Goetzmanns and appellant negotiated a settlement of the Goetzmanns’ claims on June 29, 2005. In exchange for appellant’s payment of $147,500 to the Goetzmanns, the parties released each other from any and all claims, and the Goetzmanns assigned any claims that they had or might have against respondents to appellant. Appellant, in turn, agreed to hold the Goetzmanns harmless to the extent of any indemnity or contribution claims. The Goetzmanns signed the settlement agreement in July 2005 and received the settlement proceeds. When Vetter Windows requested a copy of the settlement agreement, appellant’s counsel advised Vetter Windows that the agreement was being executed, although appellant had not yet signed it, and that the Goetzmanns had sold their house. Based on the settlement agreement’s reference to a Pierringer release, Vetter Windows moved for summary judgment, and the other respondents, with the exception of Scott King, individually and d/b/a L & S Construction, joined.
In response to the summary-judgment motion, the Goetzmanns and appellant revised the language in the settlement agreement in order to clarify their intent that appellant would retain its third-party claims against respondents. Unlike the first settlement agreement, the revised agreement made no reference to a Pierringer release or its effect. Appellant provided an unsigned copy of the revised settlement agreement to the district court at the summary-judgment hearing on September 27, 2005. A fully executed copy of the settlement agreement was then submitted to the district court by appellant’s counsel in a letter dated October 28, 2005.
The district court granted summary judgment for respondents. Appellant sought reconsideration, but the district court denied reconsideration and ordered dismissal. This appeal follows.
D E C I S I O N
Appellant contends that the language of the revised settlement agreement accurately reflects the terms of its settlement with the Geotzmanns and that the district court erred in determining that the first settlement agreement applies. Appellant also argues that the district court’s determination that the settlement agreement is a Pierringer release that extinguishes its claims for contribution and indemnity is error.
The first settlement agreement, which the Goetzmanns signed in July 2005, stated that it was the parties’ intent “to settle and release all of the claims by [the Goetzmanns] against [appellant], while preserving [appellant’s] ability and right to pursue any and all claims against [respondents] or any other subcontractor, supplier or manufacturer.” The agreement also provided:
4. In executing this Agreement and
accepting the payment referenced above, [the Goetzmanns] hereby assign any and
all claims relating to the Property that they have or may have against any of
the [respondents] or any other subcontractors, suppliers or parties to
[appellant]. In consideration for the
above-mentioned Release and this Assignment, if [appellant] asserts a claim
against a third party for indemnification or contribution arising out of the
construction of the Property, then this Agreement shall act as a “Pierringer”
release, and [appellant] shall defend, indemnify and hold the [Goetzmanns]
harmless to the extent of that claim for indemnification or contribution. It is the intention of the parties that this
paragraph be construed in accord with the principles of Pierringer v. Hoger,
124 N.W.2d 106 (
In addition, the agreement stated that “The parties agree that this Agreement fully and finally resolves the claims by the [Goetzmanns] against [appellant] in the Lawsuit but otherwise has no effect on the direct and assigned claims by [appellant] against the [respondents] in the Lawsuit or any other subcontractor, supplier, manufacturer or party.”
The revised settlement agreement stated that
it is the desire and specific intent of the [Goetzmanns] and [appellant], the only parties to this Agreement, to settle and release all of the claims by [the Goetzmanns] against [appellant] and all other [respondents], subcontractors, suppliers and manufacturers, while preserving [appellant’s] ability and right to pursue any and all claims in contribution and/or indemnity against the various [respondents] or any other subcontractor, supplier or manufacturer.
. . . .
5. In executing this Agreement and accepting the payment referenced above, [the Goetzmanns] hereby release any and all claims they have against any and all parties, including [appellant and respondents] and any other subcontractors, suppliers or manufacturers relating to the construction of the Property.
6. In consideration for the above-mentioned Release, if any party asserts a claim against [the Goetzmanns] for indemnification or contribution arising out of the construction of the Property, [appellant] shall defend, indemnify and hold the [Goetzmanns] harmless to the extent of that claim for indemnification or contribution.
. . . .
9. The parties agree that this Agreement fully and finally resolves . . . all claims by the [Goetzmanns] against [appellant] and any other party in the Lawsuit and any and all subcontractors, supplier[s] and manufacturers, but otherwise has no effect [on appellant’s] right or ability to seek contribution or indemnity against [respondents] in the Lawsuit or any other subcontractor, supplier, manufacturer or party.
In dismissing on summary judgment appellant’s third-party claims against respondents, the district court described the revised agreement as appellant’s attempt to “recreate a cause of action that was previously extinguished by a release.” The district court thus found that the first settlement agreement controlled.
When appellant sought reconsideration, the district court indicated that it was willing to reconsider its decision “[i]f the other parties agree with [appellant’s] factual assertions and everyone was aware the first settlement document was not executed.” But the district court further stated that it would not reconsider its decision if appellant’s counsel drafted the first agreement with appellant’s assent, sent it to the Goetzmanns for signature, and “simply did not take the formal step of having your client sign the document.” Respondents subsequently advised the district court that it was the “latter of the two scenarios” and that the motion for reconsideration should be denied.
We conclude that the district court did not err by finding that the first settlement agreement controls. While appellant had not yet signed it, the Goetzmanns had signed it and received the settlement proceeds a few months before the summary-judgment hearing. But even if the district court was in error and the revised settlement agreement is the appropriate one to consider, we conclude that the result is the same because both agreements are modified Pierringer releases.
were recognized by the Minnesota Supreme Court in Frey v. Snelgrove, 269 N.W.2d 918, 921 (Minn. 1978), as a means for
a plaintiff to settle its claims with one or more of multiple defendants while
permitting the trial against the nonsettling defendants to go forward. The basic elements of a Pierringer release are: (1) the
release of the settling defendants from an action with an equivalent discharge
of that part of the cause of action attributable to the settling defendants’
causal negligence; (2) the reservation by the plaintiff of all legal claims
against nonsettling defendants; and (3) the plaintiff’s agreement to indemnify
the settling defendants from any claims of contribution made by nonsettling
parties and to satisfy any judgment obtained from the nonsettling defendants to
the extent that the settling defendants have been released. Frey, 269 N.W.2d at 921 n.1. “The legal effect of the Pierringer release is that each tortfeasor pays only its
proportionate share of liability, and no more, and, thus, there can be no
liability for contribution.” Bunce v.
A.P.I., Inc., 696 N.W.2d 852, 856 (
We are guided in our
analysis by this court’s decision in Bunce. In Bunce, the plaintiff used a Pierringer release to settle his
personal-injury claim against A.P.I., Inc., one of 14 defendants that
manufactured, sold, or distributed products that contained asbestos.
It is understood and agreed that the purpose, intent, and legal effect of this document is to bar forever any recovery, contribution, indemnity, or subrogation against releasees by any other party as a result of the accident except and other than such elements as are cognizable under the workers compensation statute and in accordance with NAIG [Naig] v. Bloomington Sanitation, 258 N.W.2d 891 (1977). It is further understood and agreed that this document shall have the same effect as the releases described in [Pierringer] and in [Frey], and shall be so construed.
. . . .
This release is intended to release only [Bunce’s] claim against [A.P.I., Inc.]. [Bunce] expressly reserve[s] the balance of the whole cause of action or any other claim of whatever kind or nature not released which [Bunce] may have or hereafter have against any other persons or entities arising out of the above-described dispute. It is also specifically agreed that [A.P.I., Inc.] reserve all claims [A.P.I., Inc.] may have for contribution, indemnity, or subrogation against other persons or entities who may be found liable to [Bunce], or who may be jointly or severally liable to [Bunce] with [A.P.I., Inc.].
to the settlement, A.P.I. asserted third-party claims for contribution and indemnity
against several entities that had not been sued directly by Bunce.
acknowledged before this court that, if the settlement agreement had been a
standard Pierringer agreement, it
would lose on the merits.
disagreed, concluding that A.P.I.’s distinction was without a difference in the
long-settled law of Pierringer
The circumstances here are strikingly similar to those in Bunce. Appellant crafted settlement language in both agreements that settled the Goetzmanns’ claims against it but preserved its third-party claims against respondents. Because we conclude that these agreements are modified Pierringer releases, appellant has paid no more than its fair share of the common liability to the Goetzmanns. Therefore, appellant has no remaining third-party claims. The district court did not err in its ruling.
also argues that the district court erred by determining that its claims for
contribution and indemnity are time-barred by Minn. Stat. § 541.051 (2002)
and that the district court’s decision unconstitutionally deprives it of due
process. The construction or application of a statute is
a question of law, which we review de novo.
Minn. Stat. § 541.051 (2002) provides:
Subdivision 1. Limitation; service or construction of real property; improvements. (a) Except where fraud is involved, no action by any person in contract, tort, or otherwise to recover damages for any injury to property, real or personal, or for bodily injury or wrongful death, 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 two years after discovery of the injury or, in the case of an action for contribution or indemnity, accrual of the cause of action, nor, in any event shall such a cause of action accrue more than ten years after substantial completion of the construction. Date of substantial completion shall be determined by the date when construction is sufficiently completed so that the owner or the owner’s representative can occupy or use the improvement for the intended purpose.
(b) For purposes of paragraph (a), a cause of action accrues upon discovery of the injury or, in the case of an action for contribution or indemnity, upon payment of a final judgment, arbitration award, or settlement arising out of the defective and unsafe condition.
. . . .
Subd. 2. Action allowed; limitation. Notwithstanding the provisions of subdivision 1, in the case of an action which accrues during the ninth or tenth year after substantial completion of the construction, an action to recover damages may be brought within two years after the date on which the action accrued, but in no event may an action be brought more than 12 years after substantial completion of the construction.
briefing, but before oral arguments in this matter, the supreme court decided Weston v. McWilliams & Assocs., Inc.,
716 N.W.2d 634 (
underlying facts in Weston were
of the subcontractors moved for summary judgment on the ground that the
third-party action was extinguished because it was not brought within the
ten-year repose period.
supreme court granted review and reversed this court, reinstating the district
court’s dismissal of the claim.
the plain meaning of accrual does not confound a clear legislative purpose; to the contrary, it accomplishes the clear legislative purpose of preventing the accrual of a cause of action after a specified period of time from the completion of construction.
[General contractor] also argues that it had no control over when it could bring its contribution and indemnity claims because they are derivative of the underlying injury action and it had no control over when the injury action was commenced. That argument presents a distinction that the legislature could have recognized, but did not. We agree with [subcontractor’s] assertion that, had the legislature wanted to declare a separate and different repose period for contribution and indemnity claims, it could have done so explicitly.
the repose provision of section 541.051, subd. 1(a), bars a contribution and indemnity claim that has not accrued (i.e., where the principal claim has not been paid) and has not been brought within the 10 years from the completion of the construction.
In this case, the home was substantially complete on April 29, 1993. Appellant settled with and paid a settlement to the Goetzmanns in July 2005. Because appellant’s claims for contribution and indemnity had not accrued and were not brought within ten years of the completion of the home’s construction, those claims are barred. We, therefore, conclude that the district court did not err in its ruling.
appellant asserts that to hold that its third-party claims are time-barred
unconstitutionally deprives it of its due-process rights under the
[A] statute [of repose] is intended to terminate the possibility of liability after a defined period of time, regardless of the potential plaintiff’s lack of knowledge of his or her cause of action. Such statutes reflect the legislative conclusion that a point in time arrives beyond which a potential defendant should be immune from liability for past conduct.
the repose provision of section 541.051 is based on a legitimate legislative objective and does not violate the Due Process or Remedies Clauses of the Minnesota Constitution. Because we see no reason to differentiate between the Due Process Clause of the Minnesota Constitution and that of the United States Constitution as applied to these facts, we likewise hold that the repose provision of section 541.051 does not violate federal due process.
Weston, 716 N.W.2d at 644. Because this issue has been resolved in Weston, we conclude that appellant’s due-process rights have not been violated.
 Appellant added Schield Brothers, Inc. d/b/a Vetter Windows and Doors by amended third-party complaint in July 2005.
v. Hoger, 124 N.W.2d 106 (
 Vetter Windows was voluntarily dismissed from this action before the summary-judgment hearing.
 All alterations in original except for alterations referring to A.P.I., Inc.
dispute arose out of the Goetzmanns’ lawsuit, filed in May 2004. The legislature included housing warranties,
Minn. Stat. § 327A.02 (2002), under the statute of limitations and repose,
effective August 1, 2004. 2004
Respondents also claim that appellant could not sue respondents based on
housing warranties under Minn. Stat. § 327A.02 (2002) because the
respondents are not house vendors as required by the statute. Respondents did not raise the argument
previously. Generally, respondents are
required to file a notice of review for issues decided adversely.