Firm Wins Minnesota Supreme Court Decision in Improvement to Real Property Case

Bob Kuderer, with the assistance of Tom Brock and Madeline Davis, successfully argued the 2-year statute of limitations in Minn. Stat. § 541.051, subd. 1(a) (2016) applies to claims arising from the replacement of a broken, asbestos-insulated boiler.  On February 3, 2021, the Minnesota Supreme Court affirmed the lower courts’ decision in applying the statute to bar appellant Moore’s claims. Moore v. Robinson Environmental, et al., A19-0668 (Minn. 2021).

Moore brought suit in 2018 for claims stemming from Robinson’s 2013 removal of an asbestos insulated boiler and pipes.  He alleged Robinson failed to remove all asbestos, tracking it throughout his house, along with a separate heating contractor.

The district court granted Robinson judgment on the pleadings, dismissing Moore’s claims based on the 2-year statute of limitations in Minn. Stat. § 541.051.  Minn. Stat. § 541.051, subd. 1(a) provides that actions “arising out of the defective and unsafe condition of an improvement to real property” shall be brought no more than two years after the cause of action accrues. The court concluded Robinson’s work was not “merely demolition,” but was “integral to the installation of an updated boiler system” and thus an improvement to real property. The court of appeals affirmed.

The Minnesota Supreme Court granted review. Moore argued the 2-year statute of limitations did not apply to his claims for three reasons: (1) the removal of the broken, asbestos-insulated boiler was not “an improvement to real property”; (2) Robinson did not perform “construction,” as it “merely removed materials”; and (3) the damages did not arise out of a “defective and unsafe condition of an improvement.”

First, based on principles of statutory interpretation, the Minnesota Supreme Court concluded that the boiler removal was indeed an improvement to real property.  While the statutory language was ambiguous, the Court first looked to dictionary definitions of the word “construction” and determined the word encompassed the entire process of work.  It also reviewed the Legislature’s amendments to the statute, which expanded the statute over years.  Ultimately, the Minnesota Supreme Court concluded the statute applied to all work done in construction to improve real property because applying otherwise would be “arbitrary and inconsistent…”

Second, the court applied the Siewert v. Northern States Power Co. three-factor test to determine whether work was an improvement to real property. 793 N.W.2d 272, 287 (Minn. 2011). It concluded the first two factors “straightforwardly applied” to this case: the new boiler was permanent and enhanced the capital value of the Moore’s home.  The Court was not persuaded by Moore’s argument that the new, asbestos-free boiler was not designed to make his home more useful, but rather intended to restore it to its previous level of usefulness.  Instead, the Court concluded that an asbestos-free boiler and pipes undoubtedly made Moore’s property more useful and valuable.  In sum, it concluded “the abatement and removal work [done by Robinson] was a necessary part of the process of installing the new heating system” and thus, an improvement to real property.

Lastly, looking to the “individual facts alleged in the complaint,” the Minnesota Supreme Court concluded that Moore alleged “that his damages arose out of the defective and unsafe condition of the heating system because the heating contractor stepped in asbestos and tracked it through his home.”  Simply because negligence created an unsafe and defective condition does not mean the damages did not arise from the unsafe and defective condition.

The Supreme Court’s decision confirms that Minn. Stat. § 541.051, subd. 1(a) applies to construction work taken as a whole, even if part of that work is removal.  The improvement to real property statute of limitations can significantly impact the outcome of a case.

A thorough understanding of it is critical in construction related matters.  If you have any questions about this, or any other matter, please contact us.