Important Dismissal Obtained by Reunion Industries, Cambria County Court of Common Pleas

03/03/15

Kenneth King v. CBS Corp. et al., case number 2012-3539; Robert Kline v. CBS Corp. et al., case number 2012-4040; John Lumley v. CBS Corp. et al., case number 2013-4249; and Francis Nedock v. CBS Corp. et al., case number 2012-3566, all in the Cambria County Court of Common Pleas

John C. McMeekin II, Julie Nord Friedman and Natalie M. Kreter obtained a dismissal in four cases set in Cambria County on behalf of Reunion Industries, an overhead crane manufacturer, after oral arguments on motions for summary judgment based upon the statute of repose.  Reunion Industries has been engaged in litigation in Cambria County for the last decade and this recent ruling indicates an important shift by that Court.

The Pennsylvania Statute of Repose, 42 Pa.C.S.A. § 5536, provides that one must bring a civil action against a person who has been involved in the construction of any improvement to real property within twelve  years after completion of that construction of an improvement to real property.  A defendant seeking protection under the Statute of Repose must demonstrate the following:  “1) what is supplied is an improvement to real property; 2) more than twelve years have elapsed between the completion of the improvements to the real estate and the injury; and 3) the activity of the moving party is within the class of activities designated in the statute.” (Noll v. Harrisburg Area YMCA, 643 A.2d 81, 84-85 (Pa. 1994) (internal citations omitted)).  While the Pennsylvania Supreme Court has held that an improvement to real property includes “everything that permanently enhances the value of real property” it has also defined three elements in which to determine whether a fixture qualifies as an improvement.  Id. at 87. Those elements are “ 1) the relative permanence of attachment to realty; 2) the extent to which the chattel is necessary or essential to the use of the realty; and 3) the intention of the parties to make a permanent addition to the realty.”  (Id.).

Reunion Industries is a designer, engineer and manufacturer of industrial-sized overhead cranes.  Many of these large, metal, custom-built overhead cranes were present in many former industrial sites, including Bethlehem Steel, the site at issue in these Cambria County cases.  Overhead cranes were an indispensable part of the large metal making and metal-processing facility and were the only practical method for efficiently moving large heavy materials within a mill.  Without overhead cranes, these industrial facilities could not have made or processed steel, the very product they were in business to make.   In order for these cranes to effectively lift and move heavy materials, they had to be attached to the structural girders of the buildings in which they were installed.  They were connected to various electrical systems as well as had ramps, catwalks, and ladders that enabled them to be made a valuable and necessary part of the mill.  In essence, these cranes were permanent improvements to the properties in which they were installed.  Indeed, with regard to the Reunion overhead cranes at issue in these Cambria County cases, there is a significant amount of former Bethlehem Steel workers who have described the large and permanent nature of these cranes and have stated they were necessary for the operations of that mill.

The Reunion overhead cranes at issue have met all of the elements necessary under the current law in order to qualify for protection under Pennsylvania’s statute of repose.  In these four cases, there was evidence that the overhead cranes were considered permanent and necessary structures within the Bethlehem Steel mill and thereby qualified as an “improvement to real property.”   There was evidence that more than twelve years had elapsed between the completion of any installation of an overhead crane at Bethlehem Steel and any injury alleged by these four plaintiffs, as well as countless other plaintiffs in previous Cambria cases.  Finally, there was evidence that Reunion’s role as a designer and manufacturer of custom-built overhead cranes established that it qualified as a member of the class of activities designed to be protected by this statute.    

As part of their argument against applying the statute of repose to these cases, Plaintiffs’ counsel has repeatedly pointed to an isolated statement within the Abrams v. Pneumo Abex Corp. Pennsylvania Supreme Court opinion, which stated “no statutory right of repose exists with respect to asbestos cases.”  981 A.2d 198, 212 (Pa. 2009).  Notwithstanding defendants’ arguments that that opinion did not even address the applicability of the Construction Project Statute of Repose in cases involving allegations of asbestos exposure and should therefore be considered dicta.

In 2014, the Superior Court issued an Opinion in Graver v. Foster Wheeler Corp., 2014 PA Super 132, and held that the statute of repose for improvements to real property set forth in 42 Pa.Cons.Stat.Ann. S. 5536 barred asbestos personal injury claims against a boiler manufacturer.  The Superior Court addressed the argument set forth by plaintiffs from the Abrams opinion and found that the defendants in Abrams were not involved in the design and construction of improvement to real property and that there was no discussion of the statute of repose for improvements to real estate.  The Superior Court also found that a declaration that no statutory right of repose exists with respect to asbestos cases was dicta and in conflict with the plain meaning of the statute.  After examining all of the evidence of record, the Graver Court found that the boiler in question constituted an improvement to real property and thus qualified for protection under the statute of repose.

There was a pending Petition for Allowance of Appeal in the Graver case until February 4, 2015, when the Pennsylvania Supreme Court issued an Order denying that petition.  A week later, on February 11, 2015, Natalie Kreter presented Reunion’s Motion for Summary Judgment Based Upon the Statute of Repose detailing how the overhead cranes at Bethlehem Steel should qualify under the statute and requested that the Cambria Court of Common Pleas apply the Superior Court’s reasoning in Graver to the facts of the four cases before it.  On February 13, 2015 the Cambria trial court issued an Order granting Defendant Reunion Industries’ Statute of Repose Summary Judgment motions in the four cases that had been presented before it.

John C. McMeekin II represents clients as local, national and trial counsel in environmental, toxic and mass torts product and related class actions, products liability, insurance coverage and aviation litigation. He graduated magna cum laude from the University of Baltimore School of Law.  John is admitted to practice in Pennsylvania, New Jersey and Maryland and related U.S. District Courts. He has been published in professional and law review journals on a variety of topics related to toxic tort and environmental litigation. His significant cases can be found in the BNA Law Reports and Law 360.  He is a past Chair of the ABA TIPS Toxic Tort & Environmental Law Committee and International Law Committee, Chair of the Philadelphia Bar Association Environmental and Toxic Tort Law Committee, and serves as Revenue Officer and a member of the ABA TIPS Council. He is a member of the firm’s Executive Committee and Chair of the Aviation practice group.

Julie Nord Friedman concentrates her practice on the defense of manufacturers, suppliers and contractors in mass and toxic tort litigation, with an emphasis on asbestos litigation.  Her clients range from Fortune 500 companies to regional contractors and suppliers.  She is a National Coordinating Counsel for one client and she also acts as trial counsel in the defense of claims in mass tort and toxic tort litigation and regularly handles matters for multiple clients in Pennsylvania and West Virginia.  Julie is active in the Defense Research Institute.  She earned her J.D. in 1995 from the University of Pittsburgh School of Law and her B.A. in 1992 from the American University in Washington, D.C.

Natalie M. Kreter focuses her practice on the defense of corporations in the areas of products liability, toxic torts and  environmental law. She received her J.D. in 2004 from the University of Pittsburgh School of Law and her B.S. in 2000 from the University of North Carolina at Greensboro, majoring in biology and chemistry. She received a full NCAA Athletic Scholarship in Women’s Basketball.  She is admitted to practice in Pennsylvania and West Virginia, as well as the U.S. District Court for the Eastern District of Pennsylvania and the U.S. District Court for the Southern District of West Virginia.