Indiana justices outline ‘improvement to real property’

For the first time, the Indiana Supreme Court addressed what constitutes an “improvement to real property” as mentioned in the construction statute of repose. In doing so, the justices reversed the trial court’s grant of a contractor’s motion for summary judgment in a wrongful death claim.

In 2007, Sharon Gill filed a complaint in Marion Superior Court against Evansville Sheet Metal Works and 18 other defendants asserting wrongful death claims. As to ESMW, she sought damages on theories of products liability and contractor negligence. Her husband worked at Aluminum Company of America in Newburgh and was allegedly exposed to and inhaled asbestos fibers during the course of his employment. He was diagnosed with an asbestos-related disease in 2004 and died of lung cancer in 2005.

ESMW allegedly worked as a contractor for Alcoa at a common worksite with Gill’s husband.

The Marion Superior Court placed the complaint on its Mass Tort Asbestos Litigation Docket and eventually granted ESMW’s motions for summary judgment on the grounds that Gill’s product liability and contractor negligence claims were barred by the product liability statute of repose and construction statute of repose, respectively. At issue Monday was only whether the construction statute of repose applied.

The Court of Appeals affirmed, finding Gill brought her claim outside the 10-year period stipulated in the statute, so her claim was barred.

Indiana courts have yet to define the meaning of “improvement to real property” as used in Indiana Code 32-30-1-5 (2004). The justices cited the statute in effect at the time of Gill’s complaint even though the statute was amended in 2005. Justice Frank Sullivan noted the court perceived no substantive difference between the former version and the current one.

Looking at how other states have handled this issue, the justices decided to take the “commonsense” approach that looks to the ordinary or plain meaning of the phrase. Whether something is an improvement to real property under the commonsense approach is a question of law, but its resolution is grounded in fact, Sullivan wrote in Sharon Gill, on her own behalf and on behalf of the Estate of Gale Gill v. Evansville Sheet Metal Works, Inc., 49S05-1111-CV-672.  

The high court held that an “improvement to real property” is an addition to or betterment of real property, that is permanent, that enhances the real property’s capital value, that involves the expenditure of labor or money, that is designed to make the property more useful or valuable, and that is not an ordinary repair.

“In applying this commonsense definition, judges and lawyers should focus on these individual criteria but they should not lose sight of the fact that this is a definition grounded in commonsense,” he wrote. “The fact that a purported improvement satisfies each of these individual criteria may not be sufficient for it to be an improvement within the meaning of the CSoR if it would do violence to the plain and ordinary meaning of the term as used in the construction context.”

In this case, ESMW failed to make a prima facie showing that its work at Alcoa constituted an improvement to real property. The justices remanded for further proceedings.

The justices also addressed the COA’s criticism of that Marion County court following its local rule allowing pre-discovery motions for summary judgment. They agreed with the COA judges that whether something is an improvement to real property is a fact-sensitive inquiry that may require discovery in some cases, but disagreed with the conclusion that Local Rule 714 can’t be applied in this context.