In a significant decision for manufacturers, the Minnesota Supreme Court found that the state’s 10-year statute of repose (limitations) did not bar claims that involve machinery installed on real property, allowing claims of breach of warranty, negligence, and product liability to move forward.
The case arose out of a residential construction project and the installation of ventilators into a home’s HVAC system. Sixteen years after completion of the work, a fire broke out in one of the ventilators, causing property damage. After paying the homeowner’s insurance claim, Great Northern Insurance filed a suit against the manufacturer of the motors in the ventilators, with claims of product liability, breach of warranty, and negligence, including a claim for breach of a post-sale duty to warn consumers of the risk of fires in ventilator motors.
The trial court ruled in favor of the manufacturer based upon time passed under the statute of repose. The Supreme Court reversed, finding that the manufacturer’s motor was “machinery” to which the statute of repose did not apply.
The Court reasoned that the purpose of Minnesota’s 10-year statute of repose was to bar stale claims involving defective construction of improvements to real property, but, as an exception to this bar, the statute allows “[t]he limitations prescribed do not apply to the manufacturer or supplier of any equipment or machinery installed upon real property.”
The Court premised its argument against tolling the statute by concluding that what mattered was the materials’ nature and function rather than its integration into a structure.
Going forward, the decision represents a difficult hurdle for manufacturers to surmount in products-liability litigation, and the amount of time elapsed once the equipment is installed may no longer serve as a viable defense.