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Horning v. Penrose Plumbing & Heating, Inc.

Supreme Court of Wyoming

October 28, 2014

RICHARD A. HORNING and MARY D. HORNING, Appellants (Plaintiffs),
v.
PENROSE PLUMBING & HEATING INC., Appellee (Defendant)

Appeal from the District Court of Campbell County. The Honorable William J. Edelman Judge.

Representing Appellants: Ryan W. McGrath and J. David Horning of Cox, Horning & McGrath, LLC, Gillette, Wyoming. Argument by Mr. McGrath.

Representing Appellee: Monty L. Barnett and Grant R. Curry of White and Steele, P.C., Denver, Colorado. Argument by Mr. Curry.

Before BURKE, C.J., and HILL, KITE, DAVIS, and FOX, JJ. KITE, J., delivers the opinion of the Court; FOX, J., delivers a dissenting opinion, in which DAVIS, J., joins.

OPINION

Page 152

KITE, Justice.

[¶1] Richard A. and Mary D. Horning (Hornings) sustained damages from carbon monoxide poisoning after an exhaust pipe in the furnace in their home ruptured. They filed a complaint against Penrose Plumbing & Heating, Inc. (Penrose) and others to recover damages for their injuries. The district court granted summary judgment for Penrose after concluding the Hornings did not file their complaint within the applicable ten year statute of repose. The Hornings appealed from the order dismissing their claim, asserting the district court misinterpreted the statute of repose. We reverse.

ISSUE

[¶2] The issue for our determination is when the statute of repose contained in Wyo. Stat. Ann. § 1-3-111 (LexisNexis 2013) begins to run.

FACTS

[¶3] Mill Iron Partners, LLC, (Mill Iron) was a real estate developer in northeastern Wyoming. In 2001, Mill Iron began development of property located in Gillette, Wyoming. The project involved construction of three condominium units. Mill Iron hired Woodcraft, Inc. (Woodcraft) as the project manager. In that capacity, Woodcraft was responsible for supervising construction of the condominiums. Woodcraft subcontracted with Penrose to install heating, ventilation and air conditioning (HVAC) systems, including gas forced air furnaces and duct work, in each of the units.

[¶4] Penrose completed the installation of the HVAC system in August of 2001. According to Mill Iron and Woodcraft, the condominium was substantially completed in early 2002. However, Mill Iron did not pay the water tap fee required for the city to do the final inspections and issue a certificate of occupancy until August of 2003, eighteen months later. The Hornings purchased one of the condominium units in 2004.

[¶5] In January of 2012, eight years after they purchased the unit, the Hornings awoke to extreme cold temperatures. They had headaches and shortness of breath and were confused and disoriented. They called an HVAC technician who came to the home, inspected the system and found a rupture in the exhaust pipe. He expressed concern that the Hornings had been exposed to carbon monoxide. Later, they were diagnosed with having sustained severe carbon monoxide poisoning.

[¶6] In 2012, the Hornings filed a complaint against Mill Iron, Woodcraft and Penrose alleging they were negligent in the course of constructing the home. Specifically, they alleged Penrose had installed the HVAC system with the owner's manual and installation instructions wedged inside the

Page 153

exhaust pipe, which obstructed the flow of exhaust gases and eventually caused the pipe to rupture, releasing carbon monoxide into the home. Mill Iron and Woodcraft settled the claims against them and were dismissed from the lawsuit.

[¶7] In its answer, Penrose admitted that it installed the HVAC system in the Hornings' home but denied any negligence. As an affirmative defense, Penrose asserted the Hornings' claims were barred by operation of § 1-3-111, the statute of repose which requires claims for alleged defective or unsafe conditions relating to improvements to real property to be brought within ten years of substantial completion of the improvement. Penrose filed a motion for summary judgment arguing that the claims against it must be dismissed pursuant to § 1-3-111 because they were not brought within ten years after Penrose completed its work on the HVAC system. Penrose submitted evidence showing it had completed the construction and installation of the HVAC system in August of 2001, eleven years before the Hornings filed their complaint.

[¶8] In response, the Hornings argued the ten year statute of repose did not begin to run until construction of the condominium was sufficiently completed such that they could utilize the home and, correspondingly, the furnace, for the purposes for which they were intended. The Hornings asserted no one was able to utilize the condominium and furnace until the city issued a certificate of occupancy in August of 2003. Because they filed their complaint in November 2012, nine years after the city issued the certificate, they asserted it was timely.

[¶9] After a hearing, the district court granted Penrose's motion for summary judgment. The district court concluded the ten year statute of repose found in § 1-3-111 begins to run when an improvement to real property is completed to a point where an owner can utilize the improvement, not when the entire project is complete. Because Penrose completed the HVAC system in 2001, the district court concluded the Hornings' complaint filed eleven years later was untimely. The Hornings timely appealed from the district court's order.

STANDARD OF REVIEW

[¶10] The Hornings assert the district court erred in interpreting the applicable statute of repose as beginning to run when installation of the furnace was completed and granting summary judgment for Penrose. We review district court interpretations of statutory provisions and summary judgment orders de novo. City of Cheyenne v. Bd. of County Comm'rs of Laramie Co., 2012 WY 156, ¶ 4, 290 P.3d 1057, 1058 (Wyo. 2012).

DISCUSSION

[¶11] The statute of repose at issue here provides in pertinent part as follows:

§ 1-3-110. " Substantial completion" defined.
As used in this act [§ § 1-3-110 through 1-3-113] " substantial completion" means the degree of completion at which the owner can utilize the improvement for the purpose for which it was intended.
§ 1-3-111. Improvements to real property; generally.
(a) Unless the parties to the contract agree otherwise, no action to recover damages, whether in tort, contract, indemnity or otherwise, shall be brought more than ten (10) years after substantial completion of an improvement to real property, against any person constructing, altering or repairing the improvement, manufacturing or furnishing materials incorporated in the improvement, or performing or furnishing services in the design, planning, ...

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