AG Valley Coop. v. Servinsky Eng'g, PLLC

311 Neb. 665

974 N.W.2d 324

AG VALLEY COOPERATIVE, Non-Stock, a Nebraska cooperative corporation, appellant,

v.SERVINSKY ENGINEERING, PLLC, a Michigan professional limited liability company, et al., appellees.

No. S-20-709.

Supreme Court of Nebraska.

Filed June 3, 2022

John P. Weis, Omaha, and Andrew D. Wurdeman, of Wolfe, Snowden, Hurd, Ahl, Sitzmann, Tannehill & Hahn, L.L.P., for appellant.

Terry J. Grennan and Michael R. Faz, Omaha, of Cassem, Tierney, Adams, Gotch & Douglas, for appellee Servinsky Engineering, PLLC.

Daniel L. Lindstrom and Elizabeth J. Klingelhoefer, Kearney, of Jacobsen, Orr, Lindstrom & Holbrook, P.C., L.L.O., for appellee Johnson System, Inc.

Brenna Marie Grasz, Gary Nedved, and Christopher Gruber, Lincoln, of Keating, O'Gara, Nedved & Peter, P.C., L.L.O., for appellee Heartland Building Systems, Inc.

Andre R. Barry, Lincoln, Jennie A. Kuehner, Aurora, and Kevin J. Schneider, Lincoln, of Cline, Williams, Wright, Johnson & Oldfather, L.L.P., for appellee Chief Industries, Inc.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, and Freudenberg, JJ., and Weimer, District Judge.

Stacy, J.

This case arises from the 2017 collapse of a premanufactured grain bin that was constructed and put into service in 2007. In 2018, the owner of the grain bin filed suit against multiple defendants, alleging the collapse was due to defects in designing, manufacturing, and constructing the grain bin. In a series of orders, the district court granted summary judgment in favor of the defendants. It dismissed the claim against the general contractor as barred by the statute of repose in Neb. Rev. Stat. § 25-223 (Reissue 2016). It dismissed the product liability claim against the manufacturers as barred by the statute of repose in Neb. Rev. Stat. § 25-224(2)(a)(i) (Reissue 2016). And it dismissed the product liability claim against an engineering firm after finding the firm was not involved in the design or manufacturing of the subject grain bin.

The owner of the grain bin appeals, arguing primarily that the district court did not apply the correct statutes of repose to the various claims. Finding no merit to the assignments of error, we affirm.

I. BACKGROUND

1. PARTIES

Ag Valley Cooperative, Non-Stock (Ag Valley), is a cooperative corporation organized and existing under Nebraska law. It is an agricultural producer-owned cooperative engaged in the buying, selling, and storing of grain, farm products, and farming inputs.

Chief Industries, Inc. (Chief), is a Delaware corporation with its principal place of business in Nebraska. One of its divisions, headquartered in Kearney, Nebraska, is engaged in the business of designing, manufacturing, and constructing metal buildings, including grain bin storage facilities and components thereof.

Heartland Building Systems, Inc. (Heartland), is a Nebraska corporation engaged in the business of constructing, designing, and installing grain bin systems and components for grain bin storage. Heartland is a dealer for Chief.

At all relevant times, Johnson System, Inc. (Johnson), was a Michigan corporation engaged in the business of designing, manufacturing, and selling grain bin structures and component parts. And Servinsky Engineering, PLLC (Servinsky), was a company that provided structural engineering consulting services to Johnson.

2. GRAIN BIN

In late January 2007, Ag Valley contracted with Heartland to serve as the general contractor for the construction of a grain storage facility in Edison, Nebraska. The Edison facility included several grain bins, one of which was a "Chief Titan ‘Agri-Dome’ " model CB50-15, which Heartland ordered directly from Chief. For ease of reference, we will refer to the subject grain bin as the "Titan model CB50."

Chief designed and manufactured the primary components of the Titan model CB50 at its facility in Kearney, including the curved sidewall panels, the roof structure, and the metal stiffeners that ran vertically along the sidewalls to add strength. The Titan model CB50 sold to Ag Valley was customized to include specific features for the Edison facility, including a feature the parties refer to as a "skid loader door." This door was approximately 7 feet wide and 8 feet tall, and it allowed a skid loader to enter the base of the bin to assist in emptying residual grain. To accommodate the skid loader door, Chief designed and manufactured the Titan model CB50 using shorter sidewall sheets, and it designed and fabricated two base plates to add horizontal strength to the sill of the skid loader door.

At Chief's request, the skid loader door itself was designed and manufactured by Johnson, specifically for incorporation into the Titan model CB50 being manufactured for the Edison facility. Johnson manufactured the door at its facility in Michigan in May and June 2007, and then shipped the component part directly to Chief in Kearney. Chief then shipped the entire Titan model CB50, with all of its component parts and instructions for assembly and installation, to Heartland's construction site in Edison.

Heartland's subcontractors completed installation and construction of the Titan model CB50 on July 4, 2007. During construction, the bin was anchored to a concrete foundation, and when completed, the bin was 155 feet in diameter and could store over 1 million bushels of grain. The following exhibit depicts the Edison facility with the Titan model CB50 and the skid loader door in the foreground:

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Construction on Ag Valley's Edison facility was completed on November 1, 2007, and the Titan model CB50 was placed into service. Final payment on the construction project was made by Ag Valley to Heartland on November 30. The Titan model CB50 was full of grain when it collapsed without warning almost 10 years later, on August 6, 2017.

3. OPERATIVE COMPLAINT

On March 20, 2018, Ag Valley filed this lawsuit in the district court for Lancaster County, seeking damages in excess of $8 million from multiple defendants allegedly involved in designing, manufacturing, and constructing the grain storage facility. We summarize the allegations of the operative second amended complaint only as relevant to the issues and the parties before us on appeal.

Ag Valley styled its only claim against Heartland as one based in contract. The operative complaint alleged that Heartland, as the general contractor, "breached its agreement to properly design and construct the grain bin facility in a workman like manner" and "failed to provide Ag Valley with a properly designed and usable grain bin which would safely withstand the loads placed upon it by grain to be stored in the facility as contemplated in the agreement."

Ag Valley asserted product liability claims against Chief, Johnson, and Servinsky. The complaint alleged, collectively, that each of these defendants was strictly liable in tort as a result of designing, manufacturing, and selling a dangerous and unsafe product and that each defendant was negligent in "incorporating into [the] grain bin facility the skid loader door." More specifically, the complaint alleged:

The grain bin storage system was unreasonably dangerous for its intended use and failed to work as safely as an ordinary consumer would expect when used in a manner intended by the manufacturer or reasonably foreseeable by the manufacturer. The Defendants placed the grain bin storage system on the market when they knew, or in the exercise of reasonable care, should have known the grain bin storage system was defective, unreasonably dangerous, and unsafe. The skid loader drive door system incorporated into the grain bin storage facility was defective when the [Titan model CB50] left the possession of ... Chief ....

The complaint alleged the specific defects which "caused or contributed to the failure" of the Titan model CB50 included (1) the skid loader door system and its component parts that were insufficient to withstand normal operational forces created by storing grain in the bin and (2) the doorframe and the "flexible grain bin walls [that] were not properly designed to withstand normal operational forces." The complaint also alleged Chief, Johnson, and Servinsky were negligent in "utilizing a skid loader door assembly that was not compatible with the grain bin wall" and that had not been adequately tested.

At different points in the litigation, Servinsky, Heartland, Chief, and Johnson all moved for summary judgment.

4. SUMMARY JUDGMENT TO SERVINSKY

Servinsky moved for summary judgment on the merits of the product liability claim, asserting that it had "no involvement in the project which is the subject matter of [the] Complaint and, therefore ... no duty to the plaintiff." The district court granted Servinsky's motion, finding the evidence was undisputed that Servinsky neither "designed, [nor] manufactured any component[ ] parts or assisted in any manner with regard to the site specific" Titan model CB50 that collapsed.

5. SUMMARY JUDGMENT TO HEARTLAND

Heartland's motion for summary judgment asserted that Ag Valley's claim against Heartland was barred by the 10-year statute of repose set out in § 25-223, which provides in relevant part:

In no event may any action be commenced to recover damages for an alleged breach of warranty on improvements to real property or deficiency in the design, planning, supervision, or observation of construction, or construction of an improvement to real property more than ten years beyond the time of the act giving rise to the cause of action.

The district court agreed that Ag Valley's claim against Heartland was governed by § 25-223, and it determined the 10-year repose period commenced running in November 2007. Because Ag Valley's lawsuit was filed more than 10 years later, the court concluded the claim against Heartland was barred by the statute of repose, and it granted summary judgment in Heartland's favor.

6. SUMMARY JUDGMENT TO CHIEF AND JOHNSON

At separate times, Chief and Johnson each moved for summary judgment, arguing the product...