Consolidated Grain & Barge Co. v. Structural Systems Inc.

FILED
United States Court of Appeals
Tenth Circuit

UNITED STATES COURT OF APPEALS April 3, 2009
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court

CONSOLIDATED GRAIN &
BARGE CO.,

Plaintiff-Appellant,
No. 07-7063
v. (D.C. No. 06-CV-520-RAW)
(E.D. Okla.)
STRUCTURAL SYSTEMS, INC.,

Defendant-Appellee.

ORDER AND JUDGMENT *

Before LUCERO, HARTZ, and HOLMES, Circuit Judges.

In October 2006, Nationwide Agribusiness Insurance Company, the insurer

of plaintiff Consolidated Grain & Barge Company (CGB), filed this subrogation

action under CGB’s name in Oklahoma state court, alleging that one of CGB’s

facilities in Arkansas was damaged by a November 2003 fire that was caused by

negligent work substantially completed there in June 2000 by defendant Structural

*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Systems, Inc. (SSI). After SSI removed the case to federal court, the district

court granted summary judgment to SSI, ruling that the suit was barred by

Arkansas’s five-year statute of repose, Ark. Code Ann. § 16-56-112(a).

CGB appealed, arguing that Oklahoma’s common-law choice of law rules

were abrogated by Oklahoma’s borrowing statute, Okla. Stat. tit. 12, § 105, and

that, under the borrowing statute, the applicable statute of repose was Oklahoma’s

ten-year statute of repose, id., § 109, making this suit timely. We certified to the

Oklahoma Supreme Court the question of whether Oklahoma’s borrowing statute,

id., § 105, should be interpreted to include Oklahoma’s substantive statute of

repose, id., § 109. Based on that court’s answer that it should not, we lift the

abatement of the appeal and affirm.

I.

CGB, a Missouri corporation, operated a grain terminal in Van Buren,

Arkansas. Following a fire at that facility, CGB entered into a written contract in

Arkansas with SSI, an Arkansas corporation, to reconstruct and repair parts of the

grain conveyor system. SSI substantially completed the work in June 2000 and

completed the final call back in September 2000. Another fire occurred at CGB’s

facility in November 2003. CGB asserted that grain dust ignited from the heat

generated from a failed bearing improperly installed by SSI, and that the fire

caused approximately $800,000 in damage.

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 Nationwide Agribusiness, through CGB, filed its first subrogation action

against SSI in an Arkansas state court in October 2005. CGB voluntarily

dismissed that suit, however, after SSI filed a motion to dismiss based on

Arkansas’s five-year statute of repose, which bars an action in contract for

damages caused by the deficient construction or repair of any improvement to real

property brought “more than five (5) years after substantial completion of the

work.” Ark. Code Ann. § 16-56-112(a). In October 2006, Nationwide

Agribusiness, through CGB, filed this subrogation action in state court in

Oklahoma, which has a ten-year statute of repose for tort claims arising from

“construction of an improvement to real property,” Okla. Stat. tit. 12, § 109, and a

borrowing statute stating that “[t]he period of limitation applicable to a claim

accruing outside of this state shall be that prescribed either by the law of the

place where the claim accrued or by the law of this state, whichever last bars the

claim[,]” id., § 105 (emphasis added). SSI removed the case based on diversity

jurisdiction to federal court, and the district court denied SSI’s subsequent motion

to dismiss or transfer venue. SSI then moved for summary judgment, arguing that

Oklahoma’s choice-of-law rules called for the application of Arkansas’s

substantive law, including its five-year statute of repose. CGB argued that

Oklahoma’s ten-year statute of repose applied under Oklahoma’s borrowing

statute. The district court ruled that Oklahoma’s choice-of-law rules required it

to apply Arkansas’s substantive law; that Oklahoma’s borrowing statute applies to

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procedural law, not substantive law; and that because statutes of repose are

substantive, Arkansas’s statute of repose applied to bar CGB’s suit.

II.

We certified to the Oklahoma Supreme Court the following question:

Should “period of limitation” in Okla. Stat. tit. 12, § 105 be interpreted to include

statutes of repose, including Oklahoma’s statute of repose for construction tort

claims, id. § 109? The Oklahoma Supreme Court recently answered that question

in the negative in Consolidated Grain & Barge Co. v. Structural Systems, Inc.,

No. 105918, 2009 WL 532390 (Okla. Mar. 3, 2009). The court’s analysis of

Oklahoma’s borrowing statute is lengthy and detailed, and the court’s holding is

clear. The court reasoned that “Oklahoma’s borrowing statute, 12 O.S.2001,

§ 105, is a procedural law that applies to time periods that operate upon the

remedy” that may be available under state law, Consolidated Grain & Barge,

2009 WL 532390, at *7, and the borrowing statute “does not relate to substantive

statutes of repose[,]” id. at *6, that is, to a party’s “substantive rights to actions

for damages[,]” id. The court concluded that

[w]hen CGB’s insurer filed this subrogation action in the Oklahoma
district court on October 28, 2006, CGB’s right to a damages action
under Arkansas [substantive] law had been extinguished for more
than a year and CGB no longer had a claim under Arkansas law.
Oklahoma’s procedural borrowing statute, 12 O.S.2001, § 105, may
not be construed to resurrect a foreign claim that has been
extinguished by substantive law. The phrase “period of limitation”
in Oklahoma’s procedural borrowing statute, 12 O.S.2001, § 105,

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 may not be construed to include Oklahoma’s substantive ten-year
limitation on construction torts, 12 O.S.2001, § 109.

Consolidated Grain & Barge, 2009 WL 532390, at *7 (footnote omitted).

The parties did not discuss, and we need not decide, whether the

reconstruction and repair work done by SSI on CGB’s facility was “construction

of an improvement to real property” within the meaning of Oklahoma’s statute of

repose, Okla. Stat. tit. 12, § 109. CGB raised only one issue on appeal: whether

Oklahoma’s borrowing statute applies to statutes of repose. Based on the

Oklahoma Supreme Court’s answer to the certified question, Oklahoma’s

borrowing statute, id., § 105, cannot, in any event, be interpreted to include

Oklahoma’s substantive statute of repose, id., § 109. As noted by the Oklahoma

Supreme Court, CGB’s cause of action against SSI had already been extinguished

by Arkansas’s five-year statute of repose when CGB filed this suit in Oklahoma.

The abatement is lifted. The judgment of the district court is AFFIRMED.

Entered for the Court

Jerome A. Holmes
Circuit Judge

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