Products Liability Law Daily Wrap Up, STATUTES OF LIMITATIONS AND REPOSE—ASBESTOS—Wash. App.: Asbestos exposure claims not barred by Washington state’s construction statute of repose, (Jun 21, 2023)

By Nicholas Kaster, J.D.

The court applied the state supreme court’s decision in Condit to the facts of this case.

A worker’s claims against two companies arising from his alleged exposure to asbestos-containing pipe insulation while working at a refinery in the 1980s were not barred by Washington state’s construction statute of repose, a state court of appeals in Washington has ruled. The court found that neither company presented competent evidence to show that its insulation installation or insulation removal contributed to the construction of either: (1) a structural improvement in the refinery; or (2) a system that is integrally a normal part of a refinery and required for the refinery to function as intended. Thus, because the companies failed to satisfy their initial burdens on summary judgment, the appellate court reversed the trial court’s summary dismissal of the claims (Welch v. Brand Insulations, Inc., June 20, 2023, Chung, J.).

Background. A former welder and pipefitter (and his wife) brought a lawsuit against Brand Insulations, Inc. and Haskell Corporation for damages arising from his alleged exposure to asbestos-containing pipe insulation while working at the Atlantic Richfield Company (ARCO) “Cherry Point” refinery in the 1980s.

Although the couple alleged that the husband’s exposure occurred at various industrial sites, their claims against Brand and Haskell were based solely on the man’s work at the ARCO Cherry Point petroleum refinery. The Cherry Point refinery was originally built in the early 1970s, and Brand was the subcontractor retained by the general contractor to install thermal insulation “in various refinery units.” Haskell was a contractor later retained by ARCO to perform various projects at the refinery.

According to the husband, Haskell personnel regularly worked at the Cherry Point refinery when he was there, and he “typically worked in close range to Haskell,” whose personnel he could distinguish from other workers because they wore differently colored hats. In his deposition, he said that Haskell personnel “did a lot of pipe work” and “fabricated a lot of pipe.” He also recalled that Haskell workers were “changing out the insulation” on the pipes. The couple claimed, among other things, that Haskell “removed or otherwise disturbed asbestos-containing insulation without adopting safety precautions or following government regulations that it knew or should have known about to reduce or eliminate harm to bystanders.” Brand installed the insulation at issue during the initial construction of the refinery.

The trial court granted summary judgment motions by both Brand and Haskell based on Washington state’s statute of repose. The current appeal ensued.

Construction statute of repose. A statute of repose terminates the right to file a claim after a specified time even if the injury has not yet occurred. Washington’s construction statute of repose bars any claim arising from a person having “constructed, altered, or repaired” an improvement upon real property or having performed certain services for the construction, alteration, or repair of an improvement on real property, if the claim does not accrue within the six-year repose period specified in the statute.

Here, the parties disputed whether Brand and Haskell’s activities satisfied the statute’s “improvement upon real property” requirement. In granting summary judgment, the trial court relied on Maxwell v. Atlantic Richfield Co., 15 Wn. App. 2d 569, 476 P.3d 645 (2020), rev. denied, 197 Wn.2d 1005 (2021), concluding that the claims were barred because the pipes that Haskell repaired or replaced “were part and parcel to the original construction of the ‘entire refinery,’” which was an “improvement upon real property.”

The appellate court declined to follow Maxwell because the holding departed from the Washington state supreme court’s decision in Condit v. Lewis Refrigeration Co., 101 Wn.2d 106, 676 P.2d 466 (1984). The appellate court held that the Condit decision controlled here. In Condit, the state supreme court adopted a test to determine whether a claim is barred under the construction statute of repose because it arises from the defendant’s construction, alteration, or repair of an improvement upon real property. The state high court held that the statute applies only to activities that contribute to the construction of either: (1) a structural improvement to real estate; or (2) a system that is integrally a normal part of the kind of improvement in question and required for it to function as intended.

Applying Condit, the appellate court determined that neither company presented competent evidence to show that its insulation installation (in Brand’s case) or insulation removal (in Haskell’s case) contributed to the construction of either: (1) a structural improvement in the refinery; or (2) a system that is integrally a normal part of a refinery and required for the refinery to function as intended.

Claim against Brand. While it was undisputed that Brand’s insulation installation activities constituted either construction or the performance or furnishing of construction services, the couple argued that there was a genuine issue of material fact as to whether those construction activities satisfied the statute’s “improvement upon real property” requirement. The court agreed.

The court found that Brand pointed to no facts establishing that by installing insulation on the various components listed in its subcontract, it contributed to the construction of either: (1) a structural improvement to real estate; or (2) systems which are integrally a normal part of that kind of improvement, and which are required for the structure to actually function as intended.

Brand cited nothing in the record to establish the intended function of a petroleum refinery, what a petroleum refinery normally consists of in terms of structures and systems, or that the various refinery components it insulated or the insulation itself constituted a system that was integrally a normal part of a petroleum refinery and necessary for it to function as intended, as distinct from mere accoutrements to the manufacturing process taking place within, the court said.

Brand asserted that “insulated piping systems” are “integral to the function of the entire refinery.” And Brand asserted on appeal that the components it insulated were necessary to safely transport hydrocarbons within the refinery and that those components, as well as the insulation Brand installed, were “integral to the refinery’s ability to function as a refinery.” But Brand pointed to no evidence in the record to support these assertions, the court stated. Nor was there any evidence to support an inference that all of the activities of the general contractor and its subcontractors during the initial construction of a refinery must be for systems that are normally a part of that facility and necessary for it to function as intended, solely because of the timing of those activities.

Without competent evidentiary support in the record, the court determined, Brand did not satisfy its initial burden on summary judgment to establish that its activities were covered by the statute of repose.

Claim against Haskell. The couple also argued that the appellate court should reverse the summary judgment dismissal of their claims against Haskell based on the construction statute of repose. The court agreed.

Haskell argued that it was at the Cherry Point facility to fabricate, repair, or replace the same pipes that were part and parcel to the original construction of the entire refinery and that there was no evidence to support a reasonable inference that Haskell installed a new system within an existing improvement.

The court noted that, in the 1980s, ARCO retained Haskell for a number of projects at the Cherry Point refinery, including to: (1) conduct mechanical work associated with “Upgrade Calcined Coke Loadout structure,” including “extending safety rails and revamping the operator enclosure pressurization system”; (2) provide the necessary supervision, labor, tools, equipment, and material for fabricating and installation of all process and utility piping and structural steel associated with the New Sulfur Storage Tank Installation, including “insulation of piping and tank”; (3) provide the necessary supervision, labor, and tools, and install a cooling water supply and return; (4) furnish labor, supervision, tools, equipment and material as required for fabricating and installing piping, electrical conduit, and wiring in ARCO’s “Coker Boiler Feedwater Control Valve Manifolds”; (5) install a temporary steam bypass; and (6) fabricate and install trench piping.

Haskell appeared to ask the court to simply accept, without any predicate facts to explain what these items were and how they related to a refinery’s function, that items such as a new sulfur storage tank, a cooling water supply and return, and a calcined coke loadout structure were integral systems in a refinery and not accoutrements to the manufacturing process taking place within, the court stated. The company asserted that a majority of its work “was, in fact, structural in nature,” and that “the piping Haskell repaired or replaced was required ‘to maintain the structure’ as a refinery.” But again, said the court, Haskell cited no facts to support these assertions.

Haskell’s unsupported assertions that its work at the Cherry Point refinery contributed to the construction, alteration, or repair of structural improvements and/or integral systems were insufficient to meet its initial burden on summary judgment to establish that there were no genuine issues of material fact, the court determined.

Accordingly, the appellate court reversed the summary judgment dismissal of the claims against both Brand and Haskell and remanded for further proceedings consistent with this opinion.

The case is No. 83745-1-I.

Attorneys: Matthew Phineas Bergman (Bergman Oslund Udo Little PLLC) for David J. Welch and Linda Welch. David Albert Shaw (Williams Kastner & Gibbs) for Brand Insulations, Inc. and Haskell Corp.

Companies: Brand Insulations, Inc.; Haskell Corp.

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