MEMORANDUM OPINION
JUDITH K. FITZGERALD, Bankruptcy Judge.
The matter before the court is Debtors’ Motion and Memorandum for an Order Pursuant to F.R.B.P. 7056 Disallowing and Expunging Eighty-Eight Time-Barred Canadian Asbestos Property Damage Claims, docketed as a Motion for Summary Judgment.
Since the filing of the motion, the eighty-eight claims have been reduced to thirty-five due to withdrawal, expungement, or settlement of claims. Debtors assert that these remaining thirty-five claims are time-barred by the applicable Canadian ultimate limitations periods,
similar to American statutes of repose, and move for summary judgment. Anderson Memorial Hospital
filed a response
to Debtors’ motion on its own behalf and on behalf of the Canadian Claimants. The Canadian Claimants dispute the dates upon which the ultimate limitations periods would begin to run and contend that the limitations periods were tolled.
Background
The Canadian Claimants seek to recover the costs associated with management and removal of asbestos-containing surfacing materials sold by Debtors and installed in the Claimants’ buildings. The thirty-five remaining Canadian Claims involve buildings in three different Canadian provinces. Thirty-three of the claims arise from properties located in Alberta and the remaining two arise from properties located in Manitoba and British Columbia. It is undisputed that Debtors ceased selling asbestos-containing products in Canada by 1976, at the latest.
Based upon this date, Debtors argue that the thirty-three Alberta claims are time-barred. With regard to the Manitoba claim, the parties have stipulated to the fact that the asbestos-containing material was installed in 1956.
The British Columbia claim involves an installation date in the 1960s at the latest.
Based upon these dates, the Debtors argue that the applicable Canadian ultimate limitations periods expired with respect to each of the remaining claims prior to April 2, 2001, the Bankruptcy Petition Date.
Summary Judgment Standard
Pursuant to Federal Rule of Civil Procedure 56(c), the moving party is entitled to summary judgment where the evidence shows that “there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” The non-moving party can defeat summary judgment if it produces evidence in the record creating a genuine issue of material fact.
However, where the moving party has satisfied its burden under Rule 56(c), “its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.”
The non-moving party cannot “rely merely on
allegations or denials in its own pleading; rather, its response must ... set out specific facts showing a genuine issue for trial.”
Only evidence which is “ultimately reducible to admissible evidence” will be considered.
Causes of Action
Analysis of ultimate limitations periods requires identification of the cause of action being pursued. Debtors assert that, under Canadian law, “any asbestos-in-building tort claims fall under the rubric of ‘pure economic loss.’ ”
Therefore, the Debtors addressed only how the ultimate limitations periods would bar economic loss claims. However, the Claimants contend that the Debtors failed to show that claims based on certain other “asbestos-property damage causes of action,” such as nuisance, warranty, conspiracy, restitution, fraud, and misrepresentation, would be barred.
In addition, the Claimants assert that, due to a manufacturer’s continuing duty to warn, the ultimate limitations periods cannot bar these claims as “a new cause would accrue for every breach of the continuing duty to warn.”
Both parties’ Canadian law experts reached the same conclusion with regard to the cause of action being pursued by the Claimants. That is, in Canada, the claims are cognizable only as negligence claims for pure economic loss.
The Supreme Court of Canada in
Winnipeg Condominium, Corp. No. 36 v. Bird Construction Co. Ltd.,
addressed whether the cost of repairing a defect in the construction of a building is the type of economic loss recoverable in tort.
Pure economic loss claims are those which do not arise from injury to persons or damage to property apart from the defective product itself.
The
Winnipeg Condo
court recognized and outlined five categories in which these claims arise. The relevant category in both
Winnipeg Condo
and under the facts of this case is “negligent supply of shoddy goods or structures.”
Prior to
Winnipeg Condo,
the claims asserted by the Canadian Claimants in this case “would have been regarded as speculative if not entirely unarguable in Canadian courts[.]”
Furthermore, Canadian courts are skeptical of attempts to recharacterize causes of action and are unwilling to permit the purpose of the ultimate limitations periods to be undermined.
Based on reported cases construing Canadian law and the consensus in opinion of the parties’ experts, which is unrefuted on this record, the court will proceed to analyze the claims as negligence claims for pure economic loss.
Canadian Limitations Acts
As the Claimants’ buildings are located in Alberta, Manitoba, and British Columbia, the laws of each of those Canadian provinces must be considered in determining whether the claims are barred by the applicable limitations period.
Alberta’s Limitations Act, R.S.A., ch. L-12
Pursuant to § 3(l)(b) of Alberta’s Limitations Act, a claimant must seek a remedial order within the ten-year ultimate limitations period.
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MEMORANDUM OPINION
JUDITH K. FITZGERALD, Bankruptcy Judge.
The matter before the court is Debtors’ Motion and Memorandum for an Order Pursuant to F.R.B.P. 7056 Disallowing and Expunging Eighty-Eight Time-Barred Canadian Asbestos Property Damage Claims, docketed as a Motion for Summary Judgment.
Since the filing of the motion, the eighty-eight claims have been reduced to thirty-five due to withdrawal, expungement, or settlement of claims. Debtors assert that these remaining thirty-five claims are time-barred by the applicable Canadian ultimate limitations periods,
similar to American statutes of repose, and move for summary judgment. Anderson Memorial Hospital
filed a response
to Debtors’ motion on its own behalf and on behalf of the Canadian Claimants. The Canadian Claimants dispute the dates upon which the ultimate limitations periods would begin to run and contend that the limitations periods were tolled.
Background
The Canadian Claimants seek to recover the costs associated with management and removal of asbestos-containing surfacing materials sold by Debtors and installed in the Claimants’ buildings. The thirty-five remaining Canadian Claims involve buildings in three different Canadian provinces. Thirty-three of the claims arise from properties located in Alberta and the remaining two arise from properties located in Manitoba and British Columbia. It is undisputed that Debtors ceased selling asbestos-containing products in Canada by 1976, at the latest.
Based upon this date, Debtors argue that the thirty-three Alberta claims are time-barred. With regard to the Manitoba claim, the parties have stipulated to the fact that the asbestos-containing material was installed in 1956.
The British Columbia claim involves an installation date in the 1960s at the latest.
Based upon these dates, the Debtors argue that the applicable Canadian ultimate limitations periods expired with respect to each of the remaining claims prior to April 2, 2001, the Bankruptcy Petition Date.
Summary Judgment Standard
Pursuant to Federal Rule of Civil Procedure 56(c), the moving party is entitled to summary judgment where the evidence shows that “there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” The non-moving party can defeat summary judgment if it produces evidence in the record creating a genuine issue of material fact.
However, where the moving party has satisfied its burden under Rule 56(c), “its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.”
The non-moving party cannot “rely merely on
allegations or denials in its own pleading; rather, its response must ... set out specific facts showing a genuine issue for trial.”
Only evidence which is “ultimately reducible to admissible evidence” will be considered.
Causes of Action
Analysis of ultimate limitations periods requires identification of the cause of action being pursued. Debtors assert that, under Canadian law, “any asbestos-in-building tort claims fall under the rubric of ‘pure economic loss.’ ”
Therefore, the Debtors addressed only how the ultimate limitations periods would bar economic loss claims. However, the Claimants contend that the Debtors failed to show that claims based on certain other “asbestos-property damage causes of action,” such as nuisance, warranty, conspiracy, restitution, fraud, and misrepresentation, would be barred.
In addition, the Claimants assert that, due to a manufacturer’s continuing duty to warn, the ultimate limitations periods cannot bar these claims as “a new cause would accrue for every breach of the continuing duty to warn.”
Both parties’ Canadian law experts reached the same conclusion with regard to the cause of action being pursued by the Claimants. That is, in Canada, the claims are cognizable only as negligence claims for pure economic loss.
The Supreme Court of Canada in
Winnipeg Condominium, Corp. No. 36 v. Bird Construction Co. Ltd.,
addressed whether the cost of repairing a defect in the construction of a building is the type of economic loss recoverable in tort.
Pure economic loss claims are those which do not arise from injury to persons or damage to property apart from the defective product itself.
The
Winnipeg Condo
court recognized and outlined five categories in which these claims arise. The relevant category in both
Winnipeg Condo
and under the facts of this case is “negligent supply of shoddy goods or structures.”
Prior to
Winnipeg Condo,
the claims asserted by the Canadian Claimants in this case “would have been regarded as speculative if not entirely unarguable in Canadian courts[.]”
Furthermore, Canadian courts are skeptical of attempts to recharacterize causes of action and are unwilling to permit the purpose of the ultimate limitations periods to be undermined.
Based on reported cases construing Canadian law and the consensus in opinion of the parties’ experts, which is unrefuted on this record, the court will proceed to analyze the claims as negligence claims for pure economic loss.
Canadian Limitations Acts
As the Claimants’ buildings are located in Alberta, Manitoba, and British Columbia, the laws of each of those Canadian provinces must be considered in determining whether the claims are barred by the applicable limitations period.
Alberta’s Limitations Act, R.S.A., ch. L-12
Pursuant to § 3(l)(b) of Alberta’s Limitations Act, a claimant must seek a remedial order within the ten-year ultimate limitations period.
Section 3(3)(b) of the Act states that, for purposes of the ultimate limitations period, “a claim based on a breach of a duty arises when the conduct, act or omission occurs.”
The Claimants contend, however, that this latter provision does not apply to economic loss cases, but only to those cases involving a generalized breach of duty. The Claimants base their argument on the general definition section of the Act which defines “injury” in five separate categories, one of which is “economic loss” and another for breach of duty where the injury does not fall into one of the other five categories.
However, a similar argument was rejected by the Alberta Court of Appeal in
Bowes v. Edmon
ton.
In
Bowes,
counsel for the plaintiffs attempted to avoid the result of the language of § 3(3)(b) by relying on the definition of “claim” in § 1(a), the general definition section of the Act.
The court rejected the argument, stating “the Legislature does not confine itself to the vague general s. 1(a) [definition],.... Section 3(l)(b), the unconditional limitation period, has its own express interpretation section.”
Therefore, Claimants cannot avoid the result that the Alberta ultimate limitations period commences to run upon the act, omission, or conduct that constituted the breach.
As previously stated, these claims fall under the
Winnipeg Condo
category of “negligent supply of shoddy goods or structures,”
and the Debtors ceased selling asbestos-containing products in Canada by 1976.
Therefore, the Debtors could not have committed an act constituting the negligent supply of these products after that date. Consequently, the ten-year ultimate limitations period for the Alberta claims would have expired by 1986. Absent suspension of the ultimate limitations period, the thirty-three Alberta claims are time-barred.
Manitoba’s Limitation of Actions Act, R.S.M., ch.
L150
Pursuant to Manitoba’s statute, the ultimate limitations period within which to bring an action is thirty years after the occurrence of the acts or omissions that gave rise to the cause of action.
The language of the statute is clear. As in Alberta, the date for commencement of the ultimate limitations period is the date of the relevant act or omission.
With regard to the single Manitoba claim, the parties stipulated to a 1956 installation date of the Debtors’ product.
Therefore, the limitations period expired with respect to this claim no later than 1986 unless the period was otherwise tolled.
British Columbia’s Limitation Act, R.S.B.C., ch. 266
British Columbia’s Limitation Act provides a thirty-year ultimate limitations period to bring an action which begins to run from “the date on which the right to do so arose.”
The British Columbia Act, unlike the Alberta statute, does not define when a cause of action arises, but British Columbia case law provides guidance. The most factually relevant case is
Privest Properties Ltd. v. Foundation Co. of Canada,
where the plaintiffs sought compensation for the removal costs of the asbestos-containing material MK-3.
Claimants attempt to argue that the
Privest
decision is not applicable because it does not address the “ultimate” limitations period but rather interprets the “normal” limitations period.
The normal limitations period provided that an action “shall not be brought after the expiration of 6 years after the
date on which the right to do so
arose.”
Therefore, the court was interpreting identical language found in both the normal and ultimate limitations provisions and its analysis focused on the identical issue: that is, when time begins to run under the Act.
The court concluded that “a cause of action accrues when all of the constituent elements exist, whether or not the plaintiff is then aware of them.”
The court then applied its ruling to the facts of the case and held that it was “clear that all of the elements necessary to the plaintiffs cause of action came into existence ... when the MK-3 was installed in the Building. Accordingly, the limitation period began to run ... when the installation was completed.”
The Claimants argue that the
Privest
court’s holding is incorrect and is not based on any Canadian legal authority.
However, there is no British Columbia case law contrary to
Privest
and we decline to create a different interpretation of the statute where a British Columbia court has already spoken directly on the issue. The single British Columbia claim at issue herein involved an installation date in the 1960s. Therefore, the thirty-year ultimate limitations period expired prior to the April 2, 2001, Bankruptcy Petition Date.
Tolling of Limitations Periods
The Claimants assert that, even if the limitations periods would have commenced at a date such as to potentially bar their claims, the running of the ultimate limitations periods was suspended.
Fraudulent Concealment
First, the Claimants contend that the limitations periods were postponed by Debtors’ fraudulent concealment of the injury for which the remedial order is sought. British Columbia’s ultimate limitations period continues to run despite
fraudulent concealment.
Therefore, this argument could only apply with respect to the Alberta
and Manitoba
claims. While the Claimants have produced numerous exhibits
in an attempt to support a claim of fraudulent concealment, the miscellaneous exhibits are not identified in any way or supported by an affidavit. Because the Claimants have not satisfied the basic evidentiary standards, the court will not consider these exhibits.
Despite the fact that the Claimants’ pleadings contain allegations of fraudulent concealment, Claimants, as the non-moving parties, cannot “rely merely on allegations or denials in [their] own pleading.”
In addition,
while the fraudulent concealment alleged does not have to rise to the level of deceit or common law fraud, in order to argue equitable fraud under Canadian law, a special relationship must exist between the parties.
The Canadian Claimants have not shown that a special relationship exists between them and Debtors to support a fraudulent concealment argument based on equitable fraud. Therefore, the court has no evidence to conclude that the ultimate limitations periods were suspended by fraudulent concealment.
Anderson Memorial Hospital’s Class Action Complaint
The Claimants’ second argument for tolling of the limitations periods is based upon Anderson Memorial Hospital’s Class Action Complaint, which was filed in a South Carolina Court of Common Pleas in 1992.
Given the date the complaint was filed, the class action tolling argument would not affect the expiration of the ultimate limitations periods with regard to the Alberta and Manitoba claims, which expired by 1986. Therefore, the only issue is whether the filing of the South Carolina complaint suspended the ultimate limitations period with respect to the single
British Columbia claim. British Columbia has a statute governing when the filing of a class action suspends a limitations period.
Based on the language of the British Columbia Class Proceedings Act, it is clear that it does not apply to suspend the limitations period in these circumstances.
First, the Class Proceedings Act provides for suspension of a limitations period where it would be reasonable for a person to assume that he would be included as a member of the class.
Due to South Carolina’s “door closing statute,”
it would be unreasonable for any of the Canadian Claimants to believe that they would be included as class members. The door closing statute prohibits those who are not residents of South Carolina from suing foreign corporations in that State unless the claims arose or the property was situated in South Carolina. The statute “controls the eligibility of class members in a class action where the defendant is a foreign corporation.”
The Debtors are corporations created by or under the laws of states other than South Carolina and are “foreign” corporations within the meaning of the South Carolina statute.
The claims asserted by the Canadian Claimants did not arise in South Carolina or involve property located in South Carolina.
Based on the door closing statute, the tolling provision does not apply here.
Second, the tolling argument must fail because the Class Proceedings Act does not apply to proceedings that may be brought in a representative capacity under another statute.
Clearly, Anderson Me
morial Hospital did not file under British Columbia’s Class Proceedings Act. In addition, the Act does not apply to representative proceedings commenced before the Act came into force.
The British Columbia Legislature did not pass the Act until 1995, well after the filing of the 1992 Anderson Memorial South Carolina Complaint. Therefore, the Act does not apply to the South Carolina action.
Conclusion
For the foregoing reasons, the court concludes that there is no genuine issue of material fact in dispute and as a matter of law summary judgment in favor of Debtors is appropriate. 'The applicable ultimate limitations periods have expired and no evidence has been produced to show that the limitations periods were tolled. Therefore, the remaining thirty-five Canadian Asbestos Property Damage Claims are disallowed and expunged.
Counsel for Debtors shall serve a copy of this Memorandum Opinion and accompanying Order on all parties in interest who do not receive electronic notice and shall file a certificate of service forthwith.
ORDER
AND NOW, this
Uth
day of
April, 2009,
for the reasons expressed in the foregoing Memorandum Opinion, it is ORDERED, ADJUDGED, and DECREED that claim numbers 011620, 011632, 012377, 012388, 012394, 012410, 012412, 012421, 012422, 012423, 012438, 012439, 012442, 012443, 012454, 012457, 012489, 012496, 012498, 012500, 012501, 012503, 012537, 012541, 012542, 012546, 012548, 012549, 012554, 012557, 012570, 012576, 012590, 012591, and 014885 are hereby disallowed and expunged as barred by the applicable Canadian ultimate limitations periods.
IT IS FURTHER ORDERED THAT counsel for Debtors shall serve a copy of this Memorandum Opinion and accompanying Order on all parties in interest who do not receive electronic notice and shall file a certificate of service forthwith.