Vantage, Inc. v. Carrier Corp.

467 N.W.2d 446, 1991 N.D. LEXIS 50, 1991 WL 35756
North Dakota Supreme Court·Decided March 19, 1991·No. Civ. 900264·Published·Cited by 12 cases

Opinions

[447] VANDE WALLE, Justice.

Carrier Corporation d/b/a Day & Night Co. [Carrier], appealed from a judgment awarding Hamby Creek Enterprises [Ham-by Creek] $18,075, Vantage, Inc., d/b/a Carousel Village [Vantage] $364,749, and American Hardware Mutual Insurance Company [American Hardware] $620,-071.05. We affirm.

Hamby Creek owned a building in Minot, North Dakota, which it leased to Vantage for a furniture and appliance store. American Hardware insured the premises and its contents against fire. On the evening of November 8, 1986, a fire caused over one million dollars in property damage to the premises. The Minot Fire Marshal determined that a faulty rooftop furnace, which had been installed in 1974, caused the fire. Carrier had designed and manufactured the furnace. Hamby Creek, Vantage, and American Hardware sued Carrier for property damage alleging theories of strict liability and negligence.

Carrier moved for judgment on the pleadings, asserting that the statute of repose in Section 28-01.1-02, N.D.C.C.,1 barred the plaintiffs’ action because the property damage occurred more than eleven years after the furnace had been manufactured and more than ten years after it had been purchased. Citing our decision in Hanson v. Williams County, 389 N.W.2d 319 (N.D.1986), that Section 28-01.1-02, N.D.C.C., violated the equal protection clause of the North Dakota Constitution,2 the trial court denied Carrier’s motion.

Carrier thereafter moved for judgment on the pleadings, contending that the statute of repose in Section 28-01-44, N.D. C.C.,3 barred the plaintiffs’ action because [448] the property damage was caused by an alleged design defect in a real estate improvement completed more than ten years before the fire occurred. The trial court denied Carrier’s motion, concluding that Section 28-01-44, N.D.C.C., was not applicable to Carrier.

The parties stipulated to the amount of property damage caused by the fire. After a bench trial, the court found that a defective furnace caused the fire and that Carrier was liable for the property damage.

Carrier acknowledges that in Hanson v. Williams County, a majority of this court held that, under the intermediate standard of scrutiny, Section 28-01.1-02, N.D.C.C., violated the equal protection clause of the North Dakota Constitution. However, Carrier asserts that the equal protection analysis in Hanson is not controlling because the underlying action in that case, a wrongful death claim involving “human life and safety” and “personal injuries,” triggered the intermediate standard of scrutiny, whereas the underlying action in this case seeks only economic recovery for property damage. Carrier argues that, for actions involving only economic recovery for property damage, the rational basis test governs equal protection analysis of Section 28-01.1-02, N.D.C.C., and under that test, the statute is constitutional and bars the plaintiffs’ action.

In Hanson, 389 N.W.2d at 323, we outlined the three standards for reviewing a challenge to a statutory classification under the equal protection clause of the North Dakota Constitution:

“[T]here is a group of cases involving ‘inherently suspect’ or ‘fundamental interest’ classifications which are analyzed under the heightened level of review, strict scrutiny.... The rational basis standard of review is at the other end of the spectrum. When applying this standard of review, a legislative classification will be sustained unless it is patently arbitrary and bears no rational relationship to a legitimate government interest.... Finally, in Johnson [v. Hassett, 217 N.W.2d 771,] we noted that there is an intermediate standard of review which, although less clearly defined, required a ‘close correspondence between statutory classification and legislative goals’.” [Citations and footnotes omitted.]

We analyzed Section 28-01.1-02, N.D. C.C., under the intermediate standard of scrutiny, which requires a close correspondence between a statutory classification and legislative goals:

“While there are economic consequences for manufacturers and their insurers underlying the legislation in question, we believe our focus must be on the individuals affected. We are unwilling to view human life and safety as simply a matter of economics. Therefore, we agree with the New Hampshire Supreme Court that the right to recover for personal injuries is an important substantive right_ We conclude that the appropriate standard of review to be applied in the present case is the intermediate standard or the close correspondence test.” Hanson, supra, 389 N.W.2d at 325. [Citations and footnotes omitted.]

A majority of this court held that Section 28-01.1-02, N.D.C.C., violated the equal protection clause of our State constitution because there was not a discernible close correspondence between the statutory classification and the stated legislative goals.

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Vantage, Inc. v. Carrier Corp., 467 N.W.2d 446, 1991 N.D. LEXIS 50, 1991 WL 35756 (N.D. 1991).

467 N.W.2d 446 (Vantage, Inc. v. Carrier Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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