The Constitutionality of Ohio's Statute of Repose for Claims Involving Improvements to Real Property

I. Introduction and Background

The Ohio General Assembly enacted Senate Bill 80 as part of its effort to implement tort reform, adding a ten-year statute of repose to claims involving improvements to real property. Section 2305.131 essentially abolishes claims against construction professionals for injuries occurring more than ten-years after completion of work on the improvement that gave rise to the injury.

A prior, similar provision was held unconstitutional by the Ohio Supreme Court in Brennaman v. R.M.I. Co.,[1] because it "closed the courthouse doors" to injured persons before they even knew of their injuries, violating the Ohio Constitution's Right to a Remedy clause. As a result, the usefulness of § 2305.131 to protect builders, engineers, and architects has been in question.

The construction bar awaited the Ohio Supreme Court's decision in Groch v. Gen. Motors Corp.[2] for a prediction (or perhaps an outright answer) regarding the constitutionality of § 2305.131. In Groch, the Court was asked, upon certified questions of law from the United States District Court for the Northern District of Ohio, to review the constitutionality of Ohio's ten-year products liability statute of repose, R.C. § 2305.10(C)(1). Since Brennaman was the primary basis for the Groch plaintiff's argument against the products liability statute's constitutionality, the Court in Groch might give an indication of whether § 2305.131 would be upheld, or whether Brennaman would likely be applied to strike it down. But the Court's Groch opinion left open this question. While criticizing Brennaman, the Court expressly declined to overrule it.

Subsequently, however, in McClure v. Alexander,[3] the Ohio Court of Appeals, following the Supreme Court's lead in Groch, has resolved the constitutionality of the improvement statute. This article reviews the Groch and McClure opinions and concludes that, despite the Supreme Court's refusal to expressly overrule Brennaman, the Court will, if presented with the opportunity, follow Groch and McClure in upholding § 2305.131.

II. Groch: Examining Sedar and Brennaman

Injured while operating a thirty-year old hydraulic drill press, Groch brought a products liability action against the press manufacturer.[4] Groch argued, based on Brennaman, that the statute of repose violated his right to a remedy under the Ohio Constitution, and therefore, did not bar his claims.[5] The Groch Court disagreed and held that the new version of the products liability statute of repose was facially constitutional.[6] In doing so, the Court undertook an extensive analysis of two opinions that examined prior versions of the improvement statute: (1) Sedar,[7] which previously upheld the state of repose applicable to improvements; and (2) Brennaman, which overruled Sedar and held the prior improvement statute unconstitutional.

In Groch, the Supreme Court first set forth the general principles that (1) the legislature is the "ultimate arbiter of public policy" whose enactments are entitled to a presumption of constitutionality; and (2) stare decisis only applies to "substantially similar" legislation. The Court then praised the soundness of the reasoning in Sedar, which focused primarily on the differences between statutes of limitation (which bar an action after it accrues) and statutes of repose (which prevent the right of an action from ever vesting).[8] The Court also noted Sedar's acknowledgment of the lack of privity between improvement professionals, and the legislature's intent to shift safety responsibility to owners or others actually in control of the premises.[9]

The Supreme Court generally criticized the Brennaman opinion, calling it "devoid of any in-depth analysis…"; stating that Brennaman "summarily declared that the statute, …deprived the plaintiffs of the right to sue…and failed to accord proper respect to the principle of stare decisis";[10] and calling the opinion a "classic example of the 'arbitrary administration of justice…'"[11]

The Groch court then analyzed Brennaman's specific defects, most notably its "sweeping repudiation of all forms of statutes of repose."[12] The Court noted that Brennaman (1) failed to consider the presumption of constitutionality and "accorded no deference to the General Assembly's determination of public policy as expressed in the statute under review;" (2) failed to consider the fundamental differences between a statute of repose and a statute of limitation; (3) failed to explain why the plaintiff's right to a remedy was violated even though other avenues of recovery may have been available; and (4) "ignored the predicament of builders, who have no legal right to enter an owner's property to correct a defect that is discovered after the builder's work is completed and turned over to the owner."[13]

Based on these deficiencies, Groch confined Brennaman's precedential value to its holding that the prior version of § 2305.131 was unconstitutional.[14] The Court held, "[t]o the extent Brennaman stands for the proposition that all statutes of repose are repugnant to Section 16, Article I, we expressly reject that conclusion…..we do not overrule Brennaman; we simply decline to follow its unreasoned rule in contexts in which it is not directly controlling….we therefore decline respondents' invitation to overrule Brennaman."[15]

Applying Sedar to the products liability statute of repose, the Supreme Court held that, unlike a statute of limitations, the products liability statute of repose does not violate the right to a remedy in that it does not deprive a plaintiff of his right to pursue a vested cause of action. Rather, it prevents a cause of action from ever vesting at all.[16]

III. McClure v. Alexander: § 2305.131 is Constitutional

Groch's use of the Sedar rationale and its strong criticism of Brennaman make the likely direction of the Supreme Court on the constitutionality of the improvement statute fairly clear. In McClure v. Alexander,[17] the Ohio Court of Appeals for the Second District followed the Court's lead, holding that § 2305.131 is constitutional.

Fifteen years after the construction of an addition to his home, McClure brought claims against the building contractor's estate for faulty construction.[18] Relying on Brennaman, McClure claimed that current § 2305.131 violated his right to a remedy.[19]

At the outset, the Court of Appeals rejected the automatic application of Brennaman to § 2305.131; it quoted Groch: "We will not apply stare decisis to strike down legislation enacted by the General Assembly merely because it is similar to previous enactments that we have deemed unconstitutional."[20] It then went on to hold that the current version of R.C. § 2305.131 "recognizes that a true statute of repose prevents a cause of action from accruing rather than preventing a plaintiff from bringing an action after accrual, like a statute of limitation," and that the legislature is free to abolish actions in which the plaintiff does not have a vested right.[21] Just as the Groch court noted with respect to the products liability statute, the McClure court wrote that the General Assembly had tailored the wording in § 2305.131 to address the holding of Brennaman. The prior version provided, "no action…shall be brought," while the current version, "'like the constitutional statute of repose in Groch, provides instead that 'no cause of action…shall accrue.'"[22] Thus, the current statute is sufficiently different from the Brennaman statute such that Brennaman is not controlling.[23]

In addition, the McClure court held that the exceptions[24] to the improvement statute and the availability of alternative remedies removed McClure from the prohibitions of the Right to a Remedy clause.[25] The Court also quoted the comments to § 2305.131, which spell out in great detail the intent of the statute to strike a balance between the rights of claimants against those who provide services for the improvement of real property and to limit the risks inherent with stale litigation.[26]

In its final comment, the Court of Appeals noted that, "[w]hile the Groch Court expressly declined to overrule Brennaman,… the majority in effect accomplished a 'de facto overruling' of a decision which 'has morphed from a case worthy of citation as part of this court's well settled jurisprudence to an object of derision…"[27] In short, McClure answered these questions not conclusively answered by Groch:

1. R.C. § 2305.131 is sufficiently different from the Brennaman statute, such that Brennaman is devoid of any precedential value in the constitutional analysis if § 2305.131; and

2. R.C. § 2305.131 is constitutional.

IV. Conclusion

The practical result of the Groch and McClure opinions is twofold. First, they give a very strong and clear indication, just short of a directive to trial courts, that the Ohio Supreme Court will uphold the constitutionality of § 2305.131. Second, the construction bar can now manage its cases more effectively, by addressing in a common sense manner and in the infancy of its cases the threshold issue of the substantive applicability of the statute of repose to improvement cases.

The information contained in this article is not intended to be legal advice. If you have any questions, please contact the Product Liability Group at Dinsmore & Shohl, LLP or contact me at:

Katrina Atkins
Associate
Cincinnati, OH
(513) 977-8205 | Phone
(513) 977-8141 | Fax
 

*Special thanks to Scott R. Everett for his assistance with this article. Scott is a law student at the University of Dayton (J.D. expected December 2008) and a 2008 Summer Associate at Dinsmore & Shohl LLP.