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State Farm Fire and Casualty v. Aquila Inc.6/14/2005
st the owner or other person in possession.
Id., subd. 1.
The Minnesota Supreme Court has adopted a common-sense interpretation of the phrase "improvement to real property" as used in Minn. Stat. § 541.051. Pac. Indem. Co. v. Thompson-Yaeger, Inc., 260 N.W.2d 548, 554 (Minn. 1977). In doing so, the supreme court has defined an "improvement to real property" as "a permanent addition to or betterment of real property that enhances its capital value and that involves the expenditure of labor or money and is designed to make the property more useful or valuable as distinguished from ordinary repairs." Id. (quotation omitted). Under this common-sense analysis, we have applied the phrase "improvement to real property" broadly. See Nolan & Nolan v. City of Eagan, 673 N.W.2d 487, 496 (Minn. App. 2003) (holding that a storm sewer system is an improvement to real property), review denied (Minn. Mar. 16, 2004); Patton v. Yarrington, 472 N.W.2d 157, 160 (Minn. App. 1991) (holding that smoke detectors are improvements to real property), review denied (Minn. Aug. 29, 1991); O'Connor v. M.A. Mortenson Co., 424 N.W.2d 92, 94 (Minn. App. 1988) (holding that an unfinished stairway is an improvement to real property), review denied (Minn. July 28, 1988).
Appellants contend that their suit is not time-barred by Minn. Stat. § 541.051 because the gas pipeline in question was not an improvement to real property; instead, they argue, it was part of Aquila's natural-gas distribution system. Appellants cite our decision in Johnson v. Steele-Waseca Coop. Elec., 469 N.W.2d 517 (Minn. App. 1991), review denied (Minn. July 24, 1991), as controlling. In Johnson, the plaintiffs built a barn on their dairy farm and contracted with the local power distributor to install new electrical equipment and wiring to the barn. Id. at 518. The utility also installed a center pole and transformer on the plaintiffs' land to bring power to the farm. Id. at 518-19. Shortly after moving cattle into the new barn, the plaintiffs noticed several health problems with the herd that led to the loss of cattle. Id. at 518. A veterinarian suggested that stray voltage could be the cause of the health problems. Id. The plaintiffs filed suit, claiming that the utility "was negligent not to repair, not to prevent, and not to warn of the risk of stray voltage." Id. at 520. The district court held that the plaintiffs' suit was time-barred by Minn. Stat. § 541.051, but we reversed. Id. at 520-21.
In Johnson,we drew a distinction between (1) "the installations added to the barn and other buildings owned by the [plaintiffs]," and (2) "the pole and pendant equipment, which [the utility] owns and uses to distribute electrical power." Id. at 519. We held that the former--those items owned by the customer--were improvements to real property under Minn. Stat. § 541.051. Id. But we held that items owned by the utility were not such improvements. Id. In doing so, we explained that the utility installed an electric pole and transformer which stands independently on [plaintiffs'] property and serves the distribution purposes of the cooperative. This equipment enables the utility to increase its electric service to farm. Rather than being an improvement to [plaintiffs'] property, this equipment is an addition to [the utility's] distribution system.
Id.
We further noted, in Johnson, that the plaintiffs were not alleging a defect in the electrical equipment attached to the barn, but that the electrical service itself was defective because of the stray voltage. Id. at 520. In concluding that, with respect to the utility, the center pole and transformer were not improvements to real property, we stated:
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