Friday, June 19, 2009

What Goes Down Must Come Up

St. Paul's Evangelical Lutheran Church v. City of Webster City, no. 07-1752 (Iowa June 12, 2009).

The church had a gravity flow connection to the city sanitary sewer that was installed when it was built in 1953.

In 1978 the city embarked on an extensive water system renovation project. While installing a water main a contractor severed the St. Paul sanitary connection and rerouted it around the water main using corrugated pipe rather than iron or clay as was required.

The repairs interfered with the operation of the sewer line . In 2005 the sewer line backed up, causing $30,000 in damage to the church and the church sued the city. The city countered, arguing that Iowa Code 614.1(11) which bars lawsuits relating to improvements to real property when fifteen years have elapsed.

The district court, Judge William Pattinson presiding, agreed with the city, granting judgment notwithstanding the verdict, although the jury had found that the bootleg repair was not an improvement to real property.

The Supreme Court reversed, finding that an improvement to real property is 'a permanent addition to or betterment of real property that enhances its capital value and designed to make the property more useful or valuable, as distinguished from ordinary repairs'.

In the view of the Supreme Court, the record indicated that reconnection of the sewer line to the church was not part of the project to upgrade the city's water system. A city official testified that there was no need to cut the sewer line because the water main could have been reconfigured.

The Court concluded that the negligent repair of the sanitary sewer was not an improvement to real property that would bring it within the ambit of the statute of repose. The Court identified the four factors that define an improvement to real property:
  • a permanent addition to or betterment of real property
  • that enhances its capital value
  • involving the expenditure of labor or money
  • that is designed to make the property more valuable or useful as distinguished from ordinary repairs.
Replacing the original rigid lines with corrugated pipe only satisfied two of these considerations because it was permanent and involved the expenditure of labor and money but did nothing to enhance the value of the property and was an ordinary repair.


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