Vaughn v. Fedders Corp. , 239 F. App'x 27 ( 2007 )


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  •                                                        United States Court of Appeals
    Fifth Circuit
    F I L E D
    June 4, 2007
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT            Charles R. Fulbruge III
    Clerk
    ))))))))))))))))))))))))))
    No. 05-11329
    ))))))))))))))))))))))))))
    GINA VAUGHN, Individually and as Next Friend to Joshua Vaughn,
    Brenden Vaughn and Amber Vaughn, Minors; NICHOLAS VAUGHN,
    Plaintiffs-Appellants,
    v.
    FEDDERS CORPORATION; FEDDERS NORTH AMERICA INC.,
    Defendants-Appellees.
    Appeal from the United States District Court
    for the Northern District of Texas
    No. 4:04-CV-313-Y
    Before DAVIS, DENNIS, and PRADO, Circuit Judges.
    Per Curiam:*
    Plaintiffs-Appellants Gina Vaughn (“Vaughn”) and Nicholas
    Vaughn (collectively, “the Vaughns”) appeal from the district
    court’s August 31, 2005 order granting summary judgment to
    Defendants-Appellees Fedders Corporation and Fedders North
    America, Inc. (collectively, “Fedders”). For the reasons that
    *
    Pursuant to 5TH CIRCUIT RULE 47.5, the court has determined
    that this opinion should not be published and is not precedent
    except under the limited circumstances set forth in 5TH CIRCUIT
    RULE 47.5.4.
    1
    follow, we REVERSE the judgment of the district court.
    I. FACTUAL AND PROCEDURAL BACKGROUND
    Vaughn and her husband, Gary Vaughn, purchased a home in
    Wautauga, Texas, in July 2002. The home contained a gas-fired
    furnace that was manufactured by Defendant Fedders Corporation in
    1979 and sold in 1979 or 1980. In January 2003, Vaughn, her
    husband, and her daughter were exposed to carbon monoxide fumes,
    which resulted in injuries to Vaughn and her daughter and in the
    death of her husband. Vaughn claims that the source of the carbon
    monoxide fumes was the allegedly faulty furnace manufactured by
    Fedders. Several days after the injuries and death occurred,
    Vaughn filed a claim with her homeowners’ insurer, Fire Insurance
    Exchange (“FIE”), which denied her claim on the basis that her
    loss was not covered by the policy.
    On June 2, 2003, the Texas legislature passed a bill that
    modified Texas Civil Practices & Remedies Code § 16.012.1 Section
    16.012 is a statute of repose. It requires that a products-
    liability action be brought against a manufacturer or seller of a
    product within fifteen years of the date of the sale of the
    product by the defendant. While this requirement formerly applied
    only to suits against manufacturers and sellers of manufacturing
    equipment, the 2003 modifications extended the fifteen-year bar
    to suits against all manufacturers or sellers of any product. On
    1
    Act of June 2, 2003, 78th Leg., R.S., Ch. 204 § 5.01, 2003
    Tex. Gen. Laws 847, 859-60.
    2
    June 11, 2003, the governor of Texas signed the bill into law,
    and it went into effect ninety days after the adjournment of the
    legislature, or September 1, 2003. See TEX. CONST. art. III, § 39.
    The modified § 16.012 applies to actions filed on or after July
    1, 2003. See § 16.012, 2003 note.
    On April 28, 2004, the Vaughns commenced a personal injury
    action against Fedders. In its answer, Fedders argued as an
    affirmative defense that § 16.012 barred the Vaughns’ claim
    because their suit was filed more than fifteen years after the
    date of sale of the furnace by Fedders. The Vaughns filed a
    motion for partial summary judgment on Fedders’ affirmative
    defense. They contended that the application of § 16.012 to their
    claim violated Article I, § 16, of the Texas Constitution, which
    provides that no “retroactive law” shall be made.2 The Vaughns
    also argued that the application of § 16.012 to their claim
    violated the Due Process Clause of the United States
    Constitution. Fedders then moved for summary judgment on the
    basis of § 16.012.3
    The district court granted Fedders’ summary judgment motion
    2
    Article I, § 16, states: “No bill of attainder, ex post
    facto law, retroactive law, or any law impairing the obligation
    of contracts, shall be made.”
    3
    Fedders also filed a third-party action against FIE for
    spoliation of evidence, on the basis that FIE had Vaughn’s
    furnace destroyed after it was inspected. The district court
    dismissed this action in its August 31, 2005 order, and Fedders
    has not appealed.
    3
    in its August 31, 2005 order, concluding that § 16.012 barred the
    Vaughns’ claim and rejecting the Vaughns’ argument that this
    application of § 16.012 was unconstitutional. The district court
    explained that accrued causes of action were not vested rights
    and that, while “a reasonable time must be afforded within which
    existing causes of action may be commenced,” “Vaughn had over
    five months to file her claims before the statute of repose went
    into effect,” which constituted a reasonable period of time.        The
    district court also concluded that § 16.012 did not violate the
    Due Process Clause of the United States Constitution because the
    rights protected by that clause are defined by state law, and an
    accrued cause of action was not a protected right under Texas
    law. The Vaughns filed this timely appeal.
    II. APPELLATE JURISDICTION AND STANDARD OF REVIEW
    Under 28 U.S.C. § 1291, this court has jurisdiction over the
    Vaughns’ appeal from the district court’s August 31, 2005 final
    order and judgment, which disposed of all the parties’ claims.
    We review a district court’s grant of summary judgment de
    novo.   Dallas County Hosp. Dist. v. Assocs. Health & Welfare
    Plan, 
    293 F.3d 282
    , 285 (5th Cir. 2002). Summary judgment is
    proper when the “pleadings, depositions, answers to
    interrogatories, and admissions on file, together with the
    affidavits, if any, show that there is no genuine issue as to any
    material fact and that the moving party is entitled to a judgment
    as a matter of law.”   FED. R. CIV. P. 56(c).   A dispute about a
    4
    material fact is genuine if the evidence is such that a
    reasonable fact-finder could return a verdict for the non-moving
    party.    Anderson v. Liberty Lobby, Inc., 
    477 U.S. 242
    , 248
    (1986).    When deciding whether there is a genuine issue of
    material fact, this court must view all evidence in the light
    most favorable to the non-moving party.       Daniels v. City of
    Arlington, 
    246 F.3d 500
    , 502 (5th Cir. 2001).
    III.   DISCUSSION
    A.   As applied to the Vaughns, § 16.012 violates Article I,
    § 16, of the Texas Constitution
    1.     A plaintiff with an accrued claim must be afforded a
    reasonable time in which to file her claim
    There is a long line of Texas cases addressing the
    constitutional limits on retroactive laws, mainly new statutes of
    limitations. In essence, these cases declare that a newly enacted
    statute of limitations may not bar all remedies for an existing
    cause of action and must allow a reasonable period for its
    prosecution. One of the earliest cases to announce this principle
    is DeCordova v. City of Galveston, 
    4 Tex. 470
    (1849). In
    interpreting Article I, § 16, of the Texas Constitution,
    DeCordova stated:
    Laws   are   deemed    retrospective   and    within   the
    constitutional   prohibition    which   by   retrospective
    operation destroy or impair vested rights or rights to “do
    certain actions or possess certain things, according to
    the laws of the land,” (3 Dall. 349,) but laws which
    affect the remedy merely are not within the scope of the
    inhibition unless the remedy be taken away altogether or
    incumbered with conditions that would render it useless or
    impracticable to pursue it. (Bronson v. McKinzie, 
    1 How. 5
         R. 315.) Or, if the provisions regulating the remedy be so
    unreasonable as to amount to a denial of right, as, for
    instance, if a statute of limitations applied to existing
    causes barred all remedy or did not afford a reasonable
    period for their prosecution, or if an attempt were made
    by law, either by implication or expressly, to revive
    causes of action already barred, such legislation would be
    retrospective within the intent of the prohibition, and
    would therefore be wholly inoperative.
    
    Id. at 479-80.
    Subsequently, Mellinger v. Mayor of Houston, 
    68 Tex. 37
    , 48 (1887), quoted the above passage and stated, “[w]e
    have no doubt that the law is thus correctly stated.” In 1895,
    the Supreme Court of Texas declared:
    The Legislature may provide a shorter period of limitation
    for existing causes of action. It may make a statute of
    limitation for causes when none existed before. But it can
    not, by so abbreviating the time in which suit must be
    brought, take away the right of action altogether. It must
    allow a reasonable time after the law goes into effect to
    bring suit upon actions which are not then barred.
    Wright v. Hardie, 
    88 Tex. 653
    , 655 (1895).
    This principle has been reaffirmed by more recent decisions
    of the Texas courts. Citing Wright, among other cases, the Corpus
    Christi Court of Civil Appeals stated that:
    Generally, statutes of limitation go to matters of remedy
    and not to matters of fundamental rights unless the
    limitation period set is so manifestly unjust that it
    constitutes a denial of justice or it amounts to a
    practical denial of the right itself. The legislature may
    without violating constitutional guarantees enact statutes
    which limit the time within which actions to enforce
    demands may be brought even though there existed no
    previous period of limitation; provided that such statute
    allows a reasonable time within which to bring suit. The
    determination of what constitutes a reasonable time is
    reviewable by the courts.
    Alvarado v. Gonzales, 
    552 S.W.2d 539
    , 542 (Tex. Civ. App.–Corpus
    6
    Christi 1977, no writ) (internal citations omitted).
    In City of Tyler v. Likes, 
    962 S.W.2d 489
    , 502 (Tex. 1997),
    the Supreme Court of Texas declared:
    laws affecting a remedy are not unconstitutionally
    retroactive unless the remedy is entirely taken away. See
    De Cordova, 
    4 Tex. 470
    , 480. . . . The Legislature can
    affect a remedy by providing a shorter limitations period
    for an accrued cause of action without violating the
    retroactivity provision of the Constitution if it affords
    a reasonable time or fair opportunity to preserve a
    claimant’s rights under the former law, or if the
    amendment does not bar all remedy.
    Most recently, the Fort Worth Court of Appeals held that:
    The legislature can pass legislation affecting a remedy
    for an accrued cause of action without violating article
    I, section 16 if it affords a reasonable time or fair
    opportunity to preserve a claimant’s rights under the
    former law. When the legislature shortens an existing
    statute of limitations or creates one where none had
    existed, it must provide a reasonable time for plaintiffs
    to bring suit after the enactment of the new law . . . .
    In the Interest of K.N.P., 
    179 S.W.3d 717
    , 720 (Tex. App.–Fort
    Worth 2005, pet. denied) (citations omitted).
    The majority of the above-cited decisions addressed the
    constitutionality of new or amended statutes of limitations. The
    exceptions are Wright, which involved the length of time
    available for application for a writ of error, and Likes, which
    involved the reclassification of the operation of storm sewers as
    a government function. None of these cases involves a statute of
    repose, but it is not apparent why the same principles should not
    apply to a statute of repose. Statutes of limitations and
    statutes of repose have similar purposes and similar effects.
    7
    Just like a statute of limitations, § 16.012 cuts off the right
    to sue after a certain length of time, only the time runs from
    the sale of the manufactured product, rather than from the time
    of injury.
    Based on the above-cited decisions, therefore, we can
    conclude that when Texas passes a new statute of repose, it may
    not entirely deprive a party with an accrued cause of action of
    the right to sue, and must afford that party a reasonable time in
    which to bring suit. This circuit adopted this view in a recent
    case very similar to the present one, Burlington Northern & Santa
    Fe Railway Co. v. Skinner Tank Co., 
    419 F.3d 355
    (5th Cir. 2005),
    which also addresses the retroactive effect of § 16.012. Citing
    Likes, this court held that “[t]he Texas legislature can restrict
    the time for filing a claim without violating the retroactivity
    provision of the Texas constitution so long as ‘it affords a
    reasonable time or fair opportunity to preserve a claimant’s
    rights under the former law, or if the amendment does not bar all
    remedy.’” 
    Id. at 359-60.
    The court then applied this “reasonable
    time” analysis to § 16.012’s effect on the plaintiff’s claim, and
    concluded that a reasonable time had been afforded.
    2.   The Vaughns were not afforded a reasonable time to file
    We agree with the Vaughns that, contrary to the mandate of
    DeCordova, Wright, Likes, et al., they were not allowed a
    reasonable time in which to file their accrued personal injury
    claim before § 16.012 took effect.
    8
    We measure the length of time that the Vaughns were afforded
    to file suit from the date at which the new statute became law,
    which is the date at which persons may be charged with
    constructive notice of its provisions. The date at which § 16.012
    became law is ninety days after the adjournment of the Texas
    legislature, or September 1, 2003. See TEX. CONST. art. III, § 39.
    There are numerous cases that support this proposition that
    the “reasonable time” runs from the date that the new statute
    becomes law, rather than from some earlier date. Popham v.
    Patterson, 
    51 S.W.2d 680
    , 683 (Tex. 1932), states that “[n]o Act
    of the Legislature is operative as notice until it becomes a law,
    but it is so operative as soon as it does become law.” Popham
    further noted that the act in question became a law “ninety days
    after the adjournment of the legislature.” 
    Id. In Wright,
    the
    Texas Supreme Court stated that the Texas legislature “must allow
    a reasonable time after the law goes into effect to bring suit”
    and held that the “amended act . . . did not take effect until
    the expiration of ninety days from the day on which the
    Legislature 
    adjourned.” 88 Tex. at 655
    (emphasis added).
    The Dallas Court of Civil Appeals noted that “[s]ome states
    have adopted the rule that the reasonable time which the statute
    must allow dates from the passage of the act and not from the
    effective date;” however, the court concluded that “the sounder
    rule--that announced by Justice Gaines in Wright v. Hardie”--is
    “that the reasonable time allowed by the statute must run from
    9
    the effective date of the act.” Highland Park Indep. Sch. Dist.
    v. Loring, 
    323 S.W.2d 469
    , 471 (Tex. Civ. App.–Dallas 1959, no
    writ). In Alvarado, the Corpus Christi Court of Civil Appeals
    used the effective date to measure the reasonable 
    time, 552 S.W.2d at 540
    , 542, and recently, in In the Interest of K.N.P.,
    the Fort Worth Court of Appeals also used the effective 
    date. 179 S.W.3d at 721
    .
    We acknowledge that there are cases that use a different
    measuring stick. In Likes, without addressing its precedent that
    used the effective date, the Texas Supreme Court measured whether
    a “reasonable time” had been allowed for the filing of an accrued
    claim from the date of the statute’s 
    enactment. 962 S.W.2d at 502
    . In Burlington Northern, however, this court measured the
    “reasonable time” under Texas law from “the September 1, 2003
    effective date of the amendment to § 
    16.012.” 419 F.3d at 360
    . We
    therefore follow that approach here.
    Section 16.012 operates on claims filed on or after July 1,
    2003, but did not become law until September 1, 2003. Thus we may
    charge the Vaughns with constructive notice of § 16.012 on
    September 1, 2003, but by that time their suit had already been
    barred.4 It is therefore evident that § 16.012 allowed the
    Vaughns no time at all within which to file suit, and the
    4
    In contrast, the plaintiff in Burlington Northern had “at
    least one month and 28 days following the September 1, 2003
    effective date of the amendment to § 16.012” in which to file
    suit before the fifteen-year period permitted by § 16.012
    expired, barring its 
    claim. 419 F.3d at 360
    .
    10
    requirement stated in DeCordova, Wright, Likes, and Burlington
    Northern that they be afforded a reasonable time within which to
    file their accrued claim was clearly violated.5
    3.   Fedders’ arguments
    Fedders points to a number of Texas cases in which the
    constitutionality of statutes of repose has been upheld.
    Specifically, Fedders cites Texas Gas Exploration Corp. v. Fluor
    Corp., 
    828 S.W.2d 28
    (Tex App.-Texarkana 1991, writ denied),
    Sowders v. M.W. Kellogg Co., 
    663 S.W.2d 644
    (Tex. App.–Houston
    [1st Dist.] 1983, writ ref’d n.r.e.), and Ellerbe v. Otis
    Elevator Co., 
    618 S.W.2d 870
    , 873 (Tex. App.–Houston [1st Dist.]
    1981, writ ref’d n.r.e.).6 These cases, however, are
    distinguishable from the case at hand. First, in none of these
    decisions did the Texas court analyze the effect of the statute
    of repose under Article I, § 16’s prohibition on retroactive
    5
    We would reach the same result if we were to measure the
    time from the date of enactment instead of the effective date.
    Using the enactment date, the Vaughns would only have had 19 days
    in which to file their suit. This is not a reasonable time. See
    
    Alvarado, 552 S.W.2d at 542-43
    (where retroactive application of
    the limitations statute allowed the appellant only 21 days in
    which to file suit, such application “would not give the
    appellant a fair opportunity to file suit”).
    6
    Ellerbe and Sowders addressed challenges to Texas Revised
    Civil Statutes article 5536a, a statute of repose barring suits
    against engineers or architects for damages arising out of the
    defective or unsafe condition of real property or any attached
    equipment or improvement ten years after its substantial
    completion. 
    See 618 S.W.2d at 871
    ; 663 S.W.2d at 646. Texas Gas
    addressed a challenge to Texas Civil Practice & Remedies Code
    §§ 16.008 and 16.009, the successors to Article 
    5536a. 828 S.W.2d at 30
    .
    11
    laws. Instead, these decisions examined whether the statutes of
    repose violated the open courts provision of the Texas
    Constitution.7   Second, in each of these cases the statute of
    repose had cut off the plaintiff’s right to sue before the injury
    occurred, and therefore before the plaintiff’s claim accrued. It
    follows that these cases have little relevance to our analysis of
    the Vaughns’ claim.
    Fedders also argues, relying on Ellerbe, Texas Gas, and
    several additional cases, that Article I, § 16, protects only
    vested rights and that the Vaughns do not have a vested right in
    their accrued claim. We conclude, however, that we are not
    required to wade into Texas’s difficult vested rights
    jurisprudence to decide this appeal. Because the decisions
    setting forth the “reasonable time” requirement did not employ a
    7
    This provision states, “[a]ll courts shall be open, and
    every person for an injury done him, in his lands, goods, person
    or reputation, shall have remedy by due course of law.” TEX.
    CONST. art. I, § 13.
    In Texas Gas, the plaintiff cited Article I, § 16, as well,
    
    see 828 S.W.2d at 31
    , but it does not appear that the plaintiff
    was relying on that section’s prohibition on retroactive laws. If
    the plaintiff did make an argument based on that prohibition, the
    court did not address it. Rather, in rejecting the plaintiff’s
    claim, the court stated that “[t]he retroactive application of
    Sections 16.008 and 16.009 does not violate the right of access
    to court of the constitution or the constitutional prohibition
    against ex post facto laws.” 
    Id. It is
    possible that the court
    simply confused Article I, § 16’s prohibition on ex post facto
    laws with its prohibition on retroactive laws, but clearly the
    two are not the same.
    12
    vested rights analysis, we need not determine whether the Vaughns
    had a vested right in their accrued claim. Rather, we may simply
    rely on decisions, such as DeCordova, Wright, and Likes, which
    hold that where a claim has accrued, a reasonable time must be
    afforded for filing suit. For the same reason, we need not
    address the caselaw, also cited by Fedders, indicating that where
    a statute infringes on a vested right, the statute is not
    unconstitutionally retroactive if it is a valid exercise of the
    Texas legislature’s police power.
    Because we conclude that § 16.012 did not afford the Vaughns
    a reasonable time in which to file suit, in violation of Article
    I, § 16, of the Texas Constitution, we hold that the district
    court erred by granting Fedders’ summary judgment motion.
    B.   The Vaughns’ argument under the Due Process Clause
    Because we hold that the application of § 16.012 to the
    Vaughns’ claim violated the Texas Constitution, we need not reach
    the question of whether this application also violated the United
    States Constitution.
    IV.   CONCLUSION
    The judgment of the district court is REVERSED, and the case
    REMANDED for further proceedings not inconsistent with this
    opinion.
    REVERSED and REMANDED.
    13