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Young Radiator Co. v. Celotex Corp.

decided: August 4, 1989.


Appeal from the United States District Court for the Eastern District of Wisconsin. No. 86-C-0005--Joseph P. Stadtmueller, Judge.

Cudahy, Flaum, and Kanne, Circuit Judges.

Author: Flaum

FLAUM, Circuit Judge

This is a diversity action involving a leaky roof. Plaintiff Young Radiator Company ("Young") brought suit against the Celotex Corporation ("Celotex"), the manufacturer of the roofing system at issue, alleging negligent manufacture and defective design of the roof, breach of contract, and breach of warranty. The district court granted summary judgment in favor of Celotex, finding that Young's tort claims were lime-barred under the applicable Wisconsin statute of limitations and that there had been no breach of contract or warranty. Young appeals the district court's ruling on the tort and contract claims but does not appeal the warranty ruling. For the reasons stated in this opinion, we reverse the grant of summary judgment on the tort claims, affirm the dismissal of the contract claim, and remand for further proceedings.

In addition, this appeal raises a jurisdictional issue under Fed. R. App. P. 4(a)(3). After being sued by Young, Celotex joined as third-party defendants the architect, the general contractor, and the roofing subcontractor, seeking contribution from each. These third-party defendants filed motions for summary judgment based on statute of limitations grounds. The district court, having found Young's tort claims against Celotex to be time-barred, granted summary judgment to the third-party defendants as well. Celotex did not file a notice of appeal from that portion of the judgment dismissing its third-party complaint, and, consequently, the third-party defendants have filed motions in this court seeking to be dismissed from the appeal. They assert that in the absence of a timely Rule 4(a)(3) notice of appeal, we lack competency to exercise appellate jurisdiction to reinstate the third-party action. For the reasons stated herein, we grant the motions to dismiss.


The parties are in agreement as to the following facts. In 1972, Young undertook to construct a new plant at its facilities in Racine, Wisconsin. Cooley & Boore & Associates ("Cooley") served as the architect; Korndoerfer Construction Co., Inc. ("Korndoerfer") was hired as the general contractor; and F.J.A. Christiansen Roofing Co., Inc. ("Christiansen") was the roofing subcontractor. The parties selected for the plant a "Philip Carey" roofing system, manufactured by Celotex.*fn1

Christiansen began construction of the roof in June 1973. During the first two years of construction, various problems occurred, such as leaks and "vapor pockets."*fn2 The architect, general contractor, and roofer met several times to discuss the problems, and Christiansen was instructed to make repairs as needed. In October 1974, Cooley informed Young that the roof was "not acceptable in its present state due to vapor pockets and will be made acceptable by Korndoerfer's subcontractor in the late spring of 1975 as we need heat to detect the vapor pockets."

On July 29, 1975, Christiansen's president, Donald McNamara, inspected the roof and found that there were over a hundred openings in the roof where heating and cooling equipment was to be installed. On that day, McNamara wrote to Mr. Young (president of Young Radiator) and informed him that the equipment had not been inserted and flashed and that water was freely flowing into the building through the openings. He also advised Young that Korndoerfer had ignored Christiansen's quotations for roof flashing,*fn3 curbs, and pitch pans. Mr. Young, upset at learning of these problems from the subcontractor, responded with reprimands to Cooley for failing to properly supervise construction and demands that the project be promptly completed.

The permanent roof flashing and curbing were completed by Carlson Roofing of Racine ("Carlson"), and, after some additional remedial work by Korndoerfer, the roof was accepted by Celotex and Young (through Cooley) on November 5, 1975. With the exception of some minor follow-up flashing and curbing work by Carlson in 1976 (invoiced at $27.56 and $426.40), the construction was essentially completed as of that date. On November 13, 1975, Young Radiator was issued the Philip Carey Inspection and Service Contract which was Celotex's repair service agreement.

In 1978, Carlson repaired minor leaks which were invoiced to Young at $88. In 1979, Carlson made repairs invoiced to Young at $745.00 and $145.00. After receiving the $745.00 bill, Young contacted Celotex about the leaks. By letters dated September 7, 1979, and September 14, 1979, Celotex agreed that the leakage problems were covered by the service contract, informed Young that Carlson would make the necessary repairs at Celotex's expense, and assured Young that the roof would be put "in watertight condition." The repairs were made in the spring of 1980, but the roof continued to leak.

Celotex authorized Carlson to make additional repairs in 1980 and 1981, and by letters dated January 16 and October 21, 1981, continued to assure Young that the roof could and would be made watertight. On November 17, 1981, Celotex informed Young by letter that before the repairs could be completed four additional roof drains were needed and that those installations would be at Young's expense as they were not covered by the service agreement. The letter also offered to provide Young with materials to overlay the roof of Young's separate office building. The letter stated that Celotex "must receive a signed release from claims prior to the shipment of materials." Young never responded to this letter.

From 1980 through July 2, 1984, Young spent more than $11,000 on repairs to the plant roof. Thereafter, in 1984, the entire roof was replaced. Young filed this action against Celotex on January 2, 1986, alleging that the roof was negligently manufactured and ...

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