Pennsylvania Superior Court Declines To Apply Statute Of Repose To Bar Claim To Oil Tank, And Creates Uncertainty As To Which Building Components Are Subject To Protection Under The Statute

November 15, 2023

By: Carl L. Engel

The Pennsylvania Superior Court, in the case Biela v. Carney Plumbing, Heating and Cooling, Inc., has just affirmed that the state’s Statute of Repose does not bar a claim related to a faulty oil tank. In general, the Statute of Repose prohibits plaintiffs from bringing claims based on negligent construction to real property more than twelve years after the construction has ended. (“Real property” generally refers to what is more commonly known as “real estate.”) Because the oil tank was physically separated from the plaintiff’s house, and was subject to eventual replacement, the court found that it was not “real property” subject to protection under the statute. However, rather than clarify the contours of the statute, the court may have muddied them, as its focus on the replaceability of the fuel tank invites new arguments as to which building components are “fixtures” subject to protection under the statute.

On August 25, 2004, Dorothy Biela hired Carney Plumbing, Heating and Cooling, Inc. (“Carney”), to install an outdoor above-ground oil tank to replace the old one in her basement.  She also signed an agreement with Carney to perform annual maintenance, which included inspection of the outdoor tank.

On January 24, 2019, as a worker from Moyer and Son, Inc. (“Moyer”), was filling the outdoor tank, it burst, causing 190 gallons of oil to spill onto Ms. Biela’s property. Ms. Biela then sued both Carney and Moyer, alleging that Carney had failed to install the tank properly or to inspect it adequately, and that Moyer had not inspected the tank before filling it. Moyer settled with Ms. Biela before trial.

In a motion for summary judgment, and again at trial, Carney asked the court to dismiss Ms. Biela’s claims based on arguments that they were barred by Pennsylvania’s Statute of Repose. The trial court denied Carney’s motions, finding that the oil tank was not “real property,” as it was a piece of equipment separate from any building. The jury returned a verdict in favor of Ms. Biela in the amount of $255,000. Carney appealed.

On November 1, 2023, the Superior Court affirmed the trial court’s refusal to dismiss Ms. Biela’s claims under the Statute of Repose. The court observed that to obtain protection under the statute, Carney had to show that “what it supplied is an improvement to real property,” which “includes everything that permanently enhances the value of real property.” The court then recognized that there is a “problematic” gray area whenever an item is attached to real property, and that it must make an “objective determination” as to whether or not the item is a permanent “fixture” subject to protection under the statute.

The Superior Court identified several factors for consideration when deciding whether an item is a “fixture”: (i) The degree to which and manner in which the object is attached to real property, (ii) the ease of removing the object, (iii) whether the object may be removed without damaging the real property, (iv) how long the object has been attached to the real property, (v) whether the object is necessary or essential to the real property, and (vi) the conduct of the party and whether it evidences an intent to permanently attach the object to the property.

Considering these factors, the Superior Court agreed with the trial court that the oil tank was not a “fixture” subject to protection under the statute. In reaching its decision, the court noted that the oil tank was never affixed or fastened to Ms. Biela’s house, and it sat on cement slabs away from the structure. Moreover, the outdoor tank had replaced an indoor tank, and had been installed outdoors to make subsequent replacement easier, further indicating that it was never intended to be permanent. Therefore, the trial court had not abused its discretion by finding that the oil tank was not a “fixture.”

This case illustrates the limits of Pennsylvania’s Statute of Repose, as it shows that even components of integral and permanent building systems (such as heating) are not protected "fixtures" if the component itself is not meant to be permanent. While much of the court’s attention was focused on the physical separation of the oil tank from the house, it also found that its need for replacement was a strong indication that it was not a fixture. This opinion therefore may invite future arguments in construction cases over the frequency and extent of replacements to building-system components, and whether the conditions of replacement render the components ineligible for protection as “fixtures” under the statute.