South Carolina Lawyers Weekly
Unpublished opinions typically go unnoticed. They carry no precedential value, so lawyers and judges tend to ignore them.
But a federal judge in Anderson recently turned to an unpublished opinion to support his decision to deny the defendants’ request for summary judgment in a lawsuit stemming from an oil spill.
In Lewis v. Kinder Morgan Energy Partners, Senior U.S. District Judge Henry Herlong relied on an unpublished opinion handed down by the South Carolina Court of Appeals in 2005 to determine that a 13-year statute of repose did not bar a lawsuit filed by the owners of a piece of property allegedly damaged by a petroleum leak from an underground pipeline.
Herlong said in an April 28 order that the unpublished opinion in Bundrick v. East Richland County Public Service District indicates that the defendants in Lewis were barred from asserting the statute of repose as a defense. The reason? The defendants undeniably owned the pipeline when allegedly shoddy repairs were made to it. Herlong said that meant the defendants had triggered an exception to the statute of repose spelled out in Section 15-3-670(A) of the South Carolina Code.
“Although Bundrick is an unpublished opinion with no precedential value, the court finds that this case has persuasive value as it is factually analogous to the case at bar and involves interpretation of the ownership exception in section 15-3-670(A),” Herlong said.
Leaky problems
Eric and Scott Lewis filed the lawsuit against Kinder Morgan Energy Partners in late 2015 after discovering that a patch applied to a dent in the pipeline in 1990 had failed, which allegedly caused an estimated 369,000 gallons of petroleum to leak onto their property. The pipeline is located on an easement owned by Kinder Morgan.
The leak was repaired within a few days. But the Lewises claim their property was permanently impaired by the oil that spilled. Their initial complaint alleged claims of negligence, trespass, punitive damages and injunctive relief.
Kinder Morgan responded with a motion seeking to have the case dismissed because the 13-year statute of repose had already run. Kinder Morgan also sought to have the case bifurcated for purposes of liability and damages and to limit any recovery.
Kinder Morgan cited Section 15-3-640, which lays out exactly how the statute of repose is to be applied to claims for damages stemming from repairs to an improvement to real property. (Section 15-3-640 was amended in 2005 to institute an eight-year statute of repose and to make other substantive changes. But because the allegedly faulty pipeline repairs were made before the amendment took effect, the earlier version of the statute controls).
The South Carolina Supreme Court has previously held that a pipeline is an improvement to real property and that an easement is to be considered real property.
But Herlong said the inquiry does not end there. Section 15-3-670(A) creates an exception which prevents defendants from citing the statute of repose if they are “in actual possession or control of the improvement as owner, tenant or otherwise” and if the owner “knows or reasonably should have known, of the defective or unsafe condition.”
Herlong said it was not clear whether Section 15-3-670(A) applies to the Lewises’ lawsuit.
Unpublished guidance
There is no published case exactly on point, Herlong said.
However, the underlying facts in the unpublished Bundrick decision were similar to those in Lewis.
In Bundrick, the plaintiffs owned real property and the defendant owned an easement running through the property for a sewer line. After a house on the property began suffering structural problems, the property owners alleged an aluminum pipe running near the sewer line had caused the problems.
The question was whether the defendant owned the aluminum pipe. If they did, they could not cite the statute of repose under Section 15-3-670(A).
The South Carolina Court of Appeals held that the defendants did not own the defective pipe, so they were able to cite the statute of repose.
Based on that reasoning, Herlong said the defendants in Lewis could not use the statute of repose as a defense because there is no dispute over whether Kinder Morgan owns the pipeline and the easement where it is located.
Further, Herlong said the plaintiffs in Lewis had raised a genuine issue of material fact regarding whether Kinder Morgan knew or should have known about the allegedly defective and unsafe condition of the repairs to the pipeline.
Herlong also determined that the plaintiffs in Lewis had provided sufficient evidence at this stage of the case that could lead a jury to find that Kinder Morgan had acted willfully, wantonly or recklessly, with respect to the 1990 repairs to the pipeline. Therefore, the claim for punitive damages could proceed, Herlong said.
Herlong also denied Kinder Morgan’s motion to limit the plaintiffs’ recovery. He said the plaintiffs had raised a genuine issue of material fact about whether the damage to the property was temporary or permanent.
Kinder Morgan is represented by a team from Womble Carlyle Sandridge & Rice.
Womble Carlyle partner Clay Custer said in an email that he was limited in what he could say about Herlong’s decision because the case is set for jury selection on June 20. But he did say, “The statute of repose will likely remain an issue in the case, as raised by the parties’ pleadings.”
The Lewises are represented by Gary Poliakoff and Raymond Mullman of Poliakoff & Associates in Spartanburg and Joseph Qualey and Robert Jones from Qualey Law Firm in Charleston. None of the Lewises’ attorneys responded to requests for comment.
The 12-page opinion is Lewis v. Kinder Morgan Energy Partners, L.P. (Lawyers Weekly No. 002-130-17). An opinion digest is available at sclawyersweekly.com.
Follow Jeff Jeffrey on Twitter @SCLWJeffrey
