Construction Projects – Part 2

Church Law and Tax 1990-05-01 Recent Developments Construction Projects Richard R. Hammar, J.D., LL.M., CPA

Church Law and Tax 1990-05-01 Recent Developments

Construction Projects

A federal appeals court ruled that a local Methodist church could not sue the manufacturer of asbestos plaster for the cost of removing the plaster from church ceilings. The church, which was constructed in 1961 the Maryland, used an asbestos plaster on all ceilings at the direction of the building’s architect. The church was consecrated in 1962 and has been in continuous use ever since. A portion of the church ceiling was replaced in 1969, and asbestos-laden plaster was used again. In 1985, the church became concerned over the possibility that asbestos materials may have been used in the construction of the church. An investigation confirmed the presence of asbestos in the ceilings, and the church trustees immediately ordered its removal—at a cost of $225,000. In 1988, the church sued the manufacturer of the ceiling plaster, seeking to recover the removal costs, and alleging that the plaster posed a health hazard to those who frequently occupied the building. The church claimed that the manufacturer breached certain warranties, and was guilty of negligence and “fraudulent concealment” of a hazardous condition. The manufacturer’s defense was that the lawsuit was barred by the Maryland 20-year statute of limitations. A federal trial court granted a summary judgment in favor of the manufacturer, without letting the case go to a jury. The church appealed, and a federal appeals court affirmed the trial court’s ruling in favor of the manufacturer. The court concluded that the state 20-year statute was a “statute of repose” rather than a statute of limitation, and accordingly it was not suspended during the period of fraudulent concealment of a hazardous condition. Further, the court rejected the church’s claim that federal hazardous waste laws (notably “CERCLA”) extended the time for filing a lawsuit or gave property owners a right to recover the cost of asbestos clean-up. First United Methodist Church v. U.S. Gypsum, 882 F.2d 862 (4th Cir. 1989).

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