February 09, 2001

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JUSTICE KNECHT delivered the opinion of the court:

In September 1996, plaintiffs filed a six-count complaint against several companies, including Sprinkmann SonsCorporation of Illinois (Sprinkmann), for injuries resulting fromSamuel Boldini's exposure to asbestos-containing materials at hisplace of employment, Archer Daniels Midland Company (ADM) inDecatur, Illinois. In February 1999, Sprinkmann filed a motionfor summary judgment based solely on the Illinois constructionstatute of repose, section 13-214(b) of the Code of Civil Procedure (Code) (735 ILCS 5/13-214(b) (West 1996)). After a hearingon the motion in October 1999, the trial court issued a writtenmemorandum opinion and order finding plaintiffs' cause of actionwas time-barred by section 13-214(b) and granting Sprinkmann'smotion for summary judgment. In December 1999, plaintiffs fileda motion to reconsider, which the trial court denied. Plaintiffsappeal, arguing the trial court erred in granting summary judgment because evidence of sales by Sprinkmann to ADM does exist. We reverse and remand.

In September 1996, Samuel Boldini and Ann Boldini, hiswife, filed a six-count complaint against several companies,including Sprinkmann, for injuries allegedly caused by Samuel'sexposure to asbestos-containing materials. Plaintiffs' claimswere based upon Sprinkmann's sale and distribution of asbestos-containing materials to Samuel's place of employment, the DecaturADM plant. Samuel worked in the Extraction B Building during his39 years at the Decatur ADM plant. Samuel died in October 1996of mesothelioma, and Ann Boldini was appointed specialadministratrix of his estate.

During the period of decedent's employment with ADM,Sprinkmann was an authorized distributor of Owens-Corning products. According to Susan Stockman, the secretary-treasurer ofSprinkmann, Sprinkmann has been in the business of installinginsulation on a labor-material basis since 1945, has never been amanufacturer of asbestos-containing products, and ceased installing insulation containing asbestos between 1971 and 1975.

In their complaint, plaintiffs alleged product liability, willful and wanton conduct, and negligence. Plaintiffsclaim decedent was exposed to asbestos-containing productsdistributed or sold by Sprinkmann while he was employed by ADM. Plaintiffs did not make any claims based on Sprinkmann's installation of asbestos-containing products at ADM. In response toplaintiffs' allegations, Sprinkmann argued it installed asbestos-containing products at ADM on a labor-material basis and noevidence showed Sprinkmann ever acted as a supplier of asbestos-containing materials for the Decatur ADM plant.

In February 1999, Sprinkmann filed a motion for summary

judgment arguing plaintiffs' cause of action was barred bysection 13-214(b) of the Code. In July 1999, plaintiffs filed aresponse to Sprinkmann's motion for summary judgment, attachingtestimony and deposition transcripts as well as Owens-Corninginvoices. In their response, plaintiffs argued (1) they wereseeking redress for Sprinkmann's role as a seller and distributorand (2) evidence existed of sales and distribution to ADM.

In September 1999, the trial court held a hearing onthe motion for summary judgment. In October 1999, the trialcourt issued a written memorandum opinion and order findingplaintiffs' cause of action time-barred and granting Sprinkmann'smotion for summary judgment.

In December 1999, plaintiffs filed a motion to reconsider, attaching several exhibits, including the evidence deposition of Ellis Carlton and the affidavit of Russell Wolstenholme. The trial court held a hearing on plaintiffs' motion the samemonth and denied it. The trial court found no just reason fordelaying enforcement or appeal pursuant to Supreme Court Rule304(a) (155 Ill. 2d R. 304(a)). This appeal followed.

Summary judgment is appropriate when the pleadings,depositions, admissions, and affidavits demonstrate no genuineissue of material fact exists and the movant is entitled tojudgment as a matter of law. 735 ILCS 5/2-1005(c) (West 1998);Rotzoll v. Overhead Door Corp., 289 Ill. App. 3d 410, 413, 681N.E.2d 156, 158 (1997). In ruling on a motion for summaryjudgment, the trial court must view all evidence in the lightmost favorable to the nonmovant. Malone v. American CyanamidCo., 271 Ill. App. 3d 843, 845, 649 N.E.2d 493, 495 (1995). Wereview grants of summary judgment de novo. Malone, 271 Ill. App.3d at 845, 649 N.E.2d at 495.

Sprinkmann's motion for summary judgment was basedsolely on the contention plaintiffs' action is time-barred undersection 13-214(b), which provides, in relevant part:

"No action based upon tort, contract[,]or otherwise may be brought against any person for an act or omission of such person inthe design, planning, supervision, observation[,] or management of construction, orconstruction of an improvement to real property after 10 years have elapsed from thetime of such act or omission." 735 ILCS5/13-214(b) (West 1996).

Plaintiffs admit if this provision applies, their action is time-barred.

For section 13-214(b) of the Code to apply toSprinkmann, (1) the product at issue must constitute an improvement to real property, and (2) Sprinkmann's activity must fallwithin the activities enumerated in the statute. Adcock v.Montgomery Elevator Co., 274 Ill. App. 3d 519, 522, 654 N.E.2d631, 633 (1995).

1. Improvement to Real Property

The Supreme Court of Illinois set forth four criteriaas relevant in determining whether a product is an improvement toreal property. See St. Louis v. Rockwell Graphic Systems, Inc.,153 Ill. 2d 1, 4-5, 605 N.E.2d 555, 556 (1992). The trial courtapplied the four criteria and concluded the insulation was animprovement to real property. In their appellant brief, plaintiffs do not argue against the trial court's conclusion; therefore, this issue is waived pursuant to Supreme Court Rule341(e)(7) (177 Ill. 2d R. 341(e)(7)).

2. Activity Analysis

We next consider whether Sprinkmann's activities fallwithin the activities enumerated in section 13-214(b). Plaintiffs seek to hold Sprinkmann responsible for the sale anddistribution of asbestos-containing products, not for the installation of such products. On the other hand, Sprinkmann claimsits sales of asbestos-containing material were in conjunctionwith its installation of the product under a labor-materialcontract. In ruling any sale by Sprinkmann to ADM was incidentalto installation, and thus protected by section 13-214(b), thetrial court found the First District cases of Risch v. Paul J.Krez Co., 287 Ill. App. 3d 194, 678 N.E.2d 44 (1997), andMcIntosh v. A & M Insulation Co., 244 Ill. App. 3d 247, 614N.E.2d 203 (1993), controlling.

The Supreme Court of Illinois has held section 13-214(b) "does not exclude persons based upon their status" but,rather, "protects, on its face, anyone who engages in the enumerated activities." (Emphasis omitted.) People ex rel. Skinner v.Hellmuth, Obata & Kassabaum, Inc., 114 Ill. 2d 252, 261, 500N.E.2d 34, 37 (1986). Therefore, the activities of Sprinkmannmust be analyzed.

In analyzing whether Sprinkmann's activities areprotected by section 13-214(b), the First District in Adcockadopted the "activity-analysis test" utilized by the federalcourts. Adcock, 274 Ill. App. 3d at 523, 654 N.E.2d at 634. Under this test, a manufacturer is afforded protection when itsubstantially participates in significant activities in installing or incorporating the product at the jobsite or custom designsthe product for a specific jobsite. Adcock, 274 Ill. App. 3d at523, 654 N.E.2d at 634. While the defendant in Adcock was amanufacturer, this test has also been applied to a defendant whoengages in sales and distribution. See Krueger v. A.P. GreenRefractories Co., 283 Ill. App. 3d 300, 304, 669 N.E.2d 947, 950(1996).

Several cases have held the installation of a productis an activity within the scope of section 13-214(b). SeeKrueger, 283 Ill. App. 3d at 304, 669 N.E.2d at 950; Risch, 287Ill. App. 3d at 197, 678 N.E.2d at 46. However, case law differson the application of section 13-214(b) to installers who alsosell and/or distribute products.

The First and Third Districts apply section 13-214(b)differently to companies engaging in sales, distribution, andinstallation activities. The First District's approach findsclaims arising from sales incident to installation fall withinsection 13-214(b). See McIntosh, 244 Ill. App. 3d at 250-51, 614N.E.2d at 205; Risch, 287 Ill. App. 3d at 198, 678 N.E.2d at 46-47. Conversely, the Third District's approach finds claimsarising from a sale do not fall under section 13-214(b) even ifthey are incident to installation. See Krueger, 283 Ill. App. 3dat 304, 669 N.E.2d at 950; MBA Enterprises, Inc. v. NorthernIllinois Gas Co., 307 Ill. App. 3d 285, 289, 717 N.E.2d 849, 852(1999).

In McIntosh, 244 Ill. App. 3d at 250-51, 614 N.E.2d at205, the plaintiff by complaint alleged the defendants sold,distributed, and installed asbestos-containing products at thejobsite, but the plaintiff did not plead any facts showing thedefendants sold or distributed the products. In affirming thetrial court's order granting summary judgment in favor of thedefendants based on section 13-214(b) of the Code, the FirstDistrict stated plaintiff failed to plead facts demonstratingdefendants acted as anything other than installers of theasbestos-containing materials. McIntosh, 244 Ill. App. 3d at251, 614 N.E.2d at 205.

The next case is Risch, 287 Ill. App. 3d at 198, 678N.E.2d at 46, in which the First District applied its earlierdecision in McIntosh. Because McIntosh required the plaintiffsto plead facts demonstrating defendants' selling activities weremore than incidental to installation, the court looked forevidence of defendants' engagement in district sales activities. Risch, 287 Ill. App. 3d at 198, 678 N.E.2d at 46-47. The courtfound the evidence demonstrated the defendant was an insulationinstaller who worked on a labor-material basis only and, therefore, the defendant's activities came within section 13-214(b). Risch, 287 Ill. App. 3d at 198, 678 N.E.2d at 47. Evidence ofthe defendant paying taxes, which are typically paid by personsreselling goods, was insufficient to demonstrate distinct salesactivities. Risch, 287 Ill. App. 3d at 198, 678 N.E.2d at 47.

In the Krueger opinion, the Third District declared"section 13-214(b) does not apply to those claims that arise outof the sale of *** asbestos products." Krueger, 283 Ill. App. 3dat 302, 669 N.E.2d at 949. Later in the opinion, the courtannounced section 13-214(b) "only applies to claims arising outof the construction-related activities undertaken by the manufacturer or seller" and then summarily stated "section 13-214(b)does not apply to [the plaintiff's] claims that arise out ofSprinkmann's sale of the asbestos products." Krueger, 283 Ill.App. 3d at 304, 669 N.E.2d at 950. In making the aforementioneddeclaration, the Third District did not distinguish between salesincident to installation and direct sales. Justice Slater, inhis special concurrence, stated section 13-214(b) "does not applyto the sale or distribution of asbestos products, however, evenwhere those products are installed by the seller or distributoras an improvement to real property." Krueger, 283 Ill. App. 3dat 307, 669 N.E.2d at 952 (Slater, J., specially concurring).

The Third District reiterated its interpretation ofsection 13-214(b) in a nonasbestos case, MBA, 307 Ill. App. 3d at289, 717 N.E.2d at 852 (dealing with gas pipes). In the MBAcase, the Third District stated, "acts unrelated to the initialconstruction of the improvement, such as the sale and distribution of improvements to real property, are not protected by[section 13-214(b)]." MBA, 307 Ill. App. 3d at 287, 717 N.E.2dat 851. Furthermore, the court, explaining its decision inKrueger, stated section 13-214(b) applies to the activity ofinstalling asbestos but not to related sales and distribution ofasbestos. MBA, 307 Ill. App. 3d at 288, 717 N.E.2d at 852.

Under the Third District's approach, a sale is a saleand always falls outside section 13-214(b). This rule is easierto apply than the First District's rule, in which a sale may notbe a sale if it is incident to installation. The First District's approach requires a stringent analysis of the facts todetermine if a sale exists independent of the sales associatedwith a labor contract.

We agree with the Third District: section 13-214(b)applies to the activity of installing asbestos-containing materials but not to the related sales and distribution of theasbestos-containing materials. However, we emphasize this ruleapplies only to claims dealing with asbestos. Sprinkmann admitsit sold asbestos-containing products to ADM on a labor-materialbasis. Therefore, plaintiffs' claims are not barred by section13-214(b) of the Code, and the trial court's grant of summaryjudgment in favor of Sprinkmann was improper.

We also find evidence indicating Sprinkmann made directsales of asbestos-containing materials to ADM. In making thisdetermination, we did not consider the affidavit of RussellWolstenholme and the evidence deposition of Ellis Carlton becausethe documents were not part of the record at the time the trialcourt ruled on the motion for summary judgment; we considered allother evidence in the record at the time the trial court ruled.

The evidence of direct sales included the trial testimony of Ellis Carlton in Spain v. Owens-Corning Corp., No. 88-L-97 (Cir. Ct. Macon Co.). Ellis Carlton, an employee ofSprinkmann who handled Sprinkmann's sales from 1963 to 1994,explained the dichotomy between sales relating to a labor-material contract and those sales made directly to customers fortheir own use. He further described how customers would ordermaterials from Sprinkmann for their use and how those materialsordered would get to the customer.

Furthermore, according to Ellis Carlton, Sprinkmann hadmaintained records of direct sales to customers starting withthose sales made in 1955. After Sprinkmann was involved in anasbestos case in the early 1980s, Ellis Carlton was ordered toshred all records older than 1972. Ironically, Sprinkmann ceasedusing and selling asbestos-containing materials starting in 1971. This court does not look favorably upon the deliberate destruction of pertinent records. This court has declared "'[a]llreasonable presumptions will be indulged against a party whodeliberately destroys evidence.'" Kearney v. Brakegate, Ltd.,263 Ill. App. 3d 355, 363, 636 N.E.2d 117, 122-23 (1994), quotingHaynes v. Coca Cola Bottling Co., 39 Ill. App. 3d 39, 46, 350N.E.2d 20, 26 (1976).

The record also contained Owens-Corning invoiceslisting Sprinkmann as the company receiving the materials. Someof the invoices indicate a sale of materials by Owens-Corning toSprinkmann, with ADM listed under Sprinkmann's address and abovethe payment terms. In viewing the invoices in the light mostfavorable to plaintiffs, the invoices are also evidence of directsales.

For the first time on appeal, Sprinkmann alleges noevidence shows products it sold and distributed were the proximate cause of decedent's injury. Plaintiffs argue they did nothave an opportunity to refute this argument in the trial court. Since Sprinkmann did not raise this issue in the trial court, wedecline to entertain this issue on appeal.

Because of our resolution of the issues, we need notaddress the propriety of plaintiffs' reply brief. Accordingly,we reverse the judgment of the circuit court of Macon Countygranting summary judgment in favor of Sprinkmann and remand forfurther proceedings consistent with this opinion.

Reversed and remanded.

GARMAN and COOK, JJ., concur.