author: PEREZ-GIMENEZ, Chief Judge.

text:
    Rey F. Lorenzo ROLDAN, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
    Civ. No. 84-2458(PG).
    United States District Court, D. Puerto Rico.
    July 10, 1985.

      Juan A. Hernández-Rivera, Bayamón, Puerto Rico, for plaintiff.
    Fidel A. Sevillano, Asst. U.S. Atty., Hato Rey, Puerto Rico, for defendant.
   ORDER

PEREZ-GIMENEZ, Chief Judge.

Plaintiff filed this action on September 27, 1984, pursuant to 42 U.S.C. § 405(g) to obtain judicial review of a final decision of the Secretary of Health and Human Services (the Secretary) denying his claim for disability insurance benefits. The Secretary filed an answer on January 15, 1985, together with the administrative transcript. Thereafter, on March 20, 1985, the Secretary filed a Motion for Extension of Time to File Memorandum of Law and was granted until April 22, 1985, to file the memorandum. However, April 22 “came and left” and the Secretary did not file her memo, nor has she filed it to date, even though well over five months have elapsed since the filing of her answer to the complaint.

Rule 801.3(B) of the Local Rules of this Court provides that the Secretary has sixty days to file a memorandum of law in support of her position, running from the date of the filing of her answer to the complaint. The local rule further provides that no extension beyond ninety days will be granted to the Secretary to file her memorandum of law. In the case at bar, the Secretary has clearly failed to comply with the requirements placed upon her by the local rules of this Court.

We have previously emphasized that the Secretary is not relieved “of her ‘duty to defend cases or obey the court’s orders’ ” by the limitation in F.R.Civ.P. 55(e) of default judgments against the United States. Morales v. Secretary of Health and Human Services, 103 F.R.D. 380, 382 (D.P.R.1984). Specifically, we stated in Morales that Rule 55(e) cannot be construed to preclude any sort of sanction from being imposed against the Secretary for her failure to cooperate in the expeditious adjudication of social security claims. Id. Moreover, we have admonished the Secretary in several occasions that we will not tolerate her unexplained failures to comply with our orders or with the requirements placed upon her by the Federal Rules of Civil Procedure and the Local Rules of this Court. Id. Thus, we have held that the Court can penalize the Secretary’s failure to timely contribute a brief or memorandum by considering the case on plaintiff’s brief. Santiago v. Secretary of Health and Human Services, 599 F.Supp. 722, 724 (D.P.R.1984) (citing, Alameda v. Secretary of Health, Education and Welfare, 622 F.2d 1044 (1st Cir.1980).

WHEREFORE, in view of the above, the Secretary is hereby precluded from filing her memorandum of law. The plaintiff is granted twenty (20) days to file his memorandum of law in support of his complaint.

IT IS SO ORDERED.

       Rule 55(e) provides: "No judgment by default shall be entered against the United States or an officer or agency thereof unless the claimant establishes his claim or right to relief by evidence satisfactory to the court.”


source: Caselaw Access Project

license: Public Domain

text:
    UNITED STATES of America v. Emiliano Valencia COPETE.
    Crim. No. 84-134(PG).
    United States District Court, D. Puerto Rico.
    July 10, 1985.

      Charles E. Fitzwilliams, Asst. U.S. Atty., Old San Juan, Puerto Rico, for plaintiff.
    Peter John Porrata, San Juan, Puerto Rico, for defendant.
   OPINION AND ORDER

PEREZ-GIMENEZ, Chief Judge.

Defendant, Emiliano Valencia Copete, has filed a petition pursuant to 28 U.S.C. § 2255 to vacate, set aside or correct the sentence imposed upon him by this Court on September 28, 1984. Defendant’s petition is predicated on the grounds that he entered a guilty plea in view of the government’s “promise” that he would not serve any time in prison and that the Court, in sentencing him, did not “comply” with the plea bargaining agreement.

Present before the Court is a Report and Recommendation filed on May 15, 1985, wherein the U.S. Magistrate recommends the dismissal of defendant’s Section 2255 petition. The parties were granted ten days to file any opposition to the Magistrate’s Report and Recommendation. To date, defendant has yet to file an opposition to the Magistrate’s Report and Recommendation even though ample time has been granted him to do so.

It is settled that if a party wishes the Court to review a determination by a Magistrate, he “shall" request it by filing his objections to the Magistrate’s report within ten days after being served with a copy of the report. 28 U.S.C. § 636(b)(1)(C); Local Rule 510.2 (1984). See, Park Motor Mart, Inc. v. Ford Motor Co., 616 F.2d 603, 605 (1st Cir.1980) (“[w]e conclude that a party ‘may’ file objections within ten days or he may not, as he chooses, but he ‘shall’ do so if he wishes further consideration.”) (emphasis added). The Court of Appeals for the First Circuit did not find in its reading of 28 U.S.C. § 636(b)(1)(C), or in the general purpose of the Federal Magistrate’s Act, any implication that a court must make a de novo determination of matters included in a Magistrate’s report “to which objection is not made,” or that a court should review when a review has not been requested. Id. (emphasis in original). Moreover, in United States v. Escoboza Vega, 678 F.2d 376, 379 (1st Cir.1982), the First Circuit extended the rule of Park Motor Mart to criminal cases. Thus, no objection to the Magistrate’s report having been filed in the case at bar, we accept in whole the Magistrate’s Report and Recommendation and adopt as our own the conclusions of law therein stated.

We are convinced, at any rate, that said conclusions of law are correct in light of recent First Circuit cases. Specifically, it is settled that a court’s rejection of the government’s sentencing recommendation does not give defendant a right to withdraw his plea. United States v. Khoury, 755 F.2d 1071, 1073 n. 1 (1st Cir.1985); United States v. Keefe, 621 F.2d 17, 19 n. 1 (1st Cir.1980); United States v. Incrovato, 611 F.2d 5 (1st Cir.1979). This is especially true where, as here, the district court informs defendant at the change of plea hearing that the Government’s recommendation as to sentencing is not binding on the court.

WHEREFORE, in view of the above, the Court hereby ADOPTS the Magistrate’s Report and Recommendation, and defendant’s Section 2255 motion is hereby DENIED.

IT IS SO ORDERED.

       The Court has reserved its ruling on the Magistrate’s Report and Recommendation for much longer than the ten days customarily granted the parties to file any opposition thereto in view of the fact that defendant filed his Section 2255 motion pro se.


author: COHEN, Senior District Judge:

text:
    Annette MARKS, Kathleen Towson, Matthew Wissinger, James Deffler, Joan Walters, Individually, and on Behalf of a class of all others similarly situated, Plaintiffs, v. Clifford W. SNEDEKER, Director of The Division of Motor Vehicles, Joseph F. Murphy, Comm’r of Insurance, Kenneth R. Biederman, Treasurer of the State of New Jersey, and the New Jersey Automobile Full Insurance Underwriting Ass’n., Defendants.
    Civ. A. No. 84-1393.
    United States District Court, D. New Jersey.
    July 11, 1985.

      Philip Stephen Fuoco (argued), Haddonfield, N.J. and Gorelick & Groon, P.C. by Thomas Rossi, on brief, North Wildwood, N.J. and George H. Piperno, Haddonfield, N.J., for plaintiffs.
    Irwin I. Kimmelman, Atty. Gen. of N.J. by Patrick J. Hughes, Deputy Atty. Gen. (argued), John J. Hayden, Deputy Atty. Gen., Trenton, N.J., for defendants.
   OPINION

COHEN, Senior District Judge:

This action, challenging the constitutionality of portions of the New Jersey Insurance Reform Act of 1982 and the New Jersey Automobile Full Insurance Availability Act, N.J.Stat.Ann. 17:29A-33 et seq. and N.J.Stat.Ann. 17:30E-1 et seq. respectively (hereinafter the Reform Act), is before the Court on plaintiffs’ motion for class certification and defendants’ cross-motion for summary judgment or dismissal on abstention grounds. After a thorough consideration of the relevant facts and law, and for the reasons which follow, we shall dismiss the action on grounds of abstention.

INTRODUCTION

In order to understand our decision to abstain, it is necessary to become familiar with New Jersey’s automobile insurance laws as they existed prior to the enactment of the Reform Act and thereafter. Prior to January 1, 1983, the effective date of the Reform Act, an individual convicted of a drunken driving offense was subject to criminal penalties imposed by the State including fines, points on the license, license suspension or revocation, or imprisonment. See e.g. N.J.Stat.Ann. 39:4-50 et seq. (West Supp.1984-85). In addition to these criminal penalties, a driver would almost inevitably be required, by his or her insurance carrier, to pay an insurance surcharge for a period of three years in order to compensate the insurer for the added risk posed by a driver with a history of drunken driving. Due to the complex nature of this previous statutory and regulatory scheme, insurance rates varied dramatically throughout the state dependent upon a driver’s individual characteristics and the primary location of the automobile. See Affidavit of J. Richard Boer, Exhibit A. In addition to being subject to significant rate discrepancies, drivers throughout New Jersey were often unable to obtain insurance coverage, despite a good driving record, due to the perceived lack of profitability for insurance carriers in New Jersey and their resultant decisions to discontinue writing new policies. See “Karcher, Overview of no-fault auto insurance,” New Jersey Lawyer, No. 111 May 1985 at 8.

In an attempt to remedy the deficiencies in the State’s automobile insurance system, the legislature has enacted numerous statutory provisions which significantly overhaul the system and create a new and similarly complex scheme designed to provide insurance which “will be affordable, available, and more equitable to the motorists [throughout the] State ... ”. N.J.Stat. A.nn. 17:29A-34(j) (West 1985). A number of the reform provisions enacted are at issue here.

As a result of the Reform Act, individual insurance companies are no longer allowed to collect surcharges from motorists. Instead, a driver convicted of a drunken driving offense is billed directly by the State’s Division of Motor Vehicles (DMV) which collects the surcharges and then disburses them to the New Jersey Automobile Full Insurance Underwriting Association (the Association) pursuant to N.J.Stat.Ann. 17:29A-35(b)(2) (West 1985). Underlying the removal of the surcharge system from the control of the individual insurance carriers is the need to eliminate the added insurance risk of drunken driving from rate calculations. This effort to standardize the insurance surcharge, resulting from drunken driving offenses statewide, is an integral component of the reform effort.

Plaintiffs allege that the imposition of the surcharge under the Reform Act constitutes an ex post facto law and is a violation of their due process rights as well as certain unspecified State Constitutional rights. They seek a declaration that the Reform Act is violative of both the United States and New Jersey Constitutions, an injunction of its enforcement as it applies to them, an accounting of monies received and dispersed under the Reform Act, the return to them of monies paid, damages, and such other relief as this Court may deem just and equitable. In response, defendants have brought the instant motion for abstention in support of which they rely on the doctrine as articulated in Burford v. Sun Oil Co., 319 U.S. 315 (1943).

DISCUSSION

Although abstention is a “narrow exception to the duty of a District Court to adjudicate a controversy properly before it,” Colorado River Water Conservation District v. United States, 424 U.S. 800, 813, 96 S.Ct. 1236, 1244, 47 L.Ed.2d 483 (1976) (quoting County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188, 79 S.Ct. 1060, 1062, 3 L.Ed.2d 1163 (1959)), it is appropriate under certain circumstances where litigation in the state court “would clearly serve an important countervailing interest.” Id. One of the situations appropriate for abstention exists

where there have been presented difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar. Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25 [79 S.Ct. 1070, 3 L.Ed.2d 1058] (1959), for example, involved such a question. In particular, the concern there was with the scope of the eminent domain power of municipalities under state law. See also Kaiser Steel Corp. v. W.S. Ranch Co., 391 U.S. 593 [88 S.Ct. 1753, 20 L.Ed.2d 835] (1968); Hawks v. Hamill, 288 U.S. 52 [53 S.Ct. 240, 77 L.Ed. 610] (1933). In some cases, however, the state question itself need not be determinative of state policy. It is enough that exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern. In Burford v. Sun Oil Co., 319 U.S. 315 [63 S.Ct. 1098, 87 L.Ed. 1424] (1943), for example, the Court held that a suit seeking review of the reasonableness under Texas state law of a state commission’s permit to drill oil wells should have been dismissed by the District Court. The reasonableness of the permit in that case was not of transcendent importance, but review of reasonableness by the federal courts in that and future cases, where the State had established its own elaborate review system for dealing with the geological complexities of oil and gas fields, would have had an impermissibly disruptive effect on state policy for the management of those fields. See also Alabama Pub. Serv. Comm’n v. Southern R. Co., [341 U.S. 341, 71 S.Ct. 762, 95 L.Ed. 1002 (1951)].

Colorado River, 424 U.S. at 813-15, 96 S.Ct. at 1244-1245 (footnotes omitted).

As in Burford, the “exercise of federal review of the question in [this] case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.” Colorado River, 424 U.S. at 814, 96 S.Ct. at 1244.

In opposing defendants’ motion, plaintiffs maintain that we need only be concerned with the “narrow issue of the constitutionality of the retroactivity of the penalties ” thus not requiring that we consider a complex and technical regulatory scheme of the State of New Jersey. Plaintiffs’ Brief at 9 (emphasis added). Plaintiffs’ argument, however, begs the question. Before addressing the constitutionality of the “retroactivity of the penalties,” the Reform Act must be interpreted to determine whether the surcharges actually apply retroactively and whether they constitute a penalty. The resolution of these questions could have a significant disruptive effect on New Jersey’s newly reformed automobile insurance program which is unquestionably a “matter of substantial public concern.” Colorado River, 424 U.S. at 814, 96 S.Ct. at 1244. In addition, the resolution of these issues will involve an in-depth analysis of the legislative purposes which underlie a major reform effort in an area of law—insurance—which has typically been left to the states to regulate. Thus, significant questions of public policy are inextricably involved in any consideration of these issues. Initial consideration of these policy issues is typically best left to state entities. In this case, the interest of both the state legislature and judiciary is manifest.

Plaintiffs’ motion for class certification was initially returnable before this Court on September 7, 1984. At the request of both parties, however, the motion was adjourned on numerous occasions in the hope that the New Jersey Legislature would resolve the retroactivity issue, thus, rendering this case moot. At oral argument, the Court was informed that, for political reasons apparently not connected with the surcharge scheme, the legislative proposal intended to remedy the present situation is, in the words of the State’s attorney, “dead.” Although this initial attempt at a legislative resolution to the instant controversy has failed, other legislative measures, which are provided by the Reform Act itself, are yet to be exercised.

The Reform Act created a joint legislative committee to “monitorf ] and evaluate] the effectiveness of the implementation of [the surcharge system], and said joint committee shall, as it may deem appropriate, issue recommendations for administrative or legislative changes affecting the implementation of [the] act.” N.J. Stat.Ann. 17:29A-41 (West 1985). Moreover, the Reform Act created a study commission designed to evaluate market conditions resulting from the implementation of the reforms with respect to

market availability, affordability and equity of automobile insurance coverage; the operation and effectiveness of the modified two tier rating system including the effectiveness and adequacy of merit rating plans and surcharge systems; ... the effectiveness and fairness of the New Jersey Automobile Full Insurance Underwriting Association, including the adequacy and fairness of its funding system; and the creation of genuinely competitive market conditions.

N.J.Stat.Ann. 17:30E-23 (West 1985) (emphasis added). The study commission’s findings and recommendations regarding improvements in the reforms are to be reported to the Governor and Legislature no later than January 1, 1987. Id. The continuing involvement of the state legislature, vis-a-vis the joint committee and the study commission, clearly counsels in favor of our abstention in this matter.

Of even greater importance, however, is the fact that the regulations promulgated pursuant to the Reform Act have created an expedited appeals process whereby an individual challenging the application of the surcharge goes immediately to the Appellate Division of the New Jersey Superior Court following administrative review by the Division of Motor Vehicles. See N.J. Admin.Code 13:19-12.1 et seq. See also N.J.Stat.Ann. 52:14B-9 through 14. (West Supp.1984-85). In fact, at the present time, at least eight cases are before the Appellate Division challenging the surcharge system on grounds identical to those presented here. Thus, in light of Burford v. Sun Oil Co. and in the interests of comity, we shall dismiss plaintiffs’ complaint.

We feel constrained to note two additional factors which support our decision and which are involved with any perceived need on the part of plaintiffs for a federal review of their claims. First, an Administrative Law Judge (AU) has held the surcharge system to be an unconstitutional denial of due process as a result of it being harsh, oppressive and retroactive; although the AU’s decision on the system’s constitutionality was overturned on final review by the DMV, the result indicates that plaintiffs need not fear receiving a biased hearing from the state’s judiciary. Secondly, if plaintiffs receive an unfavorable ruling from the Appellate Division, they have recourse to the State Supreme Court and, if necessary, they can seek federal review from the United States' Supreme Court.

In light of our decision to abstain, it is unnecessary to consider plaintiffs’ motion for class certification. The Court shall enter an appropriate order.

ORDER

This matter having come before the Court on the motion of plaintiffs, ANNETTE MARKS, et als., for class certification and the cross-motion of defendants, CLIFFORD W. SNEDEKER, et als., for summary judgment or dismissal on grounds of abstention; and

For the reasons stated in the Court’s opinion filed this date;

It is on this 11th day of July, 1985 ORDERED that defendants’ motion to dismiss on grounds of abstention be and hereby is granted.

      . For example, a young male driver located in suburban Trenton without any motor vehicle convictions and with basic coverage would have paid, in 1983, $1,842 for insurance. The same individual located in Jersey City would have paid $2,920 while the same person, if located in Newark, would have paid $4,296.

      . Among the other statutes enacted were The New Jersey Insurance Fraud Prevention Act, N.J.Stat.Ann. 17:33A-1 et seq. (West 1985) and The New Jersey Automobile Insurance Freedom of Choice and Cost Containment Act of 1984 which is codified in various sections of Titles 17 and 39 of N.J.Stat.Ann.

      . The Association, created pursuant to N.J.Stat. Ann. 17:30E-4 (West 1985), is an unincorporated, nonprofit association made up of all insurers licensed to transact automobile insurance in New Jersey. Among the powers and duties of the Association is the capacity to "[a]rrange for the issuance of automobile insurance to any qualified applicant through servicing carriers." N.J.Stat.Ann. 17:30E-7 (West 1985). In effect, the Association replaced the former “assigned risk pool." Nevertheless, it may write insurance for any qualified driver and not just those who present a high risk.

      . The eight cases of which we are aware are those of Harry Ryan, Docket No. A-2432-84T7; Elaine M. Berger, Docket No. A-2431-84T6; Diane M. Vilardo, Docket No. A-2805-84T7; Robert L. Walukiewicz, Docket No. A-2991-84T7; Steven Koerner, Docket No. A-2785-84T7; Frederick Eldridge, Docket No. A-2656-84T7; William J. Crerand, Docket No. A-2532-84T7; and James Cuabello, Docket No. A-2964-84T7. See Defendants brief at 17.


author: ALLEN SHARP, Chief Judge.

text:
    William SIMPSON, Plaintiff, v. G. Michael BROGLIN, Superintendent of Westville Correctional Center; Daniel McBride, Director of Industrial Complex; Anthony Metzcus, Health Care Administrator and Keeper of Medical Records, Defendants.
    No. S 84-399.
    United States District Court, N.D. Indiana, South Bend Division.
    July 11, 1985.

      William Simpson, pro se.
    William Patrick Glynn III, Deputy Atty. Gen., Indianapolis, Ind., for defendants.
   MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

Defendants filed a motion for summary judgment pursuant to Fed.R.Civ.Pro. 56. Defendants notified plaintiff pursuant to Lewis v. Faulkner, 689 F.2d 100 (7th Cir.1983), and Rule 7 of the United States District Court for the Northern District of Indiana that plaintiff had fifteen days from the date of service within which to file a response to defendants’ motion for summary judgment. The date of service on defendants’ motion for summary judgment was December 24, 1984. Plaintiff has failed to respond. This case is now ripe for ruling.

Plaintiff, William Simpson, is a prisoner of the State of Indiana incarcerated at Westville Correctional Center (WCC) in Westville, Indiana. Plaintiff has filed an action against officials at WCC pursuant to 42 U.S.C. § 1983. In his complaint, plaintiff alleges that the defendants, G. Michael Broglin, Superintendent of WCC, Daniel McBride, Director of Industrial Complex at WCC, and Anthony Metzcus, Health Care Administrator and Keeper of Medical Records at WCC, were negligent because they refused to repair the shower floor in Dorm N.

On May 25, 1984, at around 9:15 o’clock P.M., plaintiff slipped and fell while alone in the Dorm N shower. Plaintiff alleges that he slipped and fell because tiles in a couple of seven to ten inch square areas and which were each lU inch deep, were missing. As a result of his fall and the defendants’ alleged negligence in not having replaced the tile, plaintiff sustained serious injury to his lower spine area and the left side of his head. Plaintiff claims that he received improper medical treatment thereafter. None of the defendants were involved in plaintiff’s accident.

The following morning, May 26, 1984, plaintiff was taken to the prison hospital by ambulance after he complained that he could not get out of bed and walk. An x-ray taken at the hospital showed a normal spine. Plaintiff was then seen by an orthopedic specialist on June 11, 1984, and was released from the hospital. He continued reporting to the orthopedic clinic until he was discharged on July 23, 1984.

The court notes that plaintiff’s fall in the shower was not the first time plaintiff had injured his back. Plaintiff injured his back on April 30, 1984 while playing basketball. He had seen an orthopedic surgeon on May 21, 1984, and was released back to his dorm, just five days before plaintiff reinjured his back in the shower. This court further notes that several recreation leaders at WCC stated in their affidavits that they had observed plaintiff participating in basketball games and playing tennis after he had been discharged from the orthopedic clinic on July 23, 1984. Plaintiff has not denied these allegations.

Plaintiff has filed this action pro se under 42 U.S.C. § 1983. The issue this court must decide is whether the plaintiffs complaint fosters an appropriate § 1983 claim.

It is axiomatic that a plaintiff can prove no deprivation of his constitutional rights under § 1983 unless the state has a constitutionally recognized duty to protect the plaintiff. Jackson v. Byrne, 738 F.2d 1443, 1446 (7th Cir.1984). Where the state has created a custodial or other special relationship with a particular class of individuals, courts have recognized that the state may have a constitutionally recognized “affirmative duty” to provide certain “elementary protective services.” Benson v. Cady, 761 F.2d 335, 339 (7th Cir.1985); Jackson, supra, at 1446-47. Prisoners are considered one such class.

In Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), the Supreme Court of the United States held that in any § 1983 claim the initial inquiry must focus on whether the two essential elements to a § 1983 claim are present: (1) whether the conduct complained of was committed by a person acting under color of state law, and (2) whether the conduct deprived a person of rights, privileges, or immunities secured by the Constitution or laws of the United States.

The fact that all the defendants are employed by the state and any action they take in regard to their employment is sanctioned by the state, is sufficient to fulfill the requirement that these defendants are acting under the color of state law. The court’s second inquiry is whether plaintiff has been deprived of any right, privilege, or immunities secured by the Constitution or laws of the United States. Plaintiff has not referred to any right, privilege, or immunity secured by the Constitution or laws of the United States which have been traversed. However, under Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972), this court must construe plaintiff’s complaint in the light most favorable to the plaintiff and will do so.

The most logical claim that plaintiff can present is that the conduct of the defendants violates the due process clause of the Fourteenth Amendment of the Constitution of the United States. However, Justice Rehnquist suggested in Parratt, supra, that:

To accept respondent’s argument that the conduct of state officials in this case constitute a violation of the Fourteenth Amendment would necessarily result in turning every alleged injury which may have been inflicted by a state official acting under “color of law” into a violation of the Fourteenth Amendment cognizable under § 1983. It is hard to perceive any logical stopping place to such a line of reasoning. Presumably, under this rationale, any party who is involved in nothing more than an automobile accident with a state official could allege a constitutional violation under § 1983. Such reasoning ‘would make the Fourteenth Amendment a front of tort law to be superimposed upon whatever systems may already be administered by the States.’ Paul v. Davis, 424 U.S. 693, 701, 96 S.Ct. 1155 [, 1160], 47 L.Ed.2d 405. We do not think that the drafters of the Fourteenth Amendment intended the Amendment to play such a role in our society, (emphasis supplied). Parratt v. Taylor, supra, 451 U.S. at 544, 101 S.Ct. at 1917.

Plaintiff’s claim satisfies three prerequisites of a valid due process claim: defendants acted under color of state law, the right to be free from bodily injuries falls within the definition of liberty interest, and the injury, allegedly negligently caused, may amount to a deprivation of a liberty interest. However, according to Parratt, supra at 537, 101 S.Ct. at 1914, these elements standing alone do not establish a violation of the Fourteenth Amendment. The Fourteenth Amendment protects only against deprivation without due process of law. Baker v. McCollan, 443 U.S. 137, 145, 99 S.Ct. 2689, 2695, 61 L.Ed.2d 433 (1979). Plaintiffs alleged deprivation of liberty is not without due process of law under Parratt, supra, because a post-deprivation remedy is available in the state courts. Under Ind.Code § 34-4-16.5-1 et seq., an inmate may bring a claim against a state employee.

In a case very similar to the one here, the United States Court of Appeals for the Fourth Circuit held that injury to an inmate allegedly resulting from the negligence of prison officials was not a protectable liberty interest under the due process clause of the Fourteenth Amendment. Daniels v. Williams, 748 F.2d 229 (4th Cir.1984). In Daniels an inmate brought a civil rights action against a deputy sheriff to recover for injuries allegedly sustained when he slipped and fell on a pillow and newspapers left on some stairs by the deputy sheriff. The court in Daniels further held that if the ordinary citizen may not sue under § 1983 a state employee who has negligently deprived him of a liberty interest by injury to his person, then the prisoner should not be allowed to prosecute a similar claim. Parratt v. Taylor, supra 451 U.S. at 544, 101 S.Ct. at 1917; Daniels, supra at 231. The district courts in the Fourth Circuit following Daniels have done so in the same vein as announced here. White v. Booker, 598 F.Supp. 984 (E.D.Va.1984); Stewart v. Hunt, 598 F.Supp. 1342 (E.D.N.C.1984).

This court has also held that injury to one’s person in both the prisoner context and the person in “free society” context does not foster a constitutional claim. In Hendrix v. Faulkner, 525 F.Supp. 435 (N.D.Ind.1981), aff'd in part, rev’d in part and rem. sub nom. Wellman v. Faulkner, 715 F.2d 269 (7th Cir.1983), an inmate’s Eighth Amendment claim for mistreatment of a broken hand was dismissed where there was no evidence to implicate the prison hospital administrator’s direct personal responsibility for inmate’s treatment by prisoner nurse. In Ellsworth v. Mockler, 554 F.Supp. 1072 (N.D.Ind.1983), appeal pending, this court held that negligent operation of an automobile by a deputy sheriff acting under color of state law did not give rise to a § 1983 claim for wrongful death. Here, like in Hendrix and Ells-worth, plaintiff has no constitutional claim.

The fact that the tile was missing in the shower raises the issue of whether the defendants were merely negligent or deliberately indifferent, which can be shown by either actual intent or reckless disregard on behalf of the defendants, in not having replaced the missing tile. In the most recent Seventh Circuit decision involving the alleged negligence of prison officials resulting in prisoner injury, the Court of Appeals held that mere negligence is not sufficient to merit a constitutional claim. Benson v. Cady, 761 F.2d 335 (7th Cir.1985). Benson, a prisoner, brought an Eighth Amendment claim, equal protection claim, and pendent state law claims against various prison officials. Benson was injured when one of the weights on the barbell exercise equipment that he was using slipped off and struck him in the neck, head, and shoulder area of his body. The lock and screw designed to hold the weight on the barbell was missing. Benson was later injured when the bed in his cell, which was held in it daytime vertical position by two large hooks, fell from its vertical position and struck Benson in the neck. One of the hooks had been missing and the bed fell when the remaining hook failed. Benson claims that the defendant prison officials failed to have the barbell exercise equipment and the bed inspected and repaired. The Court of Appeals held that although the prison officials might have been negligent, a mere failure to inspect and repair periodically defective items in the prison environment does not evidence deliberate indifference; therefore Benson did not state an appropriate claim under § 1983. Id. at 340.

Here plaintiff alleges that defendants were negligent in not replacing the missing shower tile. As previously stated, the issue is whether the defendants were merely negligent or deliberately indifferent in failing to replace the missing tile. Based on the standards defined in Benson, supra, plaintiff must show defendants’ deliberate indifference, evidenced by either actual intent or reckless disregard, in order to have a constitutional claim. Plaintiff has not done this. “Actual intent” is self-explanatory, and based on the record, plaintiff has not shown that defendants actually intended to harm him. Reckless disregard is not self-explanatory according to the decision in Benson. Id. at 339. Recklessness is characterized by highly unreasonable conduct or a gross departure from ordinary care in a situation where a high degree of danger is apparent. Prosser, Law of Torts, § 34 at 185 (4th ed. 1971). In other words, a defendant acts recklessly when he disregards a substantial risk of danger that either is known to him or would be apparent to a reasonable person in his position. Benson, supra at 339. There is nothing before this court to show that the missing tile posed a risk of danger to plaintiff or any other inmate. No other injuries have been attributed to the missing tile nor is there any evidence before this court indicating that there had been complaints about the missing tile. Furthermore, plaintiff has failed to allege that defendants knew or had reason to know of any risk of danger posed by the missing tile. Thus, plaintiff has failed to state a claim of deliberate indifference to his physical safety due to the missing tile in the shower. Id. at 340.

Plaintiff further states that he received improper medical treatment for his injuries. Plaintiff has not responded to defendants’ motion for summary judgment. The Supreme Court of the United States held in Estelle v. Gamble, 429 U.S. 97, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976), that “medical malpractice does not become a constitutional violation merely because the victim is a prisoner.” Id. at 106, 97 S.Ct. at 292; Daniels v. Williams, supra at 231; see also Hendrix v. Faulkner, supra. In light of Estelle v. Gamble, supra, and Benson v. Cady, supra, negligent injury to the body is not a constitutional violation. Thus, negligent injury to plaintiff’s person is not a protectable liberty interest under the due process clause of the Fourteenth Amendment, and plaintiff’s complaint does not state a cause of action under § 1983.

Plaintiff’s alleged deprivation of liberty is not .without due process of law under Parratt v. Taylor, supra, because a post-deprivation remedy is available in the state court. I.C. § 34-4-16.5-1 et seq.

Accordingly, defendants’ motion for summary judgment is hereby GRANTED. SO ORDERED. NO COSTS ASSESSED.

      . The Court of Appeals for the Seventh Circuit has held that one is not deprived of his liberty without due process of law where post-deprivation state tort remedies are available. Guenther v. Holmgreen, 738 F.2d 879 (7th Cir.1984). Plaintiff Guenther filed a § 1983 action claiming that his arrest was made without probable cause. Because of the availability of state court remedies, the court held that Wisconsin has done all that the Fourteenth Amendment requires in this context to guarantee Guenther procedural due process.


author: RYAN, District Judge.

text:
    LUMBERMEN’S UNDERWRITING ALLIANCE, et al., Plaintiffs, v. MOBIL OIL CORPORATION, et al., Defendants.
    Civ. Nos. 83-1094, 83-1255.
    United States District Court, D. Idaho.
    July 11, 1985.

      Craig L. Meadows, P. Craig Storti, Kenneth C. Howell, Hawley Troxell Ennis & Hawley, Boise, Idaho, for Lumbérmen’s Underwriting Alliance.
    Joseph M. Imhoff, Michael W. Moore, Jerry Goicoecheas, Boise, Idaho, for Bruce Hardy, Linda Hardy, The Estate of Boyd Smith, deceased, and Emma Loyne Smith.
    Howard Humphrey, Max Eiden, Jr., Rory R. Jones, Clemons Cosho & Humphrey, P.A., Boise, Idaho, for Mobil Oil Corp.
    Quane Smith Howard & Hull, Boise, Idaho, for Hydraulic & Air Equipment Co.
    Timothy C. Walton, Lyons Bohner Chasan & Walton, Boise, Idaho, for Hollenbeak.
    David W. Cantrill, Cantrill Skinner & Sullivan, Boise, Idaho, for Salmon River Lumber Co. and Employers Ins. of Wausau.
    Michael G. Brady, Brady McDaniel & Matthews, Chd., Boise, Idaho, for Grange-ville Grange Supply.
   MEMORANDUM OPINION

RYAN, District Judge.

I. INTRODUCTION

This action arises from an explosion and fire which occurred at the Riggins, Idaho, sawmill of the Salmon River Lumber Company on April 23, 1982. The fire destroyed the mill, killed one employe^, and injured several others.

Plaintiff Lumbermen’s UuucnmlUi6 Alliance (LUA) is a reciprocal insurance exchange bringing suit as subrogee to the rights of the Salmon River Lumber Compa ny. The other plaintiffs represent the interests of those persons killed or injured in the fire. Plaintiffs assert claims sounding in both contract and tort. These claims arise from the circumstances surrounding the services and materials supplied to the lumber company for the maintenance of an air compressor which allegedly was the origin of the explosion and fire.

Although this case has been proceeding before the court for a considerable period of time and, in fact, has been set down for trial in November of 1985, the court was heretofore unaware of a serious question relating to the court’s subject matter jurisdiction over this action. This question was brought to the court’s attention in LUA’s motion for class certification filed April 30, 1985. Jurisdiction in this case is based upon diversity of citizenship. LUA is a reciprocal insurance exchange and, as such, is an unincorporated association for purposes of determining citizenship. An unincorporated association’s citizenship for purposes of determining diversity is that of each of its members. Navarro Savings Association v. Lee, 446 U.S. 458, 461, 100 S.Ct. 1779, 1782, 64 L.Ed.2d 425 (1980). LUA’s membership includes citizens of all states except Hawaii. Consequently, diversity of citizenship is lacking between LUA and the named defendants unless LUA can be properly certified as a class represented by a diverse member.

Subsequent to LUA’s motion for class certification, Defendants Mobil Oil Corporation and Hydraulic & Air Equipment Company moved to dismiss for lack of subject matter jurisdiction. The issues raised by the pending motions involve the interaction of Rules 17(b) and 23.2 of the Federal Rules of Civil Procedure and Idaho Code § 41-2905(2). Rule 17(b) of the Federal Rules of Civil Procedure provides that the federal courts must look to state law in a diversity action to determine the capacity of a party to sue. Idaho Code § 41-2905(2) provides that a reciprocal insurer “shall” sue and be sued in its common name. Rule 23.2 of the Federal Rules of Civil Procedure provides a procedure by which unincorporated associations may sue or be sued as a class. Because the court determines that the members of LUA cannot bring suit in their individual capacity under the laws of the State of Idaho, the class action device afforded by Rule 23.2, as a procedure allowing the members to bring suit in their individual capacity, is not available. Consequently, there is no diversity of citizenship between LUA and the named defendants, and the claims of LUA must be dismissed for lack of subject matter jurisdiction.

II. DISCUSSION

Defendants’ argument in support of their motions to dismiss is two-fold. First, defendants assert Rule 23.2 is only available when state law does not allow an unincorporated association to sue in its common name. The purpose behind Rule 23.2 is satisfied where, as here, the state allows an unincorporated association to sue or be sued in its common name. Defendants conclude, therefore, that resort to Rule 23.2 is no longer necessary. Second, defendants argue the legislature’s use of the word “shall” in Section 41-2905 effectively excludes suit by or against an unincorporated association through means other than as an entity, i.e., an unincorporated association has capacity to sue or be sued only in its common name. Therefore, state law does not give the unincorporated association members capacity to sue or be sued as a class under Rule 23.2.

Plaintiff’s argument in favor of allowing suit as a class is also two-fold. First, Section 41-2905(2) is not exclusive, but simply gives an unincorporated association additional rights which it did not previously hold. Because an unincorporated association could historically sue as a class, it retains the right to do so under Rule 23.2. Second, plaintiff argues that Rule 23.2 does more than merely allow an unincorporated association to be treated as an entity where not so provided by state law. Rule 23.2 also provides a mechanism by which unincorporated associations can bring suit in federal court by appointing diverse representatives of the class, thus avoiding the difficulties of establishing complete diversity (where the association has a large number of members).

A. Scope of Class Actions under Rule 23.2

At common law, an unincorporated association had no legal identity as an entity, but was simply a collection of its individual members. United Mine Workers of America v. Coronado Coal Co., 259 U.S. 344, 385, 42 S.Ct. 570, 574, 66 L.Ed. 975 (1922); see generally Note, Capacity and Class Actions under Federal Rule 23.2, 61 B.U.L.Rev. 713, 713 (1981). Thus, it was necessary to join all of the members as parties in a suit by or against the association. Alternatively, if the membership of the association was so large that joinder was impracticable, suit could be maintained as a class action. In such a class action, as with joinder, the association itself was not a party to the suit. In addition to alleviating the practical difficulties of joinder, the class action also allowed large unincorporated associations access to the federal forum where it would not otherwise exist by the simple expedient of choosing a diverse member as class representative.

Rule 17(b) provides that in federal diversity cases, state law determines a party’s capacity to sue or be sued. Even though state law might give an unincorporated association the capacity to sue or be sued as an entity, the citizenship of each of the members must still be considered for diversity purposes in federal court. See Navarro Savings Association v. Lee, 446 U.S. at 461, 100 S.Ct. at 1782 (1980); United Steelworkers of America v. R.H. Bouligny, Inc., 382 U.S. 145, 86 S.Ct. 272, 15 L.Ed.2d 217 (1965). Consequently, while a state’s grant of entity status eliminated the practical difficulties of joinder, it left many large unincorporated associations in no better position with regard to access to the federal forum than comparable associations in states which did not allow suit as an entity.

Prior to 1966, class actions in federal court by or against an unincorporated association were brought pursuant to Rule 23 of the Federal Rules of Civil Procedure. In 1966, the Supreme Court adopted Rule 23.2 of the Federal Rules of Civil Procedure which separately addressed class actions brought by or against the members of an unincorporated association. The adoption of Rule 23.2, however, did not help clarify the relationship between Rule 23, governing class actions, and Rule 17(b), governing capacity to sue. Those courts which have addressed the impact of a state’s grant of entity status on the availability of a class action under Rule 23, or subsequently Rule 23.2, have reached inconsistent results. In those cases decided subsequent to adoption of Rule 23.2, this inconsistency results primarily from divergent treatment of the advisory committee note to Rule 23.2. That note provides:

Although an action by or against representatives of the membership of an unincorporated association has often been viewed as a class action, the real or main purpose of this characterization has been to give “entity treatment” to the association when for formal reasons it cannot sue or be sued as a jural person under Rule 17(b).

Those cases adopting a restrictive view of the scope of Rule 23.2 interpret the reference to “entity treatment” in the advisory committee note to mean a grant of capacity from the forum state to sue and be sued as an entity. E.g., Suchem, Inc. v. Central Aguirre Sugar Co., 52 F.R.D. 348 (D.P.R.1971). Where state law grants an unincorporated association capacity to sue and be sued as an entity, the purpose of Rule 23.2 has been satisfied and resort to the class action device provided by that rule is not necessary. Id. Under this approach, LUA is given entity treatment under Idaho Code § 41-2905(2), and therefore, LUA may not resort to the class action device provided by Rule 23.2.

Other courts have interpreted the scope of Rule 23.2 more broadly. See Kerney v. Fort Griffin Fandangle Association, Inc., 624 F.2d 717 (5th Cir.1980); Oskoian v. Canuel, 269 F.2d 311 (1st Cir.1959). Under this approach, LUA could sue as a class under Rule 23.2 unless the law of Idaho prohibited suit against the individual members of the Association. As long as the members of an unincorporated association have the individual capacity to sue or be sued under state law, the class action device afforded by Rule 23.2 is appropriate.

The court is persuaded that the broad interpretation of Rule 23.2 reflected in the Kerney and Oskoian decisions is correct. The language of Rule 23.2 suggests no “entity treatment” limitation, nor does the advisory committee reference to “entity treatment” specifically refer to capacity to sue or be sued as an entity. From the evolution of the legal identity of an unincorporated association it is apparent that entity treatment allowed a party suing or being sued by an unincorporated association to avoid the practical difficulties of joining all members of the association. Such “entity treatment” can be achieved by suing the association in its common name or by suing the members of the association individually as a class. The broad interpretation is also supported by the advisory committee’s citation of the First Circuit’s decision in Oskoian v. Canuel (applying the broad interpretation), and the Fourth Circuit’s decision in Tunstall v. Brotherhood of Locomotive Firemen and Engine-men, 148 F.2d 403 (4th Cir.1945) (which adopted the broad approach in dictum).

B. Capacity of the Individual Members to Sue or be Sued

Having adopted the broad interpretation of Rule 23.2, the class procedure provided by that rule will be available to LUA unless the individual members of the association do not have capacity to sue or be sued under the laws of the State of Idaho. Title 41, Chapter 29, Idaho Code, regulates the operation of reciprocal insurance exchanges in Idaho. As noted earlier, Section 41-2905 provides that, “a reciprocal insurer shall ... (2) Sue and be sued in its own name.” The parties disagree as to whether or not the legislature intended to allow suit exclusively by or against the entity and not by or against the members as individuals.

Use of the mandatory term “shall” is, of course, indicative of exclusivity. The exclusivity of the capacity to sue or be sued as an entity provided in Section 41-2905 is further supported by other provisions in Chapter 29. The relevant provisions are as follows:

41-2910 ... (e) Except as to nonassessable policies, a provision for a contingent several liability of each subscriber in a specified amount which amount shall be not less than one (1) nor more than ten (10) times the premium or premium deposit stated in the policy. [Nonassessable policies are allowed where the entity has sufficient assets to cover the entire contingent liability.]
41-2915 ... (2) Any judgment .. shall be binding upon each of the insurer’s subscribers as their respective interests may appear, but in an amount not exceeding their respective contingent liabilities, if any, the same as though personal service of process was had upon each such subscriber.
41-2921 ... (1) The liability of each subscriber, other than as to a nonassessable policy, for the obligations of the reciprocal insurer shall be an individual, several and proportionate liability, and not joint.
(2) Except as to a nonassessable policy, each subscriber shall have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers’ agreement, for payment of actual losses and expenses incurred while his policy was in force. Such contingent liability may be at the rate of not less than one (1) nor more than ten (10) times the premium or premium deposit stated in the policy____
41-2922 ... (1) No action shall lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for thirty (30) days.
(2) Any such judgment shall be binding upon each subscriber only in such proportion as his interests may appear and in amount not exceeding his contingent liability, if any.

It is clear that the referenced sections contemplate suit against the entity itself rather than suit against the individual members. Further, Section 41-2921(1) expressly eliminates the doctrine of joint liability. The referenced sections also contemplate suit on nonassessable policies. In such cases, the entity has enough assets to cover all contingent liability and, therefore, suit against the individual members is unnecessary. While it is implicit in Sections 41-2905, 2910, 2915, and 2921 that suit against the individual members is precluded, Section 41-2922(1) expressly prohibits suit against an individual subscriber until final judgment has first been obtained against the association. The provisions of Title 41, Chapter 29, leave little doubt that a member of a reciprocal insurance exchange cannot be sued in Idaho to recover on a claim which is based upon the activities of the insurance exchange except in a collection action subsequent to entry of judgment against the insurance exchange itself.

The history of Section 41-2905 also supports this conclusion. The predecessor to the current Section 41-2905 provided that, “an exchange or reciprocal shall have the right to sue or be sued in its own name.” 1947 Idaho Sess.Laws, ch. 270, § 4. The Idaho Legislature’s change from the earlier permissive language to the current mandatory language suggests the provisions of Section 41-2905(2) are exclusive.

The court finds that under Idaho law, the individual members of a reciprocal insurance exchange do not have capacity to sue or be sued in an original action based upon an obligation claimed for or against the insurance exchange.

Finally, LUA asserted during oral argument on these motions that LUA as a class constitutes an “entity” within the meaning of Idaho Code § 41-2905. This argument is fundamentally in error. Rule 23.2 provides only a procedural mechanism for suit against the members individually. Generally 7 C. Wright & A. Miller, Federal Practice and Procedure § 1751 (1972). It is axiomatic that an entity cannot sue as a class because it is itself a unique individual with or without the capacity to sue. Nor does Rule 23.2 create capacity in the individual members to bring suit. Capacity in diversity actions is expressly to be determined by state law. Fed.R.Civ.P. 17(b). If the individual members themselves cannot sue or be sued, a procedural mechanism for such a suit is, of course, superfluous. A procedure for suit by the members individually presupposes the individual member’s capacity to sue.

III. CONCLUSION

The procedural device provided in Rule 23.2 of the Federal Rules of Civil Procedure allowing the individual members of LUA to maintain suit as a class will be available to LUA where, under the laws of the State of Idaho, the individual members have the capacity to maintain such an action. The provisions of Idaho Code § 41-2905 requiring LUA, as a reciprocal insurance exchange, to bring suit exclusively as an entity, preclude suit on behalf of the individual members. Lacking capacity to maintain this action, the members cannot utilize the class action device afforded by Rule 23.2.

For purposes of diversity, the citizenship of LUA, as an unincorporated association, is that of the citizenship of each of its members. Complete diversity does not exist between the members of LUA and the defendants, and consequently, this court lacks subject matter jurisdiction over LUA’s claims. Those claims must, therefore, be dismissed.

      . Briefing in this matter filed on behalf of LUA conceded LUA’s status as an unincorporated association only for purposes of consideration of its motion for class certification. However, at oral argument LUA made no attempt whatsoever to assert that it might be anything but an unincorporated association. Implicit in LUA’s position at oral argument was its concession that it is an unincorporated association and should be treated as such when determining its citizenship.

      . LUA seeks to have its attorney-in-fact, U.S. Epperson Underwriting Company, named as class representative. For purposes of determining diversity in a class action, only the citizenship of the class representative is considered. See Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969); Supreme Tribe of BenHur v. Cauble, 255 U.S. 356, 41 S.Ct. 338, 65 L.Ed. 673 (1921). U.S. Epperson is incorporated in the State of Missouri and its principal place of business is in Florida, and therefore, diversity exists if LUA is allowed to proceed as a class with U.S. Epperson as class representative.

      . With the exception of Section 41-2905, the referenced provisions speak only in terms of suit against the insurer rather than by the insurer. From this, it might be suggested that while the individual members cannot be sued on obligations against the insurer, they may sue as individuals on behalf of the insurer. LUA has not asserted this argument, nor is it persuasive. Capacity to sue, and be sued is an integral concept as reflected by the language of Section 41-2905 which speaks in terms of suit by and against an entity as a unified grant of capacity.

      . There can be no question that “entity” as it is used in reference to reciprocal insurers in Section 41-2905 does not contemplate the aggregation of the individual members, but refers to the management structure of the association itself. For purposes of illustration, the “entity” referred to in Section 41-2905 is analogous to a corporation as opposed to an aggregation of the corporation’s stockholders. A contrary conclusion would eliminate any distinction between suit as an entity and suit by joinder of all members, the method already existing at common law. Indeed, if such were the case, there would be no need for statutes providing for suit as an entity.


author: HAROLD A. ACKERMAN, District Judge.

text:
    SECURITIES INVESTOR PROTECTION CORPORATION, Plaintiff, v. The I.E.S. MANAGEMENT GROUP, INC., Defendant.
    Civ. A. No. 77-1039.
    United States District Court, D. New Jersey.
    July 12, 1985.

      David J. Sheehan, and Ira J. Hammer, Crummy, DelDeo, Dolan, Griffinger & Vecchione, P.C., Newark, N.J., for trustee for the Liquidation of The I.E.S. Management Group, Inc.
    Arthur J. Delaney, Chd., John W. Karr, Karr, Lyons & Burns, Washington, D.C., for Stoneybrook Apartments and Townhouses, Ltd., and its partners.
   OPINION

HAROLD A. ACKERMAN, District Judge.

In this complex and prolonged liquidation proceeding of Investors Economic Systems (IES) Management Group, Inc., (Management Group), Michael R. Griffinger is the appointed Trustee. Management Group, a Delaware Corporation wholly owned by IES which itself has sought relief under Chapter XI of the Bankruptcy Act, was a registered broker-dealer with the Securities and Exchange Commission. As such, it provided financial services to some 1,600 customers who, upon liquidation, filed claims with the Trustee. Pursuant to court order and to his obligations under the Securities Investor Protection Act of 1970 (SIPA), 15 U.S.C. § 78aaa, et seq. (1976), the Trustee has engaged in rendering his determinations on these claims. Pursuant to this Court’s Order dated November 18, 1977, certain claimants (limited partners in a real estate syndication known as Stoney-brook Apartments and Townhouses, Ltd.) having received an adverse determination from the Trustee, filed objections with this Court. The matter is presently before me on cross-motions for summary judgment, in essence seeking affirmance or reversal of the Trustee’s determination. The Stoney-brook claimants and the Trustee agree that there are no genuine issues of material fact in this regard precluding summary judgment. See Rule 56 of the Federal Rules of Civil Procedure; Sames v. Gable, 732 F.2d 49, 51 (3d Cir.1984). I agree and for the reasons which follow I have decided to affirm the Trustee’s denial of the claims filed by the Stoneybrook limited partners and thus to grant judgment in favor of the Trustee with respect to the instant claims.

The undisputed facts pertinent to the pending motions are as follows. The Stoneybrook claimants are 26 investors who together paid $466,000 in cash for ten Class “A” shares in the Stoneybrook limited partnership. The investment was made in reliance on the offering memorandum Exhibit A to claimants’ Statement of Facts Not In Dispute (hereinafter “PPM” or Private Placement Memorandum). The memorandum authorized payment by the limited partners in two phases. On or about December 13, 1976 payments totalling $366,-000 were made. Subscription Agreements were entered into at this time and this was the date the Certificate of Limited Partnership was filed with the Essex County Clerk. See Exhibit C to Affidavit of Patricia Jacobs. On January 15, 1977 a final payment totalling $100,000 was made. The PPM authorized the use of the proceeds of these payments for the purchase of partnership property, in particular a 113 unit garden apartment complex in Houston, Texas, then owned by a Mr. Joseph Durst. The property was encumbered by a $2,000 mortgage and consisted of leased rental units. Revenue from the leases was to cover management expenses and distributions to the limited partners. The PPM further stated that “[i]t is understood and represented that the Partnership shall not become effective until such time as the said improvements are conveyed to the Partnership.” PPM.

The PPM identified Westwood, Inc. as the general partner for the limited partnership in question. Westwood is a wholly owned subsidiary of IES, as is Management Group, and was organized in 1973 to act as the corporate general partner for numerous real estate limited partnership syndications which were developed, packaged and sold by IES through Management Group. It is undisputed that “the officers and directors of IES and its subsidiaries were virtually identical. The parent, IES, conducted no business of its own but merely acted as a conduit, bill payer and guarantor of its subsidiaries’ debts and helped to administer the operations of the IES group of companies. Substantially all the business conducted by the IES group was conducted by subsidiary corporations. The same management personnel for the various subsidiary companies handled all phases of the transactions, including putting the various transactions together, maintaining the books and records, controlling the flow of funds, managing the properties and partnerships and generally superintending all transactions from start to finish.” Trustee’s Objection to Allowance of Claim and Counter Claim, filed January 12, 1979 at 4, quoted in Claimants’ Reply Brief to Trustee’s Opposition to Cross-Motion at 8; see generally, id. at Exhibits I and J.

The PPM further set forth the general partner’s fiduciary responsibilities, its relationship to Management Group, its general responsibilities and the requirements for removal of Westwood as general partner. The PPM also stated that:

... although the General Partner has undertaken certain obligations to the Partnership, the fulfillment of these obligations is dependent upon the General Partner’s financial strength____

Affidavit of Patricia Jacobs, Exhibit B at 26.

It is undisputed that the partnership was organized with the purpose of acquiring and operating the Stoneybrook properties described supra. The PPM thus further provided that “Westwood, Inc. will purchase from Joseph Durst the property and garden apartment complex constructed thereon which is the subject matter of this private placement. Subsequent to its purchase, Westwood, Inc. shall convey the property to the partnership at which time the partnership shall take title in the name of the partnership.” Exhibit B to Affidavit of Patricia Jacobs at 19.

Pursuant to his responsibilities in this regard, on August 4, 1976, Joseph Durst contracted to sell the properties in question to “a limited partnership to be formed of which Westwood, Inc. will be the general partner.” See Exhibit E to Claimants’ Reply to Trustees’ Opposition (Letter to Terry Madden, President of IES dated August 4, 1976, signed by Joseph Durst). This Agreement was further “agreed and accepted” by signature of Terry Madden, President of Westwood, Inc. The Agreement to sell provided for a purchase price of $2,370,000 to be paid as follows:

A. By Purchaser taking subject to a “Wrap-Around” Note and Deed of Trust in the amount of $2,000,000, payable as follows:
It shall bear interest at the rate of 9%: Be for a term of 32 years bearing constant annual payments (payable monthly) in the amount of $191,000.
B. By the payment of cash at the closing in the amount of $250,000.
C. By the payment of $80,000 on February 15, 1977 and by an additional payment of $40,000 on February 15, 1978.

Id. In partial fulfillment of the purchase price as described in this Agreement, an unsecured promissory note in the amount of $120,000 was executed on December 1, 1976. The note provided for the payment by Westwood to Durst of $80,000 on February 15, 1977 and $40,000.00 on February 15, 1978. See Id. at Exhibit B. The execution of this note was not specifically authorized by the PPM and was never disclosed to the limited partners herein. Further, on December 1, Joseph Durst, pursuant to the Agreement of Sale described above, conveyed the Stoneybrook properties to John J. Szerszen, Vice President of Westwood. See id. at Exhibit K. Thereafter, also on December 1, Mr. Szerszen on behalf of Westwood, Inc. conveyed these properties to the Stoneybrook limited partnership.

As noted supra, on December 13 the claimants herein made their first payment and the Certificate of Partnership was filed. On December 31, if not before, pursuant to the owners’ policy of title insurance, of that date, the partnership officially acquired title to the subject property. Exhibit D to Affidavit of Patricia Jacobs. It is undisputed that the partnership commenced upon acquiring title to the property in question.

On January 15,1977, the limited partners made their final payment of $100,000 to Westwood. (I note that there appears to be an issue of fact regarding the precise amount of this payment, however, I do not find the amount of this payment to be material to resolution of the instant motion.) On February 15,1977, upon the maturation of the obligation incurred by West-wood to Durst for payment of $80,000 pursuant to the promissory note cited supra, Westwood apparently defaulted notwithstanding its obligation pursuant to the Certificate of Partnership to apply $75,475 of the $100,000 January 15, 1977 payment to satisfaction of the balance due on the total cash purchase price for the properties in question. See Exhibit C to Affidavit of Patricia Jacobs at 7. It is undisputed that Mr. Durst thereupon foreclosed upon the partnership property and sold it to an alleged bona fide purchaser for value. The property was subsequently resold. See Claimants’ Statement of Facts at II10.

The limited partnership filed a Chapter XI petition in the Bankruptcy Court in the Southern District of Texas. Ten other limited partnerships also syndicated by Management Group and involving Mr. Durst filed bankruptcy petitions at about the same time. A new general partner was substituted for Westwood and a settlement agreement was entered by Durst, Green-way Management Corporation (a Durst company), Stoneybrook and the ten other similarly situated limited partnerships on September 26, 1978. Pursuant to this and subsequent agreements, the Stoneybrook partners recovered $350,000 which had been paid to Durst by Westwood and had the mortgages against the partnership property reinstated. The parties to the settlement agreement agreed to resolve all differences between them thereby.

In pursuing their claim before the Trustee and in support of their cross-motion herein, the Stoneybrook claimants make the following arguments. First, they argue that any settlement with Mr. Durst in no way settled claims regarding monies allegedly misappropriated by the broker-dealer. See Request to Admit # 32, Exhibit 1 to Affidavit of Patricia Jacobs. Second, they contend that the co-mingling of funds, management and operations between IES, Management Group and West-wood make it impossible to denominate Westwood as general partner and IES or Management Group as broker-dealer at least as far as the Stoneybrook transaction was concerned. In essence, they contend that Westwood and IES or Management Group were one or, at least, that Westwood operated as a broker-dealer. See, e.g., id. at Request to Admit # 1. Finally, they contend that they received the bargained for limited partnership interests only “to the extent that the broker dealer delivered the full security interest and paid the previous owner for the security interest. [However,] to the extent that such monies paid to the broker dealer were not used to pay the previous owner, then a full limited partnership interest was not received.” Id. at Request to Admit # 15. In short, the Stoneybrook limited partners claim that Westwood/IES Management Group misappropriated funds to be paid to Mr. Durst thereby causing default and that they therefore never received the limited partnership interest paid for from the broker-dealer. Pursuant to the provisions of SIPA described infra, these claimants seek to recover these monies from the bankrupt broker-dealer: the IES Management Group.

In denying the claim of the Stoneybrook limited partners and in support of its motion for summary judgment herein, the Trustee contends that the investors obtained the limited partnership interest in question from the broker-dealer and consequently that regardless of any claim these investors may have against Westwood, the general partner, they have no claim against IES Management Group, the broker-dealer, as “customers” under SIPA. In the alternative, the Trustee contends that the settlement agreement with Durst operated as a waiver of any claims against the broker-dealer or a bar of such claims through abrogation of the Trustee’s right of subrogation.

I turn now to a review of the pertinent provisions of SIPA. I note that though SIPA was amended in 1978, 1980 and again in 1982, all parties agree that the 1970 version of the Act, in effect at the time of the underlying events herein in 1976 and 1977, governs the instant case. A proceeding under SIPA is in essence a bankruptcy or liquidation proceeding conducted in accordance with Chapter X of the Bankruptcy Act. See SIPA, Sec. 6(c)(1) (I note that I will refer to the section numbers of the Act as the parties have done instead of to the sections of the Act as codified in the United States Code); see also Exchange National Bank of Chicago v. Wyatt, 517 F.2d 453 (2d Cir.1975); SEC v. Aberdeen Securities Co., 480 F.2d 1121, 1128 (3d Cir.), cert. denied, 414 U.S. 1111, 94 S.Ct. 841, 38 L.Ed.2d 738 (1973). SIPA establishes procedures for liquidation of financially troubled broker-dealers and “seeks to provide assistance to those investors unfortunate enough to have selected a stockbroker, who perhaps is able to give sound financial advice to others but is unable to stay solvent himself. The intent of Congress to protect customers of financially distressed security dealers is clear, but the specifics of precise resolution of individual situations are clouded by the provisions of a statute which range far from the clarity of blue sky one might expect in this area of law.” Id. at 1123. In Aberdeen, the Third Circuit summarized the SIPA scheme in the 1970 Act as follows:

The Securities Investor Protection Act was passed by Congress in 1970 in response' to demands that it provide some assurance to investors that they would not suffer financial loss as a consequence of bankruptcy of their stockbrokers. While the theory of the statute was that it was to provide a type of protection for security purchasers somewhat similar to that enjoyed by bank depositors under the FDIC, the complexities of the securities market obviously required some major differentiations.
In broad outline the legislation contemplates the appointment of a Receiver in the event of the insolvency of a broker who is covered by the terms of the statute. A liquidation, rather than a reorganization, is to be conducted and the claims of the debtor’s customers are to be paid promptly. To the extent that the insolvent broker’s assets are insufficient to satisfy obligations to his clientele, the Securities Investor Protection Corporation (SIPC), an entity established by the Act, will advance funds to pay claims up to $50,000 per customer, of which no more than $20,000 represents reimbursement of cash.
The account of a customer is to be valued as of the day when proceedings are instituted against the broker—the “filing date”—in order to determine his “net equity”. A computation is made to arrive at the dollar amount of the customer’s account by excluding from it, specifically identifiable property which is returned to him; by deducting indebtedness and other obligations, if any, to the insolvent broker; and by giving effect to certain open contractual commitments.
All property held by the debtor for the account of his patrons, other than that specifically identifiable, forms a single and separate fund in which all customers are entitled to share pro rata.
The Trustee may satisfy customer claims from the single and separate fund or from the monies advanced by SIPC or by a combination from the two sources. To the extent that a claim is satisfied by advances from SIPC, it is subrogated to the customer’s rights to a pro rata share of the single and separate fund.

Id. at 1123-24; see generally, SIPA § 6(c). Thus, those who fit the definition of “customer” under Section 6(c)(2)(A)(ii) are accorded preferential treatment in the satisfaction of claims in the form of a priority over general creditors. See Report of Special Study of Securities Markets of the SEC, H.R.Doc. No. 95 Pt. 1, 88th Cong., 1st Sess. 411-12 (1963); SEC v. Kenneth Bove & Co., 378 F.Supp. 697, 700 (S.D.N.Y.1974).

A “customer” for purposes of liquidation proceedings under SIPA is defined as follows:

“[Customers” of a debtor means persons (including persons with whom the debtor deals as principal or agent) who have claims on account of securities received, acquired, or held by the debtor from or for the account of such persons (I) for safekeeping, or (II) with a view to sale, or (III) to cover consummated sales, or (IV) pursuant to purchases, or (V) as collateral security, or (VI) by way of loans of securities by such persons to the debtor, and shall include persons who have claims against the debtor arising out of sales or conversions of such securities, and shall include any person who has deposited cash with the debtor for the purpose of purchasing securities, but shall not include any person to the extent that such person has a claim for property which by contract, agreement, or understanding, or by operation of law, is part of the capital of the debtor or is subordinated to the claims of creditors of the debtor; ...

SIPA, § 6(c)(2)(A)(ii). The Trustee disallowed the claims of the Stoneybrook limited partners finding them not to be “customers” within the meaning of SIPA. All parties agree that the central issue before this Court today is whether the Stoneybrook claimants are “customers” as a matter of law. As I read the operative subsection quoted supra, an investor can be a customer in one of two situations:

1. where they state claims on account of securities received, acquired, or held by the debtor for one of the four purposes specified in the Act including where claims arise from alleged sales or conversions of such securities or 2. where the claims are by any person who has deposited cash with the debtor for the purpose of purchasing securities.

In determining whether an investor is a customer under SIPA regarding a particular transaction with a debtor in liquidation under SIPA, a court must keep in mind the general purposes and confines of the investor protective measures enacted therein. The Fifth Circuit, referring to the amended version of the statute, has recently explained that:

“Customer,” ... is a statutorily defined term of art as used in SIPA. The term is an integral part of a comprehensive statutory scheme governing the rights of creditors and brokers. It is not used in the colloquial sense of “one who buys or trades”. It is instead meant as a shorthand designation for those eligible under SIPA to receive special protection for their investments.

In Re Stalvey and Associates, Inc., 750 F.2d 464, 468 (5th Cir.1985). In amending the Act Congress noted that:

The definition of “customer” should include only a person who enjoys the type of fiduciary relationship with the debtor that characterizes customers in general. Recent decisional law is codified in the definition to provide that only securities received “in the ordinary course of [the debtor’s] business as a broker or dealer” may form the basis of a customer claim. See, e.g., SIPC v. Executive Securities Corp., 556 F.2d 98 (2d Cir.1977); SEC v. F.O. Baroff Co., 497 F.2d 280 (2d Cir.1974).

Hearing before the Subcommittee on Securities, Senate Committee on Banking, Housing & Urban Affairs, 95th Congress, Second Session, at 40 (April 25, 1978). As noted in the section quoted, this view was shared by the courts before the statute was amended. See, id. (and cases cited therein). Thus, it is clear that “the Act contemplates that a person may be a ‘customer’ with respect to some of his claims for cash or shares, but not with respect to others.” Baroff, 497 F.2d at 282, n. 2; see Stalvey, 750 F.2d at 471. Similarly, where the debt- or in liquidation acts as a broker-dealer with respect to certain transactions and acts in some other capacity with respect to others, it is clear that the investor is only a “customer” under SIPA with respect to those transactions in which the debtor acted as a broker-dealer. See SEC v. Ambassador Church Finance/Development Group Corp., 679 F.2d 608, 612-14 (6th Cir.1982). Further, “the intent of Congress in enacting SIPA, as shown by the legislative history ... was ... to protect investors against losses caused by the insolvency of broker-dealers and not by the insolvency of the companies in which their funds have been invested.” SEC v. Wagner, 373 F.Supp. 1214, 1218 (D.Mass.1974). Finally, the Fifth Circuit has noted that:

... there is evidence in the legislative history that Congress believed that the SIPA was only an “interim step” that would not provide complete protection for losses occasioned by the failure of broker-dealer firms____ Courts have acknowledged the limited coverage of the SIPA regardless of the equities in favor of the claimant. (Citations omitted).

Stalvey, 750 F.2d at 472-73.

In this case, I agree with the Trustee that at least as of December 31, 1976, when the title to the Stoneybrook properties was officially held by the limited partnership, the claimants herein can be said to have received their limited partnership interests and thus the broker-dealer did not receive, acquire or hold securities owned by these partners at the time of the alleged misappropriation of funds. In short, the claimants admit that a Certificate of Partnership was filed, that title to the property was acquired by the partnership, and that the partnership was fully formed upon that acquisition. Thus, at the time title was acquired they received the limited partnership. Although the claimants attempt to construe their claim differently, in reality their gripe is with the general partner, or IES Management Group no longer acting as broker-dealer but as general partner in the form of Westwood. That the general partner failed to meet a payment to the seller of the partnership property states a claim of mismanagement against the general partner not a preferred status customer claim under SIPA. The investors’ claim arises out of the failure of the general partner to apply their January 1977 payment to the February 1977 installment due to Durst. At the time they made their January 1977 payment the partnership was already in effect and the limited partners had already received their security interest. Because they had received the security interest bought from the broker-dealer the dealer did not have it. See, e.g., Matter of Atkeison v. Ambassador Church, 446 F.Supp. 844, 848 (M.D.Tenn.1977).

It is true that the general partner, or, if you will, the broker-dealer, had the $100,-000 cash payment. But it is absolutely clear that by January 1977 this cash was not held for the purpose of purchasing a security interest in a limited partnership. This had already occurred. In January 1977, the cash paid was for payment for the services of the general partner and for purchase of partnership property and not for the purchase of a security interest covered by SIPA.

Because I conclude, as did the Trustee, that with respect to the transaction at issue the Stoneybrook claimants were not “customers”. I affirm the Trustee’s denial of their claim for participation in the fund pursuant to SIPA and I need not address the Trustee’s contention that the Stoney-brook claimants had waived their claims through their settlement with Durst at this time. The Trustee’s motion is granted and the claimants’ cross-motion is denied.


text:
    GRAIN DEALERS MUTUAL INSURANCE COMPANY, INC., an Indiana corporation, as subrogee of Jasper County Farm Bureau Co-Operative Association, Inc., an Indiana corporation, Plaintiffs, v. CHIEF INDUSTRIES, INC., a Nebraska corporation, and Riggs Drying and Storage Equipment Company, a sole proprietorship (upon information and belief), located in Ohio, Defendants.
    No. L 84-123.
    United States District Court, N.D. Indiana, Hammond Division.
    July 13, 1985.
    David B. McAfee, Michael W. Duffy, Chicago, 111., William M. Bache, Lafayette, Ind., for plaintiffs.
    Larry R. Fisher, Lafayette, Ind., Charles W. Ewing, Columbus, Ohio, for defendants.
   MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

I.

This cause is before the court on the motion for summary judgment of defendant, Chief Industries, Inc. (Chief Industries). Plaintiff, Grain Dealers Mutual Insurance Company, Inc., commenced this action by filing a complaint in the Lafayette Division of this court on August 31, 1984. The complaint alleges that on April 6, 1979, Chief Industries designed, manufactured, distributed and assembled large capacity, all-steel grain storage bins and tanks. Defendant, Riggs Drying and Storage Equipment Company (Riggs), was in the business of installation, construction, assembly and erection of such grain storage bins and tanks. In this case, Chief Industries manufactured, fabricated and assembled an all steel storage bin, designated as Model 18-20, on the premises of Jasper County Farm Bureau Co-Operative Association, Inc. in Fowler, Indiana. Riggs allegedly established, assembled, and/or erected the model 18-20 grain bin.

In this complaint, Chief Industries, is charged with the following negligent acts and omissions: (1) negligent design, fabrication, manufacture and/or assembly of the model 18-20 grain bin so that it was incapable of withstanding lateral wind loading under normal conditions to this area; (2) negligent design, fabrication manufacture and/or assembly of the anchoring system in the model 18-20 grain bin; (3) negligent preparation of the instructions for the erection, installation, and/or assembly of the model 18-20 grain bin; (4) negligent design, fabrication, manufacture and/or assembly of the model 18-20 grain bin roof to sidewall corrections; (5) negligent design, fabrication, manufacture and/or assembly of the model 18-20 grain bin in whole as well as component parts in that it failed as a whole after erection and installation to comply with recommended and accepted engineering codes as well as accepted engineering principles as to lateral wind loadings; (6) negligent selection of materials of adequate strength for the model 18-20 grain bin; (7) negligent design, fabrication, manufacture and assembly of the roof to sidewall stiffners; (8) negligent selection of materials of adequate strength for the roof to sidewall connection bolts, nuts and washers, anchor bolts, nuts and washers and anchor angles and sidewall stiffness.

It is further alleged that as a result of such negligence, the roof to sidewall connections and anchor system became detached causing the grain bin to become dislodged and deformed. This, in turn, caused damage to the connected loading and unloading augers and drying fans.

Chief Industries filed a motion for summary judgment on April 1, 1985. This court heard oral argument on the motion June 14, 1985, in Lafayette, Indiana. At that time a schedule for supplemental briefing was set. Such schedule has been met and this motion is now ripe for ruling. Jurisdiction of this court is predicated upon 28 U.S.C. § 1332. The substantive law of Indiana applies.

II.

A.

Chief Industries argues , that this complaint is time barred by Ind.Code § 33-1-1.-5-5 which provides that “any product liability action in which the theory of liability is negligence or strict liability in tort must be commenced within two [2] years after the cause of action accrues or within ten [10] years after the delivery of the product to the initial user or consumer.” Chief Industries contends that since plaintiffs action against it is a “product liability action” based on a negligence theory, plaintiffs claim is barred by the above statute’s provision that such actions must be brought within two (2) years after the cause of action accrues. In support of its argument, Chief Industries relies upon Monsanto Company v. Miller, Ind.App., 455 N.E.2d 392, 394 (1983), and Dague v. Piper Aircraft Corp., 275 Ind. 520, 418 N.E.2d 207 (1981), a case emanating from this court. See Dague v. Piper Aircraft Corp., 513 F.Supp. 19 (N.D.Ind.1980).

Plaintiff contends that the applicable statute of limitations is Ind.Code § 34-4-20-1, the Indiana improvement to realty statute. The statute provides that an action can be brought for damages to real and personal property arising out of the design, planning, supervision or construction of an improvement to real property within ten (10) years of the date of substantial completion. Plaintiff argues that this case was filed well within the parameters of this statute. It is beyond dispute that these issues can be properly raised by a motion for summary judgment under Fed. R.Civ.P. 56.

The key case on the issue of whether the Indiana improvement to realty statute or the Indiana products liability statute applies in a factual context as is here presented is Dodd v. Kiefer, Ind.App., 416 N.E.2d 463 (1981). In Dodd, an electrician installed a certain electrical system in a residential home. After the installation, a fire occurred causing damage to the home. The electrical contractor moved for summary judgment on the basis of Ind.Code § 34-4-20-2 which bars recovery for deficiencies to improvements to real property brought more than ten years after date of substantial completion of the improvement. The trial court denied the motion and Dodd, the electrical contractor, appealed. The Court of Appeals affirmed the trial court’s ruling.

The plaintiff homeowner raised a cross-error on appeal regarding the trial court’s ruling that the ten year statute of limitations for real estate improvements applied to the product liability count of the complaint. The plaintiff argued that the six and two year accrual statutes for injuries to real (Ind.Code § 34-1-2-1) and personal (I.C. § 34-1-2-2) property should apply. Immediately after restating the plaintiffs argument, the Court of Appeals noted: “This particular problem has been subsequently resolved with the passage of the Indiana Prodict Liability Act, IC § 33-1-1.-5-1 et seq.” Id. at 465 n. 1.

The Court of Appeals then ruled that the real estate improvement statute applied to the product liability count for two reasons. First, the court noted that the coverage of the real estate improvement statute is very broad since it applies to actions based “upon contract, tort, nuisance or otherwise.” It then pointed out that product liability is a form of tort and that there was no statutory intent to exclude products liability from the coverage of the statute of limitations. The court also noted that Luxurious Swimming Pools v. Tepe, 177 Ind. App. 384, 379 N.E.2d 992 (1978), indicated that the real estate improvement statute applied to allegations of express and implied warranties because the basis for the cause of action is founded upon an injury to real property. Based on Luxurious Swimming Pools, the court apparently concluded that the real estate improvement statute could apply to product liability claims as well as warranty claims.

Dodd involved a lawsuit against an electrical contractor who was intimately involved in the construction of an improvement to a particular piece of real estate. Other Indiana cases in which the real estate improvement statute has been applied to an action against an entity which was intimately involved in the improvement of a particular parcel of real estate include Monsanto Co. v. Miller, supra, (builder of concrete silo); Beecher v. White, Ind.App., 447 N.E.2d 622 (1983) (architect of school); Beta Alpha Shelter of Delta Tau Delta Fraternity, Inc. v. Strain, Ind.App., 446 N.E.2d 626 (1983) (designer and builder of heating/cooling system for fraternity house); Capitol Builders, Inc. v. Shipley, Ind.App., 439 N.E.2d 217 (1982) (builder of house); Great Lakes Co. v. Merrill A. Jones & Associates, Inc., Ind.App., 412 N.E.2d 257 (1980) (general contractor for new building); Walsh v. Haltman, Ind. App., 403 N.E.2d 894 (1980) (builder of new house); and Luxurious Swimming Pools, Inc. v. Tepe, supra (installer and planner of in-ground swimming pool manufactured by another).

The Indiana real estate improvement statute has never been applied to actions against entities like Chief Industries who design fungible products without any particular parcel of real estate in mind and do not participate in the on-site construction of an improvement to real estate. The courts in other jurisdictions which have addressed the issue appear to be unanimous that it is inappropriate to apply real estate improvement statutes similar to Ind.Code § 34-4-20-2 to entities which mass produce items not intended for particular parcels of real estate. See, e.g., Montaup Electric Co. v. Ohio Brass Corp., 561 F.Supp. 740 (D.R.I.1983); Cinnaminson Township Board of Education v. U.S. Gypsum Co., 552 F.Supp. 855 (D.N.J.1982).

The Indiana cases in which the real estate improvement statute has been applied have all involved actions against an entity which was intimately involved in designing, planning, constructing, or supervising the construction of an improvement to a particular piece of real estate. Nothing in Dodd compels the conclusion that the real estate improvement statute governs this plaintiffs product liability action as against Chief Industries.

Moreover, footnote one to the opinion of the court in Dodd indicates that the product liability státute of limitations, not the real estate improvement statute, should be applicable to the plaintiffs action against the defendant. Footnote one states: “This particular problem has been subsequently resolved with the passage of the Indiana Product Liability Act, IC 33-1-1.5-1 et seq. ” 416 N.E.2d at 465 n. 1. The “particular problem” with which the Court of Appeals dealt in Dodd was the determination of the statute of limitations applicable to the product liability count of the plaintiffs complaint. The court stated that the problem was resolved by the passage of the Indiana Product Liability Act. This statement by the court, while rather cryptic, leads to the conclusion that the Product Liability Act’s statute of limitations applies to a product liability claim, even when the product is incorporated into real estate.

The conclusion of the Court of Appeals in Dodd v. Kiefer that, after the effective date of the product liability statute, the Product Liability Act’s statute of limitations governs products liability actions, even when the product has become part of an improvement to real estate at the time it causes damage, is supported by one of the basic rules of statutory interpretation. In a case where two or more statutes deal with the same matter in different language, the latest expression of the legislature is controlling. State ex rel. Board of Tax Commissioners v. Daviess Circuit Court, 249 Ind. 580, 230 N.E.2d 761, 764 (1967); see also Connell v. City of Logansport, Ind.App., 397 N.E.2d 1058, 1061 (1979). The real estate improvement act’s statute of limitations was adopted in 1967. As the Court of Appeals noted in Dodd, the real estate improvement statute “is very broad in its application.” The product liability act’s statute of limitations was adopted in 1978. Its coverage is much narrower. It applies only to product liability actions in which the theory of liability is negligence or strict liability in tort. Warranty claims are covered by the statute of limitations provided in the Uniform Commercial Code (I.C. § 26-1-2-725) or the real estate improvement statute itself (see Luxurious Swimming Pools, Inc. v. Tepe, 177 Ind.App. at 388, 379 N.E.2d at 995 n. 2). Since the product liability statute was more recently enacted and has a narrower scope of coverage than the real estate improvement statute, it governs products liability actions based upon negligence or strict liability in tort as the Court of Appeals intimated in Dodd.

Plaintiff cites and relies on a number of cases outside of this jurisdiction. Neither Grover Kill Grain Company v. Baughman-Oster, Inc., 728 F.2d 784 (6th Cir.1984), a case under Ohio substantive law, nor Moorman Manufacturing Company v. National Tank Company, 91 Ill.2d 69, 61 Ill.Dec. 746, 435 N.E.2d 443 (1982), compel a result contrary to that announced here. This court will leave it for others to decide whether the last word of the Illinois Supreme Court in Moorman eroded the interpretation of Illinois substantive law as set forth in R.L. Grain Co. v. Chicago Eastern Corporation, 531 F.Supp. 201 (N.D. Ill.1981). For what it is worth, Smith v. Clayton & Lambert Manufacturing Company, 488 F.2d 1345 (10th Cir.1973), cited by both parties, lends further support to the result announced here.

B.

A review of the Indiana cases which have either cited or applied the Indiana product liability statute demonstrates that an action against the manufacturer of an allegedly defective item which becomes part of an improvement to real estate after the item is delivered by the manufacturer is a product liability action. See Corbin v. Coleco Industries, Inc., 748 F.2d 411 (7th Cir.1984) (applying Indiana law) (product liability statute applied to manufacturer of above-ground swimming pool); Wilson v. Robertshaw Controls Co., 600 F.Supp. 671, 673 (N.D.Ind.1985) (Ind.Code § 33-1-1.5-5 applied to action against waterheater control manufacturer); Lukowski v. Vecta Education Corp., Ind.App., 401 N.E.2d 781 (1980) (strict liability in tort action recognized against manufacturer and installer of gymnasium bleacher); see also Neofes v. Robertshaw Controls Co., 409 F.Supp. 1376 (S.D.Ind.1976) (strict liability action against manufacturer of component part of water heater, as well as against the heater’s manufacturer, was cognizable under Indiana law). These cases demonstrate that courts in Indiana treat an action against a manufacture of a product as products liability actions even if the product ultimately becomes a part of an improvement to real estate.

Further, Indiana courts have applied product liability law in situations similar to this case in which an action has been brought against the manufacturer of an item which has become part of a grain or silage storage system. In Monsanto Co. v. Miller, supra, the Indiana Court of Appeals applied the Indiana products liability statute (including the statute of limitations provision) in an action against a manufacturer of a coating which was applied to the inside of a silo. The case was viewed as a product liability action even though the coating had become part of an improvement to the real estate at the time it caused injury to the plaintiffs property. The real estate improvement statute was applied to the claim against the entity which had constructed the concrete silo. Ind.App., 455 N.E.2d at 393. The entity which has constructed the silo was intimately involved in designing, planning, and constructing a particular silo for a particular piece of real estate, unlike the manufacturer of the coating who was not involved in any way in improving the plaintiffs real estate. Coffman v. Austgen’s Electric, Inc., Ind.App., 437 N.E.2d 1003 (1982) involved negligence and strict liability actions against the manufacturers of an auger and grain dryer which were part of a grain storage system. The Court of Appeals noted that the plaintiffs strict liability claim would have been governed by the product liability statute had the statute been in effect at the time of plaintiffs injury. Id. at 1007 n. 2. In Shanks v. A.F.E. Industries, 275 Ind. 241, 416 N.E.2d 833 (1981), the Indiana Supreme Court applied the law of strict liability in tort in an action against the manfacturer of a grain dryer. The grain dryer was part of an automatic grain storage system and was connected by augers and elevators to several grain storage bins. The entire system was centrally wired and controlled. Despite the fact that the system was clearly an improvement to real estate when completed, the Supreme Court applied Section 402A of the Restatement (Second) of Torts, which applies to “one who sells any product.”

C.

The strongest support in Indiana case law for the proposition that an action against a manufacturer of a product which later becomes incorporated into an improvement to real estate is governed by the product liability statute rather than the real estate improvement statutes is contained in Beecher v. White, supra. Beecher involved a constitutional challenge to the real estate improvement statute. One argument set forth by the plaintiff in that case was that the statute violated the equal protection clause or the special law proscriptions of the federal or state constitutions. Ind.App., 447 N.E.2d at 626. The plaintiff apparently argued that the real estate improvement statute conferred special immunity upon builders while discriminating against owners and materialmen without a reasonable basis for doing so. Id. The Indiana Court of Appeals, in sustaining the statute, provided a number of justifications for the differentiation between builders and owners. With respect to the differentiation between builders and materialmen, the Court of Appeals simply noted: “Materialmen and prefabricators are covered under the products liability statute. See Ind.Code 33-1-1.5-5 et seq.” Id. at 627. A prefabricator is one who manufacturers in advance, often in standard sections that can be easily shipped and assembled. See American Heritage Dictionary of the English Language, 1032 (1975). Chief Industries fits within the definition of “prefabricator,” and thus an action against it is governed by the product liability statute, not the real estate improvement statute.

In Great Lakes Co. v. Merrill A. Jones & Associates, Inc., Ind.App., 412 N.E.2d 257 (1980), the plaintiff tried to avoid the application of the real estate improvement statute of limitations to its claim against a general contractor by arguing that the general contractor was not covered by the statute because it supplied building materials in addition to planning, observing, and supervising the construction. The plaintiffs claim against the general contractor was based solely upon the allegedly inadequate supervision the general contractor provided over the electrical contractor:

Great Lakes has charged no one with negligence in the role of a supplier of materials. At most, Jackson [the general contractor] erred in planning, supervising, or observing installation of materials which it supplied. I.C. 34-4-20-2 bars the action to recover damages from Jackson for such deficiencies.

Id. at 261. Given this reasoning the real estate improvement statute would not be applicable here.

The Motion for Summary Judgment filed by defendant Chief Industries is GRANTED. SO ORDERED.