Industrial Risk Insurers v. the Rust Engineering Co.

—In this case we hold that the 10-year time limit Code of Civil Procedure section 337.15 places on suits for latent defects in improvements to real property commences when the defendant’s work on the improvement is substantially completed, rather than when the improvement itself is substantially completed. The trial court here granted the motion of respondent, The Rust Engineering Company, for summary judgment under section 337.15, finding that the $20 million damage claim of appellant, Industrial Risk Insurers, was time barred and that there was no triable issue of fact to the contrary. We affirm the judgment entered in favor of respondent.

I.

A 400-ton boiler at Louisiana Pacific Fiberboard Corporation’s paper mill in Antioch, California, exploded on July 5, 1987, killing 3 people, wounding several others and causing extensive property damage. Appellant, Fiberboard’s property and business interruption insurer, filed suit against respondent on December 24, 1987, to recover amounts paid under its policy on account of the explosion. The complaint alleged that the explosion was caused by failure of the rapid drain system respondent designed for the boiler, and that…