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Kennedy Tank & Mfg. Co., Inc. v. Emmert Industrial Corp.

Supreme Court of Indiana

January 3, 2017

Kennedy Tank & Mfg. Co., Inc., Appellant-Defendant, Third-Party Plaintiff,
Emmert Industrial Corporation d/b/a AND Hemlock Semiconductor Operations LLC and Hemlock Semiconductor, LLC, Appellants, Third-Party Defendants, Emmert International, Appellee-Plaintiff

         Appeal from the Marion Superior Court Civil Division 1, No. 49D01-1501-CT-2052 The Honorable Heather A. Welch, Judge

         On Petition to Transfer from the Indiana Court of Appeals, No. 49A02-1507-CT-934

          Attorneys for Appellant Kennedy Tank & Mfg. Co., Inc. Craig J. Helmreich Brandon K. Wiseman Scopelitis, Garvin, Light, Hanson & Feary, P.C.

          Attorneys for Appellee John R. Maley Peter J. Rusthoven T. Joseph Wendt Barnes & Thornburg LLP

          Attorneys for Appellants Hemlock Semiconductor Operations LLC and Hemlock Semiconductor, LLC A. Richard M. Blaiklock Charles R. Whybrew Edward D. Thomas Lewis Wagner, LLP

          Rush, Chief Justice.

          After Emmert Industrial Corporation ("Emmert") successfully transported an enormous process tower vessel from Indiana to Tennessee, the vessel's manufacturer-Kennedy Tank & Manufacturing Company ("Kennedy")-refused to pay nearly $700, 000 in unforeseen transportation expenses. Emmert attempted to collect, but Kennedy still had not paid by the time a federal statute of limitations expired. Emmert eventually sued for breach of contract and unjust enrichment, and Kennedy raised the federal statute of limitations as an affirmative defense, arguing it preempts Indiana's longer limitations period. On this issue of first impression, we disagree with Kennedy and hold that Indiana's ten-year statute of limitations is not preempted. Emmert's collection claim may therefore proceed.

         Facts and Procedural History

         Kennedy needed a process tower vessel transported from its headquarters in Indianapolis, Indiana, to Hemlock Semiconductor's ("Hemlock") location in Clarksville, Tennessee. The vessel was massive-about 280 feet long, 18 feet wide, and 16 feet tall, and weighing about 360, 000 pounds. Kennedy contracted with Emmert, an Oregon-based heavy-haul transporter, to get it to Clarksville. Their contract-which specified it should be interpreted under Indiana law-called for Kennedy to pay $197, 650.00 plus additional unforeseen costs.

         Many of those additional unforeseen costs piled up. The I-64 bridge between Indiana and Kentucky unexpectedly closed, requiring an alternate route. This led to additional route surveys and permit applications in Indiana, Illinois, Missouri, and Tennessee. Altogether, construction delays, road closures, permit applications, safety escorts, and bureaucratic delays cost Emmert an additional $691, 301.03. Despite these troubles, Emmert delivered the vessel on November 11, 2011.

         Emmert then tried to collect the additional costs from Kennedy. They discussed the dispute through January 2013, then considered arbitration from June to August 2014. But, in September 2014, Kennedy refused to pay any additional charges, claiming to owe nothing because of the federal eighteen-month statute of limitations in 49 U.S.C. section 14705(a). Emmert then sued, alleging breach of contract and, in the alternative, unjust enrichment.

         Kennedy moved to dismiss Emmert's complaint under Indiana Trial Rules 12(B)(1) and 12(B)(6), relying on the eighteen-month federal statute of limitations. Emmert responded that dismissal was inappropriate because the federal statute did not preempt Indiana's ten-year limitations period in Indiana Code section 34-11-2-11. Emmert also claimed that the parties' settlement discussions equitably estopped Kennedy from asserting the federal statute of limitations. The trial court denied the motion to dismiss, finding no preemption.

         Following the denial of its motion, Kennedy brought Hemlock into the case-alleging Hemlock's responsibility for any additional charges-and filed this interlocutory appeal. The Court of Appeals reversed the trial court, finding that Indiana's statute of limitations was preempted, Kennedy Tank & Mfg. Co. v. Emmert Indus. Corp., 53 N.E.3d 505, 509-11 (Ind.Ct.App. 2016), and that Emmert waived the equitable estoppel issue on appeal, id. at 506 n.2. Emmert sought transfer, which we granted-thus vacating the Court of Appeals opinion. Ind. Appellate Rule 58(A).

         We now affirm the trial court, agreeing that Indiana's statute of limitations is not preempted.

         Standard of Review

         We review the denial of Kennedy's motion to dismiss de novo. Teaching Our Posterity Success, Inc. v. Ind. Dept. of Educ., 20 N.E.3d 149, 151 (Ind. 2014). To determine if this denial was appropriate, we must first determine whether Indiana's statute of limitations is preempted-a question of law, Hardy v. Hardy, 963 N.E.2d 470, 473 (Ind. 2012), abrogated on other grounds by Hillman v. Maretta, 133 S.Ct. 1943 (2013), that we also review de novo, see Clippinger v. State, 54 N.E.3d 986, 988 (Ind. 2016).

         Discussion and Decision

         Our analysis begins with a presumption against preemption, which Kennedy and Hemlock bear the burden to overcome. Yet here, Congress has provided no indication that it intended to impose a uniform national statute of limitations, and breach of contract collection actions are not an area of federal regulation. Furthermore, other jurisdictions addressing this issue provide little guidance and do not compel a different result. Kennedy and Hemlock thus ...

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