Conveyor Belt is an Improvement to Real Property
Oklahoma has a statute of repose for "improvements to real property". If you are hurt by an improvement to real property more than 10 years after it is substantially completed, you may not sue. See, 12 Okla.Stat. § 109. In Goad v. Buschman, the 10th Circuit affirmed the trial court's grant of summary judgment to the owner of a building which had a conveyer belt system. The building was used for grocery warehouse operations. The court found that the factors favored finding that the conveyor system was part of the property and therefore fell within the ambit of the statute of repose.
The evidence presented to the district court shows that in 1985, Buschman contracted for the design, construction, and installation of the conveyor system. Buschman designed and installed the system. It was constructed from several conveyor “standards” that were installed to fit within the building’s existing footprint. The system is hardwired into the building, is three stories high, and originally contained about 6,155 feet of conveyor. It is attached to the floor by anchors set in concrete and bolts, and further attached to the building by a variety of bolts, angle bracing, stabilizing legs, floor-support columns, and ceiling hangers. The conveyor system is not welded to the building or embedded in the floor. The purchase price of the system was approximately $776,852.
The evidence presented to the district court shows that in 1985, Buschman contracted for the design, construction, and installation of the conveyor system. Buschman designed and installed the system. It was constructed from several conveyor “standards” that were installed to fit within the building’s existing footprint. The system is hardwired into the building, is three stories high, and originally contained about 6,155 feet of conveyor. It is attached to the floor by anchors set in concrete and bolts, and further attached to the building by a variety of bolts, angle bracing, stabilizing legs, floor-support columns, and ceiling hangers. The conveyor system is not welded to the building or embedded in the floor. The purchase price of the system was approximately $776,852.
The fact that the conveyor was taxed as personal property, not real property was not dispositive, but was merely one factor to consider. The other factors were:
(1) is the improvement permanent in nature; (2) does it add to the value of the realty, for the purposes for which it was intended to be used; [and] (3) was it intended by the contracting parties that the “improvement” in question be an improvement to real property or did they intend for it to remain personalty.
The court disregarded statements by two of the building employees that the conveyor belt was not intended to be permanent since it was not apparent that the statements were made on personal knowledge. Further, the fact that the conveyor could be theoretically removed was mere speculation.
