Anchor Coatings, Inc. v. Marine Indus. Residential Insulation, Inc.

• Decision Date: 04 June 1986
• Docket Number: No. 55548,55548
• Citation: 490 So.2d 1210
• Parties: ANCHOR COATINGS, INC. v. MARINE INDUSTRIAL RESIDENTIAL INSULATION, INC.
• Court: Mississippi Supreme Court

Page 1210

490 So.2d 1210

ANCHOR COATINGS, INC. v. MARINE INDUSTRIAL RESIDENTIAL INSULATION, INC.

No. 55548.

Supreme Court of Mississippi.

June 4, 1986.

William M. Rainey, Franke, Rainey & Salloum, Gulfport, for appellant.

Harold J. DeMetz, Gulfport, for appellee.

Before PATTERSON, C.J., and DAN M. LEE and ROBERTSON, JJ.

ROBERTSON, Justice, for the Court:

I.

Roofing contractor brought suit against the distributor and the manufacturer of insulating materials alleging, inter alia, defective manufacture of products marketed as Anchor Coating Sunshield 790-A, 6015 and 6016; and Anchor Coating White--Cap; a breach of product warranty and the wilful, wanton and negligent putting into commerce of a defective product and such acts and omissions being a proximate cause of Plaintiff's injuries. In praying for relief the contractor sought $640,000.00 in actual damages and $700,000.00 in punitive damages.

The manufacturer subsequently answered and denied all material allegations and set up as affirmative defenses that contractor's alleged injury was due to its failure to apply manufacturer's products as instructed by the manufacturer, together with contractor's failure to adhere to accepted practices within the roofing industry.

After a lengthy discovery process a jury trial finally commenced on Monday, October 26, 1981, and lasted for 15 days, with the jury returning a verdict for the Plaintiff contractor, and against the Defendant manufacturer in the amount of $268,112.00. The trial court had peremptorily instructed the jury to find for the co-Defendant distributor.

The Defendant manufacturer has filed its appeal and assigned an exhausting 22 errors. The contractor in turn has cross-appealed and assigned error in the ordering of a remittitur. We affirm on direct appeal and reverse and render on cross-appeal.

II.

Marine Industrial Residential Insulation, Inc. (hereinafter "MIRI") is a Mississippi corporation engaged in the roofing business with principal offices in Long Beach, Harrison County, Mississippi. Larry Tully and James English are president and vice president of the corporation. MIRI was the Plaintiff below and is the Appellee/Cross-Appellant in this instance.

Roofing Systems and Coatings, Inc. is a Mississippi corporation which maintains its principal offices in Gulfport, Harrison County, Mississippi, and Hugo F. Carbajo is the president. At the time of this suit Roofing Systems was the authorized distributor for Anchor products in Mississippi and was a Defendant below. The trial court directed a verdict in Roofing Systems' favor, and it is not a party to this appeal.

Anchor Coatings, Inc. is a foreign corporation organized under the laws of the State of Wisconsin with principal offices at Waukesha, Wisconsin. Anchor is engaged in the development and manufacture of insulating materials. Anchor was a Defendant below and is the Appellant here.

On May 3, 1979, MIRI entered three separate contracts with the Vicksburg Municipal Separate School District for the reroofing of Grove Street Elementary School, Bowmar Elementary School and Vicksburg High School. Thereafter, on July 3, 1979, MIRI contracted with the Board of Trustees of the Poplarville City Schools for the reroofing of Upper Elementary School, Lower Elementary School, and the high school (both junior and senior). The six schools in question were reroofed by MIRI using Anchor Coatings materials. Many problems resulted.

In due course each of the school districts made claims against its contractor, MIRI, which in turn brought this indemnity action in the Circuit Court of Harrison County, Mississippi, First Judicial District, against Anchor Coatings, Inc., and Roofing Systems & Coatings, Inc., the local distributor of Anchor Coatings products. Among other things, MIRI charged Anchor with providing defective products. Anchor's defense was that the coatings were improperly applied by MIRI employees and that the problems with the roofs of the Vicksburg and Poplarville schools were the direct result of the faulty application of the coatings by the contractor.

At trial MIRI's president, Lawrence A. Tully, testified that he was trained by an employee of the Upjohn Company and was certified by Anchor Coatings as an applicator of polyurethane foam. His company had roofing contracts with the two school districts totaling $345,066.00. Roofing Systems' president, Hugo F. Carbajo, had recommended Anchor products in substitution of the products specified in the bids. The architects had approved the substitution after he (Hugo Carbajo) furnished them with Anchor coating literature describing the material.

Tully stated that the Poplarville school project bids were submitted based on Anchor products. Various officers of Anchor Coatings--namely Bob Schmidt and Dave Purcell--advised him in positive terms of the suitability of Anchor products. Hugo Carbajo also inspected the roofs and indicated that Anchor products would be suitable. The roofs were adequately prepared--such testimony was corroborated by another witness, Wayne Jameson, maintenance supervisor of Vicksburg schools--and the foam and the coatings were applied in accordance with both the contract specifications and the manufacturers' instructions.

Problems, however, became evident after MIRI had applied the coating. Tully discussed this with Anchor personnel who in some instances came down to inspect the building and recommended changes in the ratio of the materials to be applied. In another instance Anchor sent an independent consultant, Earl N. Doyle, who, after his initial inspection, concluded that the problems were due to faulty application of the material.

During the application of the foam and coating Tully testified that MIRI relied on Anchor's technical people, David Purcell and Dave Bigsby. They changed application from that specified on Anchor's printed material due to problems with brown leaching on the roofs. The material would not dry and it cracked on the second or third day after it was put down. Bigsby told him some of these problems were normal with the material. He said where it was cracked they should wipe it off, peel it off, put new base coat down and a new top coat. Bigsby advised that the problems would be solved if MIRI employees modified the application rate to a much thicker gray under-coat and a much thinner white top-coat.

After MIRI modified the application, the problems seemed to have been solved, but they were not. On final inspection by the architect and the Educational Finance Commission from the State Department of Education, there were bubbles in the coating. The coating had cracked and would not adhere to the foam. Tully had a three-way telephone conversation with Bigsby and Kramer of Anchor, and Anchor personnel came down and inspected the roofs. Kramer came down in March or April of 1980 and said, "We definitely have a material problem."

In December of 1979 Dave Bigsby came to Vicksburg and inspected the roofs, and at that time it appeared the problems had been solved. After this visit by Bigsby, Anchor approved the job and issued its warranties to the School District and wrote the architects that Bigsby had inspected the roofs, measured the thickness of foam and coating and approved the job.

Philip Maslow, an expert witness, conducted tests on the roofs and based on the results, concluded:

It was my opinion, based on the tests I ran, the tests conducted by D.L. Laboratory, and my inspection of the roofs, and the literature supplied by Anchor Coatings, that water-base coating was not the kind of roofing membrane that should be used on a flat roof and, in fact, is not suitable for flat roofs. There was a failure of the material on the Vicksburg and Poplarville school roofs. The material evidenced blistering, peeling, lack of adhesion and softening, all of which could have been expected based on the permeability properties of the coating. In my opinion, the foam was properly applied to the Vicksburg High School roof since it had adhered to the built up tar roof. Where the foam does not adhere to the tar, if water penetrated through the membrane and lodged between the foam and the tar, it could cause leaks in the roof and, once the sun heated up the roof, the foam above the tar would be heaved. I did see blisters on the roof ranging from the size of two to twelve inches in diameter. Film applied over a layer of dirt could produce delamination of a latex emulsion. Delamination could also possibly result from oxidized foam or powdery dust on the top of the foam. The samples which I took covered a total area of three square feet out of the 250,000 square feet of roofing performed by MIRI. If the film has not had sufficient time to cure, the latex acrylic emulsion coating will wash off in rain. The sample of Anchor Coatings material I removed from the drum almost matched the properties set out in the Anchor Coatings literature. When I opened the drum, I found no separation of the solids from the liquids and there was no liquid on the top of the barrel. Larry Tully and I stirred the drum before I removed the sample in order to ensure that the sample was representative. I do not know how long the drum had been sitting out in the open prior to taking the sample on April 8, 1981.

Max L. Harris was an architect on the Vicksburg projects. Prior to the reroofing in 1979, the three Vicksburg schools had standard flat built up roofs, all of which were in poor condition and had evidence of ponding. According to the project specifications, the foam was to be applied in a manner to provide the positive drainage, i.e. sloping. Harris testified that MIRI complied with all specifications. After the change in material from that specified in the project manual, Harris reviewed all the literature supplied by Anchor Coatings and concluded that, based on the literature, Anchor products would be suitable.

On December 26, 1979, Anchor Coatings wrote Harris that they had made a...