Anthony v. Kelsey-Hayes Co.

• Decision Date: 10 May 1972
• Docket Number: KELSEY-HAYES
• Citation: 25 Cal.App.3d 442,102 Cal.Rptr. 113
• Court: California Court of Appeals Court of Appeals
• Parties: G. W. ANTHONY and Herbert T. Lockerbie, Plaintiffs and Appellants, v.COMPANY, a corporation, (erroneously sued and served herein as Kelsey-Hayes Corporation, Inc.), Defendant and Respondent. Civ. 37873.

Page 113

102 Cal.Rptr. 113

25 Cal.App.3d 442

G. W. ANTHONY and Herbert T. Lockerbie, Plaintiffs and Appellants, v. KELSEY-HAYES COMPANY, a corporation, (erroneously sued and served herein as Kelsey-Hayes Corporation, Inc.), Defendant and Respondent.

Civ. 37873.

Court of Appeal, Second District, Division 5, California.

May 10, 1972.

Rehearing Denied June 7, 1972.

Hearing Denied July 5, 1972.

Stephen I. Zetterberg and Charles L. Zetterberg, Claremont, for plaintiffs and appellants.

Overton, Lyman & Prince, Carl J. Schuck, and Brenton F. Goodrich, Los Angeles, for defendant and respondent.

AISO, Associate Justice.

Plaintiffs G. W. Anthony and Herbert T. Lockerbie appeal from a judgment (order) of dismissal entered in favor of defendant Kelsey-Hayes Company, a corporation (Kelsey-Hayes), after its general demurrers (no cause of action stated) to the three counts of plaintiffs' first amended and supplemental complaint directed against it were sustained without leave to amend. (Code Civ.Proc., § 581, subd. 3.)

Plaintiffs are owners of Chevrolet three-quarter ton trucks. They instituted this action against defendants General Motors Corporation (General Motors) and Kelsey-Hayes, purportedly suing on behalf of themselves and all other owners of similar trucks sold by General Motors between 1960 and 1965, for damages allegedly suffered from defective wheels mounted on and sold as component parts of their trucks by General Motors. Kelsey-Hayes manufactured and sold these wheels to General Motors. The peculiarity of this suit is that plaintiffs do not aver for themselves any damages arising out of any personal injury or any physical damage to their vehicles attributable to the wheels claimed to have been defective. This appeal concerns only defendant Kelsey-Hayes.

General Motors sent out a letter dated May 28, 1969, (Exhibit 'A') ¹ calling attention of owners of 1964 (sic) Chevrolet three-quarter ton trucks to a serious safety risk on certain 15 x 5.50, three-piece disc wheels installed on trucks of this model if they were equipped with over-the-cab type campers, were overloaded, or operated with over-inflated tires. The risk is described as a sudden fracturing and breaking apart of the wheels, causing the tires to lose air suddenly and to separate from the wheel, with possible resultant loss of control of the vehicle. It advised the owners to consult a Chevrolet dealer and to purchase proper replacement wheels and, if necessary, tires and springs.

Plaintiffs filed their original complaint on August 12, 1969.

Thereafter, General Motors sent out a letter dated October 7, 1969, (Exhibit 'B') referring 1965 (sic) Chevrolet three-quarter ton truck owners to the May 28, 1969, letter. It offered to replace all three-piece 15-inch wheels on three-quarter ton trucks with campers or special bodies at Chevrolet's expense. It advised those who had their wheels replaced subsequent to the May 28, 1969, letter to contact their Chevrolet dealer for adjustments on costs paid for such replacements. It offered to replace wheels, at Chevrolet's expense, in the event the owner or any subsequent owner of the truck should elect to attach a camper body or special body to such a truck.

In plaintiffs' amended and supplemental complaint, filed May 13, 1970, there is an averment that they had availed themselves of the offer in Exhibit 'B' and that they now possess new wheels.

The three counts (causes of action) directed against Kelsey-Hayes consist of the third count based on negligence, the fourth upon strict liability, and the sixth on breach of implied warranty of fitness for use.

The compensatory damages sought are: (1) general depreciation in the value of the vehicles caused by General Motors' letter of May 28, 1969; (2) cost of inspections, repairs, and replacements; and (3) loss of use prior to and during inspections and repairs. Since plaintiffs have had new wheels installed at Chevrolet's cost, item (2) is no longer applicable to them.

The type of depreciation for which compensation is asked is one that has been characterized as within the category of loss of bargain. (See Prosser, Torts (4th ed. 1971) p. 666.) Because this type of loss differs with the terms of each purchase (or exchange in part payment of another vehicle) with the particular dealer, it is one more properly relegated to remedies available only to the immediate parties to the transaction (retailer and purchaser) in the absence of any express warranty running directly to the purchaser. (See Cumming, Manufacturer's Responsibility for Defective Products (1966) 54 Cal.L.Rev. 1681, et seq,; Uniform Com.Code, §§ 2313--2317.)

Loss of use is an item of incidental damage. It appears appropriate, therefore, to characterize it according to the nature of the damage of which it is an incident. Unless incidental to physical property damage, it would appear that it may be properly classified as a type of economic loss.

Negligence: In California, the only kinds of damages caused by negligence which may be recovered from a defendant not in privity with plaintiff are for bodily injury and physical damage. (Seely v. White Motor Co. (1965) 63 Cal.2d 9, 18, 45 Cal.Rptr. 17, 403 P.2d 145; Wyatt v. Cadillac Motor Car Division (1956) 145 Cal.App.2d 423, 426, 302 P.2d 665 and Fentress v. Van Etta Motors (1958) 157 Cal.App.2d Supp. 863, 866, 323 P.2d 227 (both disapproved on other grounds in Sabella v. Wisler (1963) 59 Cal.2d 21, 30, 27 Cal.Rptr. 689, 377 P.2d 889); see also: Trans World Airlines v. Curtiss-Wright (1955) 1 Misc.2d 477, 481--482, 148 N.Y.S.2d 284, 290, affirmed 2 A.D.2d 666, 153 N.Y.S.2d 546, 550.) The depreciation claimed here is not due to physical property damage. As for loss of use, it too does not flow from a compensable physical property damage. Here there is no claim for loss of profits based upon intended commercial use of the vehicles as in Seely. In fact only an indefinite possible loss flowing from a loss of use is pleaded. In actions sounding in negligence, the cause of action matures only when actual damage results from the negligent act. (Fields v. Napa Milling Co. (1958) 164 Cal.App.2d 442, 447--448, 330 P.2d 459.) In actions bottomed on negligence, there is no recovery against a manufacturer for economic loss alone. (Thomas v. Olin Mathieson Chem. Corp. (1967) 255 Cal.App.2d 806, 810, 63 Cal.Rptr. 454.) Consequently, Kelsey-Hayes' demurrer upon the ground that no cause of action was stated was properly sustained against count three pleaded in terms of negligence.

Strict liability: In Seely v. White Motor Co., Supra, 63 Cal.2d 9, 16--19, 45 Cal.Rptr. 17, 403 P.2d 145, the court indicated that defects in the quality of goods (loss of bargain) and economic losses (loss of use of truck resulting in business loss) were not recoverable from the manufacturer under the theory of strict liability, but that these types of losses should be relegated to the law of contracts (sales) governing commercial transactions, i.e., to express and implied warranties. ² We realize that the authorities in the various jurisdictions are not uniform in this regard (see Prosser, Torts (4th ed. 1971) Supra, pp. 666, 667), but we feel constrained to be governed by the views set forth in the Seely majority opinion. The depreciation claimed by plaintiffs is definitely a complaint that the trucks with defective wheels were not of the quality bargained for. The loss of use in this case (as previously noted) is not specifically alleged even in terms of economic damage, but Seely indicates that even where the loss of use causes loss of profits, it is not recoverable from the manufacturer under the theory of strict liability. The general demurrer for failure to allege a cause of action was properly sustained to count four predicated upon strict liability.

Cases such as Gherna v. Ford Motor Co. (1966) 246 Cal.App.2d 639, 55 Cal.Rptr. 94; Kriegler v. Eichler Homes Inc. (1969) 269 Cal.App.2d 224, 74 Cal.Rptr. 749, and Avner v. Longridge Estates (1969) 272 Cal.App.2d 607, 77 Cal.Rptr. 633, cited by plaintiffs, are distinguishable in that in those cases there was ponderable physical property damage to the property sold and purchased.

Implied warranty: It is settled law in California that privity between the parties is a necessary element to recovery on a breach of an implied warranty of fitness for the buyer's use, with exceptions not applicable here. (Burr v. Sherwin Williams Co. (1954) 42 Cal.2d 682, 695--696, 268 P.2d 1041.) A demurrer is properly sustainable in an action predicated upon a breach of an implied warranty when lack of privity between plaintiff and defendant is disclosed on the face of the complaint. (Thomas v. Olin Mathieson Chem. Corp., Supra, 255 Cal.App.2d 806, 810, 63 Cal.Rptr. 454.) We conclude that the trial court properly sustained the demurrer to the sixth count, which was based upon this theory.

Plaintiffs contend that a class action exists and that the allegations of personal injury and property damage of Other class members give rise to a cause of action for negligence, strict liability, and breach of implied warranty. As previously noted, however, plaintiffs do not allege that they themselves sustained any personal injuries or physical property damages. They cannot confer upon themselves standing to sue by purporting to represent a class of which they are not members. (Cal. Gasoline Retailers v. Regal Petroleum Corp. (1958) 50 Cal.2d 844, 850, 330 P.2d 778.) They are not 'similarly situated' to those who may have suffered such damages and therefore may not represent such a class (Greater Westchester Homeowners Assn., Inc. v. City of Los Angeles (1970) 13 Cal.App.3d 523, 91 Cal.Rptr. 720.) La Sala v. American Sav. & Loan Assn. (1971) 5 Cal.3d 864, 97 Cal.Rptr. 849, 489 P.2d 1113 is not of assistance to plaintiffs here because the benefits conferred or offered after plaintiffs filed their original complaint were 'provided (or offered) to the class as...