Cova v. Harley Davidson Motor Co., O-L

• Citation: 182 N.W.2d 800,26 Mich.App. 602
• Decision Date: 30 September 1970
• Docket Number: Docket No. 7265,No. 2,O-L,2
• Parties: , 8 UCC Rep.Serv. 1258 Charles C. COVA and Julia Cova, d/b/a Bob-ink Golf Course, Plaintiffs-Appellants, v. HARLEY DAVIDSON MOTOR COMPANY, a foreign corporation, Defendant-Appellee
• Court: Court of Appeal of Michigan (US)

Page 800

182 N.W.2d 800 26 Mich.App. 602, 8 UCC Rep.Serv. 1258 Charles C. COVA and Julia Cova, d/b/a Bob-O-Link Golf
Course, Plaintiffs-Appellants,
v.
HARLEY DAVIDSON MOTOR COMPANY, a foreign corporation,
Defendant-Appellee. Docket No. 7265. Court of Appeals of Michigan, Division No. 2. Sept. 30, 1970.
Rehearing Denied Nov. 10, 1970.
Released for Publication Jan. 22, 1971.

Page 801

David M. Fried, [26 Mich.App. 603] Lampert & Fried, Detroit, for plaintiffs-appellants.

Nelson S. Shaperd, Detroit, for defendant-appellee.

Before LEVIN, P.J., and J. H. GILLIS and BRONSON, JJ.

LEVIN, Judge.

The plaintiffs, Charles C. and Julia Cova, doing business as Bob-O-Link Golf Course, purchased golf carts manufactured by the defendant, Harley Davidson Motor Company. The complaint alleged that the carts were defective in that they did not operate properly and that this constituted a breach of an implied warranty of quality.

The carts were purchased by the plaintiffs from a dealer, defendant Lawn Equipment Corporation, not directly from the manufacturer. The trial judge dismissed the complaint, apparently on the ground that where the damages claimed are for economic loss, not personal injury, a consumer may not maintain an action against the manufacturer for breach [26 Mich.App. 604] of warranty unless there is privity of contract. We reinstate the complaint and remand for trial. ¹

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The history of the development of the consumer's direct remedy against the manufacturer has been frequently told. We, therefore, begin with our Supreme Court's landmark decision in Piercefield v. Remington Arms Co., Inc. (1965), 375 Mich. 85, 98 ,133 N.W.2d 129, 135, where the Court declared that Spence v. Three Rivers Builders & Masonry Supply, Inc. (1958), 353 Mich. 120, 90 N.W.2d 873, and succeeding decisions had 'put an end in Michigan to the defense of no privity, certainly so far as concerns an innocent bystander injured as this plaintiff pleads, and that a person thus injured should have a right of action against the manufacturer[26 Mich.App. 605] on the theory of breach of warranty as well as upon the theory of negligence.' ²

While the Piercefield plaintiff suffered personal injuries, not economic loss, in Spence the loss was entirely economic. There the plaintiff owned several cottages in a resort area, one of which was built from cinder blocks manufactured and sold for building purposes by the defendant. A few months after the cottage was built the blocks started to crack, chip, and pit. ³ The plaintiff claimed that under § 15 of the Uniform Sales Act ⁴ there was an implied warranty that the blocks were of merchantable quality and the warranty had been breached. The defendant contended that the difficulties did not impair the safeness or the habitability of the cottage. The Supreme Court responded (p. 126, 90 N.W.2d p. 876):

'(I)n this day and age appearance as well as structural safety and durability is an important factor in determining the merchantable quality and fitness of these particular products as used in this case.'

And later (p. 130, 90 N.W.2d p. 878):

'We can also find no reason in logic or sound law why recovery in these situations should be confined to injuries to persons and not to property, or allowed in food and related cases and denied in all others.'

The Court ruled (p. 128, 90 N.W.2d p. 877) that it would no longer continue to be

'hobbled by such an obsolete rule (privity) and its swarming progeny of exceptions.'

[26 Mich.App. 606] Having thus spoken forthrightly, the Court blurred its decision by going on to intimate that the consumer's remedy was grounded in negligence, not warranty. ⁵

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And it will be remembered that in the present case the plaintiff proceeds on an implied warranty, not a negligence, theory.

Spence was followed by Manzoni v. Detroit Coca-Cola Bottling Company (1961), 363 Mich. 235, 109 N.W.2d 918. Theresa Manzoni commenced an action for breach of implied warranty claiming that she was injured as a result of drinking coca-cola contaminated by a foreign substance. The manufacturer contended that in a suit upon an implied warranty there is 'no distinction between a count in implied warranty or in tort' and the burden was upon the plaintiff to show negligence. This reasoning was rejected; the Court [26 Mich.App. 607] again reviewed the history ⁶ of the development of the consumer's remedy against the manufacturer, summing up as follows (pp. 239, 240, 109 N.W.2d p. 921):

'The result of the operation of the these forces has been a marked change in legal theory on a wide front. The food and beverage area is but a small subdivision of a field much more comprehensive, involving the whole topic of products liability. It ranges through areas both of contract and tort, from the liability of the manufacturer of a defective automobile wheel, or cinder blocks (citing Spence) to that of the seller of an inflammable dress, or the distributor of unwholesome food or contaminated drink, or even the purveyor of a caustic perfume.'

The Court added that because of the growing pressure for consumer protection the requirement of privity had been abandoned, thereby opening the door to the widespread use of the Warranty theory, and that in Michigan recovery is permitted in this type of case (p. 241, 109 N.W.2d p. 922) 'either on a theory of negligence, Or implied warranty,' again citing Spence. (Emphasis supplied.) The Court concluded that the consumer has a choice of remedies and said (p. 241, 109 N.W.2d p. 922):

'(I)n a suit upon a warranty theory it is not necessary to show negligence, but rather breach of the implied warranty.' ⁷

In Santor v. A and M Karagheusian, Inc. (1965), 44 N.J. 52, 60 207 A.2d 305, 309, 16 A.L.R.3d 670, the New Jersey Supreme Court, in a well-reasoned opinion, reviewed its famous Henningsen ⁹ decision, conceded that serious consideration had not been given in that case to whether a distinction should be made between personal injury and loss of bargain claims, and, after considering that question, ruled that a manufacturer of carpeting, defective because of an unusual line in it, was subject to liability to the consumer. The court reasoned that the manufacturer is the 'father of the transaction' and said (p. 60, 207 A.2d p. 309):

'From the standpoint of principle, we perceive no sound reason why the implication of reasonable fitness should be attached to the transaction and be actionable against the manufacturer where the defectively-made product has caused personal injury, and not actionable when inadequate manufacture has put a worthless article in the hands of an innocent purchaser who has paid the required price for it.'

Although the Michigan Supreme Court has not in so many words declared that a consumer may recover[26 Mich.App. 609] from a manufacturer for breach of implied warranty without proving negligence and without regard to privity even in a case where the product is not inherently dangerous and no personal injuries have been suffered, the loss being entirely economic, we are persuaded from our review of the foregoing decisions of our Supreme Court and from the trend of authorities in other jurisdictions that a consumer can sue a manufacturer directly for economic loss resulting from a defect in a product attributable to the manufacturer without proving negligence. If all our Supreme Court said in Spence was that a consumer can sue a manufacturer for negligence without proving privity of contract, it said nothing new at all, and Spence, widely regarded as one of the more important cases in this sector of the law, is a cipher.

On principle the manufacturer should be required to stand behind his defectively-manufactured product and held to be accountable to the end user even though the product caused neither accident nor personal injury. The remote seller should not be insulated from direct liability where he has merely mulcted the consumer.

This does not mean that the liability of the manufacturer is a liability without fault. As stated in Piercefield, one who sues a manufacturer (375 Mich. pp. 98, 99, 133 N.W.2d p. 135) 'must prove a defect attributable to the manufacturer and causal connection between that defect and the injury or damage of which he complains.'

It has been suggested that the time has come further to define the nature of the liability of the manufacturer, to decide whether it is a 'strict liability,' and to decide to what extent it arises under and is affected by the warranty provisions in the sale of goods section of the uniform commercial [26 Mich.App. 610] code ¹⁰ In the judicial development of the consumer's direct remedy against the manufacturer, several dozen legal theories were coalesced in justification and rationalization of the results which the courts reached. ¹¹ Some of these concepts

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have been enacted into statutes, such as the uniform sales act, ¹² and later the uniform commercial code. But, as the UCC draftsmen acknowledged, ¹³ the remedy is not statutory, but essentially one fashioned by the courts. ¹⁴

The American Law Institute's partial restatement of the consumer's tort remedy ¹⁵ and the recodification of his warranty remedy in the uniform commercial code record salient features of the common law as it had evolved through the dates that the restatement[26 Mich.App. 611] and code drafters did their work. These formulations, however, no more mark the boundaries of the consumer's remedy than did the earlier effort at codification, the uniform sales act (see fn. 14).

The suggestion that we now label the manufacturer's liability a 'strict liability' does not strike us as particularly sound or useful. In Greenman v. Yuba Power Products, Inc. (1963), 59 Cal.2d 57, 27 Cal.Rptr. 697, 377 P.2d 897, 13 A.L.R.3d 1049, the California Supreme Court announced that the manufacturer's liability was a 'strict liability in tort.' This term, apparently borrowed from the writings of Professors Harper and James and Dean...