Depositors Ins. Co. v. Wal-Mart Stores, Inc.

• Decision Date: 06 November 2007
• Docket Number: No. 06-4141.,06-4141.
• Citation: 506 F.3d 1092
• Parties: DEPOSITORS INSURANCE COMPANY; Brooke Miller, Plaintiffs/Appellants, v. WAL-MART STORES, INC.; Walgreen Company, Defendants, General Electric Company; Frank Fletcher Companies, LTD, doing business as Cheyenne Home Furnishings and Cheyenne Industries, Inc., Defendants/Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

506 F.3d 1092

DEPOSITORS INSURANCE COMPANY; Brooke Miller, Plaintiffs/Appellants, v. WAL-MART STORES, INC.; Walgreen Company, Defendants General Electric Company; Frank Fletcher Companies, LTD, doing business as Cheyenne Home Furnishings and Cheyenne Industries, Inc., Defendants/Appellees.

No. 06-4141.

United States Court of Appeals, Eighth Circuit.

Submitted: September 27, 2007.

Filed: November 6, 2007.

Theodore F. Sporer, argued, Des Moines, IA, for appellant.

John Thomas Clendenin, argued, Des Moines, IA (Richard J. Sapp, on the brief), for appellee General Elec.

Jeff Jeffries, argued, Des Moines, IA, for appellees Frank Fletcher Companies and Cheyenne Industries.

Before LOKEN, Chief Judge, WOLLMAN and RILEY, Circuit Judges.

RILEY, Circuit Judge.

The district court¹ granted the motions for summary judgment of General Electric Co. (GE) and Frank Fletcher Cos., LTD, d/b/a Cheyenne Home Furnishings and Cheyenne Industries, Inc. (Fletcher) (collectively, the defendants²) and dismissed the claims of Depositors Insurance Co. (Depositors) and Brooke Miller (Miller) (collectively, the plaintiffs) based on product liability, implied warranty of merchantability, and negligence. We affirm.

I. BACKGROUND

Miller owned a home in Des Moines, Iowa, and purchased homeowners insurance from Depositors. Miller bought an extension cord manufactured by GE and a lamp manufactured by Fletcher. Miller placed the Fletcher lamp on an end table near an upholstered chair, plugged the lamp into the GE extension cord, and plugged the extension cord into an electrical outlet.

On October 9, 2004, a fire occurred at the Miller residence. The fire damaged the extension cord, lamp, end table, upholstered chair, and the house. The plaintiffs' expert, Todd Hartzler, could neither locate the point of origin of the fire nor reach a conclusion regarding the cause of the fire. Miller paid the $500 deductible on the insurance policy, Depositors paid $88,503.36 in benefits, and Miller assigned her subrogation interest to Depositors.

The plaintiffs filed a complaint, alleging product liability, implied warranty of merchantability, and negligence claims. The plaintiffs maintained either the GE extension cord or the Fletcher lamp cord caused the fire. The defendants moved for summary judgment on all the claims. The district court granted summary judgment for the defendants. The plaintiffs appeal.

II. DISCUSSION

We review de novo a grant of summary judgment. Libel v. Adventure Lands of Am., Inc., 482 F.3d 1028, 1033 (8th Cir.2007). Federal Rule of Civil Procedure 56(c) provides summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." To be a genuine issue of fact, the evidence must be such "that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). To be a material fact, the factual issue must potentially "affect the outcome of the suit under the governing law." Id. "Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Because the federal courts have diversity jurisdiction over this case pursuant to 28 U.S.C. § 1332, we apply the law of the State of Iowa. See HOK Sport, Inc. v. FC Des Moines, L.C., 495 F.3d 927, 934 (8th Cir.2007).

A. Product Liability

The plaintiffs asserted a manufacturing defect in either the GE extension cord or Fletcher lamp cord caused the fire. In Wright v. Brooke Group, Ltd., 652 N.W.2d 159 (Iowa 2002), the Supreme Court of Iowa adopted the Product Restatement, which provides a product "contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product." Id. at 178; Restatement (Third) of Torts: Product Liability § 2(a) (1998). "[A] manufacturing defect is a departure from a product unit's design specifications." Id. § 2 cmt. c; see also Parish v. Icon Health & Fitness, Inc., 719 N.W.2d 540, 545 (Iowa 2006) (noting, in adopting the Product Restatement, the Supreme Court of Iowa also adopted the associated commentary). A departure from the intended design of a product cannot be determined without knowing the actual intended design of the product. Thus, under Iowa law, an essential element of any manufacturing defect claim is the intended design of the product. See Wright, 652 N.W.2d at 178-79 (citing "[a] manufacturing defect exists only where an item is substandard when compared to other identical units off of the assembly line" (quoting In re Temporomandibular Joint (TMJ) Implants Prods. Liab. Litig., 97 F.3d 1050, 1054 n. 4 (8th Cir.1996))). Here, the plaintiffs never offered any evidence showing (1) the intended design of either the extension or lamp cords or (2) how the manufacturing of these cords departed from the intended product designs. Therefore, the plaintiffs failed to make a showing sufficient to establish the existence of essential elements of the manufacturing defect claims. The district court properly granted summary judgment on the plaintiffs' product liability claims.

B. Implied Warranty of Merchantability

The plaintiffs also brought claims for breach of implied warranty of merchantability, arguing the extension and lamp cords were not fit for the ordinary purpose for which cords are used.³ Iowa Code section 554.2314 provides for an implied warranty of merchantability.⁴ "[W]arranty liability under section 554.2314(2)(c) requires proof of a product defect as defined in Products Restatement section 2." Wright, 652 N.W.2d at 182; see also Restatement (Third) of Torts: Product Liability § 2(a) cmt. n (stating a manufacturing defect claim and an implied warranty of merchantability claim "rest on the same factual predicate" and thus "these two claims are duplicative and may not be pursued together in the same case"). Because the plaintiffs failed to make a showing sufficient to establish a manufacturing defect in either the extension or lamp cords, the district court properly granted summary judgment on the plaintiffs' implied warranty of merchantability claims.

C. Negligence

The plaintiffs asserted general negligence claims under the res ipsa loquitur doctrine. Res ipsa loquitur is a rule of evidence and a type of circumstantial evidence, which permits, but does not compel, an inference of negligence upon showing an injury "would not have occurred absent some unspecified but impliedly negligent act." Sammons v. Smith, 353 N.W.2d 380, 385 (Iowa 1984); see also Brewster v. United States, 542 N.W.2d 524, 528-29 (Iowa 1996) (en banc). "Under Iowa law, res ipsa loquitur applies when `(1) the injury is caused by an instrumentality under the exclusive control of the defendant, and (2) the occurrence is such as in the ordinary course of things would not happen if reasonable care had been used.'" Brewster, 542 N.W.2d at 529 (quoting Mastland, Inc. v. Evans Furniture, Inc., 498 N.W.2d 682, 686 (Iowa 1993)).

Res ipsa loquitur depends upon the "defendant's complete and exclusive control of the instrumentalities that cause the injury." Oak Leaf Country Club, Inc. v. Wilson, 257 N.W.2d 739, 744 (Iowa 1977) (quoting Eaves v. City of Ottumwa, 240 Iowa 956, 38 N.W.2d 761, 769 (Iowa 1949)). To satisfy the exclusive control requirement, "[t]he injury must either be traced to a specific instrumentality or cause for which the defendant was responsible, or it must be shown that the [defendant] was responsible for all reasonably probable causes to which the accident could be attributed." Graber v. City of Ankeny, Iowa, 616 N.W.2d 633, 643 (Iowa 2000) (en banc) (quoting W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 39, at 248 (5th ed.1984)). The exclusive control must have occurred at the time of the negligent act. Weyerhaeuser Co. v. Thermogas Co., 620 N.W.2d 819, 832 (Iowa 2000) (en banc). The purpose of the exclusive control requirement is "`to link the defendant with the probability, already established, that the accident was negligently caused.'" Brewster, 542 N.W.2d at 528 (quoting Prosser and Keeton on the Law of Torts § 39, at 248). "Failure to connect the defendant with the negligent event defeats the application of res ipsa loquitur." Id. at 528-29.

"If it appears that two or more instrumentalities, only one of which was under defendant's control, contributed to or may have contributed to the injury, the [res ipsa loquitur] doctrine cannot be invoked."⁵ Humphrey v. Happy, 169 N.W.2d 565, 569 (Iowa 1969) (quoting with approval 38 Am.Jur. Negligence § 300 (1941)). "`Unless there is vicarious liability or shared control, the logical rule usually is applied, that the plaintiff does not make out a preponderant case against either of two defendants by showing merely that [the plaintiff] has been injured by the negligence of one or the other.'" Novak Heating & Air Conditioning v. Carrier Corp., 622 N.W.2d 495, 498 (Iowa 2001) (en banc) (quoting Town of Reasnor v. Pyland Const. Co., 229 N.W.2d 269, 272 (Iowa 1975)); see also Pastour v. Kolb Hardware, Inc., 173 N.W.2d 116, 126 (Iowa 1969) (holding if multiple instruments controlled by different defendants caused the injury, res ipsa loquitur can only apply if the defendants "have been properly charged as joint tortfeasors or have been in joint control of the instrumentality or agency causing the injury, or where one was vicariously liable for the other's negligence" (quoting ...