Dole Food Co., Inc. v. North Carolina Foam Industries, Inc.

• Decision Date: 24 October 1996
• Docket Number: CA-CV,No. 1,1
• Citation: Dole Food Co., Inc. v. North Carolina Foam Industries, Inc., 935 P.2d 876, 188 Ariz. 298 (Ariz. App. 1996)
• Parties: , Prod.Liab.Rep. (CCH) P 14,792 DOLE FOOD COMPANY, INC., and Dole Fresh Vegetables, Inc., Plaintiffs-Appellants, v. NORTH CAROLINA FOAM INDUSTRIES, INC., Defendant-Appellee. 95-0300.
• Court: Arizona Court of Appeals

Page 876

935 P.2d 876

188 Ariz. 298, Prod.Liab.Rep. (CCH) P 14,792

DOLE FOOD COMPANY, INC., and Dole Fresh Vegetables, Inc., Plaintiffs-Appellants, v. NORTH CAROLINA FOAM INDUSTRIES, INC., Defendant-Appellee.

No. 1 CA-CV 95-0300.

Court of Appeals of Arizona Division 1, Department C.

Oct. 24, 1996.

Review Granted April 29, 1997.

Review Dismissed as Improvidently Granted June 25, 1997.

[188 Ariz. 300] Gammage & Burnham P.L.C. by Richard K. Mahrle, Phoenix and Robins, Kaplan, Miller & Ciresi by William P. Linhoff, Jr., Costa Mesa, CA, for Plaintiffs-Appellants.

Nye & Downey, P.L.C. by William J. Downey, Robert L. Fruge, Phoenix, for Defendant-Appellee.

OPINION

LANKFORD, Judge.

Dole Food Company ("Dole") appeals the entry of summary judgment in favor of North Carolina Foam Industries ("NCFI"). We reverse the judgment.

The appeal involves the adequacy of NCFI's product warnings. Dole filed this product liability action after a welding spark ignited polyurethane foam insulation and caused a fire that substantially damaged a Dole facility. Dole alleged that NCFI, which had supplied the foam, failed to provide adequate warnings. The trial court entered summary judgment on the ground that the warnings were adequate as a matter of law. We reverse because there are disputed issues of fact.

NCFI supplied the foam for Dole's building. Dole had hired a construction company to build an addition to its Yuma vegetable packing and processing plant. Val Lowder, who worked for a subcontractor, Mountain States Foaming, installed the polyurethane foam insulation. NCFI supplied the polyurethane foam to Lowder.

NCFI provides product warnings in the following manner. It sends a First Order Letter to all new customers who order NCFI foam. The letter cautions that the information it provides "should be understood thoroughly by you and your personnel before applying spray-in-place urethane chemicals." It also includes the following articles: (1) Urethane Foam Contractors Association (UFCA) Position Statement on "Sprayed Urethane Foam and Fire Safety"; (2) Society of the Plastics Industry (SPI) "Fire Safety Guidelines for the Use of Rigid Urethane Foam Insulation in Building Construction"; (3) SPI "Guide for the Safe Handling and Use of Urethane Foam Systems"; and (4) NCFI Material Safety Data Sheet-NCFI Gun Cleaner. ¹

NCFI did not provide this information to Lowder for the Dole job, however, because Lowder was not a new customer: He had received this information earlier that year when he had ordered polyurethane foam from NCFI for a different job. Lowder provided the general contractor with some, but not all, of the NCFI warnings.

Lowder applied NCFI foam to the walls and under the roof of the Dole addition. No thermal barrier was placed in direct contact with the NCFI foam. Wood-framed interior walls were constructed from one-half inch plywood covered with fiberglass, and there was an eight to twelve inch space between the plywood and the foam insulation.

During construction, a spark from a welding torch ignited a fire inside the wall. The gap between the foam and the plywood wall created a "chimney effect," spreading the fire quickly and causing substantial damage.

Dole's complaint claimed that NCFI failed to adequately warn of product hazards. Dole contended that NCFI did not warn that a thermal barrier must be in close contact with the polyurethane foam and did not warn that plywood is not an acceptable thermal barrier. Dole's claims included breach of warranty, negligence, and strict liability.

NCFI filed a motion for summary judgment based on three theories. It alleged that (1) its warnings were adequate, (2) it is relieved of liability by providing adequate warnings to a "sophisticated user" such as Lowder, and (3) Dole could not prove proximate cause. The court granted summary judgment in favor of NCFI without reaching the causation issue. It concluded that the warnings were adequate and NCFI satisfied its duty to warn by warning Lowder. Dole appeals the entry of summary judgment except that it does not appeal the adverse judgment on its breach of warranty claim.

Dole raises three issues on appeal: (1) Did a question of fact exist as to the adequacy of NCFI's warnings? (2) Did NCFI satisfy its duty to warn by providing warnings to the subcontractor who installed the polyurethane foam? (3) Did Dole present sufficient evidence that NCFI's allegedly inadequate warnings proximately caused Dole's damages?

We review de novo an entry of summary judgment. Gonzalez v. Satrustegui, 178 Ariz. 92, 97, 870 P.2d 1188, 1193 (App.1993). Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Orme School v. Reeves, 166 Ariz. 301, 305, 802 P.2d 1000, 1004 (1990). However, we must reverse and remand for a trial on the merits if reasonable inferences concerning material facts could be resolved in favor of either party. United Bank of Arizona v. Allyn, 167 Ariz. 191, 195, 805 P.2d 1012, 1016 (App.1990).

I.

Dole argues that NCFI failed to warn that a thermal barrier must be in close contact with the foam and that plywood is an inadequate thermal barrier. "[B]oth negligence and strict liability standards impose a duty to produce products with appropriate warning instructions...." Anguiano v. E.I. DuPont de Nemours & Co., 808 F.Supp. 719, 722 (D.Ariz.1992), aff'd, 44 F.3d 806 (9th Cir.1995).

To establish a prima facie case of strict liability, the plaintiff must show "(1) the product is defective and unreasonably dangerous, (2) the defective condition existed at the time the product left the defendant's control, and (3) the defective condition is the proximate cause of the plaintiff's injuries." Piper v. Bear Medical Systems, Inc., 180 Ariz. 170, 173, 883 P.2d 407, 410 (App.1993); accord Gosewisch v. American Honda Motor Co., 153 Ariz. 400, 403, 737 P.2d 376, 379 (1987); Restatement (Second) of Torts § 402A (1965). A product may be unreasonably dangerous in the absence of adequate warnings. Piper, 180 Ariz. at 173-74, 883 P.2d at 410-11.

"Determining whether a warning is adequate to apprise users of dangers in the product is ordinarily a question for the trier of fact." Id. at 177, 883 P.2d at 414. Based on the record, we cannot say as a matter of law that the warnings adequately conveyed the dangers posed by a space between the foam and the thermal barrier and the use of plywood as a thermal barrier. Dole's expert, Joseph Zicherman, testified that warnings should state the need for "a proper thermal barrier over the foam" and there should not be "gaps and large air spaces between the barrier and the foam." However, Zicherman admitted that in some instances plywood would be an appropriate barrier. ²

NCFI argues that its warnings adequately conveyed the need for the barrier to be in close contact with the foam. NCFI relied on its warnings of the need to "cover" the foam with a barrier and to "always use a protective coating when applying sprayed urethane foam to the interior or exterior of a building." NCFI claims this language "obviously" indicates a need for direct application. However, there is evidence to support the opposite inference: NCFI employee Ray Mackey testified that the NCFI literature does not address whether there can be a distance between the thermal barrier and the foam. If NCFI's own employees fail to glean this information from the literature, then it is not obvious. In addition, the warnings do not directly address the use of plywood as a barrier.

A reasonable jury could find that the warnings failed to adequately convey the dangers of using plywood as a thermal barrier and of leaving a space between the foam and the thermal barrier. Accordingly, summary judgment in favor of Dole is reversed.

II.

NCFI also contends that its duty to warn was satisfied even though Dole received no warnings. NCFI argues that it was enough to provide the information to a "sophisticated user" or "learned intermediary," such as the contractor who installed the foam. ³ Generally, warnings must be given to the ultimate user or consumer. Frumer & Friedman, supra, § 12.07 at 12-91. However, "[u]nder the 'learned intermediary doctrine,' 'the manufacturer's duty to warn is ordinarily satisfied if a proper warning is given to the specialized class of people that may prescribe or administer the product.' " Davis v. Cessna Aircraft Corp., 182 Ariz. 26, 38, 893 P.2d 26, 38 (App.1994) (quoting Piper, 180 Ariz. at 178 n. 3, 883 P.2d at 415 n. 3); accord Shell Oil Co. v. Gutierrez, 119 Ariz. 426, 432-33, 581 P.2d 271, 277-78 (1978).

The Restatement describes this doctrine as follows:

Giving to the third person through whom the chattel is supplied all the information necessary to its safe use is not in all cases sufficient to relieve the supplier from liability. It is merely a means by which this information is to be conveyed to those who are to use the chattel. The question remains whether this method gives a reasonable assurance that the information will reach those whose safety depends upon their having it. All sorts of chattels may be supplied for the use of others, through all sorts of third persons under an infinite variety of circumstances. This being true, it is obviously impossible to state in advance any set of rules which will automatically determine in all cases whether one supplying a chattel for the use of others through a third person has satisfied his duty to those who are to use the chattel by informing the third person of the dangerous character of the chattel, or of the precautions which must be exercised in using it in order to make its use safe.

Restatement (Second) of Torts § 388 cmt. n (1965). ⁴

To determine whether a manufacturer has satisfied its duty by warning a sophisticated intermediary, courts should consider the following factors:

[T]he likelihood or unlikelihood that harm will occur if the vendee does not pass on...