Fordyce Concrete, Inc. v. Mack Trucks, Inc.

• Decision Date: 17 March 1982
• Docket Number: Civ. A. No. 81-2041.
• Citation: 535 F. Supp. 118
• Parties: FORDYCE CONCRETE, INC., Plaintiff, v. MACK TRUCKS, INC., et al., Defendants.
• Court: U.S. District Court — District of Kansas

535 F. Supp. 118

FORDYCE CONCRETE, INC., Plaintiff, v. MACK TRUCKS, INC., et al., Defendants.

Civ. A. No. 81-2041.

United States District Court, D. Kansas.

March 17, 1982.

Dennis L. Horner and Martha Ridgway Schmid of the firm of Horner, Duckers & Cornwell, Kansas City, Kan., for plaintiff.

Edmund S. Gross of the firm of Weeks, Thomas & Lysaught, Kansas City, Kan., for defendant Mack Trucks, Inc.

Charles A. Getto of the firm of McAnany, Van Cleave & Phillips, Kansas City, Kan., for defendant Reynolds Metals Co.

MEMORANDUM AND ORDER

EARL E. O'CONNOR, Chief Judge.

Defendant Mack Truck, Inc., and defendant Reynolds Metals Company have filed respective motions for summary judgment on the grounds (1) that plaintiff's warranty claim is barred by the four-year statute of limitations pursuant to K.S.A. 84-2-725, and (2) that the damages suffered by plaintiff were solely economic loss and cannot support a strict liability claim. In its memorandum in opposition to defendants' motions, plaintiff does not contradict the assertion that its warranty claim is barred by the controlling statute of limitations, but argues that its strict liability claim is proper because plaintiff seeks recovery for physical damage to property, not economic loss or the cost of repairing the defective product. In addition, plaintiff has filed a motion to amend the petition alleging negligence on the part of the defendants, which defendants oppose. Having considered the helpful briefs submitted by the parties and the oral arguments presented by counsel for plaintiff and for defendant Mack, we are now ready to rule upon these motions.

The following facts are undisputed. On March 21, 1975, defendant Mack Trucks, Inc., (hereinafter Mack) delivered chassis No. RL 685LS-26135 to Ash Grove Cement, which was the parent corporation of plaintiff Fordyce. Defendant Mack knew the chassis was to be used as a concrete truck, but plaintiff arranged for the purchase and installation of the truck mixer assembly. The frame of the chassis broke on May 21, 1979, causing the cab and mixer first to separate and then to collide with each other. Fordyce filed suit against Mack on January 21, 1981, alleging breach of implied warranties and strict liability for sale of a product in a dangerous and defective condition. On April 2, 1981, Fordyce filed suit alleging Reynolds Metal Company had designed, manufactured and built the frame of the Mack truck and was strictly liable for damage caused by its dangerous and defective condition.

Defendants argue that the statute of limitations bars plaintiff's warranty claim. The express warranty covering the frame side rails was the Mack Standard Vehicle Warranty for 200,000 miles or 36 months, whichever came first. The warranty contained the following provision: "This warranty is made expressly in lieu of any other warranties, expressed or implied, including any implied warranty of merchantability or fitness for a particular purpose, and of any other obligation or liability on the part of the manufacturer including, without limitation of the foregoing, consequential and incidental damages."

Pursuant to § 1-102 of the Kansas Uniform Commercial Code (hereinafter UCC), K.S.A. 84-1-102, this sale involves a transaction in goods as defined in § 2-105(1) of the UCC, K.S.A. 84-2-105(1), and is therefore covered by Article 2 of the UCC. The controlling statute of limitations on the warranty claim, set forth at § 2-725, K.S.A. 84-2-725, provides in pertinent part:

(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.

(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.

The warranty cause of action accrued on March 21, 1975, when the Mack chassis No. RL 685LS-26135 was delivered. Since the action before us was commenced on January 21, 1981, more than four years after delivery of the chassis, plaintiff's warranty action is barred by the four-year statute of limitations, K.S.A. 84-2-725. Therefore, the defendants' motions to dismiss plaintiff's warranty claim must be granted.

As grounds for summary judgment on plaintiff's strict liability claim, defendants contend that the total recovery sought by plaintiff is for damage to the Mack truck, the manufactured product. Defendants argue this is a purely economic loss that is not recoverable in a strict liability claim. In response plaintiff argues that the damages it seeks covers injury to the cab and to the cement mixer mounted on the frame, but not for the cost to repair the frame or for "economic losses" such as loss of use of the truck, loss of profits resulting from damage to the truck, or the cost of renting a temporary replacement. In determining which damages, if any, sought by plaintiff are recoverable under the theory of strict liability in tort, we recognize the following four types of possible injuries in products liability cases involving claims of strict liability: (1) personal injuries, (2) physical damage to property other than the defective product, (3) harm to the defective product itself, and (4) economic loss. Iowa Electric Light & Power Co. v. Allis-Chalmers Mfg. Co., 360 F.Supp. 25, 28 (S.D.Iowa 1973). No personal injury occurred in this case. As explained in the following discussion, we conclude that the damages sought by plaintiff should be categorized as damage to the defective product itself and as physical damage to other property, but not as a claim for economic losses. We also conclude that both types of damages sought by plaintiff are recoverable under the theory of strict liability in tort.

All parties direct our attention to plaintiff's answer to defendant Mack's Interrogatory No. 20 to establish the type of damages sought by plaintiff. This interrogatory asks plaintiff to "itemize and describe all damages which you allege were incurred by plaintiff as a result of the incident alleged in plaintiff's petition." Plaintiff's answer, which is attached to the interrogatory as Exhibit B, is an appraisal of damages to a Mack truck. The items listed in the appraisal refer to the truck cab and mixer and to the Mack chassis. Since this is an insurance subrogation claim, plaintiff does not include in its damages the cost to repair the defective frame, but seeks recovery only for injuries to "other property." Plaintiff includes within its definition of "other property" damage to the cab of the truck and to the mounted mixer assembly.

In Brooks v. Dietz, 218 Kan. 698, 702, 545 P.2d 1104 (1976), the Kansas Supreme Court approved an action premised upon strict liability in tort and adopted the theory as set out in § 402A of the Restatement of Torts, Second. Section 402A, which imposes liability for physical harm to property, provides as follows:

(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if

(a) the seller is engaged in the business of selling such a product, and

(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

(2) The rule stated in Subsection (1) applies although

(a) the seller has exercised all possible care in the preparation and sale of his product, and

(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller. (Emphasis added.)

The Kansas Supreme Court has permitted recovery under the theory of strict liability in tort for physical damage to property other than the defective product when no personal injury occurred. Kennedy v. City of Sawyer, 228 Kan. 439, 445-46, 618 P.2d 788 (1980). The original plaintiffs in Kennedy, who were bystanders or third parties, sought recovery for injury to their cattle that were poisoned by the city's use of a herbicide. Concerning the imposition of liability for injury to property of bystanders or third parties, the court held that "under the doctrine of strict liability the liability of a manufacturer and those in the chain of distribution extends to those individuals to whom injury from a defective product may reasonably be foreseen" when the product "is being used for the purpose for which it was intended or for which it is reasonably foreseeable it may be used." 228 Kan. at 446, 618 P.2d 788. We, therefore, hold that plaintiff may seek to recover under § 402A for physical damage to property other than the defective product.

Plaintiff's answers to defendant Mack's interrogatories, numbers 6 through 9, show that the truck mixer assembly was purchased separate from the Mack chassis. The record shows that the defendants were not involved in either selecting or installing the mixer. In some cases installing or affixing a good onto a defective product might cause the good to become so much a part of the defective product that it loses its identity and cannot be considered other property under strict liability in tort. In this case, however, where the mixer was removable without injury to the truck, cf. Johnson v. Interstate Securities Co., 152 Kan. 346, 103 P.2d 795 (1940) (doctrine of accession not applicable where grainbed removable without injury to truck), we find that the mixer must be considered as other property. Therefore, damage to the truck mixer assembly installed on the chassis would be recoverable under the theory of strict liability as damage to other...