Green v. AB Hagglund and Soner

• Decision Date: 02 May 1986
• Docket Number: Civ. No. 84-1360.
• Citation: 634 F. Supp. 790
• Parties: Galen B. GREEN and Deborah A. Green, individually and as guardians ad litem for the minor children, Andrew Stuart Green and Denise Elizabeth Green, Plaintiffs, v. A.B. HAGGLUND AND SONER, a foreign corporation; Nordic Tracked Vehicles, Inc., dba Tracks Unlimited, a foreign corporation; and Dyna-Haul, Ltd., a foreign corporation, Defendants.
• Court: U.S. District Court — District of Idaho

634 F. Supp. 790

Galen B. GREEN and Deborah A. Green, individually and as guardians ad litem for the minor children, Andrew Stuart Green and Denise Elizabeth Green, Plaintiffs, v. A.B. HAGGLUND AND SONER, a foreign corporation; Nordic Tracked Vehicles, Inc., dba Tracks Unlimited, a foreign corporation; and Dyna-Haul, Ltd., a foreign corporation, Defendants.

Civ. No. 84-1360.

United States District Court, D. Idaho.

May 2, 1986.

Craig L. Meadows, Wayne B. Slaughter, Jr., Albert P. Barker, Hawley Troxell Ennis & Hawley, Boise, Idaho, for plaintiffs.

Blaine Evans, Robert J. Koontz, Bruce C. Jones, Evans Keane Koontz Boyd & Ripley, Boise, Idaho, for A.B. Hagglund and Soner.

R.B. Rock, Larry C. Hunter, Moffatt Thomas Barrett & Blanton, Chartered, Boise, Idaho, for Dyna-Haul, Ltd.

Brian K. Julian, Quane Smith Howard & Hull, Boise, Idaho, for Nordic Tracked Vehicles, Inc.

MEMORANDUM OPINION AND ORDER

RYAN, District Judge.

I. INTRODUCTION

This action arises from an accident which occurred during the demonstration of an all-terrain vehicle, Model BV206, manufactured by Defendant A.B. Hagglund and Soner (Hagglund). The accident occurred in August 1983. At the time of the accident, Plaintiff Galen Green was a Bureau of Land Management (BLM) employee and was participating in the demonstration by riding in the BV206. Green was injured when the BV206 was unable to negotiate a steep hill.

On April 23, 1986, the court heard oral argument on the following pending motions:

1. Defendant Tracks Unlimited's Motion for Summary Judgment.

2. Defendant Hagglund's Motion for Partial Summary Judgment.

3. Defendant Hagglund's Motion for Leave to File Cross-claims Against Dyna-Haul, Ltd., and Nordic Tracked Vehicles, Inc.

4. Defendant Hagglund's Motion to Allow Jury Inspection of the Accident Scene.

II. DISCUSSION

A. Summary Judgment Standards

Summary Judgment is appropriate only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56. Necessarily, conflicting factual testimony is not properly resolved on a motion for summary judgment. Further, the record must be examined in the light most favorable to, and all inferences from the evidence must be drawn in favor of, the nonmoving parties. Lew v. Kona Hospital, 754 F.2d 1420, 1423 (9th Cir.1985).

B. Defendant Tracks Unlimited's Motion for Summary Judgment

Tracks Unlimited (Tracks) seeks summary judgment primarily on the grounds that Idaho Code § 6-1407 insulates it from liability.

The liability limitation of Section 6-1407 is not applicable where Tracks (1) has made express warranties; (2) has had a reasonable opportunity to inspect the product in a manner which would or should, in the exercise of reasonable care, reveal the existence of the defective condition complained of, where Tracks had knowledge or reason to know of the defect; or (3) where Tracks altered or modified the BV206. As noted from the bench, the plaintiffs and cross-claimant have submitted deposition testimony and affidavits which, when examined in the light most favorable to the nonmoving parties and drawing all inferences from that evidence in favor of the nonmoving parties, create genuine issues of fact regarding the existence of the prerequisites for and exceptions to Tracks' limitation of liability under Section 6-1407. At this stage of the proceedings, the court cannot hold as a matter of law that the liability limitation of Section 6-1407 is applicable to Tracks Unlimited. Summary judgment is, therefore, inappropriate.

Similarly, the court finds issues of fact exist regarding the plaintiffs' negligence claims against Tracks, as well as the other defendants' claims of indemnity. Summary judgment is, therefore, inappropriate on those claims as well.

C. Defendant Hagglund's Motion for Partial Summary Judgment

Defendant Hagglund seeks summary judgment on plaintiffs' warranty claim and claimed loss of parental consortium brought on behalf of Green's children. Disposition of the motion on both claims requires the resolution of questions of first impression in Idaho. Not only does Hagglund's motion raise issues of first impression in Idaho, the resolution of those issues requires the evaluation of conflicting social policies with little Idaho case law to guide such an evaluation. It is with some reluctance that I undertake the disposition of Hagglund's motion rather than refer the matter to the Idaho Supreme Court for decision. However, neither of the parties have requested certification to the Idaho Supreme Court of the state law issues, discovery is at an end, and trial is set to commence June 9, 1986. In short, the interests of justice in the efficient and cost-effective resolution of judicial disputes require a decision without delay.

1. Warranty claim.

Hagglund argues the warranty claim must be dismissed for three reasons: (1) no "warranties" were made to the BLM/Green because no bargain was struck between those parties; (2) Green is not a third-party beneficiary of any warranties given to Tracks or Dyna-Haul; and (3) the BLM/Green is not in privity of contract with Hagglund, and therefore, no warranties could have been extended to the BLM/Green.

(a) "Basis of the bargain."

Hagglund argues that while it may have made representations to the BLM (and this fact is conceded only for purposes of argument), no agreement was entered into between those parties for the sale of a BV206. Consequently, any representations were not the basis of a bargain as required by Idaho Code § 28-2-313. Hagglund concludes, therefore, that no "warranty" was given.

Although the typical warranty case involves the purchase of the item warranted, this case presents the unusual situation where an intervening accident precludes consummation of any sales agreement that may ultimately have been reached. The parties have not cited any cases which address this situation, nor has the court's independent research revealed either cases or commentary on point. The difficulty presented by this factual situation is readily apparent and best illustrated by a simple example. An individual seeking to purchase a new car engages in discussions with a salesman during which the salesman represents, among other things, that the car can be safely driven at fifty-five miles per hour. The potential buyer likes the particular model and asks the salesman if he can take it for a test drive. During the test drive the car undergoes a catastrophic mechanical failure at fifty miles per hour. The driver is injured as a result of that failure. Does the driver have a cause of action for breach of an express warranty?

Clearly, the potential buyer has not entered into an agreement to purchase the car. Just as clearly, however, the car has failed to perform as represented and the potential buyer has been injured as a result of that failure. The court finds that representations made under these circumstances constitute express warranties. To reach a contrary conclusion would allow a seller to escape liability simply because the accident occurs before the purchase is consummated. In the same situation, the buyer would have a claim for breach of warranty if he had elected to forego a test drive or demonstration, bought the car, and suffered injury as he drove the car off the lot. It is illogical and unjust to penalize a potential buyer for exercising reasonable care in the selection of a vehicle.

This commonsense approach can be supported by a technical contract analysis. First, Section 28-2-313 does not require the existence of a sales agreement. That provision requires only that any affirmation of fact or promise made by the seller become "part of the basis of the bargain." Technically speaking, a bargain has been struck when the potential buyer agrees to test drive the vehicle. The consideration given by the seller to the potential purchaser is the various representations about the vehicle, including its ability to perform in a particular manner. The consideration given by the potential buyer is his agreement to test drive the vehicle and, implicitly therein, further consider the purchase of the vehicle. Thus, the seller's representations have become part of the basis of a bargain even though it is not the ultimate bargain for the sale of the vehicle.

Admittedly, this may be an overly technical analysis. However, in light of the fact that such an analysis is supported by logic, common sense and fairness, the court will adopt the analysis and hold that representations made by Hagglund, as well as Tracks and Dyna-Haul, to the BLM may constitute express warranties under the circumstances of this case.

Finally, Green, as an employee of the BLM, is entitled to the protection of any warranties extended to the BLM by Haggland, Tracks or Dyna-Haul. I reach this conclusion for two alternative reasons. First, Green can be considered the third-party beneficiary of any warranties extended to the BLM under Idaho Code § 28-2-318, and second, as an agent of the corporation, Green is the "person" to whom the warranties were extended.

(i) Third-party beneficiary under Idaho Code § 28-2-318.

Although it is not clear from the language and comments to Idaho Code § 28-2-318, to what extent that provision implicitly defines, to the exclusion of all others, those parties which may be third-party beneficiaries of an express warranty, Section 28-2-318 will be read broadly to include employees of a corporate purchaser who would be the intended beneficiaries of any express warranties.

Idaho Code § 28-2-318 provides as third-party beneficiaries of express or implied warranties only those persons in the family or household of the buyer or a guest in the buyer's home. Literally, this would exclude Green as a third-party beneficiary of any warranties made to the BLM. However, where the purchaser is a corporation and the damage is a personal injury, a literal interpretation of Section 28-2-318 would...