Keck v. Dryvit Systems, Inc.

• Citation: 830 So.2d 1
• Parties: Doug KECK and Theresa Keck v. DRYVIT SYSTEMS, INC., et al.
• Decision Date: 18 January 2002
• Court: Alabama Supreme Court

830 So.2d 1

Doug KECK and Theresa Keck v. DRYVIT SYSTEMS, INC., et al.

1001175.

Supreme Court of Alabama.

January 18, 2002.

Rehearing Denied April 12, 2002.

Brent L. Crumpton, Birmingham, for appellants.

T. Michael Brown, Matthew H. Lembke, and Jeffrey M. Anderson of Bradley, Arant, Rose & White, L.L.P., Birmingham, for appellee Dryvit Systems, Inc.

William Anthony Davis III and Blake D. Andrews of Starnes & Atchison, L.L.P., Birmingham, for appellee Apache Products Company.

John W. Clark, Jr., and Bradley J. Smith of Clark & Scott, P.C., Birmingham, for appellee Dillard Plastering Company.

E. Britton Monroe of Lloyd, Gray & Whitehead, P.C., Birmingham, for appellee Michael N. King & Associates.

Eric D. Hoaglund and Martha R. Cook of McCallum Law Firm, L.L.C., Vestavia Hills, for amicus curiae K2, Inc.

James Jerry Wood, general counsel, Home Builders Association of Alabama, Inc., Montgomery, for amicus curiae Home Builders Association of Alabama, Inc.

LYONS, Justice.

I. Facts And Procedural History

Doug Keck and Theresa Keck appeal from a summary judgment in favor of three defendants: Dryvit Systems, Inc.; Apache Products Company; and Dillard Plastering Company (hereinafter referred to collectively as the "Dryvit defendants"). The Kecks had sought to recover for damage allegedly caused by the application of an exterior insulation finishing system ("EIFS") to the Kecks' home. The EIFS was manufactured by Dryvit, distributed by Apache, and installed by Dillard. (The Kecks also allege that Dillard was a seller of EIFS.) The Kecks are the second owners of the residence they allege was damaged by the EIFS. The EIFS was applied to the structure of the house when it was built in 1994; the Kecks purchased the house in 1996 from the original owner.

The EIFS is a multilayered exterior wall system consisting of Styrofoam insulation board glued to the exterior wooden substrate previously affixed during construction of the house, a base coat into which is embedded mesh, and a finish coat designed to look like stucco. The EIFS is not completely waterproof, and water cannot drain out of the system if it, in fact, penetrates the system. The EIFS is dependent upon sealants to protect a house to which the EIFS has been applied from water intrusion. According to the Kecks, their home sustained damage because of the failure of the EIFS to prevent water intrusion behind the system.

The Kecks filed a complaint against the Dryvit defendants on November 23, 1999, alleging breach of express and implied warranties, negligent design, negligent supervision, negligent installation, negligent failure to warn, breach of contract, fraud, suppression, and violations of the Alabama Extended Manufacturer's Liability Doctrine ("AEMLD"). The Kecks presented evidence in the form of interoffice memoranda and articles published in trade magazines suggesting that Dryvit Systems, Inc., had actual knowledge that the design of the EIFS was defective, that the addition of a drainage system to the EIFS was technologically feasible, and that the EIFS was being routinely and systematically misapplied by trained applicators, including Dillard. In support of their suppression claims, the Kecks presented affidavits to the trial court in which they state that they were not aware of the problems with the EIFS application and drainage when they purchased their home. According to the Kecks, had they been aware of these facts they would not have purchased a house clad with an EIFS.

In addition to damage to their house, the Kecks also claim that they suffered mental anguish and emotional distress as a result of the Dryvit defendants' conduct. Doug Keck submitted an affidavit to the trial court in which he states that he and his wife worried that their house was having significant problems caused by the failure of the EIFS. Keck's affidavit stated that, as a result of the problems with his house, he suffered from ongoing stress, anxiety, sleeplessness, and an inability to focus mentally. In addition, Keck stated that he felt a constant sense of worry and apprehension about his house and possible future problems with the safety and stability of the structure.

The trial court entered a summary judgment in favor of the Dryvit defendants, holding 1) that the doctrine of caveat emptor barred the Kecks' claims for damages based upon breach of the implied warranty pursuant to this Court's decision in Boackle v. Bedwell Constr. Co., 770 So.2d 1076 (Ala.2000), 2) that the EIFS is not a "product" for purposes of the AEMLD because once applied it becomes the exterior wall of the building, 3) that the Dryvit defendants owed no duty of disclosure to the Kecks and that there was no evidence indicating that the Dryvit defendants had made any representations directly to the Kecks, and 4) that the Kecks' negligence claims were barred because, the trial court held, the Kecks failed to present substantial evidence of personal injury necessary to avoid the application of the doctrine of caveat emptor. This appeal followed.

II. Standard of Review

The standard by which this Court will review a motion for a summary judgment is well established. To grant a motion for a summary judgment the trial court must determine that there is no genuine issue of material fact and that the movant is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. See Bass v. SouthTrust Bank, 538 So.2d 794 (Ala. 1989). When the movant makes a prima facie showing that those two conditions are satisfied, the burden shifts to the nonmovant to present "substantial evidence" creating a genuine issue of material fact. Id. at 798. Evidence is "substantial" if it is of "such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assur. Co. of Florida, 547 So.2d 870, 871 (Ala.1989). In our review of a summary judgment, we apply the same standard the trial court applied. Our review is subject to the caveat that we must review the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Ex parte Lumpkin, 702 So.2d 462, 465 (Ala. 1997).

III. AEMLD Claim

The Kecks first contend that the trial court erred in holding that the EIFS is not a "product" for purposes of the AEMLD. According to the Kecks, the trial court should not have relied on this Court's decision in Wells v. Clowers Construction Co., 476 So.2d 105 (Ala.1985), in determining that the EIFS is not a product. The Kecks argue that Wells has been modified by more recent caselaw explaining that an object does not cease to become a product merely because it is attached to real property. See Bell v. T.R. Miller Mill Co., 768 So.2d 953 (Ala.2000). Citing a number of recent cases, the Kecks argue that this Court has repeatedly held that "products" remain "products" despite being affixed to real property. See Carrell v. Masonite Corp., 775 So.2d 121 (Ala.2000); Dillard v. Pittway Corp., 719 So.2d 188 (Ala.1998); Beam v. Tramco, Inc., 655 So.2d 979 (Ala. 1995); Carruth v. Pittway Corp., 643 So.2d 1340 (Ala.1994); and Sears, Roebuck & Co. v. Harris, 630 So.2d 1018 (Ala.1993). According to the Kecks, just as defective fiberboard siding, roof shingles, light switches, or smoke detectors are affixed or incorporated into a house and do not lose their character as "products," a defective siding product such as the EIFS does not lose its character as a "product" merely because it is attached to a house.

The Dryvit defendants argue that the EIFS cannot constitute a product under the AEMLD. According to the Dryvit defendants, this Court made clear in Wells that attachments or improvements to realty that become as much a part of a house as the four walls cannot be considered a product under the AEMLD. 476 So.2d at 106. Because the EIFS is a multilayer exterior wall system that actually constitutes the four walls of the Kecks' home, the Dryvit defendants argue that the EIFS cannot be considered a product for purposes of the AEMLD.

The AEMLD is a judicially created accommodation of Alabama law to the doctrine of strict liability for damage or injuries caused by allegedly defective products. See Casrell v. Altec Indus., Inc., 335 So.2d 128 (Ala.1976). Our caselaw has not heretofore clearly set forth factors to be considered in determining whether an object constitutes a "product" for purposes of the AEMLD. Contrary to the Kecks' argument that this Court has held that a number of items, including a gas water heater, Masonite siding, a smoke detector, a sliding glass door, a conveyor belt, a cylindrical rotary soybean conditioner, and a diving board are products under the AEMLD, this Court has only examined the issue of what constitutes a product under the AEMLD twice, in Wells v. Clowers Construction Co., supra, and Bell v. T.R. Miller Mill Co., supra.

In Wells, the purchaser of a house sued the builder of the house under the AEMLD, alleging that a fireplace in the house had been negligently constructed. 476 So.2d at 106. This Court held that the plaintiff's claim was barred, as a matter of law, because the fireplace did not constitute a product for purposes of the AEMLD. According to the Court, "[o]nce affixed to a house, a fireplace becomes as much a part of that house as the four walls, and a house cannot be classified as a `product' for purposes of the AEMLD." 476 So.2d at 106. Wells provided little guidance regarding what factors are to be taken into account in determining what attachments or improvements to realty actually become "as much a part of [a] house as the four walls."

In Bell v. T.R. Miller Mill Co., 768 So.2d at 956, this Court again dealt with the question of when an item constitutes a "product" for purposes of the AEMLD. In Bell the plaintiff filed a wrongful-death action against the manufacturers of a telephone pole, based upon the AEMLD. Id. at 954. The...