Khan v. Velsicol Chemical Corp.

• Decision Date: 25 April 1986
• Docket Number: No. 05-84-00711-CV,05-84-00711-CV
• Citation: Khan v. Velsicol Chemical Corp., 711 S.W.2d 310 (Tex. App. 1986)
• Parties: 1 UCC Rep.Serv.2d 1114 Amanullah KHAN, et al., Appellants, v. VELSICOL CHEMICAL CORPORATION, Appellee.
• Court: Texas Court of Appeals

Page 310

711 S.W.2d 310

1 UCC Rep.Serv.2d 1114

Amanullah KHAN, et al., Appellants, v. VELSICOL CHEMICAL CORPORATION, Appellee.

No. 05-84-00711-CV.

Court of Appeals of Texas Dallas.

April 25, 1986.

Rehearing Denied June 9, 1986.

Joe N. Boudreaux, Joe Smith, Baker, Foreman & Boudreaux, Dallas, for appellants.

Dennis Weitzel, Ronald D. Wren, Stradley, Schmidt, Stephens & Wright, Dallas, for appellee.

Before GUITTARD, C.J., and STEPHENS and STOREY ¹, JJ.

ON MOTION FOR REHEARING

STOREY, Justice.

In this product-liability case, summary judgment was rendered for the manufacturer. Amanullah Khan and members of his family sued Miss Phoebe's Pest Control, Inc. and Velsicol Chemical Corporation for personal injuries and property damage resulting from Miss Phoebe's application to their home of a termiticide manufactured and supplied by Velsicol. The Khans' suit against Velsicol alleges strict liability in tort, breach of an implied warranty under sections 2.314 and 2.315 of the Texas Business and Commerce Code, breach of common law warranty, and violations of the Texas Deceptive Trade Practices Act. Velsicol moved for summary judgment asserting that, upon undisputed facts, it was entitled to judgment as a matter of law because: (1) Miss Phoebe, who treated the Khans' home for termites, was a "learned intermediary" between Velsicol and Khan, (2) Miss Phoebe's misuse of the termiticide was the sole producing cause of the injury, (3) Miss Phoebe was the Khans' agent, and (4) the Khans did not as a matter of law rely on any representation made by Velsicol. The trial court granted summary judgment in favor of Velsicol and severed the Khans' claim against Miss Phoebe. We reverse and remand.

Facts

The material facts are undisputed. Velsicol manufactures and sells a termiticide known in the trade as Gold Crest C-100, an emulsifiable concentrate containing chlordane as its principal active ingredient. It is admittedly toxic--its purpose is to rid homes and other structures of termites and other insects. Therefore, it is inherently dangerous. Gold Crest C-100 is not unreasonably dangerous when properly put to its intended use. It is manufactured and sold by Velsicol in five-gallon containers to distributors who in turn sell to professional applicators such as Miss Phoebe for their use only. The label clearly instructs "FOR USE BY PROFESSIONAL PCO'S."

Miss Phoebe purchased the Gold Crest C-100 concentrate in a five-gallon container. In accordance with label instructions, one gallon of the concentrate was then mixed with 99 gallons of water to form a 1% solution. The solution was prepared at Miss Phoebe's offices in a one-hundred-gallon tank aboard a pick-up truck, then transported to the Khan home where it was applied directly from the tank by means of a low-pressure hose. The solution was prepared and applied by Miss Phoebe's service operator, John Long.

There is no claim that the particular lot or container of Gold Crest C-100 used in preparing the solution and in treating the Khans' home was defective. It was manufactured and marketed precisely as Velsicol intended. The "defect" making the product unreasonably dangerous, and thus giving rise to the Khans' action in strict liability, was Velsicol's alleged placing of the product into the stream of commerce without adequate warnings and instructions for its use. Specifically, the Khans complain that Velsicol failed to adequately warn or give instructions either to them or to Miss Phoebe concerning the very event that occurred at the Khan home: Miss Phoebe's service operator, Long, drilled a hole into the concrete slab foundation of the home, pierced an air-conditioning duct encased within the slab, and proceeded to induce an unknown quantity of Gold Crest C-100 into the duct.

Duty to Warn and Instruct

Velsicol contends that because its product was purchased and used only by professional applicators trained in its use, it owed no duty to warn or instruct the Khans concerning its safe use, but instead its duty to warn was limited to Miss Phoebe, who had full knowledge of the danger and was fully instructed. Velsicol would have us apply the "learned intermediary" doctrine to the circumstances of this case.

The rationale supporting the learned intermediary exception to the manufacturer's duty to warn the consumer in products liability cases is well stated in Reyes v. Wyeth Laboratories, 498 F.2d 1264, 1276 (5th Cir.1974):

Prescription drugs are likely to be complex medicines, esoteric in formula and varied in effect. As a medical expert, the prescribing physician can take into account the propensities of the drug, as well as susceptibilities of his patient. His is the task of weighing the benefits of any medication against its potential dangers. The choice he makes is an informed one, an individualized medical judgment bottomed on a knowledge of both patient and palliative.

The Texas Supreme Court has never explicitly approved the learned intermediary doctrine, although it has been approved by intermediate appellate courts in Texas. See, e.g., Cooper v. Bowser, 610 S.W.2d 825, 830-31 (Tex.Civ.App.--Tyler 1980, no writ); Bristol-Myers Co. v. Gonzales, 548 S.W.2d 416, 425 (Tex.Civ.App.--Corpus Christi 1977), rev'd on other grounds, 561 S.W.2d 801 (Tex.1978); Gravis v. Parke-Davis & Co., 502 S.W. 863, 870 (Tex.Civ.App.--Corpus Christi 1973, writ ref'd n.r.e.). This doctrine has consistently been limited in its application in Texas and elsewhere to the prescription drug, physician-patient relationship. For these reasons, we are unwilling to extend the exception to the circumstances of this case. Additionally, we cannot attribute to the termiticide applicator the ability to exercise the individualized judgment in weighing benefit against danger that we ascribe to the physician. This is true because, as we observe later in this opinion, the termiticide applicator gains a substantial part of his expertise in the field from his manufacturer or supplier rather than from independent sources.

Closely akin to the learned intermediary exception, as it relates to the duty to warn the ultimate consumer, is the rule applied in some jurisdictions to sellers of goods in bulk. Indeed, Velsicol interprets these authorities as applying the learned intermediary exception. However, the rationale supporting the bulk seller exception is different--it appears to be a question of feasibility and practicality. Shell Oil Co. v. Harrison, 425 So.2d 67, 70 (Fla.Dist.Ct.App.1982, pet. for rev. denied); Jones v. Hittle Service, Inc., 219 Kan. 627, 549 P.2d 1383, 1394 (1976); see also Alm v. Aluminum Co. of America, 687 S.W.2d 374, 382 (Tex.App.--Houston [14th Dist.] 1985, writ granted). These authorities, for example, seem to base their holdings on the proposition that the bulk seller has no means of identifying or communicating with the ultimate consumer. Hence, these authorities hold that the bulk seller has no duty to warn the ultimate consumer, but only to warn the distributor or retailer.

In Shell Oil Co., Shell, the manufacturer, sold its fungicide to Kerr-McGee in 30-gallon steel containers. Kerr-McGee then sold the product to its distributors, who sold it to retailers, who finally sold it to the consumer in one-gallon glass jars. Noting that warnings from Shell to the consumer were "unfeasible" and that Shell's warnings to Kerr-McGee were adequate, the Florida court remanded the case with instructions to direct a verdict in favor of Shell. 425 So.2d at 70.

Similarly in Jones, the Kansas Supreme Court held:

[A] manufacturer of [propane] gas who sells it to a distributor in bulk fulfills his duty to the ultimate consumer when he ascertains that the distributor to whom he sells is adequately trained, is familiar with the properties of the [product] and safe methods of handling it, and is capable of passing on his knowledge to his customers. A manufacturer so selling owes no duty to warn the ultimate consumer, and his failure to do so is not negligence and does not render the product defective.

549 P.2d at 1394. The authorities applying the bulk-seller exception place a greater burden upon the bulk seller, apparently recognizing that the bulk seller's intermediary is not learned in the sense that the physician is a learned intermediary. Consequently, the bulk seller is charged with the duty not only to warn, but also to "ascertain that the distributor to whom he sells is adequately trained" in use of the product. See Jones, 549 P.2d at 1394.

We agree with the reasoning of the cited cases with respect to Velsicol's duty to warn the Khans, as distinguished from a duty to warn Miss Phoebe and its employees. The alleged defect in this case was not the contents of the container but its label, which the Khans never saw and would never have seen in the ordinary course of use of the product by Miss Phoebe. Because Velsicol had no practicable method of warning the Khans or giving them instructions concerning the safe use of the product, the Khans' claim must rest on a duty to provide adequate warnings or instructions to Miss Phoebe. Velsicol cannot escape liability to the Khans if it failed to give adequate warnings or instructions to Miss Phoebe. See Darryl v. Ford Motor Co., 440 S.W.2d 630 (Tex.1969).

The adequacy of warnings and instructions was placed in issue by the Khans' pleadings. The Khans alleged that Velsicol was negligent and that it rendered its product unreasonably dangerous in failing to provide warnings and instructions against use of the product in homes with slab foundations and in failing to warn against drilling into slab foundations without first ascertaining the location of air-conditioning ducts.

The jurisdictions that apply the bulk-seller exception, holding that the bulk seller fulfills its duty to the consumer when it ascertains that the distributor is adequately trained, familiar with the properties and the safe methods of handling, and capable of passing on its...