Kolarik v. Cory Intern. Corp.

• Decision Date: 08 September 2006
• Docket Number: No. 04-1647.,04-1647.
• Citation: 721 N.W.2d 159
• Parties: Douglas C. KOLARIK, Appellant, v. CORY INTERNATIONAL CORPORATION, Italica Imports, and Tee Pee Olives, Inc., Appellees.
• Court: Iowa Supreme Court

Page 159

721 N.W.2d 159

Douglas C. KOLARIK, Appellant, v. CORY INTERNATIONAL CORPORATION, Italica Imports, and Tee Pee Olives, Inc., Appellees.

No. 04-1647.

Supreme Court of Iowa.

September 8, 2006.

COPYRIGHT MATERIAL OMITTED

Steven E. Ballard and Patrick J. Ford of Leff Law Firm, L.L.P., Iowa City, for appellant.

David L. Hammer and Angela C. Simon of Hammer, Simon & Jensen, Dubuque, for appellees.

CARTER, Justice.

Plaintiff, Douglas C. Kolarik, appeals from an adverse summary judgment in his product-liability action against Cory International Corporation, Italica Imports and Tee Pee Olives, Inc., importers and wholesalers of olives imported from Spain.¹ Plaintiff, relying on theories of negligence, strict liability, and breach of express and implied warranty, sought to recover damages from defendants for the fracturing of a tooth when he bit down on an olive pit or pit fragment.

The district court granted summary judgment for defendants as to each of plaintiff's theories of recovery. After reviewing the record and considering the arguments presented, we affirm the district court's ruling with regard to plaintiff's theories of strict liability, and express and implied warranty, but conclude that, with respect to plaintiff's negligence claim based on an alleged failure to warn, there remains a genuine issue of material fact requiring denial of summary judgment on that theory of recovery.

Plaintiff has alleged that he opened a jar of pimento-stuffed, green olives, which had been imported and sold at wholesale by defendants. He alleges that he used several of these olives, which bore the label Italica Spanish Olives, in the preparation of a salad and, when eating the salad, bit down on an olive pit or pit fragment and fractured a tooth.

The motion papers reveal that defendants are importers and wholesalers of Spanish olives grown by various Spanish companies.² They obtain bulk shipments of pimento-stuffed, green olives shipped in 150-kilogram drums to their plant in Norfolk, Virginia. There, the drums are emptied and the olives are washed and placed in a brine solution in glass jars suitable for retail sale under various names including Italica Spanish Olives. When defendants receive the olives, they are inspected for general appearance, pH, and acid level. Defendants rely on their Spanish suppliers for quality control of the pitting and stuffing process. Other facts that are significant in reviewing the summary judgment ruling will be discussed in our consideration of the legal issues presented.

I. Standard of Review.

Summary judgment rulings are reviewed for correction of errors of law. Mason v. Vision Iowa Bd., 700 N.W.2d 349, 353 (Iowa 2005). Summary judgment is appropriate if there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Iowa R. Civ. P. 1.981(3). Further considerations when reviewing a motion for summary judgment are summarized as follows:

"A factual issue is material only if the dispute is over facts that might affect the outcome of the suit. The burden is on the party moving for summary judgment to prove the facts are undisputed. In ruling on a summary judgment motion, the court must look at the facts in a light most favorable to the party resisting the motion. The court must also consider on behalf of the nonmoving party every legitimate inference that can be reasonably deduced from the record."

Estate of Harris v. Papa John's Pizza, 679 N.W.2d 673, 677 (Iowa 2004) (quoting Phillips v. Covenant Clinic, 625 N.W.2d 714, 717-18 (Iowa 2001)).

II. Strict Liability and Breach of Implied Warranty.

In sustaining defendants' motion for summary judgment, the district court concluded that defendants were immune from plaintiff's strict liability claim and implied-warranty-of-merchantability claim by reason of Iowa Code section 613.18(1)(a) (2001). That statute provides:

1. A person who is not the assembler, designer, or manufacturer, and who wholesales, retails, distributes, or otherwise sells a product is:

a. Immune from any suit based upon strict liability in tort or breach of implied warranty of merchantability which arises solely from an alleged defect in the original design or manufacture of the product.

Iowa Code § 613.18(1)(a).

Plaintiff urges that section 613.18(1)(a) does not apply to his strict liability and breach-of-implied-warranty-of-merchantability claim. He contends that defendants were assemblers of the olives at issue here, thus removing them from the immunity provisions of the statute. The assembling occurs, he asserts, when defendants remove bulk olives from drums and repackage them in jars. We disagree that this repackaging process excludes defendants from the immunity granted by the statute.

We are convinced that the assemblers exclusion contained in section 613.18(1)(a) is aimed at those situations in which an assembling process has some causal connection to a dangerous condition in the product that gives rise to a strict-liability claim or a product condition that constitutes a breach of an implied warranty of merchantability. Because the repackaging of the olives by defendants did not contribute to the condition that underlies plaintiff's product-liability claim, defendants are afforded the immunity granted by the statute.

In the alternative, plaintiff argues that section 613.18(1)(a) does not apply because olives are not a "product" as that term is used in that statute. This argument is premised on his assertion that a product is something that has been produced by human action. He contends that no human action has produced the olives that defendants import and sell. In his written argument, plaintiff states this point as follows:

No producer can mix ingredients or connect component pieces in order to create an olive. The creation of an olive is a phenomenon of nature over which no human can exercise control or influence. Thus, olives are neither assembled, designed, nor manufactured.

To the contrary, we are reasonably certain that human effort does play a role in the growing and commercial distribution of olives. A standard legal dictionary defines "product" as follows:

Something that is distributed commercially for use or consumption and that is usually (1) tangible personal property (2) the result of fabrication or processing, and (3) an item that has passed through a chain of commercial distribution before ultimate use or consumption.

Black's Law Dictionary 1225 (7th ed.1999). We are satisfied that agricultural commodities may be products as that term is used in section 613.18(1)(a). That statute is aimed at situations giving rise to product liability actions and food products may produce such claims. See Restatement (Third) of Torts: Product Liability § 7 (1998) (one engaged in the business of selling or distributing food products is subject to liability for harm to persons caused by defective product). Consequently, the district court did not err in applying that statute to bar plaintiff's strict-liability and breach-of-implied-warranty-of-merchantability claims.

III. Express Warranty.

Plaintiff urges the words "minced pimento stuffed," contained on the label of the jar of olives, constituted an express warranty that the olives had been pitted. Iowa Code section 554.2313(1) provides that an express warranty is created by the following:

a. Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain . . . .

b. Any description of the goods which is made part of the basis of the bargain . . . .

Although both the express-warranty and implied-warranty provisions of the U.C.C. are drafted so as to determine the rights and obligations of the immediate parties to a sales transaction, the Code also provides:

A seller's warranty whether express or implied extends to any person who may reasonably be expected to use, consume or be affected by the goods and who is injured by breach of the warranty.

Iowa Code § 554.2318. Under the facts of the present case, plaintiff falls within this class of extended beneficiaries.³ Official comment 5 to accompanying U.C.C. section 2-607 (Iowa Code § 554.2607) states that remote buyers falling within this class of beneficiaries are not required to give the notice to seller that is otherwise required by section 554.2607(3)(a). This was the holding in McKnelly v. Sperry Corp., 642 F.2d 1101, 1107 (8th Cir.1981) (applying Iowa law).

The vice president of quality control for defendants testified in his deposition that olives must be pitted in order to be stuffed because the pitting process provides the cavity in which the pimento stuffing may be placed. This witness also testified that

[t]here's a reasonable expectation that most of the pits would be removed, and there's some expectation that it's not a perfect world, and some of the pits or fragments may not be removed. I think anytime you're dealing with natural products—see, this goes back to what we were talking about before. When the olives go into those machines, the machines do very well, but, you know, the olives have different shapes. And the reason they don't get pitted right all the time is because of the different shapes of the olives.

The witness asserted that, because large quantities of pitted and stuffed olives are received in bulk form, no practical method of inspection exists. This witness's statements concerning the inevitability of some pits or pit fragments being in the product was corroborated by plaintiff's own assertion that United States Department of Agriculture standards for pitted olives allow 1.3 pits or pit parts per one hundred olives.

Comment 7 of the official comments that accompany U.C.C. section 2-313, from which Iowa Code section 554.2313 is taken, states:

Of course, all descriptions by merchants must be read against the applicable trade usages with the general rules as to merchantability...