Lloyd Wood Coal Co. v. Clark Equipment Co.
Decision Date | 07 April 1989 |
Citation | 543 So.2d 671 |
Parties | 9 UCC Rep.Serv.2d 899, Prod.Liab.Rep. (CCH) P 12,173 LLOYD WOOD COAL COMPANY and Aetna Insurance Company v. CLARK EQUIPMENT COMPANY, et al. 86-1282. |
Court | Alabama Supreme Court |
Stanley A. Cash of Huie, Fernambucq & Stewart, Birmingham, for appellants.
Charles L. Robinson, James C. Barton, Jr. and Hollinger F. Barnard of Johnston, Barton, Proctor, Swedlaw & Naff, Birmingham, for appellees.
This is an appeal from a summary judgment in favor of the defendants, Clark Equipment Company and Aetna Insurance Company (hereinafter collectively referred to as "Clark Equipment Company").
On February 16, 1976, the plaintiff, Lloyd Wood Coal Company ("Wood"), leased a Model 475B Michigan front-end loader from Simmons Machinery Company. The front-end loader was manufactured by Clark Equipment Company and, pursuant to the lease agreement with Simmons, Wood was required to take out fire insurance on the machinery. Aetna Insurance Company, the other plaintiff in this case, issued the insurance policy to Wood.
A few months after Wood leased the equipment, the right hydraulic pump hose had to be replaced. An employee of Simmons Machinery Company replaced the hose; however, the replacement hose was approximately 23 inches longer than the original hose. This hose ruptured in June 1976, causing a fire that resulted in substantial damage to the machinery. No one was injured and no other property was damaged. Aetna, pursuant to the insurance policy, issued a check to Simmons Machinery in the amount of $253,477.56.
This is a claim solely for damage to the product itself, the front-end loader, which was for commercial use, as opposed to consumer use. As stated above, there is no claim for personal injury or for damage to any property other than the front-end loader itself.
The plaintiffs claim that the equipment was negligently designed and they argue that a cause of action arises in tort (under theories of negligence, wantonness, strict liability, or the Alabama Extended Manufacturer's Liability Doctrine (AEMLD)) when a commercial product malfunctions or is defective and the malfunction or defect results in damage only to the product itself. We disagree, and we affirm the judgment of the trial court.
While there is no case law directly on point in this state, we are persuaded by the rationale expressed in the admiralty case of East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986). In East River, the United States Supreme Court considered the very issue before us today: "... whether injury to a product itself is the kind of harm that should be protected by products liability or left entirely to the law of contracts." East River, supra, 476 U.S. at 859, 106 S.Ct. at 2296. That Court recognized that different states have resolved this issue differently and, in his opinion, Justice Blackmun set forth an explanation of the three approaches as follows:
Id., 476 U.S. at 868-70, 106 S.Ct. at 2300-02.
The Supreme Court adopted the majority approach, thereby rejecting the minority approach, which it felt would result in unrealistic damages and too much overlap between the law of contract and products liability, id., 476 U.S. at 870, 106 S.Ct. at 2302, as well as the intermediate approaches, which "are too indeterminate to enable manufacturers easily to structure their business behavior." Id.
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