Loughridge v. Goodyear Tire and Rubber Co.
| Decision Date | 13 March 2002 |
| Docket Number | No. CIV.98-B-345.,No. CIV.98-B-2118.,No. CIV.98-B-227.,No. CIV.98-B-488.,No. CIV.98-B-1884.,No. CIV.00-B-388.,No. CIV.98-B-1302.,CIV.98-B-1302.,CIV.98-B-1884.,CIV.98-B-2118.,CIV.98-B-227.,CIV.98-B-345.,CIV.98-B-488.,CIV.00-B-388. |
| Citation | 192 F.Supp.2d 1175 |
| Parties | Linda LOUGHRIDGE, William P. Loughridge, Jerry Hannah, Nancy Hannah, Donna L. Garth, Ronald Hochfield, and Marsha Hochfield, Balaju, L.L.C., a Colorado limited liability company, Dale V. Kesler, Judith A. Kesler, Rosemarie Glas, Christopher W. Congalton, Susan T. Congalton, Claire Beck, Dr. Calvin Daks and Carol Daks, Justine Parker, Howard G. Parker, Janet Sutterley, Randy Kilgore, Sue Taylor, Darrell Taylor, Janet G. Upton and Charles R. Upton, Robert B. Grossman, Gale K. Grossman, Mark A Lathrop, Susan K. Lathrop, Janice C. Meyer, Gary Q. Barnett and Julia Watson Barnett, Robert S. Julian and Corey Bender Mindlin, Addison L. Piper, Richard C. Raczuk, Claudette L. Raczuk, Thomas A. Hardilek, Sandra J. Hardilek, and Fuyu Farms, a Colorado general partnership, Plaintiffs, v. GOODYEAR TIRE AND RUBBER COMPANY, an Ohio corporation, and Chiles Power Supply Company, Inc., d/b/a Heatway Radiant Floors and Snowmelting, a Missouri corporation, Defendants. |
| Court | U.S. District Court — District of Colorado |
In this diversity action Plaintiffs bring suit in seven consolidated cases under Colorado state law against Defendants Good-year Tire and Rubber Company ("Good-year") and Chiles Power Supply d/b/a Heatway Radiant Floors and Snowmelting ("Heatway"). Goodyear and Heatway bring cross-claims against each other. Goodyear moves for summary judgment on all claims against it. The motion is adequately briefed and oral argument would not materially aid its resolution. For the following reasons, I grant Good-year's motion for summary judgment in part and deny it in part.
Heatway sells parts for hydronic radiant heating systems. These systems circulate warm fluid under indoor flooring as an alternative to conventional heating systems, or under driveways and sidewalks to melt snow and ice. Goodyear manufactured and sold a hose, the Entran II, used in Heatway's radiant systems. Colorado was a major market for these systems.
In 1992 Heatway began receiving complaints from homeowners about hardening of the Entran II hose and leaks in the installed systems. Believing that the Entran II hose was causing the leaks, Heatway stopped paying Goodyear for hose shipments. As a result, Goodyear sued Heatway in 1997 in the United States District Court for the District of Ohio (the "Ohio action"). Heatway filed a counter-claim alleging that the hose was defective. Goodyear had by this time manufactured 25,000,000 feet of hose. The Ohio Action went to trial on the issue of the merchantability of all 25,000,000 feet. The jury returned a verdict for Goodyear.
Following the loss against Goodyear, Heatway declared bankruptcy. A bankruptcy plan was approved on August 18, 2000. Heatway's insurers have received a channeling injunction limiting their liability to $2,900,000, paid into the bankruptcy estate. Claims must be made against those funds prior to August 2002. Because several Plaintiffs have been exempted from this provision of the bankruptcy plan, Heatway remains a party to the Colorado suits.
Between 1998 and 2000 a number of suits were filed in Colorado state and federal courts by homeowners against Goodyear, Heatway, or both. Seven of these cases are currently pending in this Court. These cases have all been assigned to me, and have been consolidated for discovery purposes. The suits allege breach of implied and express warranties, negligence, strict product liability, consumer protection claims and civil conspiracy.
The purpose of a summary judgment motion is to assess whether trial is necessary. See White v. York Int'l Corp., 45 F.3d 357, 360 (10th Cir.1995). Fed. R.Civ.P. 56(c) provides that summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, admissions, or affidavits show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. A party seeking summary judgment bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the pleadings, depositions, interrogatories, and admissions on file together with affidavits, if any, that it believes demonstrate the absence of genuine issues for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Mares v. ConAgra Poultry Co., Inc., 971 F.2d 492, 494 (10th Cir.1992). Once a properly supported summary judgment motion is made, the opposing party may not rest on the allegations contained in the complaint, but must respond with specific facts showing the existence of a genuine factual issue to be tried. See Fed.R.Civ.P. 56(e); Otteson v. United States, 622 F.2d 516, 519 (10th Cir.1980). These facts may be shown "by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere pleadings themselves." Celotex, 477 U.S. at 324, 106 S.Ct. 2548.
Goodyear moves for summary judgment on Plaintiffs' claims and Heatway's cross-claims. I consider each in turn.
All seven Complaints bring claims for breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose, negligence, manufacturing defect, design defect, violation of the Colorado Consumer Protection Act, and civil conspiracy. The Piper, Balaju, and Grossman Complaints bring additional claims for failure to warn and fraudulent concealment. Goodyear moves to dismiss Plaintiffs' contract claims, tort claims, Colorado Consumer Protection Act claims, and civil conspiracy claims. I consider each in turn.
All Plaintiffs bring claims for breach of express warranty, breach of implied warranty of merchantability, and breach of implied warranty of fitness for a particular purpose against Goodyear. Each of these claims is based on the Colorado Uniform Commercial Code (UCC). Goodyear first moves to dismiss the UCC claims on the ground that they are barred by the applicable statute of limitations.
Under the Colorado UCC, a claim for breach of warranty must be brought within three years. See Colo.Rev. Stat. § 4-2-725; 13-80-101. Section 4-2-725 provides:
A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made; except, that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance, the cause of action accrues when the breach is or should have been discovered.
Id. at § 725(2). "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 creates an express warranty that the goods shall conform to the affirmation or promise." Colo. Rev.Stat. § 4-2-313(1)(a). "The question of the existence of a warranty and whether that warranty was breached is ordinarily one for the trier of fact." Stroh v. Am. Recreation & Mobile Home Corp. of Colo., 35 Colo.App. 196, 530 P.2d 989, 993 (1975); Colo.Rev.Stat. § 4-2-313 cmt. 3. Where a buyer alleges the existence of oral warranties prior to execution of the written contract, as well as conduct following the sale such as a commitment to pay for certain repairs which tend to show that warranties were in fact made, there is a material issue of fact for resolution. See O'Neil v. Int'l Harvester Co., 40 Colo.App. 369, 575 P.2d 862, 865 (1978).
The parties agree that the three year statute of limitations applies, but disagree as to the accrual date. Goodyear argues that the breach, if any, occurred at delivery. Because the radiant systems were all installed three years or more prior to the filing of the suits, Goodyear argues that the claims must be dismissed. I disagree. Here, Plaintiffs have provided sufficient evidence of specific oral promises made by Goodyear regarding the longevity of the Entran II hose which could be construed as explicit warranties of future performance. See Plaintiff's Exhibits 2; 3 at 62-63, 69; 20 at 2767. They also produce evidence that these promises became part of the basis of the bargain, and that Heatway would not have chosen Goodyear as a manufacturer without them. See Plaintiffs' Exhibit 21 at 88-89. Thus, factual issues exist and it is inappropriate to grant summary judgment.
Goodyear next argues that all claims based on the UCC should be dismissed because the transaction did not involve a sale of goods but rather a fixture of real property. Article 2 of the UCC applies only to sales of goods. See Colo.Rev.Stat. § 4-2-102(1).
`Goods' means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale ... `Goods' also includes ... other identified things attached to realty as described in the section on goods to be severed from realty (section 4-2-107).
Colo.Rev.Stat. § 4-2-105(1). The terms of section 4-2-107 do not apply here.
Goodyear argues that because the Entran II was used in the construction of radiant systems which were then covered by flooring or cement, the hose became a fixture of real property and not a good for purposes of the UCC. I disagree. The Plaintiffs have made clear that they are suing as third-party beneficiaries to the contract between Goodyear and Heatway for sale of the hose. See Plaintiffs' Opposition at 20. Thus, the Entran II was an existing and identifiable thing which was movable at the time of identification to the contract for sale, making it a "good" for purposes of the UCC. See Colo.Rev.Stat. § 4-2-105(1)-(2). Further, the Colorado Courts have held that separate units...
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