Micjan v. Wal-Mart Stores, Inc.

• Decision Date: 04 August 2016
• Docket Number: Civil Action No. 14-855
• Parties: TRAVIS MICJAN and STEPHANIE MICJAN, Co-administrators of the Estate of DYLAN MICJAN, a deceased minor and in their own right, Plaintiffs, v. WAL-MART STORES, INC., GARAN, INC., and GARAN SERVICES CORP., Defendants, v. TRIBORO QUILT MANUFACTURING CORP., Third-Party Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

TRAVIS MICJAN and STEPHANIE MICJAN,Co-administrators of the Estate of DYLAN MICJAN,a deceased minor and in their own right, Plaintiffs, v. WAL-MART STORES, INC., GARAN, INC.,and GARAN SERVICES CORP., Defendants, v. TRIBORO QUILT MANUFACTURING CORP., Third-Party Defendant.

Civil Action No. 14-855

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

August 4, 2016

Magistrate Judge Mitchell

MEMORANDUM OPINION AND ORDER

Presently before the Court is a motion for summary judgment, filed by Defendants Garan, Inc., and its subsidiary, Garan Services Corp. (together, "Garan"). For the reasons that follow, the motion will be granted in part and denied in part.

Plaintiffs, Travis Micjan and Stefanie Micjan,¹ co-administrators of the estate of Dylan Micjan, a deceased minor and in their own right, bring this action alleging various Virginia state common law and statutory tort claims against Garan and Wal-Mart Stores, Inc. (Wal-Mart), arising out of the tragic death of their 3-month old son, Dylan Micjan, on March 25, 2012. Dylan died of asphyxia, which Plaintiffs contend resulted from Dylan rolling face first into a defective and dangerous crib bumper pad that was manufactured by Third-Party Defendant Triboro Quilt Manufacturing Corp. (Triboro), licensed by Garan and sold by Wal-Mart. Defendants impleaded Triboro as a Third-Party Defendant to this action, although Wal-Martsubsequently dismissed its Third-Party Complaint.

In the pending motion, Garan contends that Plaintiffs cannot maintain their remaining claims (for negligence, breach of express warranties, breach of implied warranties, fraud by concealment, negligent misrepresentation, wrongful death and violations of the Virginia Consumer Protection Act), primarily because it was neither the manufacturer nor the seller of the crib bumper pad, but rather only provided the license for Triboro to use its trademark on the product. For the reasons that follow, the motion will be granted with respect to the claims for breach of express warranties, fraud by concealment and the Virginia Consumer Protection Act, and denied with respect to the claims for negligence, breach of implied warranties, negligent misrepresentation, wrongful death and Plaintiffs' request for punitive damages.

Facts

Plaintiffs allege in their Complaint that Dylan "died of asphyxia after rolling [his] face into a crib bumper pad manufactured, distributed and sold by defendants." (Compl. ¶ 11.)² Plaintiffs indicate that Stefanie Micjan purchased the crib bumper pad at Wal-Mart's store located in Virginia in November 2011. (Compl. ¶ 33; Pls.' Resp. Wal-Mart Interrog. No. 3;³ S. Micjan Dep. 36:20-23, 37:1-2.⁴) Plaintiffs state they did not purchase the crib bumper pad based on any advertisement. (Pls.' Resp. Wal-Mart Interrog. No. 4; S. Micjan Dep 40:21-41:8; T. Micjan Dep. 64:17-65:4.⁵)

Plaintiffs state that Travis Micjan installed the crib bumper pad in Dylan's crib. (Pls.' Resp. Triboro Interrog. No. 7;⁶ T. Micjan Dep. 68:2-4.)

Plaintiffs note that the crib bumper pad at issue is labeled with the "GARANIMALS" logo - a registered trademark of Garan Services Corp. - in at least five (5) different places. (Pls.' App. Ex. 1.)⁷ Garan has admitted that "GARANIMALS" is a registered trademark of Garan Services Corp. (Compl. ¶ 12; Garan Answer ¶ 12.) Triboro entered into a Trademark Licensing Agreement with Garan Services Corp. for the registered trademark "GARANIMALS." (Triboro Resp. Pls.' Interrog. No. 4; White Dep. 167:20-168:11.)⁸

Triboro has indicated that it designed the crib bumper pad, and that non-party, Nantong Heritage Home Textile Co. Ltd., located in China, manufactured the crib bumper pad. (Triboro Resp. Pls.' Interrog. Nos. 5, 13, 19.) Triboro's Corporate Representative, Richard White, testified that Garan had no involvement in Triboro's manufacturing of the crib bumper pad. (White Dep. 169:12-16.)⁹ Similarly, Wal-Mart's Corporate Representative, Joseph Bussell, testified that Garan did not manufacture the crib bumper pad. (Bussell Dep. 55:14-22.)¹⁰

Wal-Mart states that any labels, warnings, brochures, manuals, and instructions would have been provided by Triboro. (Wal-Mart Resp. Pls.' Interrog. No. 10;¹¹ Bussell Dep. 132:3-133:7.)

Triboro states that it was the supplier of the crib bumper pad to Wal-Mart. (Triboro Resp. Pls.' Interrog. No. 6.)¹² Wal-Mart has a Supplier Agreement with Triboro. (Wal-Mart Resp. Pls.' Interrog. No. 7.) Wal-Mart states that it did not purchase, and was not otherwise provided, the crib bumper pad from Garan. (Id. No. 4.) Triboro states that it did not purchase, and was nototherwise provided, the crib bumper pad from Garan. (Triboro Resp. Pls.' Interrog. No. 4.) Wal-Mart states that it sold the crib bumper pad in its stores. (Wal-Mart Resp. Pls.' Interrog. No. 6.)

Garan engaged two (2) third-party testing companies to perform testing on the subject product line in accordance with Wal-Mart and Consumer Product Safety Commission (CPSC) standards, prior to the date of Dylan Micjan's death. (Garan Resp. Pls.' First Set of Interrogs. No. 3.)¹³ Plaintiffs have provided test results that Gran received from Consumer Testing Laboratories ("CTL") and Bureau Veritas ("BV"), and have noted that none of testing regarded breathability or suffocation risk of the product. (Garan Resp. Pls.' Interrog. No. 12.)¹⁴

Garan also required its licensees (including Triboro) to periodically test the subject crib bumper pad line. (ECF No. 107 Ex. 2, No. 13.) Plaintiffs note that Garan collected royalties of more than $240,000 in 2012 alone (the year Dylan Micjan died) from the sale of the subject line of crib bumper pads at Wal-Mart. Over the lifetime of the product, Garan has collected millions of dollars in earned royalty income therefrom. (ECF No. 107 Ex. 4.)

Robert Reda, Garan's corporate designee, testified, in pertinent part, as follows:

a. He "direct[s] all of the licensees for Garan" and has done so since 2008 (Reda Dep. 29).¹⁵

b. Wal-Mart recommended Triboro to Garan to be the manufacturer of the subject crib bumper pad line of products. (Id. at 34.)

c. He has a showroom for GARANIMALS products in Garan's offices in New York City. (Id. at 8, 36-37.)

d. The GARANIMALS brand is exclusive to Wal-Mart. (Id. at 39.)

e. He heard crib bumper pads create a suffocation risk to infants in 2011 or 2012. (Id. at 42.)f. Garan does their own safety testing of the subject bumper pad products independently of Wal-Mart and Triboro's testing "to ensure they are not putting anything out with their name on it that is not safe." (Id. at 51.)

g. He receives the test results from Lucretia Burton, a Garan employee from Mississippi. (Id. at 54.)

h. Garan wants "to have a say in what the product looks like on the floor at retail." (Id. at 58.)

i. He always had a relationship with Zoran Todorovic, the buyer of children's bedding at Wal-Mart. (Id. at 59.)

j. Garan has a showroom in Bentonville, Arkansas where Mr. Reda would meet with the buyer and each manufacturer (across the street from Wal-Mart's home office), and then determine, with Wal-Mart's representative, which manufacturer would be given the business. (Id. at 61-62, 125.)

k. When asked if Garan had a person in charge of product safety, Mr. Reda replied "[a]gain the name Lucretia Burton is involved in the testing of products." (Id. at 93.)

l. All of Garan's bedding items that are under the GARANIMALS brand would have a "GARANIMALS" label in the seam. (Id. at 101.)

m. He would meet with the Triboro creative team once or twice a year, which would include Donna Slaberhorn, the product designer, Darryl Farrell, the merchandiser, Richard White, the vice president of sales, and Joel Kaplan, the president and owner of Triboro. (Id. at 128.)

n. He also goes to Triboro's offices in White Plains, New York once or twice a year to review new designs and "do approvals." (Id. at 130.)¹⁶

Garan licensed the rights to sell the subject crib bumper pad with the "GARANIMALS" logo on it to Triboro by way of a Trademark License Agreement. (ECF No. 107 Ex. 7.)¹⁷ In section 2.3 of the Agreement, the parties agreed that the Licensee (Triboro) may not sell any "Licensed Merchandise" which is in any way defective without first removing or totallyobliterating all references to the GARANIMALS trademark. Section 3.1 of the Agreement requires that all merchandise and materials used must be "fit for their intended purpose," be at least equal to standards and specifications accepted by the licensor and be in accordance with applicable federal, state and local laws, rules, and regulations, including those of the CPSC. Section 3.1 also required that Triboro test each item and, upon request, provide the test results to Garan, while Garan also retained the right to test each item. Garan retained dozens of other rights related to the licensed product lines according to the Agreement.

Moreover, the Agreement requires that Triboro indemnify Garan and hold it harmless from any liability for which Garan may become liable "including, but not limited to, any action or claim relating to products liability . . ." Id. § 9.3A. Per the Agreement, Triboro was also required to procure and maintain a liability insurance policy "including products liability coverage with respect to the Licensed Merchandise . . .written for the benefit of [Garan], shall name Licensor and Garan as additional insureds . . ." Id. § 9.3B.

Procedural History

Plaintiff filed this action in the Court of Common Pleas of Allegheny County on May 30, 2014. The first nine claims were alleged on behalf of Dylan against Wal-Mart and then mirrored by claims ten through eighteen asserted against Garan, as follows: strict liability for failure to warn (Counts I, X), strict liability for defective design (Counts II, XI), strict liability for a manufacturing defect (Counts III, XII), negligence (Counts IV, XIII), breach of express warranty (Counts V, XIV), breach of implied warranty (Counts VI, XV), fraud by concealment (Counts VII, XVI),...