Rocky Mountain Fire and Cas. Co. v. Biddulph Oldsmobile

• Decision Date: 14 January 1982
• Docket Number: No. 15332,15332
• Citation: 640 P.2d 851,131 Ariz. 289
• Parties: , 33 UCC Rep.Serv. 546 ROCKY MOUNTAIN FIRE AND CASUALTY CO., a Washington corporation, Appellant, v. BIDDULPH OLDSMOBILE, an Arizona corporation; Winnebago Industries, Inc., a foreign corporation; Chrysler Corporation, a foreign corporation, Appellees.
• Court: Arizona Supreme Court

Page 851

640 P.2d 851

131 Ariz. 289, 33 UCC Rep.Serv. 546

ROCKY MOUNTAIN FIRE AND CASUALTY CO., a Washington corporation, Appellant, v. BIDDULPH OLDSMOBILE, an Arizona corporation; Winnebago Industries, Inc., a foreign corporation; Chrysler Corporation, a foreign corporation, Appellees.

No. 15332.

Supreme Court of Arizona, In Division.

Jan. 14, 1982.

Rehearing Denied Feb. 17, 1982.

Udall, Shumway, Blackhurst, Allen, Bentley & Lyons, P. C. by Steven H. Everts, John H. Lyons, Mesa, for appellant

Black, Robertshaw, Frederick, Copple & Wright, P. C. by John N. Norris, Phoenix, for appellee, Biddulph Oldsmobile

Lawrence O. Anderson, John S. Schaper, Phoenix, for appellee, Winnebago Industries, Inc.

Renaud, Cook & Videan, P. A. by William R. Mettler, Jr., William W. Drury, Jr., Phoenix, for appellee, Chrysler Corp.

GORDON, Vice Chief Justice:

Seeking damages allegedly suffered from the destruction of a new motor home, the Bryants brought this action on the theories of strict liability, negligence, and breach of warranty.

In June, 1974 the Bryants purchased a new Winnebago motor home from Biddulph Oldsmobile, a dealer. The electrical system on the vehicle had been manufactured by Chrysler Corporation. Biddulph did repair work on the electrical system before the formal purchase and also when readying the motor home for delivery to the Bryants.

The motor home continued to experience electrical problems after delivery to the Bryants. On a trip to Indiana the home lost all power and came to a complete stop. While attempting to restart the engine, Bryant noticed sparks, burned wires, and melted connectors under the dashboard. The record indicates that Bryant returned the motor home to Biddulph approximately six times, and repairs were made on the electrical system.

In December, five and a half months after the motor home was purchased, Bryant and his six-year old son went fishing at San Carlos Lake. The motor home was parked one hundred feet from the water's edge. Because of the chill in the morning air, Bryant turned on the furnace in the home for the first time and returned to the shoreline to clean the morning's catch. Ten minutes later, Bryant noticed that the generator that operates the furnace had turned off. Suddenly the horn began blaring and the main engine of the Winnebago began to turn over. As he neared the home Bryant observed smoke billowing from the front end around the front tires. Before a fire extinguisher could be retrieved from the boat, the windows of the home blew out. Bryant hurriedly yanked open the door and aimed the extinguisher at the smoke filled interior. Realizing that his efforts were in vain, Bryant unhooked his boat trailer, and he and his son stood by as the Winnebago burned to the frame.

The Bryants brought suit against the dealer Biddulph and the manufacturer Winnebago on theories of strict liability, breach of warranty, and negligence. Winnebago filed a third party complaint against the manufacturer of the electrical system Chrysler Corporation. Prior to trial, Rocky Mountain Fire and Casualty Company, the insurer of the motor home, paid the Bryants in full for their damages and, therefore, was substituted as the plaintiff at the trial. The trial judge granted defendants/appellees' motions for directed verdicts at the close of the plaintiff/appellant's case and judgment was entered. Appellant Rocky Mountain filed a timely notice of appeal, and we accepted jurisdiction pursuant to Ariz.Const. Art. 6, § 5(3) and Rule 19(e), Arizona Rules of Civil Appellate Procedure, 17A A.R.S.

The issue in this case is if the trial court improperly granted appellees a directed verdict on the theories of strict liability, breach of warranty, and negligence.

After examining all the evidence this Court holds that the trial court erred in granting a directed verdict in favor of all appellees on strict liability in tort and appellee Biddulph on breach of warranty. We further hold the trial court did not err in granting a directed verdict in favor of all appellees on negligence and appellees Winnebago and Chrysler on breach of warranty.

A directed verdict may only be granted where there is no evidence introduced that "would justify a reasonable person returning a verdict for the opposing party." Matson v. Naifeh, 122 Ariz. 360, 362, 595 P.2d 38, 40 (1979); accord Smith v. Chapman, 115 Ariz. 211, 564 P.2d 900 (1977). A directed verdict admits the truth of all the evidence of the party opposing the motion "It is well settled that a motion for a directed verdict admits the truth of all competent evidence introduced by the party opposing the motion, including all reasonable inferences to be drawn therefrom. * * * If, considering all the facts and circumstances, there is a reasonable likelihood that reasonable men may reach different conclusions, the question of fact in issue is to be decided by the jury. (Citations omitted.)"

including all reasonable inferences that could be drawn from the evidence. Byrns v. Riddell, Inc., 113 Ariz. 264, 550 P.2d 1065 (1976).

Reader v. General Motors Corp., 107 Ariz. 149, 154, 483 P.2d 1388, 1393 (1971).

The appellate court must view all the evidence in the light most favorable to the party who opposed the motion. Jackson v. H. H. Robertson Co., Inc., 118 Ariz. 29, 574 P.2d 822 (1978); W. R. Skousen Contractor, Inc. v. Gray, 26 Ariz.App. 100, 546 P.2d 369 (1976).

STRICT LIABILITY

Our Legislature has embraced the concept of strict liability in tort. See A.R.S. § 12-681 to 686. This Court has approved the doctrine as found in § 402(A) of the Restatement (Second) of Torts (1965). Reader v. General Motors Corp., 107 Ariz. 149, 483 P.2d 1388 (1971); O. S. Stapley Co. v. Miller, 103 Ariz. 556, 447 P.2d 248 (1968). To establish a prima facie case of strict liability, the burden is upon the plaintiff to show the following: the product is defective and unreasonably dangerous; the defective condition existed at the time it left defendant's control; and the defective condition is the proximate cause of plaintiff's injuries or property loss. Amburgery v. Holan Division of Ohio Brass Co., 124 Ariz. 531, 606 P.2d 21 (1980); Reader, supra; Vineyard v. Empire Machinery Co., Inc., 119 Ariz. 502, 581 P.2d 1152 (App.1978). Strict liability theory does not rest on traditional concepts of fault; therefore, the plaintiff does not have to establish that the defendant was negligent. The theory extends liability to manufacturers, including manufacturers of component parts, W. Prosser, Law of Torts § 100, at 664 (4th ed. 1971), as well as the dealer or retail seller of the product. Sullivan v. Green Manufacturing Co., 118 Ariz. 181, 575 P.2d 811 (App.1978).

In the present case significant evidence was presented indicating that the motor home was defective. A new motor home with fewer than 10,000 miles should not burst into flames within six months of purchase. Several repair receipts issued by Biddulph, the retail seller, and entered into evidence show that the Chrysler electrical system required work prior and subsequent to the purchase of the motor home. The jury heard Bryant testify that he observed burned wires on his trip to Indiana. In addition, immediately prior to the fire, the main engine of the vehicle turned over and the horn blew.

Admittedly none of the evidence directly proves a defect, but the plaintiff is limited to circumstantial evidence because the motor home is not available for inspection.

"The plaintiffs must be permitted to rely upon circumstantial evidence alone. There will seldom be a case based upon strict liability where a person will be able to testify from his personal knowledge that a particular product was sold in a certain defective condition. A requirement of direct evidence would effectively deny the theory of recovery of which we approved in Stapley, supra."

Reader, 107 Ariz. at 154-55, 483 P.2d at 1393-94.

This Court concludes that reasonable people could have found that the product was sold in a defective condition.

Appellee Winnebago interposed a defense that strict liability theory is only available if personal injuries have been sustained. In this instance plaintiffs' only damages were due to the destruction of the chattel, the motor home. Restatement (Second) § 402(A) was originally intended to make a cause of action available to plaintiffs that would avoid the restraints of warranty theory. The language of § 402(A) indicates "(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property * * *." (Emphasis added.)

that it was also intended to cover property damages:

Arizona case law has restricted the doctrine of strict liability in that purely commercial losses are not recoverable. Beauchamp v. Wilson, 21 Ariz.App. 14, 515 P.2d 41 (1973).

Appellees mistakenly interpret Beauchamp as holding strict liability theory inapplicable if no personal injury has been sustained. In Beauchamp, the defects did not cause physical harm to persons or property. Beauchamp does not foreclose recovery for damages to property and is limited to cases where the plaintiff is claiming commercial losses only.

"With the extension of strict liability beyond food, and in particular to products likely to cause harm only to property * * * physical harm to property began to be included; and there is now general agreement that there may be recovery not only for damage to the defective chattel itself * * * but also to other property in the vicinity * * *."

Prosser, supra, § 101, at 666.

"There is no merit in defendants' argument that the (strict liability) rule applies only in cases resulting in personal injury. It is settled that the doctrine of strict liability applies to physical harm to person or property. (Seely v. White Motor Co., 63 Cal.2d 9, (45 Cal.Rptr. 17, 403 P.2d 145); Fentress...