Slaid v. Evergreen Indem., Ltd.

• Decision Date: 27 October 1999
• Docket Number: No. 32,363-CA.,32,363-CA.
• Parties: Dora SLAID, et al., Plaintiffs-Appellants, v. EVERGREEN INDEMNITY, LTD., et al., Defendant-Appellee.
• Court: Court of Appeal of Louisiana — District of US

745 So.2d 793

Dora SLAID, et al., Plaintiffs-Appellants, v. EVERGREEN INDEMNITY, LTD., et al., Defendant-Appellee.

No. 32,363-CA.

Court of Appeal of Louisiana, Second Circuit.

October 27, 1999.

Maughan, Atkinson & Martin by Roy Maughan, Baton Rouge, Counsel for Plaintiffs-Appellants.

Mayer, Smith & Roberts by Caldwell Roberts, Shreveport, Counsel for Defendant-Appellee.

Before NORRIS, C.J., and BROWN and PEATROSS, JJ.

NORRIS, Chief Judge.

The plaintiffs, Dora Slaid, et al., appeal a summary judgment dismissing all claims against defendant, Commercial National Bank ("CNB") and its successor, Deposit Guaranty National Bank ("DGNB"). Finding that genuine issues of material fact remain unresolved, we reverse and remand.

Facts

Beginning in July, 1993, Dora Slaid leased a three bedroom mobile home owned by Tom and Leona Walker, living there with her husband, three daughters, and stepson. On December 17, 1993, a fire broke out under a Christmas tree in the living room. At the time of the fire, Slaid's three daughters, Tina Nichole Leone, age 13, Gina,¹ age 6, and Lacey, age 9 were apparently home alone.

To escape the fire, Lacey ran out the front door, suffering burns. Tina and Gina fled to the master bedroom at one end of the mobile home, where a telephone was located. Since the fire began in the middle of the home and the bedroom was on one end, they quickly became trapped. Slaid's stepson and other men who were outside when the fire broke out attempted to rescue the girls by trying to break the master bedroom's window. They were unsuccessful, however, because the window was made of solid plexiglass which was screwed into the trailer's frame. Although the men hit the window with solid objects, it did not yield. After about ten minutes of effort, one rescuer finally ripped off part of the trailer's siding, creating a hole from which the girls could be removed.

The fire destroyed the mobile home. Tina was killed in the fire and Gina suffered disfiguring third degree burns over a large portion of her body which required extensive surgeries. Lacey also suffered burns in the fire, but to a lesser degree.

The affidavits accompanying the bank's summary judgment motion and Slaid's objection to summary judgment, as well as the depositions of bank officers Charles Upchurch and Adalberto Cantu, document CNB's relationship to the home in question. Between 1988 and December, 1993, CNB acquired a number of mobile homes from defaulted loans; all of these were subsequently resold to consumers. CNB would send these homes to local mobile home dealers to make any necessary repairs to the home and then resell the home for the bank on a commission basis. Before selling mobile homes it acquired by legal repossession or voluntary surrender, it was CNB's practice to conduct a valuation estimate of the home. The dealer would also inspect the homes to determine whether it was financially feasible to repair the home, and if so, to present CNB with an estimate. CNB would either authorize the repair or instruct the dealer to sell the home "as is."

CNB acquired and resold the Slaid home on several occasions. In 1984, CNB first acquired ownership of the home when its initial owners defaulted on their loan. The home was then resold to Michael and Ramone McCartney on June 17, 1984. The record is unclear whether or to what extent repairs were made before selling the home to the McCartneys. CNB subsequently reacquired the home from the McCartneys by voluntarily surrender in June, 1993 pursuant to a debtor's Chapter 13 plan in the bankruptcy court.

When the home was once again in CNB's possession in 1993, bank officer Charles Upchurch conducted an inspection of it, taking several photographs. Three of these photographs are in the record, but none show the window in question. In his affidavit, Upchurch claims that he failed to notice anything unusual about the home, although he admits that he made no effort to determine what material was used to cover the windows. Determining that it would cost at least $3,000 to repair the home, Upchurch recommended that the bank forgo repairs and sell it "as is." The home was subsequently sold to Walker, "as is," on June 24, 1993. Walker, in his affidavit, states that he did not repair any of the home's windows before the Slaids moved in shortly after his purchase.

Slaid initially filed suit against the home's owners, Tom and Leona Walker, and their insurer, Evergreen Indemnity, Ltd. Her amended petition added General Electric Company as a defendant. By means of a second amended petition, plaintiff added CNB and its successor, DGNB. Plaintiff subsequently settled with all defendants but Deposit Guaranty National Bank.

In her second amended petition, Slaid sought recovery under the Louisiana Products Liability Act, La. R.S. 9:2800.52 et seq., claiming that because the bank either "reconditioned" the mobile home or "exercised control over the ... quality of the product," CNB should be regarded as a "manufacturer" under the Act. In the alternative, Slaid alleged that the bank, as a "non-manufacturing seller" of the home, was responsible for damages in tort because it failed to warn when it knew or should have known of the home's defective condition at the time of sale.

DGNB, as the successor to CNB, filed for summary judgment, claiming that since the bank was not in the business of manufacturing or selling mobile homes, and did not hold the home out as its product, then it could not be characterized as a "manufacturer" or "manufacturer/seller" under the Louisiana Products Liability Act. As a "non-manufacturing seller," DGNB claimed that as a matter of law it was not required to inspect a product prior to sale to determine the possibility of inherent vices or defects. Plaintiff countered the latter argument in a supplemental memorandum of law in opposition to summary judgment that argued that even if the bank had no affirmative duty to inspect, that once it assumed the duty to do so, its negligent performance of that inspection created liability.

On the basis of the parties' written submissions, affidavits, depositions, and arguments of counsel, the district court rendered summary judgment in the bank's favor, finding that DGNB was not liable for plaintiffs damages under the Louisiana Products Liability Act. Specifically, the court found the statutory definitions of "manufacturer" inapplicable to the bank. The court also rejected the plaintiff's tort claim finding that "[t]here is no evidence that CNB, or its employees, knew or should have known that plexiglass had been placed on the window. Without this knowledge, there can be no liability." This appeal followed.

Applicable Law

The legal principles regarding summary judgment are well settled. A motion for summary judgment is not to be used as a substitute for trial on the merits. Rapp v. City of New Orleans, 95-1638 (La. App.4th Cir. 9/18/96), 681 So.2d 433, 436-37, writ denied, 686 So.2d 868 (La.1/24/97). A motion for summary judgment is properly granted only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to a material fact, and that the, mover is entitled to judgment as a matter of law. La. C.C.P. art. 966; Mixon v. Progressive Specialty Co., 29,698 (La.App.2d Cir.06/18/97), 697 So.2d 662. If the court finds that a genuine issue of material fact indeed exists, summary judgment must be denied. Walker v. Kroop, 678 So.2d 580, 584 (La.App. 4th Cir.1996).

The burden is on the party seeking summary judgment to establish that there is an absence of factual support for one or more of the essential elements of the adverse party's claims. If the nonmoving party then fails to produce factual support sufficient to establish that it will be able to satisfy its evidentiary burden at trial, there is no genuine issue of material fact. La. C.C.P. art. 966; Berzas v. OXY USA, Inc., 29,835 (La.App.2d Cir.09/24/97), 699 So.2d 1149.

Further, La. C.C.P. art. 967 provides that when a motion for summary judgment is made and supported as provided above, the party opposing summary judgment cannot rest on the mere allegations or denials of his pleadings, but must present specific facts showing that material facts are still at issue. La. C.C.P. art. 967. Although the burden of proof remains the same under the recent amendment to La. C.C.P. art. 966, summary judgment procedure is now favored to secure the just, speedy, and inexpensive determination of all except certain disallowed actions. Acts 1996, 1st Ex.Sess., No. 9. We review summary judgments de novo under the same criteria that govern the district court's consideration of the appropriateness of summary judgment. Magnon v. Collins, 98-2822 (La.7/7/99), 739 So.2d 191; Smith v. Our Lady of the Lake Hospital, Inc., 93-2512 (La.7/5/94), 639 So.2d 730; Schroeder v. Board of Supervisors of Louisiana State University, 591 So.2d 342 (La.1991).

The Louisiana Products Liability Act establishes the exclusive theories of liability for manufacturers for damages caused by their products. A manufacturer of a product is liable for damages proximately caused by a "characteristic of the product that renders the product unreasonably dangerous when such damage arose from a reasonably anticipated use of the product by the claimant or another person or entity." La. R.S. 9:2800.54. "Manufacturer" is defined in the Act, in pertinent part:

(1) "Manufacturer" means a person or entity who is in the business of manufacturing a product for placement into trade or commerce. "Manufacturing a product" means producing, making, fabricating, constructing, designing, remanufacturing, reconditioning or refurbishing a product. "Manufacturer" also means:

(a) A person or entity who labels a product as his own or who otherwise holds himself out to be the manufacturer of the product.

(b) A seller of a product who exercises control over or...