U.S. Steel Corp. v. Fiberex, Inc.

• Decision Date: 16 May 1988
• Docket Number: No. 05-87-00109-CV,05-87-00109-CV
• Citation: 751 S.W.2d 628
• Parties: 6 UCC Rep.Serv.2d 1438, Prod.Liab.Rep. (CCH) P 11,900 U.S. STEEL CORPORATION, Appellant, v. FIBEREX, INC. and Plas-Tex, Inc., Appellees.
• Court: Texas Court of Appeals

Page 628

751 S.W.2d 628

6 UCC Rep.Serv.2d 1438, Prod.Liab.Rep. (CCH) P 11,900

U.S. STEEL CORPORATION, Appellant, v. FIBEREX, INC. and Plas-Tex, Inc., Appellees.

No. 05-87-00109-CV.

Court of Appeals of Texas,

Dallas.

May 16, 1988.

Rehearing Denied June 20, 1988.

Frank Finn, Judy Norris, Dallas, for appellant.

Roger D. Higgins, Larry Hallman (Fiberex), Joann N. Wilkins (Fiberex), Dallas, for appellees.

Before DEVANY, LAGARDE and THOMAS, JJ.

THOMAS, Justice.

Appellee, Fiberex, Inc., sued appellant U.S. Steel Corporation and appellee, Plas-Tex, Inc., alleging that polyester resin manufactured by U.S. Steel and sold by Plas-Tex caused delamination in certain swimming pools built by Fiberex. Plas-Tex asserted a cross-claim against U.S. Steel for contribution and indemnity. U.S. Steel, asserting twenty-four points of error, appeals an adverse jury verdict finding it liable for breach of implied warranty and for violation of the Deceptive Trade Practices Act (DTPA). Because we agree that the evidence did not support a finding: (1) that the resin manufactured by U.S. Steel was unfit for its ordinary purpose, and (2) that the unfit resin manufactured by U.S. Steel proximately caused delamination in the pools manufactured by Fiberex, the trial court's judgment is reversed and the cause remanded for a new trial. In addition to discussing the points of error which form the basis of the reversal, we will also address the points necessary to aid in the trial upon remand.

FACTUAL STATEMENT

Fiberex is a manufacturer of fiberglass swimming pools. During the years 1980 and 1981, Fiberex purchased certain polyester resins from Plas-Tex, a distributer. Most, but not all, of the resins purchased in those years were manufactured by U.S. Steel. Beginning in the latter part of 1980, delamination began appearing in some pools. By the spring of 1981, Fiberex realized that delamination had become a significant problem after approximately thirty-four pools delaminated. During 1981 and 1982, Fiberex endeavored to repair the pools which had delaminated.

The resin subject to this suit is designated as MR12214, a general purpose resin. U.S. Steel manufactures other resins, and the record shows that Fiberex used several different types of resins during the relevant period. Fiberex kept no records as to which types of resin were used in the manufacture of the delaminated pools.

STATUTORY BASIS FOR CAUSE OF ACTION

Fiberex brought its claim of breach of warranty under Sections 2.314 and 2.315 of the Texas Business and Commerce Code (UCC) and section 17.50(a)(2) of the DTPA. Section 17.50(a)(2) allows consumers to maintain an action when a breach of an implied warranty constitutes a producing cause of actual damages. Section 2.314 of the UCC requires that in order to prevail on a breach of implied warranty of merchantability, a plaintiff must establish that the product in question was not fit for the ordinary purposes for which it was used. TEX.BUS. & COMM.CODE ANN. § 2.314(b)(3) (UCC) (Vernon 1968).

ARGUMENTS BY U.S. STEEL

U.S. Steel argues that the judgment in favor of Fiberex was improper because Fiberex failed to prove that the resin in question had a defect per se, but rather only showed that the resin did not laminate. While the ordinary purpose of a resin is to bond materials, U.S. Steel argues that Fiberex must nonetheless prove that the resin had a "defect" rendering it unable to laminate. It is contended that Fiberex offered no evidence of a defect causing the resin to be unfit, other than the fact that the resin failed to bond.

Further, U.S. Steel points out that Fiberex did not complain that all MR12214 produced or manufactured by U.S. Steel was unfit; rather, Fiberex complained that certain unidentified batches of MR12214 used by Fiberex on certain unidentified pools was defective. Because Fiberex also admitted it had no batch records and could not testify as to which batches were allegedly unfit, U.S. Steel maintains that the product in question is unknown and that Fiberex did not meet its burden of proving that the particular resin used by Fiberex on the delaminated pools was unfit when it

left the possession of U.S. Steel. Further it is U.S. Steel's position that Fiberex's method of production, or the use of a wax-containing resin, recommended by Plas-Tex, caused the delamination.

ARGUMENTS BY FIBEREX

Fiberex maintains that all it was required to prove in order to recover for breach of implied warranty was that the product in question was not merchantable or fit for the purpose for which it was intended at the time of manufacture of the product. Fiberex contends that it established that MR12214 was a general purpose laminating resin which was represented to be appropriate for the building of large fiberglass parts such as swimming pools. Laminating resin is a general all purpose resin with its ordinary purpose being to bond materials together. Since the resin in question failed to bond, such failure renders the resin "defective". Thus, argues Fiberex, the evidence before the jury shows that the resin manufactured by U.S. Steel was not fit because it did not do what it was intended to do, and this is sufficient evidence to support the jury findings.

Fiberex further argues that there is direct and circumstantial evidence which shows that the resin was defective and deficient at the time it left U.S. Steel. The evidence revealed that Plas-Tex received the resin in sealed barrels which it then shipped without alteration. The batch records showed some batches of resins were out of specifications and contained rework or ODD lot ¹ material.

Moreover, the circumstantial evidence demonstrates that delamination occurred and that delamination should not occur unless the resin used is unfit or defective or the application technique was improper. Since, according to Fiberex, the evidence demonstrated that the application techniques used were proper, a logical inference is that the delamination occurred because of defective resin.

STANDARD OF REVIEW

In points of error one, two, and three, U.S. Steel asserts that there is legally and factually insufficient evidence to support the jury's finding that any resin manufactured by it was unfit for its ordinary purpose, or that such a finding by the jury was against the great weight and preponderance of the evidence. In points of error four, five and six, U.S. Steel again urges a three-fold argument against the sufficiency of the evidence to support a finding that any unfit resin manufactured by U.S. Steel proximately caused delamination in any Fiberex manufactured pool. A "no evidence" point presents a question of law. In deciding that question, we must consider only the evidence and the inferences tending to support the finding and disregard all evidence and inferences to the contrary. If a "no evidence" point is sustained and the proper procedural steps have been taken, the finding under attack may be disregarded entirely and judgment rendered for the appellant unless the interests of justice require another trial. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). In reviewing factual insufficiency contentions, we consider all of the evidence in the record that is relevant to the fact being challenged, including any evidence contrary to the judgment. Burnett v. Motyka, 610 S.W.2d 735, 736 (Tex.1980). We may not substitute our judgment for that of the jury where there is some evidence of probative value which is not so against the great weight and preponderance of the evidence as to be manifestly unjust. ² See Horvath

                v. Baylor University Medical Center, 704 S.W.2d 866, 870 (Tex.App.--Dallas 1985, no writ);   David McDavid Pontiac, Inc. v. Nix, 681 S.W.2d 831, 836 (Tex.App.--Dallas 1984, writ ref'd n.r.e.)  (overruled on other grounds)
                

FITNESS FOR ITS ORDINARY PURPOSE

The parties disagree on what establishes proof that the resin was unfit for ordinary purposes, and if unfit, whether such condition was the proximate cause of the delaminated pools. Thus, in our review we must examine the meaning of "unfit" as contemplated by Section 2.314 of the UCC.

Fiberex relies upon Bernard v. Dresser Industries, Inc., 691 S.W.2d 734, 738 (Tex.App.--Beaumont 1985, writ ref'd n.r.e.) to support its position that 1) it is not necessary to show a defect but only that the resin was unfit for its ordinary purposes, and 2) circumstantial evidence is adequate to show that the resin was defective at the time it left U.S. Steel's possession. Dresser was a breach of implied warranty case involving a plaintiff who suffered injuries while testing a length of pipe with a pressure gauge manufactured by the defendant. While it is true that Dresser holds that proof of a defect is not necessary in a breach of implied warranty cause of action, the opinion also states that circumstantial evidence is adequate to show a product to be defective. ³ The court concludes that, notwithstanding their holding, there was both direct and circumstantial evidence in the record to show the gauge to be defective and deficient. Dresser, 691 S.W.2d at 738.

In finding the evidence sufficient to support the jury's findings on breach of implied warranty of merchantability, the Dresser court described what was "direct, abundant evidence in the record which glaringly demonstrates that the gauge malfunctioned at the time the expansion joint exploded." Dresser, 691 S.W.2d at 738. There was no evidence of any other possible cause or explanation for the explosion and no evidence of mistreatment of the gauge. In fact, the evidence tended to show that the gauge was in the same condition as it was when it left the manufacturer's possession and was properly handled during use. Perhaps most significant is that the product in question, namely the pressure gauge, was readily identifiable in that it was the precise object alleged to be unfit. Fiberex does not provide us with a similar record.

The instant case presents a different set of...