Weyerhaeuser Co. v. Thermogas Co.

• Decision Date: 20 December 2000
• Docket Number: No. 98-2222.,98-2222.
• Citation: 620 N.W.2d 819
• Parties: WEYERHAEUSER COMPANY, Appellant, v. THERMOGAS COMPANY, Appellee, Blackhawk Automatic Sprinklers, Inc. and Clark Equipment Company, Defendants.
• Court: Iowa Supreme Court

620 N.W.2d 819

WEYERHAEUSER COMPANY, Appellant, v. THERMOGAS COMPANY, Appellee, Blackhawk Automatic Sprinklers, Inc. and Clark Equipment Company, Defendants.

No. 98-2222.

Supreme Court of Iowa.

December 20, 2000.

Rehearing Denied January 29, 2001.

Thomas B. Caswell and John C. Goodnow of Zelle, Hofmann, Voelbel & Gette, L.L.P., Minneapolis, MN, and Diane Kutzko and Steven J. Pace of Shuttleworth & Ingersoll, P.C., Cedar Rapids, for appellant.

Joseph M. Barron of Peddicord, Wharton, Thune & Spencer, P.C., Des Moines, Leonard J. Johnson, John G. Hansen, and Brian A. Mark of the Johnson Law Group, L.L.C., Kansas City, MO, and Donald L. Eells of Eells & Sovern Law Office, P.L.C., Cedar Rapids, for appellee.

Considered en banc.

LAVORATO, Chief Justice.

A jury found against Weyerhaeuser Company in its action against Thermogas Company for damages to Weyerhaeuser's facility stemming from a liquid propane tank explosion. Weyerhaeuser appeals following the district court's denial of its motion for a new trial, raising three principal issues: (1) whether the district court erred in directing a verdict for Thermogas on Weyerhaeuser's claims for strict liability and breach of implied warranty of merchantability, (2) whether the district court erred in refusing to give an instruction that Weyerhaeuser's fault in starting the fire that precipitated the explosion of the liquid propane tank should not be considered, and (3) whether the district court erred in refusing to give the jury a res ipsa loquitur instruction on Weyerhaeuser's negligence claim. We reverse and remand for a new trial.

I. Background Facts and Proceedings.

Weyerhaeuser owns and operates a corrugated container manufacturing plant in Waterloo, Iowa. Corrugated containers are simply cardboard boxes.

During the evening of February 27, 1995, and into the early morning hours of February 28, Larry Henriksen was training Tom Chorny to operate a clamp truck. A clamp truck is a forklift with a pincher-like attachment used to move rolls of paper stock throughout the facility. The truck's fuel source is a liquid propane (LP) fuel tank mounted on the back of the truck. Thermogas Company supplied Weyerhaeuser with fifteen LP tanks each day, its daily LP tank needs. Each day a Thermogas driver would take the empty tanks from the Weyerhaeuser facility and replace them with filled tanks.

Henriksen told Chorny to drive around the roll paper storeroom to familiarize himself with the clamp truck operation. While Chorny was doing this, Henriksen stepped into a nearby room to check on a batch of starch. Starch is used as an adhesive in the construction of the cardboard boxes. A short time later, Chorny interrupted Henriksen to tell him the clamp truck was out of fuel.

After Henriksen and Chorny replaced the empty LP tank on the clamp truck with a full one, Henriksen returned to the starch room and Chorny resumed driving the truck. Chorny was unaware that he was driving the truck with the parking brake engaged. A short time later, Chorny noticed the clamp truck was "smelling funny . . . like it was overheating." As he was getting out of the truck, Chorny noticed a thin wisp of white smoke coming from the engine area located under the driver's seat.

Chorny left to tell Henriksen what was happening. As they were returning to the truck, the two saw flames coming out from the underside of the truck. At this time, the flames were not impinging on the LP tank on the truck. Soon the flames increased in size and height, reaching about eight inches beneath the seat and tank area.

Deciding not to fight the fire, Henriksen and Chorny started to exit the building. Within approximately forty-five seconds, the LP tank exploded, igniting rolls of paper and corrugated boxes in the building. Before they left, another employee, Garry Ihnen, pulled the wall-mounted fire alarm.

Approximately three minutes after Ihnen pulled the fire alarm, fire fighters arrived on the scene. The fire destroyed roughly half of the Weyerhaeuser plant as well as most of its paper stock. Weyerhaeuser sustained approximately $5.8 million in property damage, destruction of inventory, and related costs. Fortunately, no one was injured.

Later, Weyerhaeuser sued Thermogas, Blackhawk Automatic Sprinklers, Inc. (the installer of the manufacturing plant's sprinkler system), and Clark Equipment Company (the clamp truck manufacturer). Weyerhaeuser's claim against Thermogas and Blackhawk included negligence, strict liability, breach of contract, and breach of express and implied warranties. Weyerhaeuser alleged only negligence against Clark.

Weyerhaeuser alleged that the LP fuel tank exploded prematurely during the fire and that the sprinkler system failed to operate properly to extinguish the fire. Weyerhaeuser alleged that Clark negligently designed, fabricated, and tested the clamp truck.

A jury returned a verdict finding Weyerhaeuser seventy percent at fault, Blackhawk five percent at fault, and Thermogas twenty percent at fault. Weyerhaeuser moved for a new trial. Among other things, Weyerhaeuser claimed that the district court erred in (1) directing a verdict for Thermogas on Weyerhaeuser's claims of strict liability and breach of implied warranty of merchantability, (2) refusing to instruct the jury that the cause of the fire was legally irrelevant with respect to the negligence of Weyerhaeuser, and (3) refusing to give the jury a res ipsa loquitur instruction on Weyerhaeuser's negligence claim against Thermogas.

The district court overruled the motion, and Weyerhaeuser appealed. Weyerhaeuser has settled with Blackhawk and Clark, so those defendants are not involved in this appeal.

On appeal, Weyerhaeuser reasserts the issues raised in its motion for new trial.

II. Scope of Review.

How we review a denial of a motion for new trial depends upon the grounds for new trial asserted in the motion and ruled upon by the district court. Ladeburg v. Ray, 508 N.W.2d 694, 696 (Iowa 1993). When the motion and the ruling are based on discretionary grounds, we review the district court's ruling for an abuse of discretion. Id. When, however, the motion and the ruling are based on a claim that the district court erred on issues of law, our review stands or falls on the correctness of its ruling on the legal question. Id. All of the issues Weyerhaeuser raised in its motion for new trial and raises here involve the correctness of the district court's ruling on legal questions.

Our review of rulings on motions for directed verdict is for correction of errors at law. Iowa R.App.P. 4; James v. Burlington N., Inc., 587 N.W.2d 462, 464 (Iowa 1998). We review the evidence in the light most favorable to the party against whom the motion is made. James, 587 N.W.2d at 464. In our review we determine whether sufficient evidence existed to submit the issues to the jury. Id.

We review refusals to give jury instructions for correction of errors at law. Iowa R.App.P. 4; Duncan v. City of Cedar Rapids, 560 N.W.2d 320, 325 (Iowa 1997). The district court must give a requested jury instruction if the instruction (1) correctly states the law, (2) has application to the case, and (3) is not stated elsewhere in the instructions. Beyer v. Todd, 601 N.W.2d 35, 38 (Iowa 1999). "Parties are entitled to have their legal theories submitted to the jury if they are supported by the pleadings and substantial evidence in the record." Id. When we weigh the sufficiency of the evidence to support a requested instruction, we review the evidence in the light most favorable to the party seeking the instruction. Duncan, 560 N.W.2d at 325. A district court's failure to give a requested instruction does not require a reversal unless the failure results in prejudice to the party requesting the instruction. Beyer, 601 N.W.2d at 38.

III. Strict Liability and Breach of Implied Warranty of Merchantability.

A. Iowa Code section 613.18(1)(a) (1993). The district court sustained Thermogas' motion for directed verdict on these two claims based on Thermogas' contention that Iowa Code section 613.18(1)(a) immunized it from liability. Section 613.18(1) provides:

A person who is not an assembler, designer, or manufacturer and who wholesales, retails, distributes or otherwise sells a product is:

a. Immune from suit based upon strict liability or breach of implied warranty of merchantability which arises solely from an alleged defect in the original design or manufacture of the product.

Iowa Code § 613.18(1).

The district court found that Thermogas did not assemble, design, or manufacture the tank that exploded. Instead, the district court found that Thermogas simply filled the tank with its product. On that basis, the court concluded that section 613.18(1)(a) applied and granted Thermogas' motion for directed verdict.

1. Applicable law. The issue therefore is whether Thermogas was an "assembler," "designer," or "manufacturer." Of the three terms, "assembler" seems the most appropriate here. The Iowa Code does not define the word. We therefore resort to its common and ordinary meaning. See Gerst v. Marshall, 549 N.W.2d 810, 814 (Iowa 1996)

.

The verb "assemble" means "to bring together or gather together into one place, company, body, or whole." Webster's Encyclopedic Unabridged Dictionary 125 (rev. ed.1996). "Assembler" is defined as "a person or thing that assembles." Id. Thus, the dictionary meanings of "assemble" and "assembler" contemplate a person or thing that brings together [two or more] things into a whole.

The dictionary definition of "assembler" closely resembles the definition of "assembler" in a torts liability setting. For example, under the theory of assembler's liability, a party "[that] incorporates a defective component part into its finished product and places the finished product into the stream of commerce is liable for injuries caused by a defect in the component part." Baughman v. Gen. Motors Corp., 780 F.2d 1131, 1132 (4th Cir.1986); ...