Wireman v. Keneco Distributors, Inc.

• Decision Date: 04 March 1996
• Docket Number: No. 94-1448,94-1448
• Citation: 75 Ohio St.3d 103,661 N.E.2d 744
• Parties: , Prod.Liab.Rep. (CCH) P 14,584 WIREMAN, Admr., et al., Appellants, v. KENECO DISTRIBUTORS, INC. et al.; Marathon Oil Company et al., Appellees.
• Court: Ohio Supreme Court

Page 103

75 Ohio St.3d 103

661 N.E.2d 744, Prod.Liab.Rep. (CCH) P 14,584

WIREMAN, Admr., et al., Appellants, v. KENECO DISTRIBUTORS, INC. et al.; Marathon Oil Company et al., Appellees.

No. 94-1448.

Supreme Court of Ohio.

Submitted Nov. 7, 1995.

Decided March 4, 1996.

Mihlbaugh & Mihlbaugh, Michael P. Mihlbaugh and Robert H. Mihlbaugh, Lima, for appellants.

Shumaker, Loop & Kendrick, John C. Barron, Thomas P. Dillon and Jeffrey S. Creamer, Toledo, for appellee Marathon Oil Co.

Hammond Law Office and Frederick A. Sewards, Columbus, for appellees Northwest Enterprises, Inc., Freymuth and Jackson.

John K. Fitch, Portsmouth, urging reversal for amicus curiae, Ohio Academy of Trial Lawyers.

PFEIFER, Justice.

Appellants contend that Wireman was fatally injured when he was negligently instructed to use a shop vac to clean tank 101. Appellants contend that the explosion of tank 101 was caused by a spark from the shop vac igniting gasoline vapors in the tank. Appellants claim that the gasoline vapors flowed into tank 101 through a pipe in the VRS that connects tank 101 to an adjoining tank. Appellants contend that Marathon's design of the VRS was defective because it allowed this flow of fumes. On the morning of Wireman's fatal injury, an adjoining tank had been filled with gasoline by an employee of Northwest. Appellants contend that if the VRS had been used as designed during the delivery of gasoline from the Northwest truck into the adjoining tank, the fumes from the gasoline being pumped into the tank would have been returned to the Northwest truck and would not have gone into tank 101.

Appellants contest the trial court's award of summary judgment to Marathon, Freymuth, Northwest and Jackson.

I

Claims against Marathon

A Products Liability

The court of appeals upheld the trial court's award of summary judgment for Marathon because it found that the VRS was not "tangible personal property" as defined in R.C. 2307.71, and, thus, appellants could not pursue a products liability claim against Marathon. R.C. 2307.71 provides in relevant part:

"As used in sections 2307.71 to 2307.80 of the Revised Code:

" * * *

"(L)(1) 'Product' means, subject to division (L)(2) of this section, any object, substance, mixture, or raw material that constitutes tangible personal property * * *." (Emphasis added.)

Under this definition, an item must be personal property before it can fall within the realm of products liability. The court of appeals found the VRS to be a fixture. Because we find that the VRS is not a fixture, we hold that the VRS is personal property and is a "product" under R.C. 2307.71.

In Teaff v. Hewitt (1853), 1 Ohio St. 511, this court adopted the following definition of "fixtures":

"A fixture is an article which was a chattel, but which by being physically annexed or affixed to the realty, became accessory to it and part and parcel of it. But the precise point in the connection with the realty, where the article loses the legal qualities of a chattel and acquires those of the realty, often presents a question of great nicety and sometimes difficult determination." Id. at 527.

"From the examination which I have been enabled to give to this subject, and after a careful review of the authorities, I have reached the conclusion that the united application of the following requisites will be found the safest criterion of a fixture.

"1st. Actual annexation to the realty, or something appurtenant thereto.

"2d. Appropriation to the use or purpose of that part of the realty with which it is connected.

"3d. The intention of the party making the annexation, to make the article a permanent accession to the freehold--this intention being inferred from the nature of the article affixed, the relation and situation of the party making the annexation, the structure and mode of annexation, and the purpose or use for which the annexation has been made." Id. at 529-530.

Appellants contend that the VRS does not meet the third prong of this definition. Because we find that there was never an intention to make the VRS a permanent accession to the freehold where it was being used, we agree with appellants.

The record is clear that Marathon lacked the requisite intent to make the VRS a permanent addition to the bulk plant. The VRS was attached to four aboveground storage tanks. On October 3, 1989, Marathon sold the tanks along with the VRS by a bill of sale, pursuant to an earlier agreement to an offer to purchase. It is a long-standing rule of law that when property is sold by bill of sale, the property is presumed to be personalty. See Fortman v. Goepper (1863), 14 Ohio St. 558.

Also, in the offer to purchase agreed to by Marathon and Keneco, there is a provision obligating Keneco to remove the aboveground storage tanks if removal is required by law. Thus, Marathon never intended that those tanks and attached VRS be a permanent part of the premises where they rested. Finally, a bill of sale for similar tanks on the premises, which was agreed to by Marathon, classified those tanks as personal property.

For these reasons we find that the VRS was personal property when Wireman was fatally injured. Thus, the court of appeals erred when it concluded that the VRS was a fixture, and its judgment concerning this legal issue is reversed.

B Failure to Warn

Appellants claim that the court of appeals erred when it upheld the trial court's award of summary judgment to Marathon on appellants' failure-to-warn claim. We agree with appellants that their failure-to-warn claim should survive Marathon's motion for summary judgment.

Appellants' theory of liability is that Marathon failed to post a warning for the benefit of those entering the tank. Presumably, such a warning would state that petroleum vapors might be present in the tank, due to the connections between the four aboveground tanks, even if no fuel is present in the tank being entered. This claim was not addressed by the court of appeals in its opinion.

R.C. 2307.76 regulates failure-to-warn claims. The statute provides:

"(A) Subject to divisions (B) and (C) of this section, a product is defective due to inadequate warning or instruction if either of the following applies:

"(1) It is defective due to inadequate warning or instruction at the time of marketing if, when it left the control of its manufacturer, both of the following applied:

"(a) The manufacturer knew or, in the exercise of reasonable care, should have known about a risk that is associated with the product and that allegedly caused harm for which the claimant seeks to recover compensatory damages;

"(b) The manufacturer failed to provide the warning or instruction that a manufacturer exercising reasonable care would have provided concerning that risk, in light of the likelihood that the product would cause harm of the type for which the claimant seeks to recover compensatory damages and in light of the likely seriousness of that harm."

We find the record contains sufficient evidence supporting appellants' failure-to-warn claim. It is undisputed that Marathon never posted a warning on the side of tank 101 or on the VRS which indicated that fumes may be present in the tank that Douglas Wireman entered.

Marathon appears to argue that appellants are precluded from bringing a failure-to-warn claim because Marathon claims that the VRS is not a "product" under R.C. 2307.76. Because R.C. 2307.76 uses the definition of "product" in R.C. 2307.71, and because we have already determined that the VRS is a product pursuant to R.C. 2307.71, we hold that appellants' failure-to-warn claim is sufficient to survive a motion for summary judgment. We reverse the judgment of the court of appeals on this issue.

C Premises Liability

Appellants also claim that the trial court erred when it granted Marathon's motion for summary judgment because the record contains sufficient evidence that Marathon intentionally violated the terms of its permit to operate. The permit provides in relevant part:

"Any malfunction of this source or any associated air pollution control system(s) shall be reported immediately to the appropriate Ohio EPA field office in accordance with OAC rule 3745-15-06. Except as provided in that rule, any scheduled maintenance or malfunction necessitating the shutdown or bypassing of any air pollution control system(s) shall be accompanied by the shutdown of this source."

Appellants contend that Marathon should have shut down the bulk plant as soon as it discovered that the loading arm of the VRS was not operating correctly. If the plant had been shut down by Marathon, appellants contend, Wireman would have never been injured.

The problem with appellants' argument is that Marathon was powerless to shut down the bulk plant. It is a fundamental tenet of premises tort law that to have a duty to keep premises safe for others one must be in possession and control of the premises. Wills v. Frank Hoover Supply (1986), 26 Ohio St.3d 186, 26 OBR 160, 497 N.E.2d 1118. Therefore, we affirm the judgment of the court of appeals on this issue.

D Agency

Appellants contend that the court of appeals erred when it upheld the trial court's award of summary judgment to Marathon for appellants' agency claim. We disagree with appellants.

In essence, appellants argue that the employees of Keneco who negligently directed Douglas Wireman to use a shop vac in tank 101 appeared to Wireman to be agents of Marathon. Thus, Marathon should be liable for the Keneco employees' negligence. See Shaffer v. Maier (1994), 68 Ohio St.3d 416, 627 N.E.2d 986. We decline to consider this issue, however, because it was not raised by appellants ...