E.Z. Gas, Inc. v. Hydrocarbon Transp., Inc.

• Decision Date: 26 November 1984
• Docket Number: No. 3-184,3-184
• Citation: 471 N.E.2d 316
• Parties: E.Z. GAS, INC., d/b/a Petrolane Gas Service, Appellant (Third Party Plaintiff Below), v. HYDROCARBON TRANSPORTATION, INC., Dome Pipeline Corporation, Continental Oil Company, and Mobile Oil Company, Appellees (Third Party Defendants Below), and Milton Miller, Personal Representative of the Estate of Henry Miller and Ella J. Miller, Deceased, Appellees (Plaintiff Below), and Emerson Electric Co., A.O. Smith Corporation, Barker Analytical Laboratories, Inc., and United Farm Bureau Insurance, Appellees (Defendants Below). A 2.
• Court: Indiana Appellate Court

Page 316

471 N.E.2d 316

E.Z. GAS, INC., d/b/a Petrolane Gas Service, Appellant (Third Party Plaintiff Below), v. HYDROCARBON TRANSPORTATION, INC., Dome Pipeline Corporation,

Continental Oil Company, and Mobile [sic] Oil

Company, Appellees (Third Party Defendants Below),

and

Milton Miller, Personal Representative of the Estate of

Henry Miller and Ella J. Miller, Deceased,

Appellees (Plaintiff Below),

and

Emerson Electric Co., A.O. Smith Corporation, Barker

Analytical Laboratories, Inc., and United Farm

Bureau Insurance, Appellees (Defendants Below).

No. 3-184 A 2.

Court of Appeals of Indiana,

Third District.

Nov. 26, 1984.

Thomas R. Lemon, James S. Butts, Rasor, Harris, Lemon & Reed, Warsaw, for appellant.

Leon R. Kaminski, Newby, Lewis, Kaminski & Jones, LaPorte, for appellee Continental Oil Co.

John E. Doran, Doran, Manion, Boynton, Kamm & Esmont, South Bend, for appellee Dome Pipeline Corp.

Roland Obenchain, Jones, Obenchain, Johnson, Ford, Pankow & Lewis, South Bend, for appellee Hydrocarbon Transp., Inc.

R. Kent Rowe, R. Kent Rowe III, Rowe & Laderer, South Bend, for appellee Mobil Oil Co.

STATON, Presiding Judge.

Petrolane Gas Service was one of several defendants named in a suit for damages by the estate of Henry and Ella Miller who died of injuries received in an explosion related to a gas water heater in their home. Petrolane, the distributor of the liquid propane gas used in the Miller home, filed a Third Party Complaint for Indemnification against Hydrocarbon Transportation, Inc., Dome Pipeline Corporation, Continental Oil Company, and Mobil Oil Company (Suppliers), who supplied the L.P. gas to Petrolane. It is from the trial court's grant of the Suppliers' motions for summary judgment that Petrolane now appeals.

The sole issue on appeal is whether the trial court erred in determining that there was no genuine issue of material fact and that the Suppliers were entitled to summary judgment as a matter of law.

Reversed.

The estate's claim against Petrolane, sounding in negligence, strict liability, and breach of implied warranties, was that the L.P. gas supplied to the Miller home by Petrolane contained an inadequate odorant to warn the Millers of its presence in the basement of the Miller residence. When Mr. Miller attempted to light the pilot on the allegedly faulty water heater he touched off an explosion of gas which apparently had escaped and accumulated due to the defect in the heater.

In its indemnification action Petrolane claims that it received the L.P. gas from its suppliers who are responsible for odorizing the gas before transferring it to Petrolane. Therefore any defect or insufficiency in the odorant would be due to the fault of the suppliers.

The purpose of summary judgment proceedings is to terminate litigation when no factual dispute exists and when the case may be determined as a matter of law. Vanco v. Sportsmax, Inc. (1983), Ind. App. 448 N.E.2d 1198, 1200. The trial court must exercise caution to ensure a party of his right to a fair determination of genuine issues. Ogilvie v. Steele (1983), Ind.App., 452 N.E.2d 167, 169. The burden is on the proponent of summary judgment to negate the existence of any genuine issue of material fact and all doubts must be resolved against the proponent. Kahf v. Charleston South Apartments, (1984), Ind.App., 461 N.E.2d 723, 729. The court must consider as true the facts set forth in the non-movant's affidavits and liberally construe discovery in his favor. Connell v. American Underwriters, Inc. (1983), Ind.App., 453 N.E.2d 1028, 1029. To be considered genuine for summary judgment purposes, a material issue of fact must be established by sufficient evidence supporting the claimed factual dispute to require the trier to resolve the parties' differing versions of the truth at trial. Midwest Natural Gas Corp. v. Locke Stove Co. (1982), Ind.App. 435 N.E.2d 85, 87.

In their Motions for Summary Judgment, the Suppliers relied upon the pleadings, depositions, and answers to interrogatories already on file to discharge their burden of negating the existence of any genuine issue of material fact. The Suppliers filed no supporting affidavits with their motions. Between Petrolane and the Suppliers there is no dispute as to the fact that the L.P. gas had been odorized before delivery to Petrolane. Delivery tickets and highway transportation receipts for every shipment of gas from Suppliers to Petrolane during the sixty (60) days immediately preceding Petrolane's delivery to the Millers show that odorant was injected into each shipment of gas by each of the Suppliers at rates in conformance with or in excess of established industry standards. ¹ The undisputed fact upon which the Suppliers base all arguments, however is the fact that Petrolane pumped the gas as it was received from the Suppliers into two thirty thousand (30,000) gallon, interconnected, self-balancing storage tanks. This fact, they argue, constitutes a substantial change in the gas product which bars any liability of the Suppliers to indemnify Petrolane for a defective odorant level. Because Petrolane mixed the gas of all suppliers in a common tank, the argument runs, each individual supplier's product and any variation in odorant level was inalterably commingled with the product of each of the other suppliers creating a different product, i.e., substantially changed, which could no longer be identified to any single supplier. This argument is a misapplication of the substantial alteration doctrine, asserting a legal conclusion as to what constitutes a substantial change such as would bar Petrolane's right to indemnity, as well as a bootstrap attempt to negate the issue of proximate cause via circular reasoning.

In the absence of an express contractual or statutory right to indemnity a party may bring an action for indemnification only if he is without fault. He must demonstrate that he is without actual negligence and in a products liability case must show there was no substantial change or alteration in the condition of the product between the date of his purchase and the date of his subsequent resale to a consumer. Coca-Cola Bottling Co.--Goshen v. Vendo Co. (1983), Ind.App., 455 N.E.2d 370, 373.

The doctrine of strict liability for defective products is codified in Indiana at IC 34-4-20 A-1 et seq. (Burns Code Ed., 1984 Supp.) and states:

"(a) One who sells, leases, or otherwise puts into the stream of commerce any product in a defective condition unreasonably dangerous to any user or consumer or to his property is subject to liability for physical harm caused by that product to the user or consumer or to his property if that user or consumer is in the class of persons that the seller should reasonably foresee as being subject to the harm caused by the defective condition, and if:

(1) The seller is engaged in the business of selling such a product; and

(2) The product is expected to and does reach the user or consumer without substantial alteration in the condition in which it is sold by the person sought to be held liable under this chapter."

Thus, in order to claim indemnity from the Suppliers on a theory of strict liability Petrolane, at trial, would have the burden of establishing that no substantial change had occurred in the gas product before it reached the ultimate consumers, the Millers. Coca-Cola Bottling Co.-Goshen, supra. Substantial change has been defined by this Court as

"any change which increases the likelihood of a malfunction, which is the proximate cause of the harm complained of, and which is independent of the expected and intended use to which the product is put." (Original emphasis.)

Cornette v. Searjeant Metal Products, Inc., (1970), 147 Ind.App. 46, 258 N.E.2d 652, 657. For summary judgment to have been proper on this theory the trial court was required to consider the pleadings, depositions, answers to interrogatories and affidavits on file in the light most favorable to Petrolane, the non-movant, Connell, supra, and find there was no genuine issue of material fact that commingling the shipments was a change which increased the likelihood of the gas being undetectable, that such change was the proximate cause of Miller lighting a match unaware of the presence of accumulated gas, and that the commingling...