735 F.3d 750
8th Cir.2013Background
- Bruce Martin Construction purchased 79 Brock Harvest-Time power sweeps from CTB and resold 74 to regional customers; sweeps were warranted against “defects in material or workmanship.”
- Customers began complaining that the sweeps did not advance through certain grains because the steel/tire configuration could not penetrate or move the grain, requiring workers to enter the bins to push the sweep.
- Bruce Martin sued CTB for negligent misrepresentation and breach of express warranty in federal court; the district court dismissed negligent misrepresentation under Missouri’s economic loss doctrine and granted summary judgment to CTB on the warranty claim.
- The Eighth Circuit reviewed whether Missouri’s economic loss doctrine bars negligent misrepresentation claims and whether CTB’s warranty for “material and workmanship” covered the alleged defect.
- Bruce Martin conceded the sweeps conformed to their intended design but argued the design called for unsuitable materials (attempting to characterize the problem as both a design and a materials/workmanship defect).
- The court treated Indiana law (chosen by contract) as governing warranty interpretation and analyzed the distinction between design defects and defects in material or workmanship.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Missouri’s economic loss doctrine bars negligent misrepresentation | Bruce Martin argued the misrepresentation claim should proceed despite economic loss rule | CTB argued Missouri’s economic loss doctrine bars negligent misrepresentation | Held: Economic loss doctrine bars the negligent misrepresentation claim (Dannix precedent controls) |
| Whether the express warranty for “defects in material or workmanship” covers the alleged defect | Bruce Martin argued the warranty covers the defective materials used in the design (material defect) | CTB argued the problem was a design defect not covered by the materials/workmanship warranty | Held: The defect is one of design; warranty for material/workmanship does not cover design defects; summary judgment for CTB affirmed |
| Whether a design defect can be recast as a materials/workmanship defect when the design specifies the materials | Bruce Martin argued the design’s specification of unsuitable materials makes it also a materials defect | CTB argued that allowing that reading would render the “material and workmanship” limitation meaningless | Held: A design defect cannot be converted into a materials/workmanship defect merely because the design calls for particular materials; parties intended the limitation to exclude design defects |
| Choice-of-law and interpretive standard | Bruce Martin implicitly argued Indiana law would not alter coverage | CTB relied on the parties’ choice of Indiana law for contract interpretation | Held: Indiana law governs; court relied on parallels between products-liability concepts and warranty language to interpret the warranty |
Key Cases Cited
- Lombard Corp. v. Quality Aluminum Prods. Co., 261 F.2d 336 (6th Cir. 1958) (distinguishes defects in material/workmanship from design defects)
- Hoffman v. E.W. Bliss Co., 448 N.E.2d 277 (Ind. 1983) (recognizes manufacturing, design, and warning defects in products liability law)
- St. Martin v. City of St. Paul, 680 F.3d 1027 (8th Cir. 2012) (standard of review for summary judgment)
- Mack Trucks Inc. v. BorgWarner Turbo Sys., Inc., [citation="508 F. App'x 180"] (3d Cir. 2012) (refusing to read “material and workmanship” warranty to cover design defects)
- Kagan v. Master Home Prods., Ltd., 193 S.W.3d 401 (Mo. Ct. App. 2006) (discusses choice-of-law when forum’s policy is implicated)