Dannix Painting, LLC v. Sherwin-Williams Co.
2013 U.S. App. LEXIS 21225
8th Cir.2013Background
- Dannix Painting, a commercial painting contractor, used Sherwin-Williams Company (SWC) paint on buildings at Eglin AFB; initial product failed and SWC recommended alternative products.
- On an SWC employee’s recommendation, Dannix used a third SWC product that, despite adherence to manufacturer instructions, delaminated (did not adhere) on interior and exterior surfaces.
- Dannix incurred costs to remove and refinish surfaces and sued SWC in Missouri state court for negligent misrepresentation based on SWC’s recommendation; SWC removed to federal court on diversity grounds.
- SWC moved to dismiss under Rule 12(b)(6), arguing Missouri’s economic loss doctrine barred the negligent misrepresentation claim.
- The district court dismissed, concluding the claim sought purely commercial/economic loss remedied under the U.C.C. warranty regime rather than tort; Dannix appealed.
- The Eighth Circuit affirmed, predicting Missouri law would bar a merchant-to-merchant negligent misrepresentation claim grounded in a product’s failure to meet commercial expectations absent other property damage or personal injury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Missouri's economic loss doctrine bars Dannix's negligent misrepresentation claim for purchase of defective paint | Dannix: claim targets SWC’s recommendation, not the product itself, so tort recovery for negligent misrepresentation is allowed | SWC: the loss is purely economic (repair/replacement) and falls within U.C.C./warranty remedies; tort would undermine contract law | Held: Economic loss doctrine bars the negligent misrepresentation claim — claim is essentially a warranty/contract claim for failed product performance |
| Whether the "other property damage" exception applies | Dannix: delamination affected surfaces and required refinishing, so qualifies as property damage beyond the product | SWC: allegations show only economic loss (costs to remove and redo paint), not damage to other property | Held: Exception does not apply — complaint alleges economic loss, not other property damage |
Key Cases Cited
- Crowder v. Vandendeale, 564 S.W.2d 879 (Mo. 1978) (adopting economic loss doctrine in Missouri)
- Sharp Bros. Contracting Co. v. Am. Hoist & Derrick Co., 703 S.W.2d 901 (Mo. 1986) (applying doctrine to bar strict liability where damage is only to product)
- East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858 (U.S. 1986) (warning against using tort to alter U.C.C. risk allocation)
- Renaissance Leasing, LLC v. Vermeer Mfg. Co., 322 S.W.3d 112 (Mo. 2010) (limits remedies for economic loss to U.C.C. warranties; distinguished on facts)
- R.W. Murray Co. v. Shatterproof Glass Corp., 697 F.2d 818 (8th Cir. 1983) (applying Missouri law to bar negligence for purely economic loss)
- Marvin Lumber & Cedar Co. v. PPG Indus., Inc., 223 F.3d 873 (8th Cir. 2000) (fraud/misrepresentation claims barred when they merely replicate warranty claims)
- Maynard Co-op. Co. v. Zeneca, Inc., 143 F.3d 1099 (8th Cir. 1998) (negligent misrepresentation claim treated as product-failure warranty claim)
- Chicago Heights Venture v. Dynamit Nobel of Am., Inc., 782 F.2d 723 (7th Cir. 1986) (economic loss includes repair/replacement costs and diminished value)