Duncan Place Owners Associatio v. Danze, Inc., 927 F.3d 970

Background

In 2009 Danze faucets with steel-braided supply hoses were installed in all 63 units of a Seattle condominium; the hoses allegedly use an inferior alloy that corrodes and cracked in use, causing failures, property damage, and replacement costs.
Duncan Place Owners Association filed a putative class action under Washington law asserting breach of express warranty, unjust enrichment, negligence, and strict product liability; later obtained assignments from 41 of the 63 unit owners.
The district court dismissed claims brought on behalf of non-assigned unit owners for lack of associational standing, dismissed negligence and strict-liability claims under Washington’s independent-duty (economic-loss) doctrine, and dismissed the unjust-enrichment claim under Rule 9(b).
The district court also dismissed the warranty claims on behalf of assigned unit owners because the complaint did not (and plaintiff could not in good faith) allege that those owners knew of Danze’s limited lifetime warranty at purchase; the association’s own express-warranty claim later lost on summary judgment (not challenged here).
On appeal Duncan Place sought reinstatement of the dismissed warranty, unjust-enrichment, negligence, and product-liability claims; the Seventh Circuit considered waiver of new arguments, the scope of the Washington Product Liability Act (WPLA), and the independent-duty doctrine.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether warranty claims on behalf of assigned unit owners required proof that owners knew of the warranty	Duncan Place (on appeal) argued Washington law does not require owner knowledge for a standard written warranty claim	Danze argued, and district court held, that unit-owner knowledge of the warranty is required	Waived on appeal (plaintiff failed to raise the specific legal argument below); dismissal affirmed
Whether unjust-enrichment claim survives despite fraud-based allegations	Duncan Place argued judge should excise fraud allegations and evaluate remaining claim under Rule 8	Danze argued the claim sounded in fraud and failed Rule 9(b)	Argument waived for failure to raise below; dismissal affirmed
Whether negligence and strict product-liability claims are barred by Washington’s independent-duty (economic-loss) doctrine	Duncan Place alleged faucets caused damage to other condominium property (not just the faucets) and thus tort recovery is available	Danze argued all economic losses here are contractual/economic and barred by the doctrine	Reversed in part: WPLA governs product claims; recovery in tort is barred for injury to the product itself but allowed for damage to other property—WPLA claim may proceed to the extent it alleges damage to other condominium property in the 41 assigned units and to common areas asserted by the association
Whether the association can press damages claims for non-assigned unit owners via associational standing	Duncan Place sought to assert rights of non-assigned owners and requested declaratory/injunctive relief	Danze argued association lacks standing to recover individual damages without assignments	Court held associational standing does not permit damages claims for non-assigned unit owners; declaratory relief here would effectively be a damages precursor and is insufficient; argument rejected

Key Cases Cited

Eastwood v. Horse Harbor Found., Inc., 241 P.3d 1256 (Wash. 2010) (en banc) (explaining Washington’s independent-duty test and permitting tort recovery for personal injury or damage to other property caused by a defective product)
Wash. State Physicians Ins. Exch. & Ass’n v. Fisons Corp., 858 P.2d 1054 (Wash. 1993) (en banc) (holding the WPLA created a single cause of action for product-related harms and supplanted common-law remedies)
Warth v. Seldin, 422 U.S. 490 (1975) (associational standing depends on the nature of relief sought and whether individual participation is required)
United Food & Commercial Workers Union Local 751 v. Brown Group, Inc., 517 U.S. 544 (1996) (association may seek prospective relief without individual participation, but damages generally require individual proof)
Homoky v. Ogden, 816 F.3d 448 (7th Cir. 2016) (explaining waiver of new arguments raised for first time on appeal)
Catinella v. County of Cook, 881 F.3d 514 (7th Cir. 2018) (dismissal review is de novo)
Sanner v. Bd. of Trade of City of Chi., 62 F.3d 918 (7th Cir. 1995) (associational standing inappropriate when injury and damages require individualized proof)