Teague v. NORCOLD, INC.
774 F. Supp. 2d 817
N.D. Tex.2011Background
- Teague owned a 1999 Freightliner Holiday Rambler with a Norcold Unit designed and manufactured by Norcold; Norcold issued a recall for the Unit after cracking found in similar units.
- On 6/13/2008 the Unit allegedly started a fire destroying the RV and its contents; Teague was using the RV as temporary residence.
- Investigations by the Fire Marshal and Norcold engineers attributed the fire to a defective Unit.
- Teague asserted breach of warranty, DTPA, products liability, negligence, and res ipsa loquitur, seeking damages for the RV and lost personal property and related expenses.
- This is a diversity action applying Texas law; Norcold moved to dismiss for failure to state a claim; Teague responded with arguments on the Unit’s relation to the RV and warranty coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Unit is a discrete product or a component part for economic loss rule purposes | Teague alleges tort recovery for Unit value | Norcold argues economic-loss rule bars such recovery | GRANTED (dismissal of economic-value tort claims) |
| Whether Norcold's motion to dismiss tort claims for damage to other property should be granted | Teague seeks tort recovery for RV-related property | Rule precludes only economic losses tied to the Unit | DENIED (tort claims for damage to other property allowed) |
| Whether Norcold's motion to dismiss breach-of-warranty claims should be granted | Teague seeks warranty-based recovery | Component-part rule may foreclose warranties | DENIED (warranty claims survive given relation to Unit and warranties) |
| Whether Norcold's motion to dismiss DTPA claim should be granted | DTPA claim is tied to warranty | DTPA does not create warranties; must be independent | DENIED (DTPA claim maintained) |
Key Cases Cited
- Nobility Homes of Tex., Inc. v. Shivers, 557 S.W.2d 77 (Tex. 1977) (economic losses not recoverable in strict liability actions)
- Indelco, Inc. v. Hanson Indus. N. Am.-Grove Worldwide, 967 S.W.2d 931 (Tex.App.-Hou. [14th Dist.] 1998) (economic losses not recoverable in tort; component/parts context)
- Hou-Tex, Inc. v. Landmark Graphics, 26 S.W.3d 103 (Tex.App.-Hou. [14th Dist.] 2000) (economic-loss rule and tort duty limitations in Texas)
- Hininger v. Case Corp., 23 F.3d 124 (5th Cir. 1994) (component part immunity from breach of implied warranties; Erie-based analysis)
- Church & Dwight Co. v. Huey, 961 S.W.2d 560 (Tex. App.-San Antonio 1997) (manufacturer can be liable for breach-of-warranty despite being only a component)