TOKIO MARINE HCC v. DAIMLER TRUCKS NORTH AMERICA, LLC
1:16-cv-03210
S.D. Ind.May 19, 2017Background
- In 2007 the City of Columbus purchased a Freightliner packer truck from Daimler; in May 2015 that truck's engine compartment caught fire, damaging it and two nearby packer trucks. Plaintiffs are the City and its insurer, U.S. Specialty Insurance Co. (Tokio Marine HCC).
- Plaintiffs allege a defective power distribution module caused the fire, that Daimler knew of the defect, and failed to warn; they sued in November 2016 asserting breach of implied warranty of merchantability and a products-liability tort claim.
- Daimler moved to dismiss under Fed. R. Civ. P. 12(b)(6). Daimler attached warranty documents to its brief; the court declined to consider them under Rule 12(d) because they were not central to the complaint and conversion to summary judgment would be premature.
- Court held the implied-warranty claim is governed by Indiana’s 4-year UCC statute of limitations beginning at tender of delivery (2007), and Plaintiffs sued after that period.
- Plaintiffs argued the limitations period was tolled by fraudulent concealment; the court found the Amended Complaint lacked factual allegations of affirmative acts of concealment and therefore tolling was not plausibly pleaded.
- For the products-liability claim the court applied Indiana’s economic loss doctrine: tort recovery for damage to the chassis/cab (the product sold by Daimler) is barred, but damage to "other property" may be recoverable; the complaint failed to distinguish the separately acquired trash compactor from the chassis/cab, so tort claim as to the purchased truck was dismissed, while claims for the two other trucks remain.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Consideration of warranty documents attached to motion | Documents referenced warranties; court may consider them | Exhibits properly attached and should be considered | Court excluded exhibits under Rule 12(d) and treated motion as 12(b)(6) because documents were not central to the complaint and summary-judgment conversion was premature |
| Statute of limitations on implied warranty (UCC 4-year rule) | Tolling via fraudulent concealment because Daimler knew of defect and failed to warn | Claim accrued at tender (2007); action time-barred | Warranty claim barred; Plaintiffs failed to plead affirmative acts of fraudulent concealment; breach claim dismissed without prejudice |
| Economic loss doctrine as to the purchased truck (chassis/cab) | Tort theory should apply for fire damage | Economic loss doctrine bars tort recovery for damage to the product sold | Tort claim for the purchased Freightliner barred and dismissed without prejudice |
| "Other property" doctrine (trash compactor and two other trucks) | Trash compactor separately acquired and thus "other property"; two other trucks damaged by fire are recoverable in tort | Argues economic loss rule and warranty limits preclude tort recovery (relying on warranty document) | Complaint fails to plead the trash compactor as distinct property; tort claims for two other trucks survive; claim regarding compactor/truck dismissed as to purchased truck but Plaintiffs may amend to plead distinction |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for complaints)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (reasonable-inference plausibility review)
- Levenstein v. Salafsky, 164 F.3d 345 (7th Cir. 1998) (when courts may consider documents attached to a Rule 12(b)(6) motion)
- Gunkel v. Renovations, Inc., 822 N.E.2d 150 (Ind. 2005) (Indiana economic loss doctrine and "other property" rule)
- Saratoga Fishing Co. v. J.M. Martinac & Co., 520 U.S. 875 (1997) (admiralty precedent treating separately acquired additions as "other property")
- In re Copper Antitrust Litig., 436 F.3d 782 (7th Cir.) (examples of fraudulent concealment that toll statutes)
- Ferdinand Furniture Co., Inc. v. R.M. Anderson, 399 N.E.2d 799 (Ind. App.) (warranty accrual at tender of delivery)
- Olcott Int'l & Co. v. Micro Data Base Sys., Inc., 793 N.E.2d 1063 (Ind. Ct. App.) (definition of fraudulent concealment in Indiana)