TOKIO MARINE HCC v. DAIMLER TRUCKS NORTH AMERICA, LLC
1:16-cv-03210
S.D. Ind.Jul 21, 2017Background
- In 2008 Best Equipment bought a Freightliner chassis from Daimler, installed a trash compactor, and sold the completed Garbage Truck to the City of Columbus.
- In May 2015 the Freightliner caught fire, damaging that truck and two nearby packer trucks; Plaintiffs (the City and its insurer) sued Daimler alleging a defective power distribution module and failure to warn.
- Plaintiffs originally pleaded breach of implied warranty of merchantability and a products liability (tort) claim; the magistrate recommended dismissing the warranty claim as time-barred and dismissing the tort claim as to the Freightliner under Indiana's economic loss rule while leaving open recovery for "other property."
- Plaintiffs moved for leave to amend to allege the trash compactor is separately acquired "other property" and thus recoverable in tort; Daimler opposed, submitting invoices showing Best Equipment sold the completed Garbage Truck to the City as a single unit.
- The court applied Indiana law and precedent holding the relevant "product" is what the plaintiff purchased (here, the finished Garbage Truck), and concluded the compactor was part of that purchased product, so tort recovery for the compactor is barred and amendment would be futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trash compactor is "other property" permitting tort recovery despite the economic loss rule | The compactor was separately acquired/installed by Best Equipment and resembles separate equipment in Saratoga, so it is "other property" | The City purchased the finished Garbage Truck (chassis + compactor) as a single unit, so the compactor is not "other property" and recovery is barred | The compactor is part of the product purchased (the Garbage Truck); economic loss rule bars tort recovery; amendment would be futile |
Key Cases Cited
- Gunkel v. Renovations, Inc., 822 N.E.2d 150 (Ind. 2005) (Indiana defines the defective "product" as the product purchased by the plaintiff for other-property analysis)
- Indianapolis–Marion County Public Library v. Office of the State Public Defender, 929 N.E.2d 722 (Ind. 2010) (economic loss rule bars tort recovery where plaintiff purchased an integrated finished product)
- Saratoga Fishing Co. v. J.M. Martinac & Co., 520 U.S. 875 (1997) (applying admiralty law, held separately added equipment by an initial user could be "other property")