AUTOZONE, INC., Plaintiff, v. THE GLIDDEN COMPANY, d/b/a ICI PAINTS, Defendant. and THE GLIDDEN COMPANY d/b/a ICI PAINTS, Third-Party Plaintiff, v. BASF Construction Chemicals, LLC, Third-Party Defendant, and AUTOZONE, INC., Plaintiff, v. BASF Construction Chemicals, LLC, Defendant.
No. 08-2851
IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION
September 10, 2010
Also before the Court is Akzo Nobel’s March 31, 2010 Motion for Leave to Amend its Third-Party Complaint. (D.E. 90.) BASF responded in opposition on April 9, 2010, arguing that amendment would be futile (D.E. 91).
Taking all facts alleged by Akzo Nobel as true, amending its Third-Party Complaint to elaborate its causes of action for indemnification, breach of express warranty, breach of the implied warranty of merchantability, and breach of the implied warranty of fitness would not be futile. Thus, the Court GRANTS Akzo Nobel’s Motion to Amend to the extent the Amended Third-Party Complaint addresses those causes of action and DENIES AS MOOT BASF’s Motion to Dismiss those causes of action in Akzo Nobel’s original Third-Party Complaint. Amending Akzo Nobel’s Third-Party Complaint to elaborate its causes of action
I. Factual Background
This dispute concerns the failure of exterior paint on potentially hundreds of AutoZone, Inc. (“AutoZone”) retail automotive parts stores. (Memorandum in Opposition to Third-Party Defendant BASF Construction Chemicals, LLC’s Motion to Dismiss Third-Party Complaint, D.E. 65, at 2.) (“Akzo Nobel Mem. in Opp’n”) In 2005, AutoZone began a new store construction program. (Amended Third-Party Complaint Against BASF Construction Chemicals, LLC, D.E. 90-1, ¶ 8.) (“Am. Third-Party Compl.”) As part of that program, Akzo Nobel supplied exterior paints to meet AutoZone’s specifications. (See id. ¶ 9.) One specification required Akzo Nobel to obtain products from Degussa Construction Chemicals, Inc. (“Degussa”), which was a subsidiary of Degussa Corporation and which ultimately became BASF. (See id. ¶¶ 2-3, 9.) The products obtained included Thoro 35, Sonneborn Gray, SCC Smooth UD BS 5G, Blockfiller 749, Thoro Blockfiller, ThoroCoat, ThoroGuard, and ThoroSheen (“Degussa Products”). (Id. ¶ 9.) Together, they constitute
AutoZone also contracted with Akzo Nobel to manufacture AutoZone Orange paint for use as a stripe on each store’s exterior. (Id. ¶ 13-14.) Between 2006 and March 2008, Akzo Nobel purchased the orange pigment used to manufacture that paint from BASF. (Id. ¶ 15.) The resulting paint was applied to newly constructed and repainted AutoZone stores. (Id.)
The paint AutoZone purchased developed problems. (See id. ¶¶ 12, 16.) Once applied, it cracked, peeled, and faded. (See id.) In part because of those problems, AutoZone sued Akzo Nobel, alleging breach of contract. (Amended Complaint for Breach of Contract and, if Appropriate, Other Relief, D.E. 45, ¶ 11.) (“AutoZone’s Compl.”) AutoZone alleges that Akzo Nobel breached express warranties that “all material delivered shall be free of defects for a period of five (5) years from completion and/or date delivery [sic] of all goods . . . .” (Id.) AutoZone seeks, inter alia, the cost of curing warranty defects currently known and the cost it is reasonably certain to incur in the future. (Id. at 7.)
Akzo Nobel filed an Answer and a Third-Party Complaint against BASF. Akzo Nobel seeks indemnity and contribution to the extent Akzo Nobel is found liable to AutoZone, and recovery for breach of express warranty, the implied warranty of
AutoZone then sued BASF directly, alleging breach of contract and seeking compensatory damages. (Amended Complaint for Breach of Contract, D.E. 60-1, at 5.) BASF, in its Answer, admits that it and/or Degussa had issued certain warranties directly to AutoZone for products applied to AutoZone stores, and that Degussa occasionally supplied products to Akzo Nobel that may have been used on AutoZone stores. (Defendant BASF Construction Chemicals, LLC’s Answer to Plaintiff’s Amended Complaint, D.E. 61, ¶¶ 7-8.) (“BASF’s Answer”) The Court granted AutoZone’s Motion to Consolidate its action against BASF with the original disputes between AutoZone and Akzo Nobel, and Akzo Nobel and BASF. (Order Consolidating Cases, D.E. 66, at 2.)
Akzo Nobel filed a Motion for Leave to Amend its Complaint on March 31, 2010. (Motion and Memorandum of Defendant and Third-Party Plaintiff Akzo Nobel Paints LLC, Formerly Known as The Glidden Company D/B/A/ ICI Paints for Leave to Amend Complaint, D.E. 90.) (“Mot. to Amend”)
II. Jurisdiction and Choice of Law
Plaintiff AutoZone is a Nevada corporation with its principal place of business in Memphis, Tennessee. (AutoZone’s
Complete diversity exists between AutoZone and Akzo Nobel and between AutoZone and BASF. See V & M Star, LP v. Centimark Corp., 596 F.3d 354, 355 (6th Cir. 2010) (citing Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005)). The amount in controversy exceeds $75,000. (See AutoZone’s Compl. ¶ 17.) Therefore, the Court has diversity jurisdiction under
In a diversity action, the Court applies the choice of law rules of the forum state. See Morell v. Star Taxi, 343 F. App’x 54, 57 (6th Cir. 2009). Here, the parties have not discussed where any contract was made or any allegedly tortious conduct occurred. They agree in their respective motions and memoranda that Tennessee substantive law applies. “Because the parties
III. Standard of Review
“
Under
The factual allegations assumed to be true must raise a party’s right to relief above the speculative level. Twombly, 550 U.S. at 555-56 (citations omitted). Although they need not be detailed or demonstrate a probability of misconduct, they must include sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 570). To state a plausible claim, the plaintiff must plead sufficient factual content for the Court reasonably to infer that the defendant is liable. Id. (citing Twombly, 550 U.S. at 556). To meet this burden, plaintiff’s “complaint must contain either direct or inferential allegations respecting all the material elements to sustain recovery under some viable legal theory.” League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (citing Twombly, 550 U.S. at 562).
The factual record that the Court may consult in ruling on a motion to dismiss under
IV. Analysis
Akzo Nobel’s Motion to Amend seeks to update the factual allegations of the Third-Party Complaint by adding additional information learned during discovery. (Mot. to Amend at 2.) In response, BASF asserts that the Court should deny the Motion because the Amended Third-Party Complaint cannot withstand a motion to dismiss and, thus, the proposed amendment would be futile. (Third Party Defendant BASF Construction Chemicals, LLC’s Memorandum in Opposition to Third Party Plaintiff’s Motion for Leave to Amend the Third Party Complaint, D.E. 91.)
In its September 1 Motion to Dismiss, BASF asserts that the original Third-Party Complaint fails to state a claim on which relief can be granted for indemnification, contribution, breach of express warranty, breach of the implied warranty of merchantability, breach of the implied warranty of fitness, and negligence. (Third Party Defendant BASF Construction Chemicals, LLC’s Motion to Dismiss the Third Party Complaint, D.E. 56.) (“BASF’s Motion to Dismiss”) Specifically, BASF asserts that (1) the contribution claim fails to state a claim on which relief can be granted because Akzo Nobel has not been sued in tort; (2) Akzo Nobel has failed to plead the necessary elements for a breach of express warranty claim; (3) Akzo Nobel has
In response, Akzo Nobel argues that (1) the Third-Party Complaint sets forth specific facts providing BASF with fair notice of Akzo Nobel’s claims and their grounds; (2) BASF’s Motion to Dismiss should be denied because Akzo Nobel has not had an opportunity to obtain key discovery to support its claims; (3) Akzo Nobel’s contribution cause of action states a claim as a matter of law because Akzo Nobel and BASF remain potentially liable in tort; and (4) if the Court finds Akzo Nobel’s Third-Party Complaint deficient in any manner, Akzo Nobel should be granted leave to amend to assert additional facts learned through discovery. (Akzo Nobel Mem. in Opp’n.)
The Court must first determine, as to each cause of action, whether amendment would be futile. If not, the Motion to Amend should be granted, and BASF’s Motion to Dismiss the pertinent cause of action denied as moot. If so, the Motion to Amend should be denied, and the pertinent cause of action in the
A. Indemnification Claim
In Tennessee, “indemnification requires the complete shifting of liability for loss from one party to another” and rests on two principles: persons should be responsible for their own wrongdoing and wrongdoers should be liable to persons required to pay damages that the wrongdoers should have paid. Winter v. Smith, 914 S.W.2d 527, 541 (Tenn. Ct. App. 1995) (citations omitted); see Owens v. Truckstops of Am., 915 S.W.2d 420, 433 (Tenn. 1996). When a third party’s wrongful conduct causes a defendant to be liable to a plaintiff, the defendant is entitled to indemnification from the third party. See Houseboating Corp. of Am. v. Marshall, 553 S.W.2d 588, 589 (Tenn. 1977) (“The right to indemnity rests upon the principle that everyone is responsible for the consequences of his own wrong, and if another person has been compelled to pay the damages which the wrongdoer should have paid, the latter becomes liable to the former.”) (quoting S. Coal & Coke Co. v. Beach Grove Mining Co., 381 S.W.2d 299, 302 (Tenn. Ct. App. 1963)).
Under Tennessee law, an obligation to indemnify may arise expressly by contract between the parties or impliedly from the parties’ relationship. Id. (citations omitted); Farmers Mut. of Tenn. v. Athens Ins. Agency, 145 S.W.3d 566, 568 (Tenn. Ct. App. 2004); Winter, 914 S.W.2d at 541-42. For indemnification to arise expressly by contract, “there must be a clear and unequivocal expression of an intention to indemnify.” First Am. Bank of Nashville, N.A. v. Woods, 734 S.W.2d 622, 632 (Tenn. Ct. App. 1987) (citations omitted). “Courts will impose an implied obligation to indemnify when the obligation is a necessary element of the parties’ relationship, or when justice and fairness demand that the burden of paying for the loss be shifted to the party whose fault or responsibility is qualitatively different from the other parties.” Winter, 914 S.W.2d at 542 (citations omitted). “In the absence of an express contract, an obligation to indemnify will be implied only if the party from who [sic] indemnification is sought breached a contract or engaged in some other related tortious conduct.” Id. (citations omitted).
Here, BASF asserts that Akzo Nobel’s proposed amended indemnification claim would be futile because it fails to state a claim on which relief may be granted. In particular, BASF argues that Akzo Nobel alleges no facts to support an indemnification claim against BASF for any liability resulting from AutoZone’s lawsuit.
Assuming the factual allegations alleged in Akzo Nobel’s proposed Amended Third-Party Complaint are true, it states a plausible claim for indemnification. The Court must construe
The facts underlying Akzo Nobel’s claim for indemnification are simple: BASF and Degussa, a corporation later sold to BASF, provided products to Akzo Nobel for use in painting AutoZone stores, and problems developed in the paint applied to those stores. (See Am. Third-Party Compl. ¶¶ 7-16.) BASF admits supplying products to Akzo Nobel that may have been used on AutoZone stores. (BASF’s Answer ¶ 8.) Because similar problems developed with the paint — cracking, peeling, and fading — at different AutoZone stores in different climates,1 it is plausible to infer that those problems arose because the paint products were defective. It is thus plausible to conclude that BASF is responsible, or shares responsibility, for the problems that occurred and that Akzo Nobel was not solely at fault.
In an analogous case, the Supreme Court of Tennessee held that, when a customer successfully sued a distributor for rescission of a contract for sale of a houseboat because of manufacturing defects in the houseboat, the distributor was entitled to indemnification from the manufacturer. See Houseboating Corp. of Am., 553 S.W.2d at 588-89. The Supreme Court of Tennessee has also held that, when a train derailment occurred and a railroad car manufacturer was sued, the railroad car manufacturer stated a valid cause of action against the manufacturer of the wheels on the train for indemnification for attorneys’ fees and other litigation expenses in defending
Although AutoZone alleges only breach of contract by Akzo Nobel, it would be plausible to conclude that BASF has an implied obligation to Akzo Nobel and that Akzo Nobel would be entitled to indemnification from BASF based on their comparative degrees of fault. Akzo Nobel’s proposed Amended Third-Party Complaint includes sufficient factual matter to “state a claim to relief that is plausible on its face.” See Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 570). Amendment would not be futile. Therefore, Akzo Nobel’s Motion to Amend its indemnification claim is GRANTED. BASF’s Motion to Dismiss the original Third-Party Complaint’s indemnification claim is DENIED AS MOOT.
B. Contribution Claim
The Supreme Court of Tennessee has held that a party has the right to contribution in three limited circumstances: (1) when, in a case under McIntyre v. Balentine, 833 S.W.2d 52 (Tenn. 1992), the cause of action arose, the suit was filed, and the parties made irrevocable litigation decisions based on pre-McIntyre law; (2) cases in which “joint and several liability continues to apply under doctrines such as the family purpose doctrine, . . . tortfeasors act in concert or collectively with one another, . . . the doctrine of respondeat
The first circumstance does not apply because this case arises out of problems with products supplied to AutoZone after 2005. The Tennessee Supreme Court has emphasized that the third circumstance is not a broad “catch-all” provision defeating “the fundamental concepts of our comparative fault law,” id., and has applied it only when the underlying claim against the party seeking contribution sounds in tort, see id. (negligence and strict liability); Owens, 915 S.W.2d at 430 (negligence); Bervoets v. Harde Ralls Pontiac-Olds, Inc., 891 S.W.2d 905, 906 (Tenn. 1994) (negligence). The reference to “comparative fault,” which generally “means those principles governing the analysis of liability in tort actions,” Manis v. Gibson, No. E2005-00007-COA-R3-CV, 2006 WL 521466, at *4 n.1 (Tenn. Ct. App. Mar. 3, 2006) (emphasis added), suggests that the third circumstance is inapplicable when the underlying claim for which a party seeks contribution is not a tort. Under Tennessee law, breach of contract is not a tort. See Burris v. Hosp. Corp. of Am., 773 S.W.2d 932, 935 (Tenn. Ct. App. 1989). Here, AutoZone
The second circumstance is inapplicable because it refers only to contribution claims where the underlying suit is in tort. Under Tennessee law, “a statutory ‘right of contribution exists only in favor of a tort-feasor who has paid more than the proportionate share of the shared liability between two (2) or more tort-feasors for the same injury . . . .’” Williams Holding Co. v. Willis, 166 S.W.3d 707, 712 (Tenn. 2005) (quoting
Akzo Nobel argues that “liable in tort” means “potentially liable in tort” and is broad enough to include liability for
First, Akzo Nobel’s contention is inconsistent with the clear language of
Even if one concludes that “liable in tort” is ambiguous, the other tools of statutory interpretation suggest that Akzo
Second, Tennessee courts have repeatedly distinguished contractual and tort liability. See Weaver v. McCarter, No. W2004-02803-COA-R3-CV, 2006 WL 1529506, at *13 (Tenn. Ct. App. June 6, 2006) (“[T]his Court’s research indicates that liability under tort is separate and distinct from liability under breach of contract and, thus, and [sic] any judgment for breach of
Third, most states have interpreted “in tort” to exclude contribution suits based on breach of contract. See, e.g., Wagner-Meinert, Inc. v. EDA Controls Corp., No. 06-3777, 2007 WL 579668, at *3 (6th Cir. 2007) (applying Ohio law); Hartford Ins. Co. of the Midwest v. Phillip Ins. Agency Inc., No. 06-cv-00043-REB-MEH, 2007 WL 601974, at *2 (D. Colo. Feb. 22, 2007) (applying Colorado law); Unique Techs., Inc. v. Micro Stamping Corp., No. CIV.A.02-CV-6649, 2003 WL 21652284, at *3 (E.D. Pa. Apr. 15, 2003) (applying Pennsylvania law); McConal Aviation, Inc. v. Commercial Aviation Ins. Co., 799 P.2d 133, 135-36 (N.M. 1990) (applying New Mexico law); County of Chautauqua v. Pacos Constr. Co., 600 N.Y.S.2d 585, 586 (App. Div. 1993) (applying New York law); Land v. Tall House Bldg. Co., 602 S.E.2d 1, 3 (N.C. Ct. App. 2004) (applying North Carolina law). Akzo Nobel correctly points out that some states have interpreted “in tort” to include potential liability in tort. See Tamashiro v. De Gama, 450 P.2d 998, 1000 (Haw. 1969) (applying Hawaii law); Joe & Dan Int’l Corp. v. U.S. Fid. & Guar. Co., 533 N.E.2d 912, 918 (Ill. App. Ct. 1988) (applying Illinois law). Nevertheless, as the United States Court of Appeals for the Seventh Circuit recently noted, only a minority of states follow that approach. See Sompo Japan Ins., Inc. v. Nippon Cargo Airlines Co., 522 F.3d 776, 783 n.9 (7th Cir. 2008) (citations omitted).
Although the Tennessee Supreme Court has not addressed the precise issue, the statutory language of Tennessee’s Uniform Contribution Among Tort-Feasors Act and an examination of Tennessee case law persuade the Court that it would follow the majority rule. Therefore, a contribution claim in Tennessee may not be based on an underlying breach of contract claim. See Stanek v. Greco, 323 F.3d 476, 478 (6th Cir. 2003) (quoting
Because none of the circumstances in which Tennessee allows contribution claims applies, Akzo Nobel’s proposed amendment to its contribution claim would be futile. Based on the same reasoning, the contribution claim in its original Third-Party Complaint must fail. (See Answer to Plaintiff’s Amended Complaint, Counterclaim, and Third-Party Complaint, D.E. 47.) Therefore, Akzo Nobel’s Motion to Amend its contribution claim is DENIED. BASF’s Motion to Dismiss the contribution claim in Akzo Nobel’s original Third-Party Complaint is GRANTED.
C. Breach of Express Warranty Claim
Under Tennessee law, a plaintiff establishes a prima facie claim for breach of express warranty when it proves three elements: “(1) Seller made an affirmation of fact intending to induce the buyer to purchase the goods; (2) Buyer was in fact induced by the seller’s acts; and (3) The affirmation of fact was false regardless of the seller’s knowledge of the falsity or intention to create a warranty.” Body Invest, LLC v. Cone Solvents, Inc., No. M2006-01723-COA-R3-CV, 2007 WL 2198230, at *7 (Tenn. Ct. App. July 26, 2007) (citations omitted); see also
Therefore, Akzo Nobel’s amendment of its claim for breach of express warranty would not be futile, and its Motion to Amend that claim is GRANTED. BASF’s Motion to Dismiss the original Third-Party Complaint’s breach of express warranty claim is DENIED AS MOOT.
D. Breach of Implied Warranty of Merchantability Claim
Akzo Nobel’s proposed Amended Third-Party Complaint contains factual allegations and legal conclusions addressing BASF’s alleged breach of the implied warranty of merchantability. Akzo Nobel asserts that BASF breached the implied warranty of merchantability and that the products were “not fit for their ordinary purposes.” (See Am. Third-Party Compl. ¶ 24.) Because these are legal conclusions, the Court need not accept them as true. See Iqbal, 129 S. Ct. at 1949-50 (citations omitted). However, Akzo Nobel does make factual allegations that the Court must assume to be true, including that Akzo Nobel purchased paint products from BASF and Degussa for use on the exterior of AutoZone stores and that problems developed with the paint once applied. (See Am. Third-Party Compl. ¶¶ 7-16.) BASF admits that Degussa supplied products to Akzo Nobel that may have been used on AutoZone stores. (BASF’s Answer ¶ 8.)
Taking these factual allegations in the light most favorable to Akzo Nobel and drawing all reasonable inferences in its favor, Akzo Nobel states a plausible claim for breach of the implied warranty of merchantability. Reading the facts in the most favorable light, it is reasonable to infer that Akzo Nobel purchased products from BASF and Degussa that were defective and
Therefore, Akzo Nobel’s amendment of its claim for breach of the implied warranty of merchantability would not be futile. Akzo Nobel’s Motion to Amend that claim is GRANTED. BASF’s Motion to Dismiss the original Third-Party Complaint’s breach of implied warranty of merchantability claim is DENIED AS MOOT.
E. Breach of Implied Warranty of Fitness Claim
In Tennessee, “[w]here the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the
Akzo Nobel’s proposed Amended Third-Party Complaint contains factual allegations addressing BASF’s alleged breach of the implied warranty of fitness that the Court must assume to be true. Specifically, Akzo Nobel alleges that BASF was aware of Akzo Nobel’s purpose in purchasing the products and of Akzo Nobel’s expectation that the products would meet ordinary and reasonable standards for exterior paint when it sold those products to Akzo Nobel. (Am. Third-Party Compl. ¶ 21.) Although these allegations come close to “a formulaic recitation of the elements of a cause of action [that] will not do,” Iqbal,
Most importantly, BASF has admitted “that it and/or Degussa issued certain limited warranties directly to AutoZone for products applied to certain AutoZone stores” and “that Degussa, from time to time, supplied products to [Akzo Nobel] which may have been used on certain AutoZone stores.” (BASF’s Answer ¶¶ 7-8.) Because of those admissions, it is reasonable to infer that BASF and Degussa were aware of Akzo Nobel’s purpose in acquiring the products and that Akzo Nobel was relying on their judgment to furnish suitable products. That AutoZone required Akzo Nobel to obtain products from Degussa supports this inference. (Am. Third-Party Compl. ¶ 9.) Thus, it is plausible to conclude that Akzo Nobel’s transactions with Degussa and BASF gave rise to an implied warranty of fitness for a particular purpose. See
Akzo Nobel’s amendment of its claim for breach of the implied warranty of fitness would not be futile. Akzo Nobel’s
F. Negligence Claim
Under the economic loss doctrine, “[i]n a contract for the sale of goods where the only damages alleged come under the heading of economic losses, the rights and obligations of the buyer and seller are governed exclusively by the contract.” Trinity Indus., Inc. v. McKinnon Bridge Co., 77 S.W.3d 159, 171 (Tenn. Ct. App. 2001). There are two forms of economic losses: (1) direct economic losses and (2) consequential economic losses attributable to the product. McLean v. Bourget’s Bike Works, Inc., No. M2003-01944-COA-R3-CV, 2005 WL 2493479, at *6 (Tenn. Ct. App. Oct. 7, 2005). “Direct economic losses relate to the product itself and include costs of repairing or replacing the product or the diminution in the product’s value because it is of an inferior quality or does not work for the general purposes for which it was manufactured and sold.” Id. (citations omitted). “Consequential economic losses include all other economic losses attributable to the product itself such as the loss of profits resulting from an inability to use the defective product.” Id. (citations omitted). The economic loss rule requires purchasers suffering purely economic losses to seek a remedy in contract, not in tort. Id. at *5 (citations omitted).
Because the Court is adjudicating a matter of state law in a diversity suit, it is, “in effect, only another court of the State” and is bound by decisions that would be binding on a Tennessee court. King v. Order of United Commercial Travelers of Am., 333 U.S. 153, 161 (1948) (quoting Guar. Trust Co. of N.Y. v. York, 326 U.S. 99, 108 (1945)). The Court is thus bound to apply the economic loss rule in this case.
Here, Akzo Nobel alleges that BASF, the party from which it purchased the allegedly deficient products, is liable to Akzo Nobel for negligently manufacturing, designing, formulating, and testing products that failed. (Am. Third-Party Compl. ¶ 27.) That allegation is doubly deficient. First, Akzo Nobel does not offer any facts to support it, thus failing to satisfy the pleading standard in Iqbal. Second, the measure of “damages” for which Akzo Nobel seeks recovery is essentially any liability it might incur from AutoZone’s breach of contract suit. (See Am. Third-Party Compl. ¶ 28.) AutoZone is seeking “compensatory damages in an amount sufficient to compensate AutoZone for the costs incurred due to [Akzo Nobel’s] breach of the contract, including, without limitation, the cost of curing the warranty defects currently known and those reasonably certain to be incurred by AutoZone in the future.” (AutoZone’s Compl. at 7.) Thus, Akzo Nobel seeks to recover in tort for purely economic losses allegedly resulting from breach of contract.
In this case, the economic loss rule is squarely on point, barring Akzo Nobel’s negligence claim. See Trinity Indus., Inc., 77 S.W.3d at 171. When a party attempts to use tort law to recover the cost of replacing a defective product sold to it for use in its business, “[t]his cost is called in law an
Because Tennessee law bars negligence claims like Akzo Nobel’s, Akzo Nobel’s amendment of its negligence claim would be futile. Based on the same reasoning, the negligence claim in its original Third-Party Complaint must fail. (See Answer to Plaintiff’s Amended Complaint, Counterclaim, and Third-Party Complaint, D.E. 47.) Therefore, Akzo Nobel’s Motion to Amend its negligence claim is DENIED. BASF’s Motion to Dismiss the negligence claim in Akzo Nobel’s original Third-Party Complaint is GRANTED.
V. Conclusion
For the above reasons, BASF’s Motion to Dismiss is GRANTED in part and DENIED in part, and Akzo Nobel’s Motion to Amend is GRANTED in part and DENIED in part.
So ordered this 10th day of September, 2010.
s/ Samuel H. Mays, Jr.
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE